A couple of months ago in a post entitled “Inflation, Population & Government,” I criticized California Senator Denham for making the following assertion in a press release: “between 1970 and 2010, for every 1 percent increase in population, our [California's state government] spending has increased 20 percent.” In reality, if you adjust for inflation, that statement should read as follows: “between 1970 and 2010, for every 1 percent increase in population, our [California's state government] spending has increased 3.4 percent.”
This is still a shocking statistic. California’s state government grew over the past 30 years at 3.4x the rate of population growth. Why make an unbelievable comment – 20x – when the inflation-adjusted indisputable truth is so dramatic?
Here’s another one, just for the record. In today’s Wall Street Journal, one of my favorite writers, George Gilder, has a guest column entitled “California’s Destructive Green Jobs Lobby.” In this column he makes some fundamental points about California’s failure on Nov. 2nd to pass Prop. 23, which would have slowed down implementation of AB32, the “Global Warming Act” passed by their legislature in 2006, and set to take effect in 2012. To paraphrase Gilder:
- CO2 is not pollution.
- Fossil fuel is cheaper and in many respects far cleaner than “alternative energy,” and there is plenty of it available within the borders of the United States.
- Economic growth depends on basic resources such as energy costing consumers and businesses LESS, not more.
- “Green plutocrats” ponied up tens of millions and were prepared to spend Prop. 23′s backers into the ground to make sure it was defeated.
- The reliance on government edict to grow venture-backed “green” companies is undermining and corrupting the most competitive, innovative sector in the U.S. economy, the venture capital industry, with potentially tragic consequences to our national security, technological leadership and economic future.
It is difficult to overstate how much I agree with Mr. Gilder on these points, as any reader of CIV FI knows. That the destroyers of Prop. 23 really believe CO2 is pollution is plausible, although they ought to do their homework because CO2 is not pollution, it is a benign trace gas that plants depend on in order to live and helps make our planet habitable. But how can they possibly think putting California through the hardship of AB32 will actually make a difference in atmospheric CO2 concentrations, or empower anything other than their own financial returns along with enhanced revenues to the public sector? These billionaires were able to persuade economists to release studies claiming that subsidized “green” jobs, producing inefficient, expensive energy solutions, and forcing consumers and businesses to buy these “solutions,” would actually create economic growth. The whole thing is ludicrous. It is laughable. The backers of Prop. 23 should have publicized the names of these plutocrats, challenged their motives, and ridiculed their premises.
Here’s where Gilder got careless, however:
“What is wrong with California’s plutocratic geniuses? They are simply out of their depth in a field they do not understand. Solar panels are not digital. They may be made of silicon but they benefit from no magic of miniaturization like the Moore’s Law multiplication of transistors on microchips. There is no reasonable way to change the wavelengths of sunlight to fit in drastically smaller photo receptors. Biofuels are even less promising. Even if all Americans stopped eating (saving about 100 thermal watts per capita on average) and devoted all of our current farmland to biofuels, the output could not fill much more than 2% of our energy needs.”
Biofuel is indeed inefficient, but it isn’t that inefficient. There are roughly 470 million acres of active farmland in the U.S. (ref. Carrying Capacity Network, “U.S. Food & Land Production“), and bioethanol from corn can yield roughly 500 gallons per acre per year (ref. EcoWorld, “Is Biofuel Water-Positive“). There are roughly 81,000 BTUs of energy within a gallon of bioethanol (ref. “Gasoline Gallon Equivalents“), which means that if you produced corn ethanol on every available acre of farmland in the U.S., you would produce about 19.2 quadrillion BTUs per year. Since we use about 100 quadrillion BTUs of energy per year in the U.S., growing ethanol on every acre of farmland would deliver us about 20% of our total energy needs, not 2%. Gilder dropped a decimal.
The reason to stop California’s global warming act isn’t that alternative energy shouldn’t be promoted. The point is alternative energy, in most cases, is still too expensive to replace conventional energy development. There are parts of the world, such as Brazil – where you can get over 1,000 gallons of ethanol per acre from sugar cane – where biofuel makes economic sense (although the environmental price paid for all that acreage of sugar cane for transportation fuel is another story). There are off-grid applications of solar electricity that also make economic sense. But these are the exceptions, not the rule, and will remain so for a few more decades. All of Gilder’s fundamental points are completely accurate. The idea that we are about to force California’s industry to trade “carbon emissions credits,” so “green” entrepreneurs can make billions, and Wall Street brokerages can rake commissions off of trillions – all on the backs of the people least able to afford this – is truly deplorable.
When the facts are on your side, there is no need to inadvertently exaggerate them. And those who want to impose bad policy onto the backs of honest working people should examine their own premises.