California's AB23 – a litmus test for climate law

California’s Prop 23: Job Saver (Benjamin Zycher, Ph.D Professor of Economics)
“Based upon official estimates of the reduction in state energy use attendant upon implementation of AB32, Proposition 23 would increase California employment by over half a million in 2012, and over 1.3 million in 2020.”
Prospective Employment Effects
of California Proposition 23 (PDF) (Benjamin Zycher, Ph.D Professor of Economics)
It is depressing to know that Arnold has a degree in economics and was a long time friend to Milton Friedman yet when he became a politician decided to abandon all rational thought for emotional economic positions proposed by economic illiterates.

Anthony,
Since I suppose you’ll also be a voter on this issue, have you a public opinion on this matter?
Ecotretas

the out-of-state oil companies funding the initiative

rings alarm bells for me. CAGW gained power to a large extent by accusing skeptics, with a tiny grain of truth, of working for oil money.
However, this may not be the whole story. Or it may be a tipping-point. And I’d love to see a piece from the oil barons on how they’ve funded CAGW many times over more than they ever funded skeptics – and how Gore & Blood [sic] run one of the companies making money out of CAGW and how Gore himself is a benefiting director in an oil company with a pretty bad humane record.
I say, with Saint Michael, don’t kill the dragon. Harness it to do the dirty work and free the beautiful lady.

Anthony, off topic item. My apologies. Wud you have a look at recent GWPF item on the court case taken against NIWA in new Zealand. This is about the homogenization of all NZ temps by NIWA. New Zealand Climate Science has just won the court case about it.
Peter Walsh

Whilst America made 20,000 green jobs they lost 2.5 million real jobs. Green jobs drive up welfare. Real jobs come from real energy not ephemeral wind.

I like the sound of proposition, postponing AB32 till they can fix REAL problems that you can see right in front of you. We know that the world has many problems, but we keep throwing money at the CO2 problem when we don’t know what’ll happen. Please pass the bill and send the statement to the world that we should throw money to fix the problems that are right in front of us (poverty, unemployment, etc…) instead of Carbon emissions when it’s uncertain how much of an effect, or even what effect, they will have

“AB32 calls for limits on emissions generated by industry, transportation, electricity generation and natural gas consumption. ”
Do these limits also apply to all the industries associated with the manufacture of solar panels and windmills? Without the use of fossil fuels, it would not be possible to create these devices.

The ads against repeal of AB32 do not make any mention at all that it has anything to do with global warming. They say it is all about big out of state oil companies wanting to sell dirty oil at high prices. The repeal, they warn, will cause a big loss of green jobs.
When ads avoid the real issues it is a sure sign the proponents know they do not have wide public support. If they win, however, they will shout from the rooftops that the public has spoken about the real issues.

All I have to say on the subject.
Except for expressing my gratitude to Prof Motl, for hosting the picture.

” The law also calls for a third of the state’s electricity and energy to come from renewable resources by 2020.”
The one third energy from renewables will not be a problem in Caliornia since
all major energy consumers will be creating jobs in fly over country before 2020.

Hey, thats my federal land in Wallowa County too, and I would rather have it covered with wolves than a bunch of sacred cows at the public trough. Of course, I’m just an elitist from Bend. Why don’t we stay on topic here?

The commercials against this bill in California hammer home something to this affect: ‘two oil companies are paying to be able to pollute California’ (I’m paraphrasing).
It’s disgusting that they get away with this same lie over and over. This is not to imply that Prop 23 was some wholly grassroots proposition that truly came “from the people.” No, California’s democracy is sometimes called “too much” democracy for a reason, because there’s a whole industry that bankrolls new propositions on the ballot each election. They pay people to walk the streets, circulate through the meager public transit systems, etc… just collecting signatures. It’s how California passed that anti-gay-marriage bill. The humorous thing is, oftentimes the courts decide these controversial bills because one side will simply lock the other up in legal doom after the election.

