People frequently argue that California should be the model for the nation’s energy use, because it has managed to keep per capita energy consumption flat over the past couple of decades. Not so fast, says Tom Tanton of the Pacific Research Institute and the Institute for Energy Research. In a paper published today by the Competitive Enterprise Institute, he reviews California’s policies and show that they have had significant costs as well as other detrimental effects and are likely to have even higher costs and even worse effects in the future. California’s policies have led to the highest electricity and gasoline prices in the continental U. S. and contributed to the de-industrialization of California.
While per capita electricity consumption has remained flat, total electricity demand has increased 65 percent since 1980.
Tom also points out that California has certain factors working that make its so-called success largely illusory:
First, California’s mild climate aids dramatically in reducing consumption for heating and cooling of homes and businesses.
Second, California’s economy has undergone a structural change, away from energy-intensive manufacturing to less energy-intensive services, which are also more reliant on having a consistent electricity supply. This shift is due in part to manufacturing firms leaving the state because of high energy prices.
Third, while the California economy has grown during the past 25 years, it has also become more volatile.
Fourth, California’s high residential property prices tilt the housing market towards smaller homes and apartments and encourage more people to live in the same household.
Tom is to be congratulated for such an important contribution to the debate.