The Type of Prosperity California Ought to Show the World

As reported earlier this month in the Los Angeles Times, California policymakers are expanding their war on “climate change” at the same time as the rest of the nation appears poised to reevaluate these priorities. In particular, California’s legislature has reaffirmed the commitment originally set forth in the 2006 “Global Warming Solutions Act” (AB 32) to reduce the state’s CO2 emissions to 40% below 1990 levels by 2030.

Just exactly how California policymakers intend to do this merits intense discussion and debate. As the Los Angeles Times reporter put it, “The ambitious new goals will require complex regulations on an unprecedented scale, but were approved in Sacramento without a study of possible economic repercussions.”

At the risk of providing actual quantitative facts that may be extraordinarily challenging for members of California’s legislature, most of whom have little or no formal training in finance or economics (ref. California’s Economically Illiterate Legislature, 4/05/2016), the following chart depicts data that helps explain the futility of what California’s citizens are about to endure:

CALIFORNIA ENERGY CONSUMPTION, POPULATION, GDP, AND CO2 EMISSIONS
Comparisons to the rest of the USA, China, India, and the world

20161227-ca-energy-metrics-vs-world2(For links to all sources for this compilation, scroll down to “FOOTNOTES”)

The first row of data in the above table is “Carbon emissions,” column one shows California’s total annual CO2 emissions including “CO2 equivalents” – bovine flatulence, for example, is included in this number – expressed in millions of metric tons (MMT). As shown, in 2014 (the most recent year with complete data available) California’s CO2 emissions were down to 358 MMT. That’s 73 MMT lower than 1990, when they were 431 MMT. While this is a significant reduction, it is not nearly enough according to California’s state legislature. To hit the 40% reduction from 1990 levels by 2030, CO2 emissions still need to be reduced by another 100 MMT, to 258 MMT. That’s another 28% lower than they’ve already fallen. But California is already way ahead of the rest of the world.

As shown on row 8 of the above table, California’s “carbon intensity” – the amount of CO2 emissions generated per dollar of gross domestic product – is already twice as efficient as the rest of the U.S., twice as efficient as the rest of the world, more than three times as efficient as China, and nearly twice as efficient as India. We’re going to do even more? How?

A few more data observations are necessary. As shown, California’s population is 0.5% of world population. California’s GDP is 2.0% of the world GDP. California’s total energy consumption is 1.4% of world energy consumption, and California’s CO2 emissions are 1.0% of the world’s total CO2 emissions.

These stark facts prove that nothing Californians do will matter. If Californians eliminated 100% of their CO2 emissions, it would not matter. On row 1 above, observe the population of China – 1.4 billion; the population of India – 1.3 billion. Together, just these two developing nations have seventy times as many people as California. The per capita income of a Californian is four times that of someone living in China; nine times that of someone living in India. These nations are going to develop as much energy as they can, as fast as they can, at the lowest possible cost. They have no choice. The same is true for all emerging nations.

So what is really going on here?

If California truly wanted to set an example for the rest of the world, they would be developing clean, safe, exportable technologies for nuclear power and clean fossil fuel. Maybe some of California’s legislators should take a trip to Beijing, where burning coal generated electricity and poorly formulated gasoline creates killer fogs that rival those of London in the 1900’s. Maybe they should go to New Delhi, where diesel generators supplement unreliable central power sources and raise particulate matter to 800 PPM or worse. Maybe they should go to Kuala Lampur, to choke on air filled with smoke from forests being incinerated to grow palm oil diesel (a “carbon neutral” fuel).

According to the BP Statistical Review of Global Energy, in 2015, renewables provided 2.4% of total energy. Hydroelectric power provided 6.8%, and nuclear power provided 4.4%. Everything else, 86% of all energy, came from fossil fuel. In the real world, people living in cities in emerging nations need clean fossil fuel. So they can breathe. Clean fossil fuel technology is very good and getting better all the time. That is where investment is required. Right now.

Instead, purportedly to help the world, California’s policymakers exhort their citizens to accept a future of rationing enforced through punitive rates for energy and water consumption that exceed approved limits. They exhort their citizens to submit to remotely monitored, algorithmic management of their household appliances to “help” them save money on their utility bills. Because supposedly this too averts “climate change,” they restrict land development and exhort their citizens to accept home prices that now routinely exceed $1,000 per square foot anywhere within 50 miles of the Pacific coast, on lots too small to even put a swing set in the yard for the kids. They expect their citizens to avoid watering their lawns, or even grow lawns. And they will enforce all indoor restrictions with internet enabled appliances, all outdoor restrictions with surveillance drones.

This crackdown is a tremendous opportunity for a handful of high-technology billionaires operating in the Silicon Valley, along with an accompanying handful of California’s elites who benefit financially from politically contrived, artificial resource scarcity. For the rest of us, and for the rest of the world, at best, it’s a misanthropic con job.