Pamela Gray says on October 7, 2010 at 6:28 am

Voting in Arnold was like inviting wolves back in to Wallowa County. There’s a reason why the previous Wallowa Valley occupants killed wolves here. The meat flavor just wasn’t as good as venison and elk. The price tag for wolf lovers to Wallowa County farmers? Over $500 per head of beef. That covers the cost of vigilance, herd damage, reduced birth rate …and ammo (to keep the sssquirrel population down).
Inviting Arnold into California’s state capital has definitely damaged the “herd”. My hunch is that Arnold will be disinvited next go around. What ever you do, don’t deport him to Oregon. We already have enough people like him.

Please pay attention. He is not on the ballot this time around. He would probably have been even less popular than Governor Moonbeam and what looks increasingly like our own affirmative action candidate.

I suspect some voters are angry. They must have read AB23

Can someone give me some figures? I am seeing saturation ads against Prop 23, and I don’t believe I have seen a single ad for it. This suggests that the vested interests opposing it have put up a whole lot more money than the two energy companies being vilified in these ads. My local paper (San Gabriel Valley Tribune) just came out against the proposition, spouting the usual evil corporative polluters rhetoric, and I would like to reply. But I need numbers. Give me a hand here….l

If it moves, tax it.
If, after taxing it, it continues to move, regulate it.
If, after regulation, it stops moving, subsidize it.
When the money to subsidize runs out, panic.
The law of diminishing returns has found California weighed in the balance and found wanting.
As California goes, so goes the nation.
One has only to look back at the MTBE regulation that was imposed on California, the resulting debacle of economic disruption and losses that it caused, for an example of what Prop 23 is trying to avert.

Politicians are not used to dealing with an informed group of people. Slowly it is improving, but still a long way to go.
Speaking of stupid politicians. I found a news article that I have up on my site about Al Gore lauding CHINA for their green tech investment. I put up some wonderful pictures of how green China is. Yikes.

The State Legislature of California is one of the best that money can buy. AB32 and Prop 23 are all about politics and money. To understand the real issues separate them out.
1) There is no global warming. This is a complete fraud and has been for over 30 years. http://scienceandpublicpolicy.org/originals/pacific_decadal.html
2) There is no need to cut back on greenhouse gases, so we do not need a mad rush to alternative energy. PV cells only generate power when the sun shines and windmills only work when the wind blows. PV cells are about 6 to 20% efficient depending on materials and windmills are about 20 to 25% efficient. California still needs power when these sources are off line, which is when it is needed it the most in the mornings and evenings. Alternative energy is just another ruse to create power shortages and raise prices and profits. How much power are we really going to generate from alternative energy anyway? Take a good hard look at those numbers and understand ‘nameplate capacity’ and ‘intermittancy’. Generation capacity is still needed to fill in the gaps, so why build the alternative energy in the first place? Fossil fuel generation is a lot cheaper and it is reliable. There is still plenty of fossil fuel around and it still OK to burn coal and produce CO2 (with controls for the other pollutants). Dare I even mention that 15% of the electrical power in the State of California comes from 4 nuclear plants.
3) Windmills are a disruptive technology to the power grid. The power fluctuates too much. One of the biggest power failures in Europe was casued by wind power fluctuations from a storm in the North Sea. Use wind power only with energy storage.
4) The only large scale alternative generation technology that has viable storage capacity is the solar thermal system. This uses the sun to heat molten salt followed by a heat exchanger and a conventional steam generator. That is the only power system that should be built right now, and only if it is cost competitive. Batteries do not work for large scale energy storage and the other main alternative is hydro-storage. (How much water is there in the desert?)
5) The number of jobs created will be much smaller than projected. Most of these are temporary construction jobs bolting solar panels to frames in the California desert. Higher pay than picking fruit, but not by much. The solar panels will come from overseas. Where do the profits go?
6) The money spent on alternative energy will create a lot more jobs when used instead for loans and grants to small businesses that do create real paying jobs.
7) Stop wasting tax money.
8) There are plenty of prisons in California. Lock the politicians and the lobbyists up where they belong.
9) Serve the real customer – the residents of California. Build the generation capacity and build the grid to match. That is the only way to grow the economy and create the jobs.
10) PS: Don’t forget the water supply ….
For California energy statistics, take a look at the official site http://www.energy.ca.gov/
Draw your own conclusions.
Hints:
Imported oil is only used for gasoline, electrical power generation uses natural gas, 20% from Canada.
Try and figure out how California ISO sets the price of electricity.

