Gov. Jim Doyle and his Global Warming Task Force committee have introduced legislation to be considered this session that would increase the state’s renewable energy portfolio to 25 percent by 2025.
There is no disputing that alternative and clean energy sources present a tremendous growth opportunity for any business that can introduce cost-effective technology that will lessen our dependence on fossil fuels, however this mandate is not the correct policy path for the State of Wisconsin.
The Independent Business Association of Wisconsin (IBA-W) stands against this piece of legislation due to the net loss of jobs that this bill will have on the manufacturing base of this state based on the necessary increase in the price of energy to support the mandates.
Wisconsin utilities produce nearly 60 percent of their energy from coal, which is one of the leading culprits of carbon emissions, but also the most cost-effective way of providing for our energy needs. Wisconsin presently ranks slightly below the national kilowatt per hour average at a cost of 9.57 cents. Without the technologies to effectively replace coal at a cost-competitive pricing point, the price of energy in Wisconsin will have to go up. There is great potential for electrical rates to more than double with the enactment of this legislation.
Recently, the Beacon Hill Institute for Public Policy at Suffolk University found that the proposed measures could have the exact opposite of a “Jobs Bill.” According to Beacon Hill, the Global Warming Task Force recommendations would cost Wisconsin 43,000 private sector jobs and $1.59 billion of wages. Wisconsin’s paper industry alone could lose 1,934 more jobs.
The IBA recognizes that there could be “green jobs” created by this measure and the supporters of this legislation have estimated that number to be 15,000 potential public and private sector jobs. Based on the two projections, that is a net loss of nearly 30,000 jobs. There are several cutting-edge alternative energy and energy efficiency companies that are within our state such as Johnson Controls Inc., Orion Energy Systems, Energy Composites Corp. and many others, and we should certainly encourage the growth of the businesses that are involved in this field.
The facts are that the State of Wisconsin has a higher concentration of employees in the field of manufacturing than any other state in the union, with 15.6 percent of our workers earning a living in this field. This number is already down from 17 percent of workers at the beginning of the Great Recession.
The last thing that our manufacturers need for their competitiveness is a dramatic increase in their energy bills. The consumption of energy is one of the highest operating expenses that a manufacturer encounters and a Clean Energy Jobs Mandate may benefit a select few companies within our state, but it will also put the vast majority of our manufacturers at a competitive disadvantage which will lead to more manufacturing jobs being shifted to areas of the world with less restrictions and a more cost competitive structure for operations.
The IBA is not qualified to debate the alleged science of global warming, and while the supporters of this bill claim that the cost of doing nothing to address climate change is far greater than the cost of implementing this legislation, it should be noted that the 65,503 square miles that the state of Wisconsin encompasses represent a mere 2 percent of the land mass of the entire United States. Any restrictions that Wisconsin imposes on itself would be infinitesimal on the effect of overall carbon levels in the atmosphere. The state of California has tried this “go at it alone” attempt to reduce carbon emissions with legislation passed in 2006. Mired with a 12.3-percent unemployment rate, the state of California is attempting to put a measure on the ballot for this November to repeal the legislation in order to spur job growth. The state-by-state implementation of this type of legislation presents competitive disadvantages in retaining and recruiting businesses and the state of Wisconsin should not preempt any national federal mandates and make the same mistake as California.
Bart Adams, vice president of state programs of the Independent Business Association of Wisconsin (IBA-W), is managing shareholder for Kolb + Co.