The alternative is tantalizing. Develop clean fossil fuel and safe nuclear power, desalination plants, sewage recycling and reservoirs to capture storm runoff. Loosen restrictions on land development and invest in road and freeway upgrades. Show the world how to cost-effectively create clean abundance, and export that culture and the associated enabling technologies to the world. Then take credit as emerging nations achieve undreamed of prosperity. With prosperity comes literacy and voluntarily reduced birthrates. With fewer people comes far less pressure on the great wildernesses and wildlife populations that remain, as well as fisheries and farmland. And eventually, perhaps in 25 years or so, renewables we can only imagine today, such as nuclear fusion, shall come to practical fruition.

That is the example California should be showing to the world. That is the dream they should be selling.

 *   *   *

Ed Ring is the vice president of policy research for the California Policy Center.

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How Gov’t Unions and Crony Capitalists Exploit Global Warming Concerns, June 21, 2016

The Alternative to Crony Capitalism and Phony Shortages, June 15, 2016

Government Unions and the Financialization of America, May 24, 2016

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Why Aren’t Unions Fighting California’s Bullet Train Boondoggle?, November 24, 2015

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The Abundance Choice, December 24, 2014

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How to Create Affordable Abundance in California, July 1, 2014

California’s Green Bantustans, May 21, 2014

The Unholy Trinity of Public Sector Unions, Environmentalists, and Wall Street, May 6, 2014

 

FOOTNOTES

Population
World Population Clock:
http://www.worldometers.info/
https://en.wikipedia.org/wiki/List_of_countries_and_dependencies_by_population
Directorate-General of the European Commission:
https://en.wikipedia.org/wiki/Eurostat
https://en.wikipedia.org/wiki/List_of_European_Union_member_states_by_population
US Census Bureau – California:
http://www.census.gov/quickfacts/table/PST045215/06

Carbon Emissions
U.S. Energy Information Administration:
http://www.eia.gov/state/rankings/?sid=CA#series/226
United Nations Framework Convention on Climate Change:
http://unfccc.int/ghg_data/ghg_data_unfccc/items/4146.php
http://edgar.jrc.ec.europa.eu/overview.php?v=CO2ts1990-2014&sort=des9
https://en.wikipedia.org/wiki/List_of_countries_by_carbon_dioxide_emissions

Total Energy Consumption
BP Statistical Review of World Energy:
http://www.bp.com/content/dam/bp/en/corporate/pdf/bp-statistical-review-of-world-energy-2015-full-report.pdf
California per capita energy consumption:
http://www.eia.gov/state/rankings/?sid=CA#series/12

GDP
World Bank:
http://databank.worldbank.org/data/download/GDP_PPP.pdf
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
US Dept of Commerce – Bureau of Economic Analysis:
https://www.bea.gov/newsreleases/regional/gdp_state/gsp_newsrelease.htm
https://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP

Note: There are only minor differences between the nominal US GDP and PPP (purchasing power parity) US GDP:
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal). With other nations, such as China and India, however, the differences are significant. Using purchasing power parity GDP figures for comparisons yields ratios that more accurately reflect energy intensity and carbon intensity among nations. 

1 reply
  1. Ronald Stein
    Ronald Stein says:

    Over regulations are NOT a hit on big oil, they’re a hit on future generations and the California and World economies, as they pay for the extra costs imposed on the energy industry.

    According to the California Energy Commission we contribute a miniscule 1 per cent to the world’s greenhouse gases which is the same contribution when AB32 was signed into law in 2006, a decade ago. The cap & trade program has had little to no impact on the reduction of California’s contributions to global greenhouse gas emissions.

    Weather wise, California is in a precarious position. While the East coast experiences abnormally wet conditions, the stagnant weather conditions in California are causing more smog days. However, the emissions crusade that began in 2006 has failed to reduce California’s 1 per cent contribution to the world’s greenhouse gases, all while cap-and-trade has raised $7 billion in fees from our citizens’ pocketbooks that are appropriated to more than 20 government pet projects. In the decade from 2006, California’s population has grown 1.077% to 38.8 million and we have less manufacturing jobs today than we had in 2006.

    Maybe it’s karma that the cash cow of the cap & trade “fees” were a bust in the May and August auctions achieving less than 2% or their projected auction income, as CARB avoids the transparency that the program has done little in 10 years to reduce California’s 1% contribution to the World’s Green House gases. With the latest August auction results, however, the financial futures of the program and the bullet train and many other pet projects are very shaky.

    With California being an energy island with the Sierra Mountains on one side and the Pacific Ocean on the other side, there are no pipelines “into” the state from the rest of the country. The green crusaders wishing to shut down the California oil industry would: 1)be depriving the airports of the 10,000,000 gallons of jet fuel required every day to keep them running smoothly, resulting in an international economic crisis,; 2)the 97% of our 32 million vehicles that run on conventional transportation fuels would be deprived of the 40,000,000 gallons of fuel being consumed every day, also resulting in a world economic crisis; and 3)we would be depriving future generations from those “chemical ingredients” that are part of virtually everything we see, eat, touch, manufacture, and use in your daily lives. All the above manufactured fuels are now manufactured in-state by the few, and most environmentally conscious manufacturers in the world, that are left and they are all on California’s energy island.

    The emissions crusade extension for another decade to 2030 is NOT a hit on big oil, it’s a hit on future generations and the California and World economies.

    Reply

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