The problem with the smartmeters that PG&E rolled out was with the gas meters, not the electricity meters. The gas meter attaches to the front of the existing gas meter, and a small gear is used to transfer the old analog meter to to the digital meter. There are several generations of old analog meters around, and if the wrong small gear is used, the new smart meter will read incorrectly.
The electric meters, on the other hand, simply replace the entire analog meter assembly.

I’ll be voting Yes on Prop 23 as will be all my friends, but I don’t really have any lib friends. The GW aspects of AB32 are bad enough but mandating 1/3 of our electricity to come from renewable sources in 10 years is crazy. Exactly how is that supposed to happen? This wouldn’t be the first time government mandated something that couldn’t be made to become reality.

Pro-AB 32 arguments:
Pro-AB 32 factions say that all its measures are worth doing because cutting CO2 emissions will stop global warming, and global warming in California causes the sea levels to rise and flood low-lying areas, the Sierra snowpack to melt or disappear, state-wide heat waves that cause deaths and illness, and many others. They also say that AB 32 will increase jobs and the economy. The way that AB 32 will increase jobs, they say, is by the net effect of all the requirements allowing each person to have an additional $5 per week for spending, or approximately $250 per year. The additional spending will go to purchases such as coffee at coffee shops, and retail sales. The increased demand for coffee shop baristas, and retail sales clerks will result in a surge in employment.
Pro-AB 32 factions say that private investors have pumped billions into California companies who will make revolutionary new products so that emissions of evil Carbon Dioxide, CO2, will no longer be necessary in beautiful California. The products will include smart-grid systems, home-generation of electrical power via solar panels, renewable power plants to supply one-third of utility grid power, advanced cars and trucks that consume about one-third less petroleum-derived fuel, and gasoline and diesel fuels that contain renewable components such as ethanol (for gasoline) and bio-diesel (for diesel, naturally).
There are many, many other aspects of AB 32, with 73 different line items in the Scoping Plan. Changes in the way people make choices are also part of the AB 32 Scoping Plan, with a significant change being scrapping the older and less-efficient home appliances for new and highly-efficient models. These include air conditioners. Proponents say that a home’s electricity usage will decline 40 percent by installing new appliances, while the price for electricity will increase only by about 13 percent. The net effect, they say, is the consumer will have more disposable cash each month. Presumably, that extra cash will be used to pay the installment payments on all the new appliances. Similarly for the advanced cars and trucks, which will use less fuel. The reduced fuel consumed (35 mpg compared to 25) will more than offset the increased fuel cost.
Proponents developed a nifty plan to allow a homeowner to be able to afford to install solar panels on the roof. The plan involves increasing the property tax bill, with the annual increase paid to a bank or other financier who puts up all the money for the solar panels and installation. If the homeowner sells the home, the new buyer takes on the payment obligation as part of his tax bill. Presumably, the payments last for 15 to 20 years. Also, proponents argue, the solar panels add to the home’s resale value.
Proponents also say that the cap and trade portion of AB 32 will not hurt businesses and industry, because they can actually make money if they just cooperate. Proponents maintain that a carbon credit will be worth $30, $50, even $100 per ton of CO2, so that if the business owners simply cut their CO2 emissions to a point below their government-mandated cap, they can sell the credits to others, thus enjoying a new revenue stream that will allow their business to grow and prosper. The idea is that one can either be a seller of these credits and prosper, or a buyer of these credits and not prosper.
There are many other pro-AB 32 arguments, such as more jobs created for solar panel installers, more construction jobs for renewable power plants, and the long-distance transmission lines to bring the power to the people, and factory jobs to fabricate solar panels and the smart grid components.
Anti-AB 32 arguments:
Implementing AB 32 will kill California by eliminating millions of jobs, causing massive bankruptcies, closing millions of small businesses and major corporations, and will do nothing to change the Earth’s climate.
As more and more scrutiny is applied to the world-wide climate scientists’ data, methods, peer-review system, and agenda, it is apparent that there is no cause for alarm over CO2 emissions, or any other so-called greenhouse gas emissions. The entire basis for CO2 causing the Earth to warm catastrophically is false. There are cities in California that show a pronounced cooling even while CO2 continues to rise – Eureka, Los Angeles, San Diego, and Sacramento. San Francisco shows a gradual increase in temperature that corresponds to population growth, but not to CO2 in the atmosphere. see this.
None of the dire predictions for California climate catastrophe have occurred since 1975, the period that climate scientists insist has shown an increase in Earth’s average temperature due to increasing CO2. In fact, sea levels are decreasing off the coast. Also, the past 40 years have seen much more rainfall than occurred in the first 40 years of the 20th century, with a state-wide average of approximately 23 inches since 1970, but only 19 inches from 1900 to 1940. Presently, the state’s lakes are full due to the recent rains and snow that is now beginning to melt. Heat waves have a long way to go to match, let alone exceed, the heat waves of the period 1920 to 1960.
On a more widespread or global basis, polar ice caps are not melting, but are growing. Sea level increases world-wide are at the same pace as far back as satellite records extend, even though CO2 continues to increase in the atmosphere. Hurricanes and tropical cyclones have not increased in intensity or frequency. In fact, ocean temperatures are decreasing, and hurricanes are decreasing too.
It is true that investors are pumping billions into California start-up companies, but as I wrote earlier, this is due to the increased price of oil. Such alternative energy, or renewable energy systems, ultimately must compete with oil. At the moment, these industries are incentivized with government subsidies, which can be removed at any time. Also, exchange traded funds (ETFs) that specialize in stocks worldwide that stand to benefit from global warming laws are under-performing the market, and by a wide margin. Investors know that global warming due to CO2 is on shaky grounds, and do not see any advantage in putting their money into such companies. see this and this.
