SACRAMENTO – The AB 32 Implementation Group, a coalition of business and taxpayer organizations, on Wednesday expressed strong concerns about the California Air Resources Board’s (CARB) plan to initiate an auction of emissions permits as part of the AB 32 cap-and-trade regulation (AB 32 is California’s Global Warming Solutions Act).  

They observe CARB is exceeding its authority and the auction will add a tremendous strain to the state’s already fragile economy.

“Imposing billions of dollars of new costs on manufacturers, power and fuel producers, agriculture, and other energy users when unemployment is in double digits and taxes may go up to balance the state budget is the height of folly,” said Dorothy Rothrock, vice president of government relations for the California Manufacturers and Technology Association and AB 32 Implementation Group member. “In the end, California consumers and the state’s economy will be the ultimate victims of this ill-conceived and poorly researched scheme.”

“As currently planned, CARB’s auction will pit California employers against Wall Street traders for a diminishing pool of allowances that they must have if they are to stay in business here. That’s a recipe for continued business flight, job loss and economic decline,” Rothrock continued.     

The AB 32 Implementation Group contends that AB 32’s carbon emissions goals can be met without a Wall Street-style auction and protect California employers, jobs and the state’s economy by issuing emissions allowances up to an efficiency benchmark.  

Allowing them to trade permits under a declining statewide cap would reward the most efficient companies and encourage cost-effective emission reductions.

“Despite CARB’s attempt to frame the cap-and-trade auction as a source of free money, it’s a textbook tax on business and consumers – pure and simple. But AB 32 doesn't give CARB taxing authority and lawmakers never intended AB 32 as a revenue generator. And since we are the only state imposing this new tax, our manufacturers will be at a competitive disadvantage. On top of other high costs in California, this will be one more reason to shift jobs and production to other locations,” Rothrock added.

Recent AB 32 Implementation Group polling confirms that two-thirds of California voters oppose CARB's carbon credit trading plan, which is scheduled to kick off later this year with an auction in November.

“There is still time to fix cap-and-trade by removing the most damaging elements of the regulation, including the auction of permits,” Rothrock concluded.  “We should immediately send signals to investors and employers that CARB will not move forward with a job-killing auction.  For the sake of the economy, consumers and the environment, CARB should make AB 32 implementation as low-cost as possible.”