Saturday, May 23, 2009

Investing in productive environmental legislation and the fear factor

In the Senate legislative debate on reducing green house gas emission, there were presumptions that companies will never consider moving into Washington State because of the potential of the bill restriction on greenhouse gas emission levels. Opponents did not envisage that other factors draw companies into a location, and that regulatory factors could actually be a plus, not a minus. The caps and tax program which allows companies to trade and sell credits for ability to pollute beyond the maximum allowable level could be positioned at a level that is considered a better opportunity cost than what obtains in other states. This therefore may actually help many companies move in and those already here, remain.

The current impact of a caps and tax program to limit greenhouse gas emission in some Northeastern states and in some European countries of the size of Washington State, have not driven many of the polluting firms away from their location. The fear tactic in the argument of the opponents of the greenhouse gas emission bill is not therefore tenable. The major problems related to the financial meltdown and the ongoing sleepy consumer demand may actually drive companies away rather than regulatory factors. When consumer confidence and opportunity for credits continue to decline for companies, they are more likely to close shop or refuse to expand rather than a regulatory factor as the caps and tax program. Many of us who support the bill are expecting that if it ever becomes a Washington State Law, it will not only control pollution but, bring alternative jobs and production processes that do not pollute or destroy the ozone layer.
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