Viewing blog posts written by Gino DiCaro

CMTA President opines on lawsuits shaking down CA manufacturers in the name of climate change

Posted by Gino DiCaro, VP, Communications on March 22, 2018

In an op-ed published by The Sacramento Bee, California Manufacturers & Technology Association President Dorothy Rothrock highlighted California manufacturers’ leading role in tackling the global problem of climate change and how new lawsuits will not help:

California manufacturers are big players in the state’s efforts to address climate change. The largest companies are regulated through a program that will greatly reduce emissions and grow the economy at the same time. The result will be a win-win for jobs and the environment.

Yet the climate liability litigation filed by eight California municipalities against manufacturers are actually discouraging those efforts.  These lawsuits stack a large financial burden on manufacturers, businesses and consumers in California, while enriching trial lawyers:

A big payday for the trial attorneys, not a solution to global climate change, is the main motivation for these suits. The attorneys and municipalities don’t care that their lawsuits hurt California’s ambitious climate change policies. . . . 

The unjustified lawsuits will add costs to energy manufacturers by forcing them to defend or settle the cases. Those costs will be passed on to consumers, other manufacturers and businesses that depend on fuel for transportation and production. Piling these new costs on top of the reasonable costs related to cap and trade could push production out of state along with their emissions. 

Rothrock also highlights the blatant discrepancies between the lawsuits filed by the municipalities and their bond offerings when it comes to climate change risks:

San Mateo County claims that it is “particularly vulnerable” to sea-level rise and that there is a 93 percent it will experience a “devastating” flood before 2050. Marin County is even more certain, calculating a 99 percent risk of a devastating flood before 2050. But contrast that with bond offerings in 2014 and 2016 where investors were told that the county “is unable to predict whether sea-level rise or other impacts of climate change or flooding from a major storm will occur."

The Manufacturers Accountability Project is leading the national charge on these lawsuits and they are focused on exposing the questionable motives of the trial attorneys, city governments and activists that are involved in targeting manufacturers in the United States. 

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Let’s get to the bottom of this 500,000 green jobs number

Posted by Gino DiCaro, VP, Communications on Aug. 27, 2016

Growing green jobs is a reason state leaders cite to support ambitious climate change policies.  The policies will spark technological innovations and entrepreneurship to create new industries and jobs but they often say nothing about the losses that may be suffered by consumers and other businesses. 

Senate Pro Tem Kevin deLeon said the following after SB 32 and AB 197 passed this week to set a new climate change target for 2030: 

"We have empirical evidence that's very clear that we have created 500,000 brand new jobs in the clean energy space ... This is not about reducing carbon in the abstract. This is about economic growth. That’s why we are the 6th largest economy in the world. There is rhyme and reason why we have this legislation – its because it leads to job growth."

The California Center for Jobs & The Economy has this to say about green job creation in California. Some highlights:   

  • The “500,000 new jobs” claim has been voiced since 2011, casting serious doubt on the validity of the number.
  • Next 10 identified only 180,0000 green jobs in their 2014 report and has since even reduced that number.
  • A report by Advanced Energy Economy Institute, a primary report used by many advocates, claims 142,000 advanced electricity generation jobs. But EDD data (the government’s gold standard for job tracking) says California has only 18,900 jobs total in the entire sector of "Electric Power Generation, Transportation & Distribution."

Most importantly, the “500,000 new clean energy jobs” claim does not account for jobs lost due to costs in other sectors such as manufacturing.  California’s 1.28 million high-wage manufacturing workers should be concerned that creating a phantom number of new green jobs at their expense is a measure of success for climate policies.

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Pay attention to manufacturing in the climate debate

Posted by Dorothy Rothrock, President on Aug. 26, 2016

In the wake of the Legislature passing new climate change bills this week, Governor Brown was asked about the impact on jobs. Part of his answer was “Manufacturing has been declining as a part of the American workforce for decades, and the decline in America generally is very similar to California.”  

Manufacturing is actually thriving in the United States.  Companies are increasingly choosing to relocate to the US due to wage growth in developing countries, logistical concerns, and poor intellectual property protection outside the US. It’s a good thing, too, because the direct jobs and ripple effect of manufacturing in the broader economy makes the US a powerhouse nation. A recent study by the MAPI institute showed that each manufacturing job supports a whopping 3.4 other non-manufacturing jobs.  

