Arnold Schwarzenegger ran on a platform of bringing businesses and jobs back to the state. To do so, the new governor will need to terminate a multitude of economically damaging policies left over from the Gray Davis era. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

One such legacy is a law, signed by <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Davis last year, which could significantly raise the cost of owning and operating cars and trucks in California. The law directs the California Air Resources Board (CARB) to produce a plan to reduce greenhouse gas emissions--principally carbon dioxide (CO2)--from new automobiles. The agency is to achieve "maximum feasible" reductions that somehow are also "cost-effective." But how CARB will implement the law is anybody's guess.

This delegation of broad regulatory authority is an open invitation to impose hidden taxes on automobile ownership and use, especially on families who buy SUVs, light vans and station wagons. These hidden taxes could take several forms, but the result will be the same as the car tax increase that Schwarzenegger just revoked: to make travel more expensive.

CARB's actions will have no impact on global greenhouse gas levels. Indeed, Davis never intended for this pointless but expensive law to do anything serious about potential global warming. Rather, it was intended to embarrass President Bush for his alleged "inaction" on global warming, and thus ultimately force him to take actions at the national level that are as foolish as California's.

It was wrong for the Davis administration to try to use California's huge clout to strong-arm the federal government on issues within federal jurisdiction. The climate policies being pursued by President Bush and Congress are a reasonable response to what is at worst a potential problem.

Conversely, attempts to cap emissions will inevitably lead to limits on energy use. Rationing energy in an energy-starved world cannot work. If global warming does turn out to be a real problem, then President Bush's emphasis on developing new technologies is the right approach. Long-term technological transformation will very likely move the world away from coal, oil and natural gas whether global warming turns out to be a real problem or not. And it probably will not.

The alarmist climate-change scenarios are based on questionable science. But the claims are ominous enough to have caught the public's attention. Bad news sells, and the major media feed the perception that there is a scientific consensus in favor of global warming alarmism. In fact, the alarmist case has been continually weakening as scientists discover more about natural climate variability and uncover more and more defects in the computer models upon which predictions have been based.

One of the most valuable things the governor could do to clean house is to appoint people to lead CARB who strongly support his pro-consumer, pro-economic growth beliefs. Surely, there are still many capable citizens in California who are skeptical of the claims of the eco-catastrophe establishment and who understand that making people poorer now is the wrong way to deal with potential climate change - or, indeed, any other problem - in the future.

California's air-quality problems are real, but capping carbon emissions will not help to solve them. Carbon dioxide is plant food, not an air pollutant. Further, making new cars more expensive via CO2-reduction mandates would hinder air-quality improvement by encouraging people to hang on to older, more polluting cars longer - a consumer response known as the "jalopy effect."

The deliberate confusion of CO2 emissions with air pollution makes pursuing reasonable climate policies more difficult, especially in California, where smog is still a major problem. However, the Schwarzenegger administration must reject global warming as a pretext for stealth taxes on Californians if the state is going to emerge from the economic collapse engineered by Davis and other Sacramento politicians. Terminating California's other car tax would not only improve the business climate in California, it would also give a tremendous boost to policy-makers throughout the country who champion economic growth and affordable energy.