The idea that the average homeowner in California will decrease his electric bill by 40 percent by installing new appliances and a new air conditioner is highly debatable, if not outright false. The largest consumers of electricity in a home are the refrigerator, electric stove and oven, clothes dryer, clothes washer, and automatic dishwasher. Of these, the electric stove and oven cannot be made much more efficient, if any. Homes built in the last 10 years (the 2000’s) have high-efficiency appliances due to construction laws. Homes built in the decade prior (the 1990s) likely have had their appliances wear out and either replaced already, or will be replaced soon. My estimate is that, at best, appliance replacement will decrease electric power consumption per home by 10 percent. This will be overwhelmed by the increase in electric power prices, which will be 30 to 50 percent. The reality of high-priced renewable electricity, with its required back-up power plants that burn natural gas, is a large increase in electric power prices. Where Californians currently pay approximately 14 cents per kWh for the lowest-tier of residential power, by 2020 the price will be at least 20 cents, almost a 50 percent increase.
Similarly, the idea that the consumer will save money at the gas pump by purchasing a high-efficiency car just does not make sense. The additional cost for a hybrid car is approximately $3,000, or if one wants to buy a VW Jetta with the high-mileage diesel engine, the cost is more than $10,000 additional. Meanwhile, all drivers in California must pay the increased price of gasoline, but not all drivers will purchase a new car. Those drivers who never purchase a new car, but must by economic necessity buy a used car, must not only wait years before a more-efficient car hits the used car lots, but must pay the higher price of gasoline while they wait. They will not have more spending cash in their pocket.
The idea of putting solar panels on homes in California to reduce grid demand has been around for decades. The economics have never been favorable until recently, with the three-tiered pricing for domestic electricity use in California. As to having the solar panels financed 100 percent by a bank, but having the home’s value increased, I’m not quite sure about that. It appears a homeowner could apply for the loan, have the bank pay for installing the solar panels, then sell the home at its enhanced value and walk away with an additional $20,000 or even $50,000 in his pocket, depending on the size of the solar panel system. The buyer would be obligated to pay the annual payments via his increased property tax bill. Hmmm….maybe I’ll go into the home-flipping business – but only if I purchase a home without solar panels.
Also, it appears that only the wasteful are in a position to benefit from solar panels on their home. Many of my friends, and my own modest lifestyle, do not have utility bills that soar into the higher echelons of pricing due to excessive use (as determined solely by the price-setting entity, the PUC). Thus, we and similarly situated people will not likely ever install a solar PV system – it just makes zero sense when power price is at 13 cents per kWh. On the other hand, maybe we can simply install the system using the bank’s money, then flip the house to a new owner.
The idea that Californians will be the ones manufacturing solar panels is highly suspect, given the manifold advantages of manufacturing overseas. Why would solar panels be manufactured here, when so many other products are made overseas where labor costs, and regulatory costs, are much lower? What is true is that solar panels will be installed using local labor. But after they are installed, what will those installers do? These are not sustainable jobs for the long run.
Cap and trade will dramatically increase the cost of doing business in California, to the detriment of in-state businesses. Arizona has already withdrawn from the regional cap and trade system, thus inviting California businesses to relocate to Arizona, hire people in Arizona, then ship their goods to California. The same is true of many, many other states where business conditions are much more favorable than are California’s. We have already seen every automobile assembly plant close in California, due to burdensome regulations, high taxes, high labor costs, high power prices, and now AB 32 wants to impose additional burdens on remaining businesses. It will not take much for businesses, say for example oil refineries, to shut down their refining processes and simply import gasoline, jet fuel, and diesel from other states or from overseas. Most California refineries are on the coast, except for the handful around Bakersfield. A shutdown refinery does not employ as many people, as it takes only a few to run the tank farm. Out of work refinery employees will have a follow-on impact on local businesses, especially those who provided parts and services to the refineries. The same is true for other industries, especially cement manufacturers, and other heavy industry.
The choice seems abundantly clear: vote to keep AB 32 in place and hope that the government knows what they are doing and will keep their word (and has that ever been the case in the USA, and especially California?), and that each person will indeed get that precious $5 extra in their pocket every week, and electric power prices will only increase 13 percent, and every homeowner will rush out to replace all the appliances and install solar panels, and every driver will immediately purchase a new car that achieves 35 miles per gallon, and every business will find some way to reduce their CO2 emissions below their cap level and sell carbon credits.
Or, recognize what business schools around the world (including the prestigious Harvard Business School) have taught for years (because it is a fundamental truth), that reducing one’s costs of doing business is the way to grow and prosper a business. Increasing the cost of utilities, and transportation for goods received and for goods shipped, when one’s competitors are not burdened with similar costs, is not the way to grow and prosper. Instead, it is a recipe for bankruptcy. Recognize that few homeowners have the ready cash, or credit, to purchase new appliances, and then recognize that many residences in California are rentals such as apartments. Rental apartments will not usually allow the renter to install new appliances, indeed, the only appliance the renter can replace is his own refrigerator. Not the washer, the dryer, the dishwasher, and certainly not the stove or oven. If the landlord replaces these, then rents will go up to pay for them. That will certainly wipe out that $5 per week that California promises will appear in every person’s pocket.

