How a New California Climate Law Will Strangle Manufacturing

Destroying California one regulation at a time.

Destroying California one regulation at a time.

California just hung up a big “Manufacturing Workers Need Not Apply” sign. It took the form of extended, stricter, and even less realistic carbon dioxide regulations.

A new California bill extends legislation previously set to expire in 2020 and imposes dramatically deeper emissions cuts for 2030. Under the new measure, California must cut its carbon dioxide emissions to a level 40 percent below its 1990 level by 2030.

It’s worth noting that California’s population is projected to be 50 percent higher in 2030 than it was in 1990. It’s also worth noting that carbon dioxide is colorless, odorless, and nontoxic. Its purported health and climate impacts result from carbon dioxide’s effect on global warming. However, no amount of emissions regulation in California (or even the United States as a whole) will have a significant impact on global warming—the developing world’s demand for affordable energy will swamp any cuts made by the U.S.

But the added regulatory burden will almost certainly drive up energy costs, which is bad news for consumers and businesses—and especially bad for energy-intensive industries like manufacturing.

California’s existing regulations have already done damage. Since 1990, California energy prices have risen faster than the rest of the country. By 2014, the average price of electricity in California was 46 percent higher than the average for the country as a whole; and even more problematic for manufacturing jobs, the industrial price of electricity in the state was 75 percent higher.

Economic studies repeatedly show the manufacturing sector will suffer with the higher energy prices brought on by carbon dioxide restrictions. (For example, see here and here.) So it shouldn’t be surprising that California’s manufacturing has missed out on the robust rebound in manufacturing employment enjoyed in the rest of the country.

What is surprising is that the California government would use new legislation to double down on the energy-strangling policies that contributed to the manufacturing malaise in the first place.

Though maybe it shouldn’t be too surprising given the mega-rich and mega-influential Californians who have outsized influence on climate policy combined with equally outsized hypocrisy and willingness to impose costs from which they are themselves insulated.

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    The fast way for California to achieve their targets is to force the jobs to Asia or another State . Kind of an illusion of green wash but what ever works . The State is a fiscal train wreck so manufacturing is better off elsewhere and workers whose union bosses are on the global warming payroll could care less .

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