Excessive Climate Policies Could Damage California Economy

John Moorlach
State Senator representing the 37th Senate District

The topic of climate change, or anthropogenic global warming (AGW), has somehow been linked – directly or indirectly – with nearly every policy area debated at the State Capitol. While I am not a scientist, I recognize there are many differing views on what the climate-related scientific research actually means. I have been and continue to be willing to have conversations on the implications concerning policy prescriptions to address this purported global warming.

However, as I am an accountant, data and models are important to me in making informed decisions about complex issues. It is unclear to me how significant human activity is in climate change, since change is an inherent characteristic of climate. From what I have seen, the data does not convince me that human activity is a primary or significant driver in warming the globe.

I struggle with the failure of even the most advanced computer models in the world to accurately predict climate outcomes. I am even less sure that dramatic action in the halls of government will have a meaningful impact on global temperatures without damaging a fragile economy still recovering from one of the worst downturns since the Great Depression.

Even so, the California Legislature has decided to aggressively move forward on policies meant to address AGW ever since the codifying of Assembly Bill 32, the Global Warming Solutions Act of 2006. Cap and trade – a major component of the first stage of California’s burdensome regulatory regime concerning greenhouse gas (GHG) emission reductions – has nearly run its course.

To alleviate the billions of dollars in compliance costs for the 600 industrial facilities and electricity generators captured by the most cumbersome regulations, there is a strong push to rework and reauthorize the cap-and-trade program. It has been estimated that gas prices could increase by 73 cents a gallon under a mature cap-and-trade program. That would be in addition to the transportation tax increases of 12 to 19 cents per gallon taking effect this Nov. 1.

Supporters of the cap-and-trade program argue that, if nothing happens, direct regulatory actions by the Air Resources Board (ARB) could cost around $1.50 per gallon. These unnecessary and costly regulations on California residents will not substantively reduce GHGs here, or anywhere in the world, no matter how much California tightens its belt.

Further, all this really does is reorganize California’s economy to be even less competitive (if that’s possible) with the other 49 states, requiring an even greater centralized government approach, while abandoning true market-based incentives.

Another problem not often considered is that such large price increases could also increase black-market gasoline sales and gasoline theft, requiring even greater government policing.

Even though California has the largest gross domestic product (GDP) in the nation, I agree with Gov. Jerry Brown that there is likely to be another negative economic adjustment soon. My legislative colleagues have engaged in a passionate debate about global warming and the need for California to be the world leader on the issue, but where is the dialogue about fixing California’s balance sheet, which carries the largest unrestricted net deficit in the United States?

Our state’s unfunded pension liabilities, unfunded retiree medical liabilities and unaddressed infrastructure deficits total a combined $400 billion or more in red ink. If we do not have our fiscal house in order, efforts to address climate-change policy will have been for naught. This misdirected effort will only further jeopardize this state’s fiscal plight. This is a disturbing sacrifice to impose on our residents.

Based on the cold, fiscal facts, I do not understand why the costs of addressing a nominal change in temperature 100 years from now should rest primarily upon the shoulders of California’s taxpayers, ratepayers and consumers today, simply to demonstrate climate leadership. Polls of the voters bear out my concerns. We must consider if higher transportation, energy and food prices, in the billions of dollars in economic costs, are worth the Legislature’s continued liaison with climate-change mitigation.

I am in favor of being good stewards of our environment and resources and have supported legislation to improve our state’s ecology. In fact, I have probably backpacked more miles in California’s mountain ranges, and summited more of its peaks, than 99 percent of its residents. I am a bona fide tree hugger. But, believing that issues of science are not settled by political votes, I think the jury is still out about the impacts humans have on climate.

We need leadership to deal with the very real fiscal challenges that continue to distress our economy in a real, tangible and immediate way so that we can act accordingly, rather than pursue more state-sponsored policies on global climate change – policies that are costly distractions in addressing a matter in which the state has very little control.

Note: For an extensive review of climate issues, please check out my policy paper, “Climate Change: Policies in California,” on Medium.com

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