Sunday, December 20, 2009


AB 32, the precursor and foundation of SB 375, has caused consternation as its implementation becomes imminent. Thanks to The Tattler for raising the issue repeatedly. This blog points to a news article on Fox & Hounds which has a copy of a report by the CSBR raising issues of cost and realistic implementation methods. There are major disagreements with the State's method of estimating Green House Gasses (GHG).

The California Small Business Roundtable has commissioned a report to examine the further costs of the California law passed in 2006 by the legislature. The implementation of this law, as directed by the California Air Resources Board, has been seriously compromised by the building industry special interests. We're now seeing tremendous blowback from this legislation because of the hijacking of its intent by these special interests, the construction and development sector. The CSBR has other issues with this legislative intent as well:

The economic analysis completed by ARB fails to address several key economic issues and variables or the uncertainty surrounding their costs. Examples include:

• Costs or disruptions to prices of crops arising due to changes in land use.
• Costs of reporting, monitoring, and enforcing compliance.

• Future availability of alternative fuels or any major fluctuations or disruptions in the demand supply equation and resulting prices.

• Availability of vehicles utilizing alternative fuels, and costs associated with technology advancements needed to make the vehicles commercially affordable and reasonably priced.

• The cost of financing of the new production facilities, or of the required investments for both production and distribution.

• Volatility in forecasts of prices of crude, gasoline, and diesel.

• Research and development costs for lower carbon intensity alternative transportation fuels.
Initial estimates suggest that billions of dollars of costs will result from the implementation of AB 32.

In addition to the costs suggested by ARB, others include infrastructure and capital investment costs upward of $60 billion, $5 billion for new home construction, $36 billion for more fuel-efficient cars, and billions in higher food costs due to higher transportation costs and change in land use. In summary, the implementation costs of AB 32 could easily exceed $100 billion upfront.

The Pew Center has also put out its own position in climate research related to this legislation. Many cities are in the process of developing ways to measure their GHG emissions through their own benchmarks (see pdf download on the Governor's Office of Planning and Research site). This is about devising a way to report the numbers, not a mandated formula for implementing solutions to the GHG problem.