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California’s Green Mirage



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On April 19, Next 10, a California-based cheerleader for all things green, issued a press release announcing the publication of the 2012 California Green Innovation Index, their fourth in a series of annual reports.

As a California lawmaker from 2004 to 2010 I was deeply skeptical of the claims of so-called “green technology” boosters and their constant push for taxpayer subsidies and government-enforced mandates. Instead, I preferred to let the free market sort out winners and losers.

A brief review of Next 10’s press release and attendant report, which resulted in a glowing story in at least one major California paper, the San Francisco Chronicle, shows some embarrassing holes — if only people would look beyond the hype.

Next 10’s presser lede claims that California’s global clean technology leadership is “supporting the state’s economic rebound, while also driving California’s ability to cut emissions.”

They go on to assert that, “From 2010 to 2011, clean tech investment in California rose by 24 percent to reach $3.5 billion.”

Mr. F. Noel Perry, Next 10’s founder is helpfully quoted as well, “California’s commitment to an economy that is cleaner will also give us an economy that is stronger.”

While the IRS deems Next 10 non-partisan, its founder is under no such illusions.  Mr. F(rancis) Noel Perry having given at least $98,250 to Democrats over the years, and not a nickel to the other side, from the gracious California locales of Menlo Park, San Francisco, and even Corona del Mar in my old Assembly district. Mr. Perry even double-maxed to Mr. Obama in 2008 and 2012 — one supposes he was captivated by candidate Obama’s January 2008 statement that, “Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”

On to an examination of six salient claims made in Next 10’s release:

  1. Claim: Clean technology has supported California’s economic rebound; Fact: from the start of the recession in December 2007 to March 2012, California has lost 557,610 jobs while the ranks of the officially recognized unemployed have jumped 981,137 — if this is an economic “rebound” we’d hate to see what a “recovery” looks like.
  2.  Claim: Clean technology has cut California’s greenhouse gas emissions; Fact: in addition to losing 557,610 jobs, the California economy shrank from 2008 to 2010 — it’s easy to reduce emissions when you’re not making as much stuff.
  3.  Claim: Clean tech investment in California rose 24 percent to reach $3.5 billion in 2011; Fact: $3.5 billion is less than 2/10th of 1 percent of the state’s economy.
  4.  Claim: California’s commitment to a “clean” economy will strengthen the economy; Fact: California’s public policy mandates surrounding the use of renewable energy have boosted California electricity rates to among the highest in the nation, accelerating industry’s flight out of California to the benefit of states with lower energy costs, such as Texas.
  5. Claim: California’s renewable electricity generation levels reached a new high at 13.7 percent in 2010; Fact: California’s electricity use declined more than 5 percent from 2008 to 2010 due to the recession, with in-state renewable power up some 4 percent due to generous subsidies and state mandates — renewables are becoming a larger piece of a smaller pie.  Further, some 25 percent of California renewables are imported, power that, in many cases, is backfilled with politically-incorrect coal power so as to sell Californians higher-priced “green” electrons, a practice I dubbed “electron-laundering” in 2010.
  6. Claim: Over 15 years through January 2010, employment in the California solar sector rose 166 percent with solar installation and contracting jobs representing the bulk of the growth; Fact: this represents about 20,000 added jobs in 15 years in a state that lost 557,610 jobs in the past four years — at that rate, California could regain its 2007 employment level by 2040.

Lastly, in an effort to lay certain ghosts to rest, Mr. Perry says, “Despite what we heard in the news this year, the data shows that Solyndra’s story is not the story of solar in California.”

He’s right: the real story is that a tiny number of people are enriching themselves by manipulating government policy to their benefit while 0.2 percent of the California workforce toils in the solar industry, installing Chinese-made solar panels to the accolades of the press.

Ironically, according to Next 10’s own 68-page report, Texas’ greenhouse gas emissions per capita declined more from 2008 to 2009 on a per capita basis than did California’s. Looking at data from the U.S. Energy Information Administration, Bureau of Labor Statistics, and Bureau of Economic Analysis, we see that, from 2007 to 2009, California saw a 6.5 percent decline in CO2 emissions, a 6.3 percent decline in non-farm employment, and a 1.5 percent decline in gross state product. But CO2 emissions in Texas declined more, 8.2 percent, while employment contracted by less than half of California’s loss, 3 percent while the economy only shrank 0.1 percent, a tiny fraction of California’s painful retrenchment.

By the way, in the past 12 months, an additional 36,400 people were employed in Texas’ oil and gas fields — a greater number than California’s entire solar sector employment base of 33,000.

So, while the “green” economy continues to promise, the real economy prospers.

Chuck DeVore served in the California State Assembly from 2004 to 2010 and was a Republican candidate for the United States Senate in 2010. He is currently a visiting senior fellow in fiscal policy at the Texas Public Policy Foundation.



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