Senate Passes Bills Increasing Fuel Costs, Regulatory Burden

JopKillerThe Senate this week passed two California Chamber of Commerce-opposed “job killer” bills that, if signed into law, may increase costs for California businesses and create regulatory burdens throughout the state.

SB 32 (Pavley; D-Agoura Hills) Slows Economic Growth — Increases costs for California businesses, makes them less competitive and discourages economic growth by adopting further greenhouse gas emission reductions for 2030 and 2050 without regard to the impact on individuals, jobs and the economy.

SB 350 (de León; D-Los Angeles) Costly and Burdensome Regulations — Potentially increases costs and burdens on all Californians by mandating an arbitrary and unrealistic reduction of petroleum use by 50%, increasing the current Renewable Portfolio Standard to 50% and increasing energy efficiency in buildings by 50% — all by 2030 without regard to the impact on individuals, jobs and the economy.

SB 32: Slows Economic Growth

SB 32 mandates a reduction in greenhouse gas emissions to 80% below 1990 levels by 2050 with no consideration of the economic side effects.

AB 32 was passed and signed into law in 2006 to reduce greenhouse gas emissions to 1990 levels by 2020, equivalent to a 30% reduction in emissions compared to a “business as usual” trend. Through a combination of command-and-control and market measures, along with the economic recession, California can meet that goal. What is not known is whether these goals have been met in a cost-effective manner, and what the economic and environmental side effects have been.

Before extending the greenhouse gas reduction mandate beyond 2020, the Legislature should independently evaluate the cost and benefit of the state’s current climate change programs to better understand what has and has not worked.

SB 350: Increased Fuel Costs

SB 350 provides broad and undefined authority to the California Air Resources Board (CARB) to adopt regulations, standards and specifications “in furtherance of achieving a reduction of petroleum use in motor vehicles by 50% by January 1, 2030….” This bill does not specify whether CARB should adopt and implement policies that have an impact on the demand for petroleum fuels, or whether it should adopt and implement policies that affect the supply of transportation fuels. SB 350 provides a blank check delegation of authority to CARB, and in doing so, gives no consideration to the cost or job loss associated with this to-be-determined regulation.

The bills now go to the Assembly and will be assigned to policy committees for hearings soon.

Staff Contact: Amy Mmagu