California’s unemployment rate has soared to 12.4%, third highest in the nation. For the sixth straight year, it has a net loss of population to other states as employers look to escape the onerous regulatory regimes and high tax rates in the nation’s most populous state. What better time to make energy more expensive and give government even more command control of the economy? Via Blue Collar Philosophy:
California regulators Thursday are expected to adopt the nation’s most comprehensive carbon trading regime, creating a market-based way to lower greenhouse gas emissions at a time when similar efforts have stalled in Congress.
The program is the centerpiece of the state’s 2006 global warming law, which aims to slash carbon dioxide and other planet-heating pollution to 1990 levels by 2020. That would amount to a 15% cut from today’s level.
The cap-and-trade system “will help drive innovation, create more green jobs and clean up our air and environment,” said California Air Resources Board Chairwoman Mary D. Nichols, adding that it “provides flexibility” to industry and takes “into consideration the current economic climate.”
Well, states are the laboratories of democracy. An imposition of cap-and-trade would allow the rest of the country to see how well it works to lower carbon emissions, and just how much it “drives innovation” and “provides flexibility.” The only innovation this will likely produce will be the relocation of energy producers to neighboring states. Los Angeles, for instance, buys a significant amount of its power from Arizona, a trend that will likely intensify as the cost disparity for producers grows as a result of regulatory growth and mandated caps on production. Welcome back to rolling blackouts when energy production fails to grow with demand.
Nor will that be the only impact on California’s economy. The costs of cap-and-trade will get passed to consumers in the form of higher energy bills. As has been repeatedly shown, that will have a deeply regressive impact on California’s poor and working class. They will either have to spend more of their smaller discretionary funds on energy or cut back, forcing them to spend less on energy-consuming products and damaging the retail economy in California even more. Those who can move will relocate to other states, mainly the middle class, which will accelerate a trend already seen in California.
California already has an economic and budgetary crisis on its hands from its insistence on overregulation and intervention. This promises to magnify the state’s problems by offering a hair-of-the-dog solution. Unfortunately, the state seems incapable of correcting itself short of financial collapse.