Climate Change and Our Inner Elephant

Peter E. Weber
Mr. Weber is a retired business executive now devoted to civic work. He serves on many non-profit boards, including as co-chair of California Forward and as Founding Chair of the Fresno Bridge Academy which aims to lift Californians out of poverty.

Last August, the California Business Roundtable released results of a statewide survey that showed 79% of Californians saw global warming as a serious (50%) or somewhat serious (29%) issue threatening to California’s economy and quality of life. The same survey, however, showed strong opposition to regulation (57% oppose vs. 37% support) if the result was a significant increase in the price of gasoline, and even more opposition (66% oppose to 24% favor) if the result was shutdown of manufacturing facilities and loss of middle-class jobs.

In this two-part series, we’ll explore if it’s possible for California to lead on climate change without placing undue burdens and displacing job opportunities for poor and middle-class Californians.

There’s a wonderful book called the Righteous Mind written by one of our nation’s most prominent social psychologists, Jonathan Haidt. The premise of the book, deeply supported by research, is that the reasoning mind of humans plays only a small role in our moral decision-making and most of that role involves post hoc rationalization of why we believe what we do about what is right and wrong. He uses the metaphor of a rider on an elephant to explain the process of moral decision-making. The rider is the human rational mind; the elephant is our moral intuition. The elephant goes where it wants to go. The rider then explains why the elephant went where it did.

For the 21% of Californians who remain skeptical about human impact on climate change, I would simply acknowledge that it’s an enormously complex subject on which most of us have not done independent analysis; a subject on which we each rely on the elephant inside of us. If you are a skeptic, I would just suggest that you allow for the possibility that your inner elephant may be wrong because the consequences are potentially catastrophic. As George Schultz puts it, “before you get mugged by reality, get an insurance policy”.

I would add for your consideration that there simply is not an inexhaustible supply of decomposed organic matter, so even if your children, grandchildren and perhaps their children may be able to rely on fossil fuels, we will eventually run out, so, again, prudence suggests that we should be looking for a sensible transition to renewables. That leaves open the question of what sensible transition means, but at least we have narrowed differences.

For Californians whose inner elephant screams out that climate change is an imminent threat to our planet, I urge you to consider if California is exercising the kind of climate change leadership you want. The California Air Resources Board tells us that we are on track to reduce our Greenhouse Gas Emissions (GHG) to 1990 levels by 2020, but I’m going to ask you to consider if that’s a good measure of success.

Leadership requires followership. California’s Cap and Trade program was the centerpiece of AB 32, the landmark climate change legislation passed more than ten years ago. Unfortunately, absolutely no one of consequence has followed California’s lead on Cap-and-Trade. I suspect one reason is that, looked at with a triple-bottom-line lens, AB-32 is failing Californians. By triple-bottom-line, I mean: how does the policy affect our environment? How does it affect our economy? How does it affect socio-economic equity?

I don’t think it’s good leadership to place the burden of climate change policy on the most vulnerable among us. Our environmental policies have had a very regressive effect.

When Californians pay 25% to 40% more than the national average for electricity, the highest prices for gasoline in the U.S., and the highest cost of housing, that probably doesn’t affect Mark Zuckerberg much, but it most certainly affects the 16 million Californians who the California Public Policy Institute and the Stanford Institute on Poverty and Inequality consider to be poor or “near-poor”. To put that number in perspective, 16 million Californians is more than the total population of all but three States outside of California.

We pride ourselves on being very energy efficient in the State, but I don’t visit many poor homes that have solar panels. And I don’t see a lot of electrical cars in their driveways.

It should be a cause for shame — and more important, a call to action — that California has the highest rate of poverty in the nation; that we have the highest rate of income inequality; that our middle class has been steadily declining from nearly 60% of our population in the 1980’s to about 48% today; that, according to a recent survey from GoBankingRates, only families earning incomes in the top two quintiles can afford to “live comfortably” in California.

We should not allow ourselves to be misled by rose-colored statements about how well California’s economy is doing. Yes, a few of our regions are thriving, but we also have regions with the highest poverty and unemployment in the nation. Employment in five major industry segments, including manufacturing and construction, remains well below 2007 pre-recession levels. Most of our employment growth is in low-wage jobs. Even in thriving regions, people can’t afford to live there unless their earnings are well above the median. Our environmental policies are contributing to these unhappy statistics.

And be aware, policies are currently being considered that could place added burdens on our most vulnerable residents. The LAO has projected that Cap-and-Trade will increase gas prices by as much as 63 cents/gallon by 2021. That’s in addition to the 12-cent price increase that will result from the recently passed transportation taxes. And, remember, we already pay the highest prices in the nation.

Not only has the burden of our policies fallen on the most vulnerable, it has also deprived Californians of good middle-income jobs that were previously available to them. The decline in manufacturing jobs in California has been far more pronounced that in the rest of the country. I speak from experience. I was vice-president of a Fortune 500 manufacturing company that employed more than 8,600 Californians in the eighties. Today, that company employs less than 200 people in California. And virtually none of those jobs have left the U.S. They have gone to other States.

I was also the CEO of a vertically integrated agribusiness company in the San Joaquin Valley and I can tell you that, while we may have the most fertile land on the planet and the best farmers, our policies have driven much of the value-added part of agribusiness – the most profitable part — out of the Valley. How does it make sense economically or environmentally to take food products that we grow here, ship them to other states or countries for processing, then ship them back to serve the 6th largest economy in the world? How does that benefit global GHG?

We seem to have forgotten that GHG is a global issue. We can pound our chest about reducing our GHG footprint in California, but that’s not a measure of success if the result is a net increase in global GHG, which is exactly what is occurring as a result of our policies. California accounts for less than 1% of global GHG.

For every onion grown in California that is dehydrated in China’s coal-fired dehydrators instead of in California’s state-of-the-art dehydrators, there are less California jobs and a net increase in global GHG. In fact, California generates by far the lowest GHG per unit of food production in the world. Any transfer of that food production out of California increases global GHG.

For every unit of manufacturing that moves from California to Texas, we generate 3 times as much global GHG because their per capita GHG is three times as high. Think of it this way – we could significantly reduce California’s GHG by transferring all our manufacturing activity to Texas. The result would be a net global increase in GHG and a socio-economic meltdown in California.

There are also geopolitical implications to how we approach environmental leadership. A strong argument can be made that fossil fuel strategy is the single biggest lever we can exercise to make the world more peaceful. If the U.S. were to become an energy exporter, which we can do if we choose to — even if just temporarily, we would gain enormous leverage on the solution to problems in the Middle East, on Russia’s stranglehold on Europe, on relations with China, North Korea, Venezuela, etc. And, yes, we might be able to use that leverage to encourage all nations to increase their contribution to climate change solutions, perhaps improving on the 2015 Paris Agreement targets.

It’s unconscionable that China and India don’t have to show GHG reductions until 2030. China accounts for almost 23% of global GHG today compared to the U.S. at less than 16%. A 2013 study published in Science of the Total Environment showed that dirty air caused premature death for 1.4 million Chinese in just one year.

If the net effect of our policies is to reduce California’s GHG footprint on the backs of California’s most vulnerable residents while increasing net global GHG, why would any other state or nation want to follow California’s example?

Are there solutions that will provide better leadership? The answer is “yes”. See Part II of this series in tomorrow’s edition of Fox and Hounds.

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