Report Reveals High Costs for Small Businesses under California’s 2006 Global Warming Solutions Act-

A study was recently performed to explore the 2006 California Global Warming Solutions Act and how it affects local business owners. Funded by several small business groups and written by a university dean, the analysis revealed that California’s battle to curb climate change will eventually cost small businesses $183 billion per year in lost output and about 10 percent of state production. At present, California has the largest population and economy in the nation. However, since the climate change law passed in 2006, the state’s economy has significantly destabilized; making the bylaw a straight target for deprecating critics. The proposed plans intend California to reduce greenhouse gas emissions by 10 percent by the year 2020, with provisions outlining forest protection and remodeling cities for more efficient roadways. The standards are unquestionably outstanding for statewide sustainability, although the study’s writer argues that costs associated are going to be passed onto the California taxpayer, with small businesses taking on the brunt of the outlay. “This is going to have a huge impact on the state’s entrepreneurial spirit,” said Sanjay Varshney, author of the study and dean of the Business College at California State University, Sacramento. He maintains that businesses already under pressure from economic impacts due to the recession would pull out and small organizations would need to shut down as expenses will slowly surpass earnings. The study estimates a 10 percent increase in costs for transportation, fuel, housing, food and utilities once the terms of the act are complete – calculating $63.9 billion in direct costs to small businesses, ultimately causing $182.6 billion in total loss of productivity; particularly in manufacturing, professional services, recreation, as well as arts and entertainment. The study did not calculate advantages to the law, stating that expenditure would come first while benefits may never transpire. However, there are many individuals condemning the study; claiming that the law would not have a major effect on California’s economy because of balancing aspects of the plan. Climate law enthusiasts emphasize that lower costs associated with fuel from more efficient cars and an increase in green energy jobs will thrust the state’s dwindling economy to soaring heights. “This contradicts the track record of three decades of improvements in energy efficiency in California which has saved individuals and small businesses alike billions of dollars,” said climate act supporter Stanley Young. As we await California’s climate solutions act conditions and the senate’s decision on the nationwide Clean Energy bill, we can only hope that critics can look past any immediate monetary sacrifices and explore deeper into what is necessary to sustain the future of the free world.