A Cautionary Tale on Energy
The idea of Pennsylvania doing things “the California way” doesn’t make much sense. Unfortunately, Pennsylvanians may not have a choice if the Obama administration has its way.
The U.S. Environmental Protection Agency will soon finalize the Clean Power Plan, which requires states to reduce carbon dioxide emissions by 30 percent by 2030. To meet these drastic reductions – which will have no impact on global temperatures – every state will have to impose California-style taxes, manipulate markets, and enforce shortsighted mandates. These are the same policies that have contributed to the Golden State’s sky-high energy prices and persistently high unemployment.
Take it from a native Californian and former official with the California Energy Commission: You don’t want our energy policies.
In 2006, California passed its landmark energy mandate requiring citizens and industry to reduce greenhouse gas emissions to 1990 levels by 2020. Central to the law is California’s cap-and-trade system, a costly carbon-trading scheme that is the stuff of Enron’s dreams. Another piece is California’s renewable electricity mandate, which requires utilities to purchase 33 percent of their electricity from unreliable sources like wind and solar by 2020.
These programs were supposed to “drive long-term investment” in wind and solar. Instead, California’s green energy dream has turned into a nightmare. Residential electricity prices are 40 percent higher than the national average and eighth-highest in the nation. Expensive energy also contributes to California’s stubbornly high unemployment rate, which, at 6.3 percent, sits a full percentage point higher than the national average.
Additionally, California suffers from an increasingly unreliable electric grid. California’s grid operator has warned that with less generation from conventional sources and more from unreliable renewable sources, “the system becomes increasingly exposed to blackouts when generation or transmission outages occur.”
Despite these ill effects on the economy and the power grid, the EPA and national environmental groups think policymakers in Sacramento got it right. They say California has a head start on the EPA’s grid of the future. However, these observers fail to realize that California’s foolish policies make even less sense for the rest of the country.
First, California is blessed with mild temperatures, so heating and cooling expenses take less of a toll there than in most other places in the United States. Second, California currently imports much of the reliable power it needs. If Pennsylvania and every other state in the country imposed California’s regulatory scheme, we would run out of places to produce reliable electricity. Third, California’s economy does not support energy-intensive manufacturing. Part of the reason the manufacturing industry – and the jobs it supports – left California in the first place is its higher energy costs.
But despite California’s failures, Washington hasn’t learned a thing. The Clean Power Plan calls on states to craft their own compliance plans, and the EPA pretends it’s offering them flexibility. But the rule is so strict that in reality, the EPA is forcing states to impose some mix of California-style capping, taxing, and mandating.
California is no model. It’s a cautionary tale. States that choose to comply will become accomplices in the EPA’s plan to export California’s failed energy policies nationwide, and with predictable results – higher costs, less reliability, and lower standards of living. States that aren’t interested in this outcome should reject the EPA’s demands to submit compliance plans. If policymakers in Harrisburg come up with the same answers as those in Sacramento, they’re asking the wrong questions.
See the article here.
- On July 16, 2015