Schwarzenegger, Newsom mark climate bill's anniversary

Signed by Schwarzenegger on Treasure Island in San Francisco in 2006, Assembly Bill 32 — the California Global Warming Solutions Act of 2006 — established the nation’s first comprehensive program to cap and reduce greenhouse gas emissions. The goal was a reduction of emissions to 1990 levels by 2020.

At the time of its signing, the legislation drew high praise from major environmental groups that sponsored it. Sheryl Carter, Western energy programs director for the Natural Resources Defense Council, noted in a joint press release that "the world is literally watching as we take this historic step against global warming," while Tom Graff, California regional director of Environmental Defense, called the enactment "a score one for humanity."

Reflecting on the anniversary, Schwarzenegger defended the state's pioneering trajectory and the creation of its carbon market, arguing that environmental regulation has coexisted with broad economic expansion.

"We have shown to the world what a subnational government, a state, can do," said the Republican, known for starring in movies such as the "Terminator" films and "Total Recall" before his venture into politics.

Schwarzenegger noted emissions reductions and regulatory certainty have helped drive business investment.

Newsom echoed those sentiments, pointing to the state's economic standing and positioning California's regulatory framework as a necessary counterweight in what he called the absence of federal leadership. The Democratic governor highlighted that the state has extended its cap-and-invest program through 2045 and pointed to surging investments in renewable energy and battery storage.

"We're proving the genius of 'and' versus the tyranny of 'or'," Newsom said, asserting that the state's climate policies have fueled job growth and technological innovation.

Newsom was mayor of San Francisco in 2006 and was there at Treasure Island for the bill signing.

According to the California Air Resources Board, the lead agency charged with implementing the law, AB 32 covers major greenhouse gases. That includes carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. CARB says the law relies on a multi-pronged approach of direct regulations, market mechanisms, and strategic investments funded through cap-and-trade auction proceeds. 

However, critics argue that the political narrative overlooks the tangible financial burdens carried by everyday residents and businesses.

Winegarden, senior fellow in business and economics at Pasadena, Calif.-based Pacific Research Institute, pushed back against the celebratory narrative, emphasizing that the conversation frequently ignores the high costs imposed on Californians.

"The energy conversation doesn't seem to consider the costs Californians pay thanks to the state's approach to global climate change," Winegarden told The Center Square in an email Wednesday. "While emissions have declined a bit faster than the national average, residents are paying the price in terms of much higher energy costs. The success of a policy, or lack thereof, has to consider both the costs and benefits."

Winegarden noted other states have achieved greenhouse gas reductions faster than the national average without adopting California's specific regulatory approach. He said that fact raises fundamental questions about the program's overall net benefits.

Furthermore, Winegarden cautioned that current leadership conflates organic economic growth stemming from the state's legacy asset base — such as the tech sector anchored by Silicon Valley — with the outcomes of current public policy.

"Importantly, due to problems such as the lack of affordability in the state and stagnant job growth, people are leaving California on net,” Winegarden said. “So are many businesses."

Winegarden warned that as competing innovation hubs in regions like Austin, Texas and North Carolina's Research Triangle continue to develop, California's historical comparative advantages face steady erosion, potentially setting the stage for weaker economic growth ahead.