Economic Development

OPINION – As California goes, so goes the nation.

This saying about how California is a leader in regulations – particularly standards that promote a cleaner environment – has never been truer than today. And while it’s usually a point of pride, there are out-of-touch national regulations being planned by the Environmental Protection Agency (EPA) that would significantly imperil our manufacturing base if the agency successfully implements them. If that happens, our manufacturing sector’s decline would harm not just us, but the entire country.

The EPA has proposed a change to the regulations for a particulate matter called PM2.5 that is a common byproduct of manufacturing operations. PM2.5 has been regulated for decades and the manufacturing industry has been able to innovate to both comply with regulations. However, this new regulatory proposal surrounding PM2.5 comes at a time when the impact of implementation would cause severe and far-reaching consequences.

California’s manufacturing base is comparable to some countries. There are 35,000 firms supporting 1.2 million jobs that generates more than $300 billion annually. We have the number one shipping port in the nation for the massive number of exports we send overseas. Over the last three decades, California has become a leader in high-tech sectors such as aerospace, electronics, electric vehicle manufacturing, and even advances in the food and beverage industries. In fact, 16% of aerospace jobs and 28% of IT and analytical product manufacturing jobs in the country are in California. And as a result, California’s manufacturing companies are among the best and the most environmentally conscious in the world.

A new regulatory proposal surrounding PM2.5 comes at a time when the impact of implementation would cause severe and far-reaching consequences.

Because of California’s large manufacturing footprint, our state would be impacted more than any other state. A recent study from the National Association of Manufacturers (NAM) details that, if PM2.5 regulations were to tighten, it would create a total economic exposure of more than $30 billion and threaten an estimated 119,000 jobs. That is something the EPA ought to consider in its rule-making process so decisions are not made in a silo.

It’s no secret to anyone reading this that California’s economy got walloped by the pandemic and subsequent supply chain crisis, and these potential compounding issues from this onerous regulation certainly wouldn’t help in our continued recovery. Every sector in the state from agricultural to hospitality to manufacturing struggled mightily, but we proved our resilience and are continuing to recover. But that progress to full recovery will come to an abrupt stop if the EPA’s shortsighted and unnecessary PM2.5 regulation is allowed to move forward.

Even the EPA itself says that the levels of PM2.5 have decreased by 44% since 2000, which means that the current standards are working. In fact, six common airborne particles that are regulated under NAAQS have decreased by 78% between 1970 and 2020. California’s manufacturers are proud to be leaders in this effort, and they will continue to play an integral role in a cleaner environment.

The California Manufacturers & Technology Association believes in a balanced approach to regulations, including those that support cleaner air. But this new rule could cause significant challenges for manufacturers seeking permits for expansions. Additionally, the proposal is likely to negatively impact the construction of new infrastructure projects as funded in the bipartisan infrastructure bill.  Of course, regulations are necessary and improving our air quality is of the utmost importance, but overly burdensome regulations, like the PM2.5 proposal under consideration, harm our members, their employees, their customers, and, by extension, our communities.

The current PM2.5 regulations are working – we know this because the EPA’s own data tells us that. There is no need to push up the regulatory schedule and cause undue harm to companies that are just now finding their footing from the pandemic and fervently trying to ward off another economic slide. We ask that our elected leaders tell the EPA to stop the regulations under consideration and let our manufacturers continue driving a strong economy.

-This OpEd was written by Lance Hastings, CMTA’s CEO & President, and was first published in Capitol Weekly on July 22, 2023.