California has raised the bar again in its relentless war on greenhouses gases.
Last week Governor Jerry Brown signed SB32 mandating that the Golden State reduce greenhouse gas emissions to 40% below 1990 levels by 2020. It is far and away the most ambitious such program anywhere in the world today.
I mention this because California is often the leader in groundbreaking legislation and technologies.
You know the national requirements for catalytic converters, safety glass, and seat belts for Detroit- manufactured cars? They all started here in CA. Your state, or country, won?t be far behind.
The bill is only the latest in a long line of attempts to halt global warming, which our Latin-speaking governor has made a hallmark of his administration.
Greenhouse gases have fallen by 9.5% since peaking in 2004 at 487.6 million metric tons. This has been largely due to the state?s three public utility companies closing the last of their coal burning power plants and shifting to cleaner burning natural gas. Improved car emissions and the rise of hybrid and electric vehicles have also helped.
This reduction has been effected with minimal economic cost. The State?s GDP has risen by 19% over the same time period, and that includes the Great Recession of 2008-2009. US real GDP rose by 18.5% over the same period.
California also hosts the planet's strictest ?Cap and Trade? system, which was implemented in 2012. A carbon tax by any other name, Sacramento sets an annual limit on the amount of carbon dioxide that can be released into the atmosphere each year, which is cut annually.
It then requires businesses, like refineries and electric power utilities, to buy a permit for every ton of greenhouse gases they spew into the atmosphere. The floor price has most recently been set at $12.73 a ton. The money raised, some $4 billion so far, is then used to finance other greenhouse reduction policies.
A big beneficiary has been California?s troubled and long-delayed High Speed Rail project, a plan to build an electric bullet train from San Francisco to Los Angeles, and ultimately to San Diego and Las Vegas.
Who is the biggest buyer of these permits? My own local utility, Pacific Gas and Electric (PCG/PC), who I sell power to, generated by my own personal solar panel array. They get whatever my Tesla Model S-1 doesn?t use.
Permit sales ran smoothly for four years. However, the program has recently run into difficulties. In the spring of 2016, only 10.5% of the needed permits sold. Fears that the entire system might get upended in the courts caused buyers to back away.
The oil industry has cobbled together a coalition of carbon-based energy producers with the California Chamber of Commerce to end the program when it comes up for renewal in 2020. Brown has threatened to fight them by sponsoring a statewide initiative that would almost certainly pass in a future election.
California is the founder of the global anti emissions movement for good reason. During the 1960s, the smog in Los Angeles was so severe that you couldn?t see 100 yards.
It rivaled the choking smog found in Beijing today. ?Smog Alerts? were declared by health officials to keep children indoors, including me.
California also boasts the world?s most ambitious alternative energy targets, which must reach 33% of total power production by 2020, and 50% by 2030. Ample state and federal subsidies have been made available to make this happen.
Still, before you ask, they pale in comparison to the $55 billion a year in federal subsidies the oil industry received in the form of the oil depletion allowance.
It is no surprise then that San Francisco has become the epicenter of a global alternative energy industry, be it in solar, geothermal, batteries, other storage or biodiesel. Not only does the industry receive enthusiastic local support, but it knows it has an ample base of local consumers who will beta test and buy their new products and services.
Want an app that will locate the nearest charging station? No Problem!
Hardly a day goes by without a young Berkeley or Stanford engineering student asking me where to focus his career. My answer is always the same: stay away from biodiesel. It?s not scalable, and smells like you know what. The future is in solar.
Ultimately, it is energy consumers who end of footing the bill for all of this. It is estimated that Cap and Trade alone has added 11 cents to the cost of a gallon of gasoline for California drivers. It is financing an industry that, if successful, will ultimately put it out of business.
There are, in fact, so many conflicting and competing alternative energy and anti global warming programs and subsidies that it can get downright confusing.
So far, the state's weary taxpayers have been tolerant. But, if you are already driving a Tesla, Leaf, Bolt, BMWi, the soon-to-be Apple McLaren electric race car, or any of the other myriad low-end electric cars to come, who cares?
20 Years of California GDP Growth
85 Years of Real US GDP Growth