Viewing blog posts written by Dorothy Rothrock


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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CA industrial electricity now 79% more expensive than the U.S. average

Posted by Gino DiCaro, VP, Communications on June 14, 2016

California manufacturers depend on cost-competitive electricity rates to stay in business and grow their operations. Since 2010 California's energy policies have steadily driven up industry's premium to purchase electricity in the state.  The annual average in 2010 for the "industrial" rate was 44 percent higher than the national average, growing to a whopping 79 percent higher in 2015. The "commercial" rate that smaller manufacturers tend to pay has also steadily increased.  That rate was 49 percent higher than the national average in 2015.

Coupled with data that shows California has attracted no more than two percent of U.S. manufacturing investments since 2010, this information tells us that we must make sure our energy policies take into account their impacts on high-wage manufacturing growth.





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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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Industrial electricity rates continue to increase

Posted by Gino DiCaro, VP, Communications on May 13, 2015

California's manufacturers paid 70 percent higher electricity rates than the U.S. average in 2014.  What's worse is that our rates have seen a steady incline for the past five years starting at 44 percent higher premium than the U.S. average in 2010.

 

Industrial rates by state





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A growing MFG economy would be a powerful message for CA climate change leadership

Posted by Dorothy Rothrock, President on March 26, 2015

I enjoyed speaking on a climate change panel this week hosted by the Public Policy Institute of California (PPIC).  The topic is important to manufacturers because they are sensitive to high energy costs, and we can expect ever higher energy costs when state climate change rules go into full effect. 
 
Other states are watching to see if the manufacturing economy in California will be hurt under our strict greenhouse gas reduction rules.  They won’t jump on board until they believe it will be good for their economies. That matters because we could take every single molecule of carbon out of the California economy and climate change would still happen.  The climate will improve only if other states and countries adopt significant reduction polices.   
 
My fellow panelists expressed great enthusiasm about our state’s leadership role in this global issue but they downplayed facts on the ground about the state’s economy.  The state is seriously lagging the US in manufacturing job growth since the recession ended. We also have very weak levels of investments for new sites or expansions.  Energy costs play a big part in making California a tough place to be a manufacturer.  
 
I understand the desire to put a positive spin on the climate change story and only make the story about technology advancements and growth in green jobs.   It interrupts a glowing narrative to mention the trade-offs -- potential loss of high wage, middle class manufacturing jobs -- when we indiscriminately add new costs to the economy.  Some groups do not want to raise public awareness about the trade-offs and thereby dampen enthusiasm about addressing climate change.    
 
But if manufacturing continues to suffer in California, other states will be reluctant to adopt similar policies. The states we need to convince have vibrant manufacturing economies with middle class jobs that they do not want to lose. Brushing the manufacturing data under the rug is not fooling anyone outside California – in fact, those state leaders see our failure to acknowledge the economic truths as one more reason to put California in the “kooky” category and shy away from joining our programs to reduce emissions.  
 
 A question that should have been asked at the PPIC event was “How can California inspire other states and countries to adopt our policies to reduce climate emissions?”  My answer would have been:  “Don’t deny the costs of the policies, take action to minimize those costs, and then make a commitment to prove with facts and data that a healthy manufacturing economy is, and will be, supported by our climate change policies.”  
 
That approach has a chance of putting California in a true leadership position on climate change.  
 
 
 
 
 




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