Small Businesses to Pay More for CARB's GHG Rules

A new study found that small businesses in California will pay an additional $49,691 as a result of the California Air Resources Board's implementation of AB 32.

Citing severe economic impacts, a coalition of small business organizations called for the suspension of the regulatory proceedings to implement California's greenhouse gas program until the report's findings are analyzed and mitigation measures are added to the state plan.

"We support the state's efforts to curb greenhouse gas emissions, but we are very concerned that these costs will apply disproportionally to California small business. Consumers will be hurt and the environmental goals will not be achieved," said Esteban Soriano, chair of the California Small Business Association and a founding member of the California Small Business Roundtable.

The analysis of the state Scoping Plan was led by Sanjay Varshney, dean of the College of Business Administration, California State University, Sacramento and Dennis H. Tootelian, Ph.D., professor of Marketing and director, Center for Small Business, California State University, Sacramento. The study reveals that when the plan is fully implemented, California families will be facing increased annual costs of $3,857.

Varshney explained that the study's cost analysis was based on the California Air Resources Board's own findings, which revealed significant cost increases. The study's findings are consistent with the Peer Review analysis that CARB commissioned, which also concluded that the cost of the AB 32 Scoping Plan would be significant, and that CARB had significantly underestimated these costs.

"Given California's current economic plight, the state must refrain from imposing new fees on taxpayers to pay for an expanded bureaucracy," said Michael Shaw of the National Federation of Independent Business. "When Assembly Bill 32 authorized this program in 2006, CARB promised to develop a greenhouse gas plan that would provide benefits to small business, not bankruptcy."

According to the authors, the study utilized IMPLAN, a widely used economic modeling program that has more than 1,500 active users in the United States and internationally. These include clients in federal and state government, universities, and private sector consultants.

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