California’s clean energy law will generate $4.6 billion in revenues and create 15,000 jobs for up to 50 percent of the state’s small service businesses by 2020, according to a new report by nonprofit group Small Business Majority.
The report reveals that the Global Warming Solutions Act or Assembly Bill 32 will spawn energy efficiency investments and new innovations that are expected to reduce consumers’ expenses on electricity and gasoline. This, in turn, will free up consumers’ cash for local spending on services, with an estimated $1,115 allotted for every employee in California’s small service sector.
The study affirms the conclusion made by a previous report of The Brattle Group stating that the legislation will have minimal economic bearing on small businesses.
“Under A.B. 32, California’s small businesses will be able to take advantage of the increased investments, innovation and energy efficiency savings that the law will generate,” said John Arensmeyer, founder and chief executive of Small Business Majority.
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“They’ll also see more demand for the products and services they provide, which will help them grow their businesses and create jobs. Not only is this good for small businesses, but for the state’s economy overall,” he added.
In addition, the bill will allow mainstream small businesses to green their opportunities, provide brand differentiation from competitors and acquire strong customer loyalty.
The global warming law is also expected to raise spending on non-energy purchases through expanded energy options, which will improve locals’ income by $2 billion annually.
Sixty-eight major investors, which manage a total of $415 billion in assets, all showed their support for the policy. They issued a statement that opposes Proposition 23, the California ballot initiative that aims to delay the implementation of the assembly bill.
The signatories include 18 California-based companies, such as Kleiner Perkins Caufield & Byers, Catholic Health Care West and VantagePoint Venture Partners.
“This policy certainty, however, would be eliminated if Proposition 23 passes. It would cause California to lose billions of dollars of investment and thousands of jobs to competitors like China, Japan, Germany or to other states in the country that have more stable commitments to clean energy policy,” according to the investors’ signed statement.
The investors pointed out that the bill paved the way for $9 billion worth of investments in California’s clean technology sector since its enactment in 2006. Halting the implementation of the bill will lead to increased air pollution, related public health risk and economic costs.
According to the American Lung Association, air pollution is responsible for thousands of premature deaths, 9,400 hospitalizations and over 300,000 respiratory illnesses in California households.