Re: The 1/3 energy from renewables:
I read recently that CA had cancelled a contract to buy power from Utah (which they were consigned to likely due to their self destructive refusal to build power plants in CA). And the reason? Because Utah is largely coal fired power. So, the Auto-Regression into self destruction has been worsening… In common vernacular we might refer to this as: “Cutting your own n$ts off” Brilliant!

Doug says:
October 7, 2010 at 7:27 am
“Hey, thats my federal land in Wallowa County too, and I would rather have it covered with wolves than a bunch of sacred cows at the public trough. Of course, I’m just an elitist from Bend. Why don’t we stay on topic here?”
Denzel Ferguson reader I see- Vegan,too? don’t shop at Safeway? Grow your own?
Wolves don’t just stay on federal land. These aren’t the native wolf. the native wolf was more like a Half-breed Coyote. Probably was. These things are a human induced
invasive species. The are decimating Elk and Deer herds. and Cattle-even behind their
own fences. While I do think Wolves can be intergrated in to an ecosystem, the Gray Wolf of the north is not it. It isn’t just Federal land. Yes this is on topic as it is an example of the intentions of well meaning people going awry.. Just like the California law.

I will vote for 23. I signed the petition to get it on the ballot. I would happier if it was an outright repeal of AB32 instead of a suspension. However, the suspension may be an easier political sell.

