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AB 32 costs before AB 32 costs

Posted by Gino DiCaro, Vice President, Communications on Sept. 10, 2008

Unless Governor Schwarzenegger vetoes SB 1762 (Sen. Don Perata), there's a good chance that the state's residential and industrial energy consumers will see the first chunk of increased global warming costs before the California Air Resources Board (CARB) has even finalized a scoping plan that will inevitably put the country's highest premium on all products that start or end in a greenhouse gas in California.

SB 1762 creates a "Climate Change Institute" that among many things would become California's greenhouse gas research and development center.  The life of the institute will use close to $500 million, in which $370 million will be collected from electricity and natural gas consumers.   Until the state reforms AB1X and un-exempts the majority of residential users, only the largest residential and industrial users will pay the cost.  With or without an AB1X fix, SB 1762 is just a taste of what's to come under California's massive global warming regulation.  And here, we come to one of the biggest rubs of all -- it's a "taste" that completely ignores and circumvents CARB's authority to guide AB 32's implementation, regulations, costs, and research and development.

The Governor went through more than a year of deliberations and legislative rigor to get AB 32 passed.  In the end, the bill delivered the entire plan's authority to CARB's greenhouse gas 200-man team.  After months and months of intense work, CARB continues to struggle with the broadest and most cost effective manner in which to implement this California-only policy.  This bill and new agency would make that challenge harder.  There is definitive value in a research and development arm for the state's massive global warming undertaking, but a half-baked plan that burdens only a select few with the costs of a program that benefits everyone will only hurt consumers and the economy.  It undermines the bill's ultimate goal to reduce global greenhouse gas emissions and grow the economy in a state that already has the highest electricity rates in the west.



See CMTA veto letter
See AB 32 Implementation Group press release


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