CalChamber Urges Careful Deliberation on Governor’s Contentious Climate Package

The time remaining in the legislative session is inadequate for the necessary full discussion of the climate proposals the Governor issued last week, the California Chamber of Commerce and a coalition of business groups and local chambers of commerce said in a letter sent to Governor Gavin Newsom on August 16.

The letter expressed the group’s “urgent request that the Legislature give careful deliberation to the recently released climate proposals from the Administration, with which we have considerable concerns.”

Any one of the issues covered in the Administration’s proposals has been and would be a matter of extensive debate in the regular legislative process. Those contentious issues include:

• codifying a statewide carbon neutrality goal;

• increasing the greenhouse gas emissions reduction goal;

• establishing pathways to 100% clean electricity retail sales;

• setbacks for new oil and gas production wells; and

• carbon capture regulation.

“Like the rest of the nation, Californians are suffering the punishing effects of inflation, reflected in ever-higher prices of gasoline, food, and other necessities,” the coalition wrote. “Our state’s residents and business owners deserve to know by how much and when the costs of these new climate initiatives will be felt in our economy — whether in higher fuel prices, utility bills, elimination of certain industries and their related jobs, limits on driving or of vehicle purchases, and the many other foreseeable economic and lifestyle impacts inherent in these proposals.”

Greenhouse Gas Emissions

As one example of the magnitude of changes being proposed, the coalition letter cited the Governor’s proposal to adopt a more aggressive 2030 greenhouse gas emissions (GHGs) reduction target — going from 40% to 55% below the 1990 level.

The proposal is just one of the five new climate initiatives outlined by the Governor.

That target would require the state to remove an additional 17 million gasoline vehicles off the road by 2030, according to data developed by the California Air Resources Board (CARB), the coalition pointed out.

Moreover, the letter continues, CARB’s initial modeling of scenarios in this range concluded them to be “economically and technically infeasible due to the current lack of low-carbon energy infrastructure, unavailability of technology, large job loss and high implementation costs.”

The 2030 and 2045 goals proposed by the climate package appear to be far-off aspirational goals, but the California Environmental Quality Act (CEQA) makes them immediate mandates in 2023.

CEQA will be a super-charged anti-housing weapon in the hands of NIMBYs. These proposals would increase the price of a new home by a minimum of $50,000 for additional energy equipment, making California’s affordable housing crisis worse than at any time in its history.

This means that the Legislature’s efforts over the past several years — enacting more than 80 bills to plan for, approve and produce the 2.5 million more homes that the Department of Housing and Community Development says are needed — will have been for nothing.

A second climate initiative in the Governor’s proposal is establishing a setback distance between a new oil well and homes, schools or parks.

The letter notes that legislative analysis of an earlier, failed attempt to enact setback restrictions on oil and gas production wells found the setback requirement threatens the loss of 8,000 jobs, including 3,000 high-paying direct jobs in the oil and gas industry, and another 5,000 jobs in supplying industries such as construction and trades, not to mention shutting down revenue streams to state and local governments.

Undermines Existing Process

The last-minute climate proposal undermines the existing public and transparent process at the Air Board, where hundreds of stakeholders have been engaged on the Scoping Plan.

It is vital to reconcile the Administration’s recently released proposals with the proposals being vetted by the Board over an inclusive, months-long process.

The Legislature sets overall policy on these matters, but the Governor traditionally has given great deference to the formal processes undertaken by the Air Board, which would be upended by a rushed consideration of these proposals.

Global Solution

California should contribute to a global solution, but not attempt to resolve a global issue beyond the means of the state’s economy and that would stifle growth and opportunities for California residents, the coalition stated, continuing: “Indeed, the worst outcome for California’s leadership on this issue would be an overreach that discredits climate change reduction strategies because of severe damage to the state’s economy.”

In concluding, the coalition letter comments: “The Governor recently stated, in the context of our water crisis, that we should move ‘away from a scarcity mind-set to one more of abundance.’

“Our climate policy should likewise embrace growth, since over the long term, successful global reductions in GHGs will happen only through increased global wealth and massive technological innovation, much of which can take place in California — if we do not embrace scarcity.”

Staff Contact: Ben Golombek

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Ben Golombek joined the California Chamber of Commerce on January 17, 2022 as executive vice president and chief of staff for policy. He heads the CalChamber policy staff, providing strategic oversight and management of CalChamber’s legislative and regulatory priorities. Most recently, as West Region vice president for public affairs for AT&T, Golombek managed a team of 20 to create and implement campaigns and media strategies to educate and influence lawmakers, regulators and consumers for eight states, including California. He has served as chief of staff to three members of the California State Assembly. Before his State Capitol experience, Golombek worked at Los Angeles City Hall as deputy city controller, communications director for a city councilmember, and deputy press secretary for Mayor Antonio Villaraigosa. Golombek graduated from Northwestern University, has an M.B.A. from the University of California, Davis, and completed the Coro Fellows Program in Public Affairs. See full bio