Susan M. Trager: AB32 Empowers State Regulators

By SUSAN M. TRAGER

As we head down the stretch to the November 2 election, Proposition 23 has become the top initiative people are talking about. The debate mainly focuses on whether it would create or kill jobs.

Prop. 23 affects AB32, the Global Warming Solutions Act of 2006, which cuts greenhouse gas emissions in the state by 25 percent by 2020. If Prop. 23 passes, AB32 would be suspended until state unemployment, currently 12.3 percent, drops to 5.5 percent or lower for a year.

Proponents cite studies, such as one by the state Legislative Analyst, showing that AB32 would put too many new burdens on business, thus killing jobs. Those backing AB32 insist that it is encouraging companies to create “green” jobs, giving California an edge in a vital new field.

A better way to look it AB32 is to see it as a type of industrial policy. According to the Concise Encyclopedia of Economics, industrial policy gives “government officials additional authority, as well as the necessary fiscal and regulatory powers, to directly alter national industrial structures.”

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