(August 18, 2006) The negative impact of California Chamber of Commerce-opposed legislation to adopt an arbitrary cap on carbon emissions is the focus of an opinion piece by Chamber President Allan Zaremberg. The legislation, AB 32 (Núñez; D-Los Angeles), moved from the Senate suspense file to the Senate floor yesterday.

The Chamber strongly urges members to express their opposition to AB 32 by either writing their senators or calling the senators’ offices.

Following is Mr. Zaremberg's commentary on AB 32:

We all agree steps must be taken to address global climate change and to curb worldwide carbon emissions. California must play an important role by continuing our strong environmental leadership and applying our strong economy and technological expertise to help others take the right steps, too.

Focusing on a truly global solution to this problem is essential to making a real impact. Respected economist Margo Thorning says that by 2020, California will account for only 1.3 percent of total worldwide emissions, as our state continues using more efficient energy production. Over that same time period, however, China's share of global greenhouse-gas emissions is expected to increase to more than 22 percent -- nearly one-quarter of the world total and 17 times California's. Any solution to climate-change issues must focus on developing countries that do not have the same standards as we do for protecting the environment.

Unfortunately, California's policy-makers are poised to implement legislation that will harm our state's economy and could make our environment worse. Assembly Bill 32, sponsored by Speaker Fabian Núñez, D-Los Angeles, calling for an arbitrary limit on carbon emissions in California, is under consideration by policy-makers. This proposal is a lose-lose for California because it would drive up energy and gas prices, hurt our growing economy, push jobs out of state and potentially hurt our environment.

California electricity rates are among the highest in the nation. As we all know from the recent heat wave, we have hardly any extra power to spare. By prohibiting many current methods of energy production, AB 32 would probably lead to further price increases as the state struggles to maintain or add capacity in the face of growing demand. Just ask leaders in the European Union, which tried a similar plan and has seen a significant spike in energy prices.

This approach also would hamper California's ability to continue our leadership and technological innovation. Facing these new restrictions, employers simply will take their jobs and investment to less-regulated states. Simply put, this cap on carbon emissions is a cap on economic and job growth in California.

Another huge impact of this costly proposal will be more pain at the fuel pump. Estimates indicate that this bill would mandate a 17 percent reduction of available gasoline supply, leading to massive gas-price spikes or forced government rationing. We can't afford either.

Even worse, after all the damage AB 32 does to California's job creators and consumers, it would have little to no positive impact on the global climate problem. Fully realized, AB 32's goal is to reduce global emissions by just 0.3 percent -- and even this tiny amount is in doubt. AB 32 actually could make our environment worse by encouraging companies to leave California to escape this new mandate, taking their carbon emissions with them. In fact, if they go to parts of the world with less-efficient energy production, like China or India, they actually may increase their emissions, making our world's environment even worse.

There is a better way for California to lead. We should work to promote protection of intellectual property worldwide to foster and encourage the transfer of cleaner, environmentally friendly technologies to countries like China and India -- where such action could significantly impact this global problem. We also should explore tax credits to spur earlier adoption of more efficient generators and manufacturing, among other things.

California has a rich history as an environmental leader, which we must continue. However, our ever-shrinking middle class will be hit hardest by the proposals outlined in AB 32, which will drive jobs to other states and countries and drive up prices for essential consumer needs like energy and gas. The damage to California's economic growth will also hurt our state's ability to pay for essential programs and services such as education, health care and public safety.

California can be a leader in fighting global climate change -- but there is a better way to lead.

Mr. Zaremberg's opinion article on AB 32 appeared in San Jose Mercury News on August 9.