State mandated policies such as cap-and-trade, LCFS, and RPS initiatives in California are the most ambitious renewable standards in the country. The state’s focus on environmental conservatism, however, has created a systemic crisis, beset by economic disaster and political paralysis. It would be foolish indeed for the United States to adopt all of the renewable-energy and climate-change policies before it becomes economically viable.
In economic terms, California is simply broke: issuing IOUs as payments for goods and services, begging the federal government to back state debt and bail out companies, and watching its credit rating plummet. Even now, as the economy slowly rebounds, California ranks as the worst state in America to do business, has the highest state income tax, the highest sales tax rate, one of the highest gasoline tax rates, and the 8th highest corporate income tax rate. Economic woes indeed.
These tax rates make it possible for the state to mandate renewable policies to further its environmental aspirations, championed by politicians eager to appear enlightened.
Today’s environmentalism in California is a long way from old-fashioned conservation. The mindset that began with John Muir’s efforts to turn Yosemite into a national park has devolved into a reflexive urge to impede the gears of commerce at every turn, notwithstanding efficiency. For example, just this past year, between 4.9 and 6.1 million pounds of radioactive waste was created to build wind turbines, one of the more aggressively lobbied renewable solutions. All this to say, by requiring rigorous environmental standards, California has severely debilitated its economic development. Such is the fate of Californians: to live in a state where environmentalism is a religion and economics a superstition.
Renewables have a place in an “all-of-the-above” energy plan for the United States. Technology, however, must be significantly developed and tested until the environmental benefits are matched by the economic demands.