Campaign Hot Air Stifles Facts About Prop. 23

Campaign Hot Air Stifles Facts About Prop. 23
October 29, 2010

Ben Boychuk

Ben Boychuk (b.boychuk.3@gmail.com) is a policy advisor for education at The Heartland Institute... (read full bio)

It’s getting hotter in California. No, not because of “global warming,” “global climate disruption,” or whatever euphemism the alarmists dream up next year. It’s because of all the overheated rhetoric coming from opponents of Prop. 23.
 
The ballot initiative would suspend California’s draconian greenhouse gas law until the state’s unemployment rate—now the third-highest in the nation at 12.4 percent—drops to 5.5 percent for at least four consecutive quarters. When the state legislature passed AB 32 in 2006, unemployment was just under 5 percent, the housing bubble had not yet burst, and recession was a year away. Now it’s an absurd luxury, especially given the mounting evidence against the alarmist belief in a manmade global warming crisis.
 
Opponents of the measure, which include the Sierra Club, and Gov. Arnold Schwarzenegger (R), have hardly let a day pass without noting how “out-of-state oil interests” are bankrolling Prop. 23. This clever bit of poll-tested messaging obscures two vital facts.
 
First, Prop. 23’s opponents have outspent supporters by nearly two to one. According to Bloomberg News, those opponents include First Solar Inc., the world’s largest maker of solar panel modules; SunPower Corp., the second-largest supplier of solar modules in the United States; the U.S. subsidiary of Yingli Green Energy Holding Co., China’s second-largest solar panel manufacturer; and a host of East Coast hedge fund managers.
 
Why would Wall Street be lining up to support a law that supposedly reins in “big polluters”? Not some altruistic desire to save the planet from an unsettled climate. Those companies and investors have business model that rely on state subsidies and rules mandating use of incredibly expensive “alternative energy” over cheaper, traditional power sources.
 
That isn’t altruism; that’s good, old-fashioned rent-seeking—which is itself a euphemism for legalized extortion.
Second, the promise of “green jobs” cannot make up for the loss of traditional manufacturing and tech jobs that will be lost if AB 32 regulations take effect next year as planned. Says who? Not “out-of-state oil interests,” but the state government.
 
A little-noticed draft report by a special advisory panel to the California Air Resources Board in December noted matter-of-factly how AB 32’s policies “can be expected to raise the price of fuels and these price increases will be reflected in higher prices of consumer goods.”
 
The CARB report also admitted employees of companies unable to bear the burden of AB 32’s new rules will likely lose their jobs, an admission underscored by the state’s nonpartisan Legislative Analyst’s Office in May. “California’s economy at large will likely be adversely affected in the near term by implementing climate-related policies that are not adopted elsewhere,” the state auditor warned. “This is in large part because such policies will tend to raise the state’s relative prices for energy, such as electricity.”
 
Opponents of Prop. 23 are much too cavalier about AB 32’s suppression of state employment and economic growth, seizing on phrases like “near term” effects. The whole point of Prop. 23 is to prevent that near-term economic damage as the state struggles to emerge from the recession.
 
Prop. 23’s opponents insist AB 32’s benefits outweigh any potential costs. Trouble is, nobody can say for certain precisely what those costs will be. In fact, the best analyses point to costs in the tens of billions of dollars, and early estimates of the law’s benefits were probably overly optimistic. As Harvard environmental economist Robert Stavins put it in his review of three economic impact studies of AB 32, lawmakers’ and regulators’ early projections were simply “too good to be true.”
 
The actual language of AB 32 requires the state to regulate carbon emissions “in a manner that minimizes costs and maximizes benefits for California’s economy,” to “minimize costs and maximize the total benefits to California” and “minimize the administrative burden of implementing and complying with these regulations.”
Nobody really believes that’s possible—certainly not in the “near term” and especially not at a time of sustained high unemployment and sluggish economic recovery. Those stark facts merit at least as much attention as the heated campaign rhetoric.
 
Ben Boychuk (bboychuk@heartland.org) is a syndicated political columnist and editor for The Heartland Institute (www.heartland.org).
 
 

Ben Boychuk

Ben Boychuk (b.boychuk.3@gmail.com) is a policy advisor for education at The Heartland Institute... (read full bio)