California’s Energy and Climate Agenda: California Dreamin!

The land of make believe is an economic nightmare that can’t have a happy ending on a Hollywood set. A report by the California Budget Project concluded that “government is dragging down the economy.” A survey of business executives ranked California the worst state in America to do business. It ranks last in new business creation and has the highest state income tax, the highest sales tax rate, one of the highest gasoline tax rates, and the 8th highest corporate income tax rate.

Is it any wonder that its unemployment rate is more than 20% higher than the national average? Moreover, California has more than twice as much debt as any other state. It energy and climate agenda will make a very bad situation worse.

The lessons “being learned on the West Coast” as well as those that should have been learned from the EU climate and energy policies are that they don’t work, don’t promote economic growth, and penalize citizens who are trying to climb the economic ladder as well as those on fixed incomes.

California imports about 40% of its electrical power and that number will probably go higher as instate power generation will get more costly as a result of cap and trade and its renewable standards portfolio. California may be the Golden State but its energy policies look like they were imported from the Federal Republic of Germany which has among the highest electricity prices on the continent and is driving private investment elsewhere. If Germany’s economy looks good, it is only because the other EU economies are in the tank.

There are a lot of super wealthy people who live in California because of its climate and attractive cities and can afford the high costs of pursuing environmental purity. That is not true for most of its citizens. They are experiencing economic pain and there is no silver lining on the horizon.

What are these policies going to accomplish beyond giving the elite a feeling to “doing the right thing”? Nothing. Air quality in the United States continues to improve each year without the benefit of California’s excesses. Carbon dioxide levels will not return to 2005 levels until 2035 while global emissions will continue to grow as a result of economic development by emerging economies. American Enterprise Institute economist Ben Zycher using the models of the gloom and doom crowd has demonstrated that reducing US CO2 emissions by over 50% would have a negligible—0.1 degrees—on global temperatures in 2100.

Instead of imposing heavy handed, ineffective energy regulations on California citizens and businesses, the state would do the nation better by adopting policies that unleash the creative potential of many of Silicon Valley businesses and its world class universities.

There is a simple bottom line that needs to be remembered. Policies that promote abundant, affordable, and high energy density energy promote economic growth while policies that lead to scarcity and high energy prices do just the opposite. “California dreamin’” may love wind and solar but screen writers cannot change the scientific realities that they are not suited to meet base load power needs.


This article appeared in the National Journal’s Energy Insiders weblog at

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