Capital Ideas: Latest California Climate Change Plan Doubles Down On Job-Killing Policies

Capital Ideas: Latest California Climate Change Plan Doubles Down On Job-Killing Policies

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Sacramento’s response to President Trump’s Inauguration Day was to release the latest version of its heavy-handed plan to stop global warming. The state’s updated approach to environmental policy will be about as effective in stopping climate change as another anti-Trump riot and far more economically damaging.

The 2017 Climate Change Scoping Plan Update issued by the California Air Resources Board (CARB) “establishes a proposed framework of action for California to meet the most aggressive climate target in North America: a 40 percent reduction in greenhouse gases by 2030 compared to 1990 levels.”

CARB calls it “the second chapter to California’s groundbreaking efforts to fight climate change,” the first chapter being a “scoping plan” required by 2008’s Global Warming Solutions Act, which demanded that the state reach 1990 levels of greenhouse gas emissions by 2020.

Senate Bill 32 requires the state to make even deeper emissions cuts and was signed by Gov. Jerry Brown in September. It extends by a decade state government’s cap-and-trade program. Under it, carbon dioxide emissions permits are auctioned by the state to power plants, large industrial facilities, and other heavy carbon producers. The buyers can then trade among themselves. Over time, the total allowances available are decreased.

CARB calls this “market-based regulation.” But it is in fact a tax. Since its enactment, the state has raked in $4.4 billion, money that businesses cannot use to invest or create jobs.

The Pacific Legal Foundation is challenging this likely-unconstitutional tax in court. They argue that cap-and-trade puts employers in a difficult situation. They can either “bid significant amounts of money for the privilege of continuing to emit carbon dioxide” or they will “be faced with closing their doors in California, laying off their employees, and moving their businesses to other states.”

While it’s plausible energy companies will bear some of the burden, it’s more likely that, as Bloomberg Intelligence analysts have noted, “most of the company’s allowance costs will probably be passed along to consumers in the form of higher fuel prices.”

The San Francisco-based Energy and Environmental Economics says that state requirements to cut emissions to 26-38 percent of 1990 levels by 2030 could cost the California economy $23 billion a year. How much more will it cost to reduce emissions by 40 percent below 1990 levels, as required by SB 32? The economy could be crushed.

If in continuing its pursuit of unrealistic climate goals the state follows the Obama administration’s Clean Power Plan, living standards will erode, too. A Pacific Research Institute report found that under that plan, the power bills for some at lower-income levels – those who can least afford it – will be 9 percent higher.

California cannot alone save the world from global warming. As has been said before, if tomorrow Brown ordered every power plant, automobile and industry in the state to be permanently shut down, it wouldn’t affect global temperatures in a year, a decade or century. Only 1 percent of the world’s total greenhouse gas emissions are generated in California.

Policymakers are acting as if there’s a climate emergency, but there’s no evidence a crisis is unfolding. It’s also a fact that the computer models driving major policy changes in Sacramento and other halls of power around the world are simply unreliable.

At the signing of SB 32, Brown bragged that the climate plan is “farsighted.” But it’s so myopic and intellectually vacant that it would never survive an honest cost-benefit analysis. It will produce no benefits and certainly carry costs.

At some point policymakers will have to end their long run of unforced errors. Overreaching, hyperactive government won’t restore California’s fading luster.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.