The idea of Montana doing things “the California way” doesn’t make much sense. Unfortunately, Montanans might not have a choice if the Obama administration has its way.
The U.S. Environmental Protection Agency (EPA) will soon finalize the Clean Power Plan, requiring states to reduce carbon dioxide emissions by 30 percent by 2030.
To meet these drastic reductions, which will have no impact on global temperatures, every state, including Montana, will have to impose California-style taxes, manipulate markets, and enforce short-sighted mandates — the same policies that have contributed to the Golden State’s sky-high energy prices and persistently high unemployment.
Take it from a native Californian: You don’t want our energy policies.
In 2006, California passed its landmark energy mandate, AB 32, requiring citizens and industry to reduce greenhouse gas emissions to 1990 levels by 2020.
Central to the law is California’s cap-and-trade system, a costly and convoluted carbon-trading scheme that is the stuff of Enron’s dreams. Another piece is California’s renewable electricity mandate, which requires utilities to purchase 33 percent of their electricity from unreliable sources like wind and solar by 2020.
California’s regulatory scheme is tortuous. The Database of State Incentives for Renewable Energy counts 200 different state programs in California that mandate or subsidize renewable energy production. That’s on top of the 28 federal programs that further inflate California’s renewables industry and raise consumer prices.
These programs were supposed to “drive long-term investment” in wind and solar. Instead, California’s green energy dream has turned into a nightmare. Residential electricity prices are 40 percent higher than the national average and eighth highest in the nation.
Additionally, California suffers from an increasingly unreliable electric grid. The state produces diminishing amounts of electricity from the controllable sources operators use to keep the lights on. California’s grid operator has warned that, with less generation from conventional sources and more from unreliable, spasmodic renewable sources, “the system becomes increasingly exposed to blackouts when generation or transmission outages occur.”
Despite these ill effects on the economy and the power grid, the EPA and national environmental groups think policymakers in Sacramento got it right. They say California has a head start on EPA’s grid of the future.
However, these observers fail to realize that California’s foolish policies make even less sense for the rest of the country.
First, California is blessed with mild temperatures, so heating and cooling expenses take less of a toll in California than most other places in the U.S. Second, California currently imports much of the reliable power it needs. If Montana and every other state in the country imposed California’s regulatory scheme, we would run out of places to produce reliable electricity.
Third, California’s economy does not support energy-intensive manufacturing. Part of the reason the manufacturing industry left California in the first place is its high energy costs.
Washington hasn’t learned from California’s failures. The Clean Power Plan calls on states to submit plans for how they intend to comply, and EPA pretends it is offering states flexibility to choose from a variety of policy mechanisms. But the rule is so strict that, in reality, EPA is forcing states to impose some mix of California-style capping, taxing, and mandating.
The EPA hails California as a model for the nation, but it’s more like a cautionary tale. States that aren’t interested in higher energy costs, grid reliability problems, and lower living standards should reject EPA’s calls to submit a compliance plan.
States that choose to comply will become accomplices in EPA’s plan to export California’s failed energy policies nationwide. If policymakers in Helena come up with the same answers as the ones in Sacramento, they’re asking the wrong questions.
Tom Tanton is director of Energy and Environmental Legal Institute and senior fellow with Reason Foundation. He formerly served as principal policy adviser at the California Energy Commission.