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  • Nothing Jolly About California’s Giant Green Economy

    The state of California likes to sell itself as a leader in the transition to a green economy. The only problem is, their policies are making that transition harder—and they’re not producing the job boom that politicians have been promising.

    The California Legislative Analyst’s Office (LAO) recently reviewed the impact of the state’s 2006 climate change legislation, which mandated a cut in GHG emissions to 1990 levels by 2020.  A letter from the LAO to the state senator that requested the analysis stated that the aggregate net jobs impact of the 2006 legislation in the near term “is likely to be negative.” Don’t let the tepid language here fool you; this is seriously bad news for California.  With so much of its economic future staked on green jobs, green tech, and the viability of green energy—and given that the state currently is suffering with unemployment 20 percent higher than the national average and that it has for months been teetering on fiscal insolvency—news that green policies are hampering the state’s overall economy stultifies lawmakers’ vision for a green-economy-driven future.

    And yet, it should come as no shock that legislation mandating the use of more expensive energy sources would result in aggregate losses to an economy.  As Heritage senior policy analyst Ben Lieberman has explained before:

    Mandates … kill jobs by raising energy costs.  The only reason these alternative energy sources need to be mandated in the first place is that they are too expensive to compete otherwise.  Thus, in addition to forcibly supplanting traditional energy jobs, renewable energy mandates raise energy costs and thus destroy jobs.

    So, for every dollar of capital that is funneled to green projects due to government mandate, there is a dollar less to be capitalized on by more efficient economic agents.  The net result, of course, is a sub-optimal economic outcome, and California is not the first economy to make this simple economic logic manifest.  Spain has likewise invested hugely in green energy, and a recent study shows the net effect on the country’s economy has been hugely negative.  For every green job created in the Spanish economy, the study found, 2.2 private-sector jobs were destroyed.

    An adage in politics says that, “As California goes, so goes the nation.”  When it comes to climate policy, however, federal lawmakers would be wise take the nation in the opposite direction of woebegone California.

    Jeff Witt  is currently a member of the Young Leaders Program at the Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm

    Posted in Energy [slideshow_deploy]

    7 Responses to Nothing Jolly About California’s Giant Green Economy

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    3. Billie says:

      How much more proof do people need to see it as it is? Government can say anything it wants, government does not create real jobs. PEOPLE DO! FREE PEOPLE!

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    5. bigdave, ocala fl says:

      Here is a typical government caused situation. In Ca my car got 35mpg at 65 mph. I am in Florida for several months and here they ADD 10% ETHANOL to gas and NOW my MPG is 27 at best!? Ethanol is GREEN CRAP!!! Destroys your mileage AND YOUR ENGINE at the same time! Typical government solution! We are being led over the cliff by mad men/women! Dumbass solutions to MADE-UP PROBLEMS so they can TRANSFER WEALTH TO PEOPLE LIKE GORE AND HIS CRONIES!!! ITS ALL ABOUT 1) CONTROL OF THE PEOPLE and 2) MONEY.

    6. Richard Anderson, He says:

      I don't know why anyone is surprised by this, California has a Governor who does nothing and a House and Senate of one political party, Democrats!

      Their way of governing is to continue to spend in the face of financial ruin!

      Sounds like our President, doesn't it?

      Rich

    7. Babette Hogan says:

      There's more than you are reporting here that can explain the problems besetting California's energy and climate.

      The fiscal mess that California has consistently faced in the last few years all started with Prop 13, which permitted corporations to freeze tax values of property assets in perpetuity, thus depriving the state coffers of funds most other state naturally assumes to receive.

      In addition, the energy crisis of the late 90's is now understood to be a problem manufactured by out-of-state energy companies seizing opportunity to materially gain rather than working in the public trust. The results have been that California rate payers have had to sustain higher energy prices when that money could/should have gone into R&D of alternative fuel/energy sources.

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