August 26, 2015 | Commentary on Energy and Environment, Energy Policy

California green failure a warning for states facing Clean Power Plan

In the eyes of the Obama administration, California is the gold standard for state energy policy. The feds lavishly laud the Golden State’s aggressive green energy mandates and stringent energy efficiency requirements. But few states have jumped on California’s green energy bandwagon — and with good reason.

The California Clean Energy Jobs Act (Proposition 39) raised corporate taxes to pay for energy efficiency initiatives and green energy projects — particularly at state schools. Backers estimated the plan would generate more than $550 million annually and create 11,000 “green” jobs.

But this month, the Associated Press reported that “money is trickling in at a slower-than-anticipated rate, and more than half of the $297 million given to schools so far has gone to consultants and energy auditors. The board created to oversee the project and submit annual progress reports to the Legislature has never met.” So far, the program created only 1,700 jobs.

Failed green jobs programs are an all-too-familiar story. The 2009 stimulus bill poured billions of dollars into green programs — to little effect.

An October 2012 report from the U.S. Labor Department’s Inspector General found that only 11,613 program participants remained employed longer than six months — a mere 16 percent of the goal. The program bore all the trademarks of a classic boondoggle. The report found that much of the training provided was perfunctory, irrelevant to the work and/or went to people who already had jobs.

Such expensive failures prompt the question: Why does government do this? If green power initiatives reduced energy costs and created jobs, these programs would not be necessary. They would sell themselves.

Maybe you’re thinking the latest fiasco is just “California being California — let ‘em drive out businesses and make all the false promises they want.” Unfortunately, the Obama administration is following the same blueprint with its Clean Power Plan.

The climate change regulations recently finalized by the Environmental Protection Agency erects greenhouse gas emission reduction targets for each state except for Vermont, Alaska, and Hawaii. The goal: To reduce overall power plant emissions to 32 percent below 2005 levels by 2030. The regulations will wrench America’s energy economy away from affordable, reliable coal, which provides approximately 40 percent of America’s electricity.

Before finalizing the rule, EPA officials toured the country claiming the plan would give states plenty of flexibility and options for meeting its goal. Ostensibly those options include: improving efficiency in coal-fired power plants; switching to natural gas, nuclear or renewables; implementing a regional cap-and-trade program; imposing a carbon tax, or mandating more stringent efficiency standards.

Although the EPA does not explicitly tell the states which path to take, the feds are clearly pushing them to adopt its favored options. For example, states choosing to produce more renewables or implement more stringent energy-efficiency mandates will get extra credits toward meeting its emissions targets. The EPA argues that implementing efficiency mandates will ultimately save consumers money over time.

But California’s Green Energy Jobs Act demonstrates that these initiatives continue to overpromise and underperform. Moreover, they’re not necessary. Businesses and families already have the option of buying more energy-efficient goods. Those which perform as advertised don’t need a government-imposed regulation to force consumers to buy them.

State officials should understand that no matter what path they take to comply with the Clean Power Plan, their citizens and the state’s economic well-being come out on the losing end. The plan lets the federal government evade all accountability and leaves state officials to take the political heat for executing power plant regulations that are all economic pain and no environmental gain.

Lawmakers and state officials should exercise leadership and reclaim their authority from the unelected bureaucrats whose regulatory ambitions threaten economic growth and individual prosperity.

-The Heritage Foundation’s Herbert and Joyce Morgan Fellow, economist Nicolas Loris specializes in energy and environmental policy.

About the Author

Nicolas Loris Herbert and Joyce Morgan Fellow in Energy and Environmental Policy
Thomas A. Roe Institute for Economic Policy Studies

This piece originally appeared in The Washington Times