California seems intent on traveling a road to self-destruction paved with government mandates and regulations that drive businesses and jobs out of state while discouraging new job creation. A prime job-killing, business-punishing scheme is the insistence on achieving radical environmental goals, despite their real-world economic liabilities.
The California Air Resources Board has adopted a mandate that utility companies produce 33 percent of their electricity from so-called renewable resources by 2020. That’s a drastic increase over the previous 20-percent requirement, which the state still is nowhere near achieving. For some perspective, Congress, firmly controlled by a Democratic majority, refused to hike its renewable requirements even to the 20-percent level.
Compounding the state air board’s error is its arrogance. Even the state Legislature, controlled by left-leaning Democrats, failed this year to impose such an over-the-top requirement. But neither Congress nor the state Legislature’s reluctance dissuaded the Air Resources Board’s unaccountable bureaucrats from going where elected representatives fear to tread.
The San Francisco Chronicle reported that air board boss Mary Nichols says the 33-percent standard is important because it “sends a strong, positive message to the market.” The market will get the message, alright. That’s part of the problem.
The message is that California energy prices will soar, on top of the added costs of huge taxpayer subsidies that will be needed to finance so-called renewable energy sources. Wind, solar and geothermal energy are all economically infeasible without massive subsidies.
Like the huge amounts of taxpayer dollars already wasted in government subsidies for the ethanol industry, other renewable-energy endeavors are likely to face similar fates. In Spain, where large tax-financed subsidies spurred its solar industry, 50,000 subsidized solar entrepreneurs now “face financial disaster” as the government realizes it can’t afford to continue propping up the industry with price guarantees, Bloomberg reports. Not only can’t Spain afford to continue subsidies that paid 10 times the wholesale price per kilowatt-hour, but for every new “green” job created by the subsidies, more than two normal jobs were lost.
Without generous tax breaks and subsidies, wind power costs $149 per megawatt hour compared with $100 for coal, according to estimates from the Energy Information Administration.
“Overall, subsidies for wind and other renewable electricity sources are more than 10 times higher per unit energy output than coal, which provides nearly half the nation’s electricity, and natural gas and nuclear power, which provide most of the rest,” said Ben Lieberman of the Competitive Enterprise Institute free-market think tank.
A far less ambitious renewable energy standard proposed at the federal level would increase electricity prices up to 36 percent, while resulting in a decline of $50 billion in GDP in 2012 and $5.3 trillion by 2035, in constant dollars, according to the Heritage Foundation’s Center for Data Analysis.
California’s obsession with forcing energy providers and users off low-cost, plentiful fossil fuels and to adopt uneconomical, economically punishing “renewable energy” alternatives is epitomized by the state’s Draconian 2006 Global Warming Solutions Act.
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