Small businesses feel pinch on curbing greenhouse gases

California’s small businesses have known for a long time that the relentless piling on of costly government regulations has jeopardized jobs, discouraged investment and hampered our state’s economic recovery.  And a new poll focused on California’s sweeping global warming policies proves that voters here feel the same way.

A survey released today by the AB 32 Implementation Group shows beyond a doubt that voters have a clear understanding of the connection between the higher costs – notably for energy – associated with climate change regulations and their pocketbooks.

When quizzed about AB 32, the state’s greenhouse gas emissions (GHG) reduction law and one of the most ambitious, expensive policies in California history, a majority of voters said they are unwilling to pay more for goods and services for programs intended to help reduce global warming.  When translated into that time-honored yardstick – the cost of a gallon of gas – even those willing to pay more largely drew the line at 50 cents per gallon or less.

That should send a sobering message to the California Air Resources Board (CARB), whose cap and trade proposal is expected to increase the costs to power plants, refiners and other large energy users by billions of dollars.  Three of the state’s largest utilities recently estimated that cap and trade, combined with other GHG reduction laws, will cost their ratepayers over $32 billion by 2020.

Voters also understand that it’s not just businesses that will pay these skyrocketing energy costs.  The fact that cap and trade as planned is a hidden energy tax that will increase costs for gas, utilities, housing, food and other consumer goods prompted 75%  to be less likely to support it.

Strong majorities of voters worry that regulations like cap and trade will force companies to lay off more workers, reduce production, and drive businesses out of California, especially since as the only state with such an aggressive cap and trade policy we would be at a distinct, economically destructive competitive disadvantage.

Voters reserved their strongest opposition for the proposed CARB cap and trade auction set to begin later this year.  The auction will sell permits to businesses unable to meet CARB’s GHG emissions cap so they can continue to operate legally in California, and is projected to raise billions of dollars annually to be spent by the Governor and Legislature. 

Voters are on the same page as small business in that they question the necessity of a costly auction when the required emissions reductions can be achieved without it.  An astounding 86 percent worry that the Wall Street-managed auction would be vulnerable to market manipulation reminiscent of the recent mortgage and energy crises.

These concerns are realities that small businesses have been facing for years. When your costs go up, there’s only so much you can pass along to your customers and expect them to stay with you.  And you have fewer customers because they’re also facing higher costs at home for the basics like utilities, fuel and food.  So instead of hiring new people and investing in expansion, you’re laying workers off and cutting your overhead. 

Is it any wonder that only about a quarter of Californians feel the state is going in the right direction while two-thirds of voters surveyed believe things are seriously on the wrong track?

This is not to say that voters don’t want to do something about global warming.  Although support has declined over the past few years, a slim majority still support the goals of AB 32. But like small businesses, they understand that poorly designed regulations with prohibitive price tags are not the way to go, as illustrated by one of the poll’s key conclusions.  A majority of voters said the following statement is closest to their opinion:

“The global warming issue is real and needs to be seriously addressed, but we need a balanced strategy that cuts greenhouse gas emissions without reducing jobs, increasing my family’s energy costs, or hurting the state’s economy.”

Many of our small business members have voluntarily taken measures to make their businesses more energy efficient without the heavy hand of government.  But the continued onslaught of draconian, costly and ill-conceived policies make rising energy costs a top concern among mom-and-pop businesses.   AB 32 and related policies like cap and trade need substantial revisions to bring them more in line with economic reality.

Voters and small businesses get it: when it comes to global warming policy, we need and deserve a “mend-it-don’t-end-it” approach that will move the ball forward without bankrupting businesses, working Californians, families and the state.  Let’s hope that CARB and others take heed before it’s too late.

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Ed’s Note: