The conference Thursday on climate change was such a perfect example of the horribly incomplete way AB 32 is covered by the California media. It featured Gov. Jerry Brown going into a lather about the “deniers” who don’t acknowledge that human activity is contributing to global warming. I’m not in the camp. But at a practical level, the “deniers” who matter to California and its economy are the ninnies like Brown, Arnold Schwarzenegger and anyone else who thinks the state’s go-it-alone policy on forcing a shift to cleaner but much costlier forms of energy makes sense. Who agrees with me? U.S. Energy Secretary Steven Chu, that’s who. Why won’t the media mention this? They’re in the green tank.
To recycle some past posts, having one state pursue an AB 32-type policy more or less unilaterally is economic suicide. Says who? Not a “global warming denier,” to use the green movement lingo. Says President Obama’s own energy secretary!
Arnold Schwarzenegger used to agree. As Arnold said back in fall 2006, an AB 32 approach only works to help the climate and to not create economic upheaval when most states and nations have similar policies. Otherwise, the climate doesn’t improve, and the few governments that do adopt such a policy — as California did — are at a competitive disadvantage. Arnold repeated this common sense in a March 2010 letter to the air board after reports it was eager to gear up implementation of AB 32:
I strongly support a more carefully phased approach to development of an auction [of emission allowances] system, beginning with a very small percentage of allowances… [The state’s approach should mesh] as seamlessly as possible into a comprehensive national strategy … Given the importance of interstate and international trade to California’s economy, we must design our program to ensure that California companies are appropriately positioned to compete under any future federal or international program.
Arnold was still governor at the time. But he got next to zero ink for pointing out this inconvenient truth. The obvious downside of AB 32 unilateralism never does. Somehow, skepticism about the practicality of AB 32 has become tantamount to being a “global warming denier.” So does that make President Obama’s energy secretary, legendary UC Berkeley physicist Steven Chu, a denier?
This is from Chu’s March 17, 2009, testimony to the House Science and Technology Committee after a discussion of, among other issues, what the U.S. should do if other big polluter nations didn’t adopt cap-and-trade type policies to reduce carbon emissions:
You’re raising a very important issue. The cap-and- trade bill will likely increase the cost of electricity, and so, it’s on the Administration’s plan of using a significant part of that money. First, there are two issues. There is the poorer part of society that has to be guarded against, and so, part of the Administration’s plan has been to try to ensure that the poorer segments of our society are not really hurt.
With regard to increasing the costs, let me go straight to the heart of the matter. Many of these costs will be passed on to the consumers, but the issue is how do we interact in terms of the rest of the world? If other countries don’t impose a cost on carbon, then we would be at a disadvantage.
I think the only way to do this, and already the Administration and others have talked about it, that you have to think about if you have something that’s manufactured in another country that is not imposing, including the cost of admitting the carbon because there’s a cost in admitting the carbon, right, to society, if Country X doesn’t do this, then I think we should look at considering perhaps duties that would offset that cost. Just as we’re beginning to talk about that in terms of even what we call local pollution costs like sulfur dioxide and natural dioxide. That will help level the playing field.
Now, in the end, I think, one hopes that all countries will include the costs of this energy and I really think the value is in including the so-called external costs that are not folded into the direct price now, but if a country does not do that, in order to protect the American industries, we ought to think about something like that.
Chu thinks the competitiveness gap problem is so significant that if the U.S. had adopted cap-and-trade, he was willing to risk a trade war by imposing sanctions on nations that didn’t follow suit!
When you hear something as stark as that, the idiocy of the claim that AB 32 will be benign goes from a dull background hum to the sound of a dozen 747s landing simultaneously. If you believe AB 32 will be benign — that having energy cost 40 percent to 60 percent more in Cali is no big deal — I’ve got a subdivision in Perris you might be interested in. If you believe AB 32 will be benign, for the good of our society, I hope you don’t have children.
Cap-and-trade died, of course, in Congress, and when it was controlled by Democrats. Why? Because the rest of the world, in economic free fall, was backing away as fast as it could from cap and trade.
In Congress, if not in Sacramento, the insanity of unilaterally forcing your energy prices to be much higher than economic rivals was apparent.
This was the best reason by far to back Prop. 23, the November 2010 measure that would have suspended AB 32 until joblessness plunged. But did a single story in the L.A. Times, S.F. Chronicle or Sac Bee coverage even make this point? Not according to Nexis.
Maybe when the competitive disadvantage caused by much higher energy costs kicks in and starts killing California’s ag and manufacturing (for starters), then the obvious flaw with going it alone on cap-and-trade will sink in with journalists. By then, though, it may be too late for manufacturing and other industries.
Dumb de dumb dumb.
I hope Jerry Brown gets done patting himself on the back for taking on “deniers” at some point, and addresses the logical fallacy and economic insanity of his stand. California is martyring itself so Schwarzenegger, Brown and green Dems in west L.A. and the Bay Area can feel good about themselves, and the media refuse to point out this and all the other problems with the go-it-alone AB 32 approach. Great, just great.