Air Board’s proposal ignores the law, hurts the people of Merced

The people and dairy industry of Merced County are my heritage. As a third-generation dairyman born and raised in Los Banos, I understand how new government regulations can impact the dairy industry. From my time on the Los Banos City Council, I also see how California’s rising costs of living are hurting families and businesses.

That’s why I am calling on the California Air Resources Board (CARB) to follow the clear intent of the Legislature rather than ignore it, causing increases in the costs of energy and fuel, including adding as much as $1.09 to the cost of a gallon of gasoline. These cost increases will harm consumers, farmers and businesses of all kinds throughout Merced County and California.

CARB is called on to manage the cap-and-trade program which requires businesses to obtain a credit for every ton of carbon they produce. Over time, as the available credits decline, so will carbon emissions. But every credit has a price, and economists predict rising credit prices will translate into greater costs we all pay for gasoline, diesel and electricity.

That’s why our elected lawmakers passed a law last year ordering CARB to set a limit on the price of credits. This was a carefully vetted, bipartisan law designed to balance California’s climate goals with the state’s economic realities. The law directly requires CARB to set a “price ceiling” that specifically will “avoid adverse impacts on resident households, businesses, and the state’s economy.”

The health of our economy depends on CARB and the Legislature making sure this program is implemented as intended.

But CARB is ignoring the will of the Legislature by proposing a price ceiling that is so high that its program will drive astronomical increases of energy costs before carbton-credit prices reach their limit. Predictably, those soaring costs will cripple California’s economy in numerous ways.

Let’s start with the dairy industry. Costs of energy are a major, daily operational expense at all dairy farms. Milk cooling, water heating and vacuum pumps place unique demands on our electricity consumption. Shipping and distribution require diesel and gas. And rising production costs threaten jobs and wages not only in Central Valley milking sheds but throughout California’s food economy, as well as placing upward pressure on consumer prices of milk, cheese and other dairy products.

CARB should understand our industry produces more than just an important food source. Dairy farms also employ an estimated 55,000 Californians in milk production and processing jobs, and each of those workers supports another six jobs beyond the farm. From its supply chain to the neighborhood grocery store, California’s dairy industry annually generates an estimated $21 billion in economic activity that benefits communities in every region of our state.

CARB’s climate proposal threatens these economic benefits. But crippling California’s dairy farms is just the tip of the iceberg compared to the additional expenses Californians will be forced to pay. For example, CARB’s own analysts say their proposal could add up to $1.09 to the cost of a gallon of gas. In a state already struggling with the highest rates of poverty in the country, these burdens will fall on everyone but will hit our most vulnerable communities the hardest.

I have constituents commuting to work every day to earn minimum wage. Imagine what paying an extra $1.09 for every gallon of gas is going to do to their ability to make ends meet.

We need CARB to follow the law our elected representatives passed last year, and our elected legislators should make sure cap-and-trade is being implemented as intended. CARB should set a price ceiling that actually avoids adverse impacts on residents and the economy. Doing anything less is only paying lip service to the Californians you are driving over the brink.