[Editor’s note: This story originally was published by Real Clear Wire.]
By Lance Christensen
Real Clear Wire
A shrinking California seemed impossible a generation ago. However, the state’s unfriendly business environment has been a main factor in companies exiting the state and taking their employees with them. And with the state bureaucracy simpatico with the federal government’s desire for stricter regulations, more Californians will flee the state.
Why?
Consider the U.S. Environmental Protection Agency’s (EPA) new stringent air rule seeking to limit particulate matter (PM2.5), which could serve as a roadblock to new development in parts of California’s Central Valley – one of the most economically disadvantaged areas of the state.
If you aren’t aware of this proposal, that was probably by design.
EPA is proposing to change the annual PM2.5 standard from the current 12 micrograms per cubic meter (µg/m3) to within the range of 9 to 10, a move that the EPA itself acknowledges could put as many as 21 counties in California under nonattainment status. Counties not in attainment with federal air quality standards have to develop expensive plans for how they can reduce emissions to meet standards.
These miniscule changes in standards seem insignificant except for those who have to comply with them. Not only is it costly for local governments, but they also serve as a signal to new manufacturers that business will be very difficult and expensive to continue or create in their region. Developers and investors already face enough scrutiny, audits, oversight and regulations so they effectively redline areas that are no longer business friendly. Adding more to their compliance obligations means project delays or eventually cancellations that take away jobs and income from the residents in these areas.
Recent analysis by the National Association of Manufacturers notes that “California is the state whose manufacturing industry is most exposed” to a stricter PM2.5 standard and the proposed rule could cost the state’s economy $31.6 billion and affect 119,000 jobs.
As the federal government one-ups the state in its regulatory regime, the parts of the state that would be hardest hit are also the ones that need new jobs and opportunity the most.
The current PM2.5 standard was set in 2012, and large swaths of California are still trying to comply. Nine counties in California – including Imperial, Plumas, San Joaquin Valley, South Coast Air Basin (covering Los Angeles, Riverside, San Bernardino, and Orange), San Luis Obispo, and Napa – have not been able to meet the current standard. If the new EPA air rule is adopted, these counties will not stand a chance to meet the standard and fall further behind from realizing their economic opportunities.
In fact, California will be expected to shoulder more than 80 percent of the entire country’s total emissions reductions requirements to meet the EPA’s proposed standard of 10 µg/m3.
Adding insult to injury, even EPA has not identified some of the control pathways to comply with the proposed standard. If the agency itself isn’t sure how attainment will be achieved, is it possible that the agency might also be underestimating the costs of this rule?
The Biden administration’s signature legislative achievement – the Inflation Reduction Act (IRA) supported by both California Senators – is designed to incentivize domestic manufacturing and “re-shore” our supply chains. But how are we going to do that in California if EPA’s air quality regulations make it impossible to invest in new manufacturing?
Representatives from various industries across California, including agriculture, manufacturing, energy, transportation, and water have submitted public comments to the EPA voicing concerns and opposition to this radical proposal. These are the same industries that we need to protect – rather than drive out – if we actually want to preserve California’s economy.
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EPA’s air trends data show that annual PM2.5 levels have declined by nearly 40 percent since 2000. We need to keep our eye on the ball and focus on how we can invest more in California and create jobs in the communities that need it most, rather than trying to manufacture concerns about air quality that is already improving.
Our leaders in Sacramento are doing everything they can to stifle manufacturing. The last thing we need is the federal government buttressing California’s unworkable regulations to make the state even less hospitable to new investment than it already is.
Lance Christensen is Vice President of Government Affairs at the California Policy Center.
This article was originally published by RealClearEnergy and made available via RealClearWire.SUPPORT TRUTHFUL JOURNALISM. MAKE A DONATION TO THE NONPROFIT WND NEWS CENTER. THANK YOU!