RogerSowell:
Very good analysis! As a venture capitalist, my firm does not invest in California for any so called ‘green energy’ opportunities. For example, solar manufacturing cannot be done in California because it is dirty manufacturing. Crystal growing and casting are metallurgical processes which are relatively energy intensive since they are processing molten silicon at around 1600°C. Consequently, most if not all such manufacturing are done in Mexico and China, which then ship the end product to California for final assembly. So someone, somewhere will have to pollute the atmosphere. Thin film or other solar manufacturing is a very, very dirty business.

In the US, per capita emissions of CO2 peaked in the early 70s at about 23 tons and have been flat to slightly declining since 1990 at about 19 tons. The most current numbers I could find were for 2007, but preliminary figures for more recent times indicate a downward trend. Population growth in California from 1990 to the present has been on the order of 7-8 million. The illegal immigrant population of California is estimated at around 3 million. Rounding them up and deporting them could potentially get the state almost 40% of the way to matching the total emissions level of 1990. This is admittedly a slightly draconian proposal but if, as seems to the case, we are at the point where we need to be blowing up people who aren’t willing to do their part in fighting this deadly menace, everything should be on the table. Some may argue that we need these folks to do jobs that others will not do, but recent stories about Meg Whitman’s domestic employee getting $23/hr suggest we may need to reexamine that proposition in the light of an entirely different wage standard than what most people imagine as the going rate.
To finish the job all that would be required is enacting enough of these environmental restrictions to create a net exodus of another 4-5 million citizens, which could completely close the gap with the 90s. If the restrictions were scary enough to accomplish this quickly, they wouldn’t ever actually have to be implemented and Californians could continue down their path to financial and social oblivion while enjoying carbon footprints that are pretty much status quo.
Given recent events in the PR realm, I feel compelled to add that I’m sort of kidding.

Darrin is correct. The cleanest power source we have, hydro, is not considered “green.” Of course the greenies would love to rip out the dams that produce the hydro power in order to increase water for the fish. They don’t reckon with the fact that those same dams that provide power protect populated areas from catastrophic floods. In the 1850s the fellow doing the geo survey for Calif. noted that after heavy rains in the mountains the Sacramento River was 25 miles wide and up to the 2nd floors in Sacramento. Maybe that would clean out the state government!!!! Here in N. Cal. we don’t get enough sunshine in the winter for solar panels to produce. Everyone I know on solar has to use generator backup during the winter. They also usually use propane for refrigeration and cooking.

I am totally on topic. California is our test case. What happens there will visit each of us in our states unless we rise up and put a stop to it.
First Point: Restrictions on manufacturing, agricultural production, and use of public federal lands (these lands being another issue for another day) for productive purposes by burdensome taxes and over-zealous rules and regulations, will harm economic stability. Which in turn will harm environmental stability. If you want to see a polluted country, visit a de-stabilized one. Better yet, just to drive home the point, have a drink of water in that country. Then wait a few hours.
Environmental improvement comes when economic engines are running, not when they are not running. Ah. But maybe that is the end game.
Second Point: In an empty county like Wallowa County is becoming, it might as well be filled with wolves. However, be careful what you wish for, or vote for. This “animal loving” direction will go around to bite greenies in the arse. Eventually, “they” will come after you and you will scream bloody murder. But then, you have done that before. Remember field burning? You didn’t want to live in a valley that was invaded by smoke in the fall (did you know that it used to be worse PRIOR to modern agriculture?). So you worked to end it. Welcome to the world of not wanting to live next to something that makes you uncomfortable. Wolves make me very uncomfortable. What is worse, we didn’t vote this in. It was forced on us. Greenies are all hyped about voting in the animals. They will change their tune when their right to vote is removed.
But it’s all good. No pressure.

Pamela Gray
exactly-as the son and grandson (gr. grandson,for that matter) of NE Oregon SW
Washngton, and Central Idaho, Cattle and Wheat Ranchers, this will, indeed rise up and bite those who have no idea what making a living off the land is like. Here is a wiki on what was called “The Big Burn of 1910″ for those of us who yearn for”The good old days.” My Granpa and Granma on my father’s side were in Wallace,ID when they evacuated the town. My railroader Granpa stayed, and help load the Passengers, and did not get out when they started the backfire, 2/3rds of the town was saved.
The Wiki: http://en.wikipedia.org/wiki/Great_Fire_of_1910
scroll down for the story of the Great Pulaski.