In February, California State Auditor Elaine Howle released a scathing report that scorched the California Air Resources Board for failing to demonstrate that its costly programs reduce greenhouse gas emissions, create jobs or have socioeconomic benefits.
It’s important reading, because California’s wildly expensive model is about to go national.
The premise of California’s policy is that government requirements and regulations to reduce greenhouse gas emissions will control climate change, which otherwise will kill us all in exactly three presidential election cycles.
Does the policy work? Maybe the better question is, “Work for whom?”
State law requires steady reductions in greenhouse gas emissions and designates CARB as the agency responsible for making it happen. CARB created a cap-and-trade program that requires entities that emit greenhouse gases to buy permits for emitting each ton of GHG. Gradually the number of permits is reduced by regulators, theoretically making the price of the remaining permits go higher, theoretically raising the “price of carbon” and making it comparatively more cost-effective to buy expensive new technologies that theoretically reduce greenhouse gas emissions.
California calls this a “market” approach because the businesses, which include manufacturers, utilities and refineries, may choose how they will comply. By this definition, armed robbery is a “market” approach. “Your money or your life” isn’t just a Jack Benny joke, it’s the model for the cap-and-trade program.
The money paid for the permits goes into the state’s Greenhouse Gas Reduction Fund, and state lawmakers decide how to spend it. They’re spending 25% of the annual revenue on building the bullet train.
Lawmakers have directed CARB to spend some of the money creating jobs and socioeconomic benefits in disadvantaged communities, but the state auditor slammed the agency for failing to collect data “to determine whether the programs actually provide those benefits.”
Maybe they don’t collect the data because they already know the answer.
Who benefits from this complex and costly regime? Anyone who is trying to make money from selling something green that people are not choosing to buy, often because of a high price. Government mandates and financial incentives can turn green money-losers into green cash machines.
So when President Joe Biden announced this week that he has a set a goal of cutting U.S. carbon emissions to half the 2005 levels by 2030, many companies were ready with glowing praise. To take just three examples, news releases said the president’s goal is “sending a clear market signal,” “signals a new trajectory,” and “will help catalyze a net-zero future.”
Force is the key. Without government coercion, people might make their own judgment about the validity of claims that we’re all going to die in three presidential election cycles unless we pay more for everything we buy.
One warning flag came from the National Rural Electric Cooperative Association, which called the administration’s goal of an emissions-free electricity sector by 2035 “overly ambitious.”
“What are going to be the commercially-viable, always-available-and-affordable, carbon-free technologies to provide electricity?” asked NRECA CEO Jim Matheson. “People can set goals … but in our business, we think about that person on the other end of the line, and are the lights going to go on and can they afford it?”
Matheson explained that the federal policy of using tax incentives to encourage the development of wind and solar power is unhelpful to municipally-owned and cooperative utilities that don’t pay federal taxes. “So we sign a power purchase agreement with a third party,” Matheson said, and “the third party takes the tax incentive and makes a profit.”
And probably sends out news releases praising the policy.
Some groups thought the president’s goal fell short. A statement from ActionAid USA complained, “We know this is not enough, and meanwhile we are still waiting for a long-term commitment on the equally important issue of international climate finance.”
We can probably guess what that means.
Part of the game of selling you on the idea that this is “cost-effective” is inventing new costs. S&P Global released a research report that claimed major global companies are “falling 72% short of required emissions reductions to achieve the Paris Agreement on climate change” and “face up to $283 billion in carbon pricing costs and 13% earnings at risk by 2025 under a high carbon price scenario.”
But these are all arbitrary, government-set charges, or potential charges, to meet arbitrary, government-set targets, to control the surface temperature of the earth, which may well be utterly impossible no matter how much money you are required to contribute to “international climate finance.”
Where is the demonstrated proof that this policy works? It’s not in California. This state, which political leaders claim is leading the nation in climate policy, actually leads the nation in electricity imports.
For comparison, consider Utah’s new “all of the above” energy policy. Lawmakers just expanded tax credits for new capital investment in rural counties and for the first time made the credits available to oil, gas and mining operations. They added tax credits for hydrogen production from conventional fuels including coal and natural gas. They passed a law that requires the state to ensure adequate supplies of dispatchable energy, which means they’re creating a mandate for the type of 24/7 generation provided by plants that run on coal and natural gas. They even appropriated $100,000 for a study to show the economic impact from the energy and natural resources industries.