While the US as a whole is becoming more attractive to manufacturing than in prior decades, we have work to do in California. CMTA tracks manufacturing jobs and investment data in California compared to other states.  Since the recession ended in 2010 we have seen only slow job growth in California while other states are enjoying the boom.  In 2015, California had the lowest rate of all states for manufacturing investments for expansions or new sites. We haven’t received more than two percent of total US investments since the year 2000. That is far short of the 11 percent we need to attract each year to maintain our share of US manufacturing GDP.

It’s impossible to attribute any single state policy, even a big one like climate change, to any particular job growth or loss.  Many costs of doing business, litigation risks, and permitting challenges discourage investment and job creation in California.  But that shouldn’t give lawmakers a pass to not consider economic impacts when they adopt climate change policies. This is especially true when success depends on other states, who want to preserve their strong manufacturing economies, being willing to adopt similar policies and making meaningful reductions in global climate emissions.   

California voters support climate change laws but also want to protect manufacturing. In a recent poll by the California Business Roundtable, when asked if they support new climate change regulations the answer is a resounding “yes.” But when asked if they would support these policies if middle-class manufacturing jobs would be lost, 66 percent said they opposed.  

Reasonable regulations can be developed to achieve both environmental and economic goals for California.  Manufacturing jobs in California produce greener and cleaner products for the world.  It’s good policy and good politics to make sure manufacturing, in particular, is part of the climate change agenda. 

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Innovation in manufacturing can improve sustainability

Posted by Gino DiCaro, VP, Communications on May 6, 2016

A blog cross posted from the National Association of Manufacturers and Mallory Micetich:

Here’s a great example of how innovation in manufacturing can improve sustainability and our world. Exxon Mobil is investing in FuelCell Energy, a company developing technology that could reduce carbon dioxide emissions from power plants. As the New York Times reports, Exxon Mobil hopes that their relationship with FuelCell will allow them to take a promising new approach to carbon capture and sequestration “from the lab to the market.” This technology could potentially mean that power plants could “isolate and compress” CO2 “while producing enough power to more than make up for the energy cost of capturing the carbon.”

Read more about how FuelCell and Exxon Mobil’s partnership could help power plants reduce emissions.

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Californians deserve better MFG information around SB 350

Posted by Gino DiCaro, VP, Communications on Aug. 31, 2015

The  "myths and facts" document created by the State Senate Democrats in support of SB 350, a bill that mandates 50 percent reduction in petroleum use, 50 percent use of renewable power and doubling energy efficiency in buildings by 2030, cherry picks data and chooses arbitrary timeframes to turn reality on its head. We can have a healthy debate about climate policy, but we must first put some perspective to these claims.

One "myth" the document claims to dispel is that “SB 350 will kill California’s manufacturing industry." To ‘prove’ this point, the document highlights the size of California’s manufacturing economy and picks statistics for jobs, output and exports to prove manufacturing is flourishing under current climate policies, such as AB 32, and would do even better with SB 350.

They claim the sheer size of the California manufacturing economy proves that these policies are a positive for the state. However, it should be no surprise that the most populated state in the nation also happens to have a large manufacturing employment, production and export base.  On a per capita basis, a more rational way to understand manufacturing’s role in our economy, the story is different.  “California has twice as many manufacturing companies as Texas,” might be factually true, but California has still has the same per capita manufacturing jobs as Texas – one for every 29 people.

Second, while we are still the country’s largest manufacturing state there has been a shift away from California in recent years. Since the end of the recession in 2010 manufacturing jobs have only increased in California by 2.8 percent while the U.S. has grown its manufacturing base by 7.8 percent – that’s more than 200 percent greater manufacturing growth outside California.

In that same time period, we attracted less than two percent of the country’s new manufacturing investments. The result of these disturbing trends is that since 2009 U.S. manufacturing output has grown by a healthy 22 percent while California’s output has been lagging with only 11 percent growth.

Finally, we wonder why the State Senate Democrats trust the Manufacturing News Index (MNI) to count jobs rather than the Bureau of Labor Statistics (BLS) that is relied on by California’s own employment agencies.  MNI uses outdated Standard Industrial Codes and includes more types of companies in their analysis (mining, extraction, among others) than does BLS.  According to BLS, we grew manufacturing jobs by 0.4 percent which is far behind the 1.6 percent US growth for the period March 2014 to March 2015.

Policies that increase energy and transportation costs on manufacturers will encourage further declines in employment, investments and manufacturing output.  We’re glad the State Senate cares about California manufacturing and we hope  these facts about manufacturing will lead to smart policies going forward to reduce burdens and maintain affordable energy supplies.   

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