Energy

California voters could reverse state level regulations modeled after Kyoto Protocol

Kevin Mooney Contributor
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Americans living in the most industrialized regions of the country have a special stake in the outcome of a California ballot initiative that would suspend implementation of that state’s global warming law until after unemployment drops, according to policy experts who favor a free market response to energy needs.

Despite being heavily outspent, the supporters of Proposition 23 appear to be within range of an Election Day victory that could help to unravel job killing regulations in other states that mirror the practices of the European Union in their estimation.

As an added benefit, the California electorate could also help insulate other parts of the country that have been more resistant to green activism, Myron Ebell, the director of energy and global warming policy at The Competitive Enterprise Institute (CEI), has observed.

“Passing Proposition 23 would be a huge blow to the energy-rationing movement and set it back a long way,” he said.  “Its defeat would not be as big a blow to our side as it would leave us in much the same position. But if California defeats energy rationing we can defeat it anywhere.”

A Los Angeles Times/University of Southern California poll shows voters were evenly split in late September with 40 percent expressing support for the ballot measure and 38 percent opposed. Other polls released through Reuters and the Public Policy Institute of California show more voters expressing disapproval.

MapLight.org, a non-partisan group, that tracks campaign funding, reports that opponents of the initiative have a three to one funding advantage. Environmental organizations, Hollywood activists and other individual donors have funneled in almost $31 million to help defeat Proposition 23 versus the roughly $10 million donated in support of the measure.

Proposition 23 would prevent the Global Warming Solutions Act (AB 32) Gov. Arnold Schwarzenegger signed into law four years ago from going into effect until unemployment drops to 5.5 percent or lower for four consecutive quarters. Without voter intervention, AB 32 will be implemented beginning on Jan. 1, 2012.

Over the past few weeks, Schwarzenegger has organized multiple fundraisers with venture capitalists who support alternative energy sources and leading figures from the entertainment industry. James Cameron, his former director, has donated $1 million to defeat the proposition while the National Wildlife Foundation has spent $3 million, and the Sierra Club has spent another $1.2 million.

“Green activists like to portray themselves as the underdogs against big business in their environmental causes,” Ben Lieberman, a CEI analyst said. “The battle over Proposition 23 is no exception. But they have David and Goliath backwards here; those spending to defeat the measure and keep California cap and tax in place have outgunned supporters of reform by at least 3 to 1.”

Activists on both sides of the debate agree that a victory for Proposition 23 would have ramifications for other state level efforts — California is the linchpin. Even as the energy rationing schemes included as part of the Kyoto Protocol of 1997 have been rejected at the federal level, well-funded green groups have successfully cajoled compliant governors into implementing emissions restrictions and renewable mandates at the state level.

Eileen Claussen, president of the Pew Center on Global Climate Change, has identified California as the new “battleground” for regulatory efforts. The long term success of the Western Climate Initiative, and other regional anti-industry agreements, would be jeopardized she has acknowledged.

The California Air Resources Board (CARB), the government agency responsible for implementing AB 32, has settled upon “cap and trade” schemes and renewable mandates that closely pattern existing programs in Europe as the preferred methodology to achieve industry restrictions. AB 32 requires California to reduce its greenhouse gas emissions to 1990 levels by 2020.

The agency has also released figures based on computer modeling that offer a relatively optimistic assessment of AB 32’s economic impact. These results are vigorously disputed by Robert Michaels, an economics professor with California State University, who also serves as an adjunct fellow with the CATO Institute and as a senior fellow with the Institute for Energy Research (IER).

There are no tangible climate benefits to be derived from AB 32, Michaels explains in his paper, since California only accounts for about 2 percent of global emissions. Moreover, he argues, CARB is overly reliant on the use of computer models as a way to measure the actual economic fallout. The results are rooted in too many assumptions that are “doubtful, unfounded and arbitrary,” Michaels concludes.

Other scholars caution against using Europe as a model for energy policy in the aftermath of acute job loss and economic stagnation. Gabriel Calzada, an associate professor of economics at King Juan Carlos University in Spain, has produced research that shows his country lost 2.2 jobs for every “green job” the government claimed to create.

Yet, California’s outgoing governor and other state officials persist in promoting the idea that AB-32 is a job creator in stark opposition to a growing body of evidence that says otherwise.

The Waxman-Markey “cap and trade” bill, which narrowly passed the House in 2009, would reduce income and heighten costs in states that are most reliant upon traditional energy sources, according to  a joint study from the American Council for Capital Formation (ACCF) and the National Association of Manufacturers (NAM). These states include: Arkansas, Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and Wisconsin. The Institute for Energy Research (IER) has also found that electricity prices are almost 40 percent higher in states that have renewable mandates in comparison to those that do not.

“The more industrialized areas of the U.S. are vulnerable here,” Dan Simmons, the director of state affairs for IER, said. “All the rhetoric against Proposition 23 is built around the idea that the California law will create green jobs. But these programs have never worked anywhere they have been tried.  Spain, Denmark, and Germany should really have showed us how to grow green jobs, but our studies show they are poor examples, not good examples. California is merely following a fatally flawed blueprint.”