California’s Economic Suicide

Last fall, California Governor Jerry Brown signed a law requiring his State to reduce its greenhouse gas emissions 40 percent below 1990 levels. That ratchets the State’s already severe limits down even tighter, now requiring a reduction to levels not seen since the 1950s or earlier. Some are beginning to understand that it cannot be done in the modern era without extreme new regulations, which could quite literally give the State power to control nearly every detail of life.

James Sweeney, director of Stanford University’s Precourt Energy Efficiency Center, warned that the requirement will result in a much more fragile economy. “Meeting the requirement will require severe restrictions, far beyond those seen to date,” he said. A cabinet-level official agreed that “it is the biggest thing we have done yet in sheer volume. It requires a level of coordination between different agencies that we haven’t seen before.”

One Los Angeles Times writer says officials are discussing rules to determine the kind of houses and businesses that might be allowed, as well as automobiles. They may need to require people to limit miles driven, to use public transportation, and to walk or bicycle to work. The State is poised to dictate how much and what kind of energy people can use, and even what kind of food can be grown on the State’s farms.

The legislature cited “evidence” that the new requirement will help limit global temperature increases to 2 degrees. That’s hard to believe, since California only produces about 1 percent of the world’s total carbon emissions, so a 0.4 percent reduction is virtually meaningless environmentally. In response, “Governor Moonbeam” Brown – never to be denied his optimism – claims other countries will follow California’s lead, though there is absolutely no evidence to support that hope.

In fact, China’s global economic strategy is based on building new coal-fired power plants; it has been involved in 240 coal power projects in 65 countries since 2001. Similarly, India is building dozens of new coal-burning power plants, despite its voluntary emission reduction targets under the Paris agreement. In both countries, several billion people are finally getting off bicycles and into cars, obviously not following California’s example. California has a much more energy-efficient economy than most of the world, yet China and India are apparently not envious.

Indeed, the only really measurable result of the regulatory nightmare about to begin in California will be the slow and painful death of economic prosperity. The State’s Air Resources Board (in charge of producing the new regulations) says it will cost the economy up to $14 billion and perhaps 102,000 jobs. It will likely be much worse. The construction sector alone says it may lose 75,000 jobs in the short-term, and the Farm Bureau openly wonders whether agriculture has any place in the State’s future. That is a shocking analysis, considering that California is the fruit and vegetable basket of the nation.

The truth is that nobody can really accurately estimate the long-term impact. That’s because most economic models are based on wishful assumptions: that the emission targets can be met, and that new technologies will be implemented efficiently. But that is not what will happen. More likely, businesses and jobs will simply move away. This is still mostly a free country, with business governing themselves in a free market, and people free to move wherever they wish. Consider what high taxes and oppressive regulations, along with stiff competition from elsewhere, did to Detroit, Buffalo, and Dayton.

Economic development leaders across the country are salivating over the prospect of attracting California companies looking for a friendlier business climate. Many have already moved. In 2000, that State produced 5.6 percent of all U.S. manufacturing investment, but today it’s only 1.8 percent, according to the California Manufacturing and Technology Association. That organization predicts that “over the long term, manufacturers will be choosing to put their money elsewhere.”

Why would the people of California allow their leaders to commit such economic suicide? The likely answer is that most people simply take for granted the conveniences of modern life, without thinking much about their source. We live in comfortable homes with heating and air conditioning, change dark to light with the flip of a switch, enjoy hot and cold running water, brew our own coffee, drive ourselves wherever we want to go, and buy products from all over the world at local stores – including produce not in season.

All of that is made possible by oil, gas, and coal – supplying about 90 percent of America’s energy. We are so use to a comfortable lifestyle that we don’t even associate these conveniences with energy, much less any specific source. Many people just imagine they can live without it. In California, they may be sacrificing their way of life on the altar of political correctness.

A version of this column originally appeared in the Grand Junction Daily Sentinel June 16, 2017.