California Ranks Near Bottom in New Energy Index

The "50 States Index of Energy Regulation" report recently published by the Pacific Research Institute measures the regulatory climate for energy consumption, production, and distribution, and which states are more economically efficient. Alabama, South Dakota, and Texas tied for best (#1), while California (#49) and New York (#50) are at the bottom. (1)

Based on seven component indices or set of questions that form a core of the index scoring and rankings, states that have a score of 1 means a state's energy regulatory movement is relatively economically efficient and 10 means a relatively inefficient economic environment. A geographic configuration shows that states on the West Coast, in the Northeast, and in the upper Midwest have the most economically inefficient regulations. States in the South and the center of the country have regulatory environments more favorable to efficient allocation in production and consumption of energy. (1) A previous report noted that renewable electricity mandates are causing electricity prices to rise and killing jobs in the states that have enacted them. Electricity prices are already nearly 40 percent higher in states with an REM (renewable electricity mandate). While the renewable mandates may not be the only reason electricity prices are higher in those states, these mandates likely contribute to higher prices and certainly are not helping to decrease the price. (2) Guess where the most states that have renewable electricity mandates are located? On the West Coast, in the Northeast, and in the upper Midwest; those mentioned earlier that have the most economically inefficient regulations. Hardly seems surprising.

---

California's troubled climate Policies

These aren't the only reports to show the trouble California is heading for based on their climate policies. Two studies in 2012 predicted economic devastation in California as the myriad regulation and costs resulting from AB 32, The Global Warming Solutions Act of 2006 takes effect over the next eight years. The hit for state residents will total $35 billion in 2020--exceeding California's combined revenue from sales tax, corporation taxes, insurance taxes, estate taxes, liquor taxes, tobacco taxes, and vehicle fees, according to a study by Andrew Chang & Company. The total cumulative cost to consumers will be $136 billion by 2020 according to the report. California's gross state product will be reduced by $153 billion, representing a 5.6 percent decrease. In addition, the state will have 262,000 fewer jobs in 2020 than if AB 32 had not been enacted. (3) The state's outlook is not much better in the other report which was prepared by the Boston Consulting Group. (4) It's key findings include:

• Gas prices could increase by $2.70 per gallon in California, depending on the cost of carbon.
• Due to refinery closures, California could lose 28,000 to 51,000 jobs, including many high-paying skilled manufacturing jobs, as well as indirect job losses due to multiplier effects.
• California could lose up to $4.4 billion of tax revenue per year by 2020.
• California climate-change regulation will discourage energy intensive industries for locating in the state, and existing industries will have an incentive to leave the state.

So, will California's sacrifices help save on world-wide emissions? Not at all. If the emissions savings from AB 32 could be met tomorrow, instead of waiting until 2050, the entire emissions savings under this plan would be completely replaced by new emissions from the rest of the world in less than 6 months. (5) For China alone, projections put this country's emissions in 2030 in the range of 500% above 1990 levels. Globally, this translates to about 40% of all energy-related CO2 emissions between now and 2030. If China's emissions continue to grow at the rate of 10% per year, by the year 2040 it could be emitting as much CO2 as the entire world is today. And this doesn't include the rest of the developing world that is on a coal-use binge. (6) References

1. Wayne Winegarden and Marc Miles, "50 State Index of Energy Regulation," Pacific Research Institute, August 7, 2014
2. "The Statues of Renewable Electricity Mandates in the States," Institute for Energy Research
3. "The fiscal and economic impact of the California Global Warming Solutions Act (AB 32), pre-release briefing," Andrew Chang & Company, June 2012
4. "Understanding the impact of AB 32," Boston Consulting Group, June 19, 2012
5. Chip Knappenberger, "California's path to regulatory hari-kari: for what climate effect?", masterresource.org, February 5, 2009
6. China Environment Series, Issue 11, 2010/2011, Jennifer L. Turner, Editor, Woodrow Wilson International School for Scholars, Page 8