Posted by: bmeverett | October 6, 2010

Friedman Watch 10-5-10

As anyone who has been even barely conscious that last year or so knows, California is in serious trouble. Unemployment is over 12%, government payrolls, pensions and entitlements are out of control, investors are fleeing the state and tax revenues are plummeting. How does Governor Schwarzenegger want to address all these problems? By picking a fight with the oil companies, of course. Tom Friedman has predictably jumped into the fray with an October 5 oped in the New York Times entitled “The Terminator vs Big Oil.”

In 2006, California passed the Global Warming Solutions Act (GWSA) – yet another piece of legislation with an absurd name. The law requires California to reduce its greenhouse gas emissions to 1990 levels by 2020. Essentially signing California on to the dead Kyoto Protocol. Two oil companies – Valero and Tesoro – are supporting Proposition 23, which would postpone implementation of the GWSA until California achieves four consecutive quarters of unemployment below 5.5%. Critics argue that Prop 23 would effectively kill the GWSA. That’s true, but the Act deserves to die.

Mr. Friedman lists the supposed benefits of the GWSA, none of which makes any sense. In the first instance, this law does nothing of any significance to reduce global warming. Even if you believe the questionable science behind catastrophic near-term man-made climate change, California cannot do anything on its own. The world currently emits about 30,000 million tons of carbon dioxide. The US accounts for 20% of that amount or about 6,000 million tons. California emits about 400 million tons, and reducing emissions to 1990 levels would require a reduction of about 25% or 100 million tons. The GWSA would therefore reduce global greenhouse gas emissions by about 0.3%. No other country in the world is making any serious effort to reduce carbon emissions. In what sense is California’s action a “solution”?

Second, Mr. Friedman pounds the “green jobs” table. Let me take a deep breath and say this one more time. Building expensive solar, wind and other equipment may create some jobs, but rising electricity prices will cost other jobs. On balance, you cannot increase overall economic activity by making essential inputs more expensive. According to the Energy Information Administration, California electricity prices to industrial consumers are already 60% above the national average. How exactly does California expect to attract investment this way?

Finally, Mr. Friedman quotes George Schultz, an opponent of Prop 23, that the GWSA is “cleaning up the air”. Reducing carbon dioxide does nothing for ambient air quality. Carbon dioxide emissions are a global issue. A 0.3% reduction in greenhouse gas emissions does nothing whatsoever for the air in California or anywhere else.
With weak arguments like these, it’s no wonder that Mr. Friedman decides to fill his op-ed with invective against “polluter lobbyists”, “right-wing mega-funders”, “out of state financiers”, “climate denialism” and “fraud”. California has no chance of solving its dire economic problems as long as its elected officials choose fashionable but meaningless environmental posturing over the difficult steps required to bring investment and jobs back to California.


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