Editorial: California's Economic Suicide
Oct 25, 2011
Investor's Business Daily
The Weather: Regulations finalized by the California Air Resources Board establish the nation's first state-run cap-and-trade regime. Despite Solyndra, the state will gather solar panels while it may.
The 262 pages of regulations implementing California's 2006 global warming legislation, Assembly Bill 32, approved by CARB last Thursday, will probably reduce employment more than it reduces emissions. The only thing it will cap is economic growth by bleeding a patient that is already hemorrhaging red ink.
Signed into law in 2006 by Gov. Arnold Schwarzenegger, the cap-and-trade regulations are intended to force California to reduce greenhouse gas emissions to 1990 levels by 2020.
By 2015, some 85% of the state's businesses and power sources will be under its mandates. Businesses that exceed 90% of their current greenhouse gas emissions will be forced to buy carbon credits as penance.
The question is why — in the face of evidence that the prospect of imminent doom from man-caused weather danger is on overhyped scam based on doctored data — California risks repeating the sad experience of Spain. There, subsidized windmills and solar panels dotted the landscape, only to wind up with a collapsed economy that lost 2.2 jobs for every "green job" created.
A 2009 study by economists at the California State University, Sacramento, commissioned by the California Small Business Roundtable, found the legislation would result in "a total loss of (economic) output of $182.649 billion annually," with an estimated impact on small businesses alone of 1.1 million jobs. This in a state with a 12.1% unemployment rate.
The experience of Spain and other countries is that the purported creation of "green jobs" destroys real jobs through diversion of economic resources and denial of abundant sources of fossil fuel energy. As California businesses and energy producers shift resources from job creation and energy production to buy pieces of paper, the state is doomed to the insanity of repeating Spain's mistake and expecting a different result.
Our national economy staggers under the weight of regulations restricting coal mining, offshore drilling and extraction of gas and oil from shale as we subsidize failing and uncompetitive, but politically connected, solar panel manufacturers such as Solyndra and electric car makers in Finland.
The Founding Fathers envisioned the states as individual laboratories where a free market and free people would find what works and reject what didn't. California's state experiment will only cause jobs and people to flee to the other 49.