Businesses Running Away From Smog Will Not Cleanse L.A.’s Air : AQMD: Few companies leaving cite an anti-smog proposal as the reason, but those that do are misguided.

In the film classic “Rashomon,” a judge must decide a case, but each witness gives a different story. Only after piecing together the overlapping testimony does he finally derive the truth.

Residents concerned about clean air and the economy are confronted with conflicting claims about why some companies are leaving Southern California, with critics pointing an accusing finger at the South Coast Air Quality Management District’s anti-smog efforts.

But a review of the facts indicates the clean-air program plays only a small role.

A study for the environmental impact report on the region’s clean-air plan concluded it would increase industry prices, on average, by 2/10 of a percent.

A survey of 14 departing firms by AQMD’s Office of Small Business Assistance found that the cost of labor, insurance, rent, immigration laws, and water quality and hazardous-waste disposal rules have been the primary reasons for business relocation. Only four specifically cited air cleanup rules as playing any role in their decisions.

Remember, auto insurance is high for Southern California firms with fleets of vehicles, as well as for individuals.

Workers’ compensation payments in the furniture-making industry equal 19 cents of each dollar paid in wages.

Offers from other states and Mexico include lucrative incentives to relocate. In Mexico, factory worker wages are a fraction of manufacturing wages in Southern California.

Admittedly, the clean air plan calls on businesses to dramatically reduce emissions under rules to be adopted in coming years. But smog here is the worst in the nation. Despite the severe problem, the plan spreads out the cleanup process over a long period, from now to 2007.

For business, the plan is gradual and flexible in that each rule is fine-tuned through open public workshops and hearings before being adopted. The Legislature even requires that the plan be updated every three years.

Under the plan, businesses and individuals alike are to reduce smog-forming emissions by 80%. Every person and industry must do their fair share.

If some firms pollute excessively and refuse to clean up, then sadly we may be better off if they move elsewhere. But no business is being forced to leave.

AQMD’s rules allow businesses a wide range of options for complying with air quality standards. Generally, firms can choose from a long menu of techniques, including low-polluting materials or add-on pollution control devices.

Often rules are adopted with long lead times to allow industry time to plan for the change. AQMD’s 1988 wood furniture rule, for example, gave eight years to meet the most difficult requirements. When immediate compliance is impossible, firms making good faith efforts can seek variances.

Records of AQMD permit activity show that this flexible approach is working. In the 12 months ending May 31, AQMD issued 2,721 permits to build new businesses and facilities. Obviously air quality rules have not stopped firms and entrepreneurs from investing here.

AQMD also makes an effort to help small businesses comply with air quality rules, offering technical information and financing tips. This year, it will initiate a pilot loan-guarantee program for purchasing pollution-control equipment.

AQMD also is co-sponsoring research into new and cleaner technologies. This work is starting to bear fruit, including development of low-pollution paints for the furniture industry and reducing solvent use in electronics manufacturing.

Each of these programs demonstrates AQMD’s concern over the effects of the clean air plan on business, particularly small- and medium-sized manufacturers. The bottom line is that any business that wants to stay in Southern California can.

The region’s furniture industry, for instance, could save as much as $1.8 million a year by 1996 by meeting AQMD’s requirements through more efficient use of paint, fewer health problems by reducing worker exposure to toxic solvents, lower insurance costs by eliminating flammables and reduced hazardous waste disposal costs.

Relocating to hide from air quality rules ultimately won’t work because 133 million U.S. residents live with unhealthful air, and Congress is moving to require rules similar to AQMD’s.

The only real solution for business is to assert leadership and help solve the region’s environmental problems.