By Janelle Germain

With the effects of human-made climate change already in rapid effect — like rising temperatures and sea levels, extreme weather events, and the depletion of biodiversity and resources — California has set ambitious goals to implement policies that will contribute to a more sustainable future.  

In an attempt to achieve 100% clean energy by 2045, the state’s energy policies have demanded significant cuts in fossil fuels. Achieving these reductions means switching from greenhouse-gas emitting energy sources such as oil and gas to renewable sources like solar, wind and hydropower to produce electricity.

While the need for more of these renewable forms of energy are immediate, shifts in energy policy have created some inadvertent economic strains on small businesses, according to representatives of Levanta Tu Voz, a group that works with Latinos to advocate for fair and affordable solutions. The group is funded by Western States Petroleum Association.

While some small businesses express concern over these shifts, others who advocate for the move to electric say making the switch can lead to lower operating and maintenance costs in the long run, and garner incentives and tax breaks while reducing harmful environmental impacts. 

California Clothing Recyclers in Sacramento is one business struggling to adapt to new environmental policies, said co-owner Marcus Gomez. The business works to reclaim used clothing and shoes by purchasing items from secondhand stores and exporting them out to nonprofits in countries such as Nicaragua, Costa Rica and Guatemala in order to extend their lifespan and be reused.

Gomez said the state doesn’t do enough to consider the logistical or financial impacts of shifting environmental policies on small businesses. For example, he expressed concerns over upcoming restrictions on the use of diesel trucks and loading equipment, something that is crucial to his everyday operations. The California Air Resources Board (CARB) Advanced Clean Fleets Regulation aims to ban the use of all diesel-powered commercial trucks in California as of 2036, requiring a shift to electric trucks.

While CARB is able to provide grants to some businesses through programs like the 2024-25 Funding Plan for Clear Transportation Incentives to help offset some of the costs, according to Gomez there are additional taxes on those grants for some businesses. Costs like these may be unrealistically high for some small businesses, especially considering the multiple other areas that will need funds in order to meet regulatory standards. This forces business owners to face tough decisions all at once, which they may feel unprepared for in terms of financial support and time. 

Gomez is worried about how the transition will eventually affect his business, adding that he also has concerns around charging stations for electric vehicles and infrastructure.

In order to support California’s climate goals, the Sacramento Municipal Utility District plans to build more infrastructure to better ease this electric transition.

SMUD has opened one of the largest high-speed EV charging hubs in the state at the Power Inn light rail station that provides charging for both passenger and commercial vehicles. SMUD offers charging incentives for businesses that install new public-access EV charging stations and blueprints for medium and heavy duty zero-emissions vehicles are also currently in development, according to Gamaliel Ortiz, public information specialist for SMUD. 

“Expanding accessible charging infrastructure remains a top priority in our strategy to support the electric transition while reducing emissions and improving air quality,” Ortiz said. 

Additionally, SMUD offers multiple forms of support to businesses interested in transitioning to electric. Their Complete Energy Solutions program aims to remove barriers for businesses by providing free assessments, personalized energy reports and contractor choices. The addition of incentives and rebates helps lower the initial financial barriers that prevent many businesses from investing in clean energy technology, according to Ortiz. 

Oscar Garcia, senior vice president of the California Hispanic Chambers of Commerce, said small businesses across the state consistently express concerns about rising costs related to tightening regulations. 

“With the state’s aggressive push toward clean energy and sustainability, local, small and minority businesses are often required to adapt quickly — sometimes without sufficient time or financial support,” Garcia said. 

Garcia stresses the crucial nature of policymakers and regulatory bodies to understand the financial constraints that small businesses face as a result of these transitions. He advocates for increased levels of support for small businesses as including practical timelines, financial incentives, grants or low-interest loans with these policies to help small businesses comply without risking their survival.

“Supporting small and minority businesses through the transition, rather than penalizing them for not adapting fast enough, is key to achieving long-term sustainability goals without sacrificing local economies,” Garcia said. 

This story was written by Janelle Germain, a student at American River College.

This story is part of the Solving Sacramento journalism collaborative. Our partners include California Groundbreakers, Capital Public Radio, Hmong Daily News, Outword, Russian America Media, Sacramento Business Journal, Sacramento News & Review and Sacramento Observer. Support stories like these here, and sign up for our monthly newsletter.