Fighting Bad Policy With Facts

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.

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4 comments to Fighting Bad Policy With Facts

  • Charles

    oz and Tough Love must be on vacation.

  • oz

    Charles-

    I appreciate your request for my humble opinion, but I’m afraid I don’t have much to say on this one.

    I do know that as it relates to automotive emissions control, California has led the way the past 40 years with their emissions control policies, and I believe the rest of the country has benefited.

    I honestly, though, am not informed enough to have an educated opinion on this massive issue.

    -Oz

  • Editor

    Oz – here’s the bottom line: CO2 is not pollution, and the idea that we can regulate CO2 emissions the way we regulated genuine pollutants – whose emissions volume is 2-3 orders of magnitude lower than CO2 emissions – is patently absurd. Environmentalists have been corrupted and lost their credibility. They have sold their souls. They should go back to saving tigers and orangutans, and getting the last bit of mercury emissions out of the smokestacks of coal-fired power plants. Those things matter. Attempting to regulate CO2 is a Wall Street scam. Period.

  • Charles

    Ed: I agree with your last comment totally. By far the energy we use in this country comes from burning hydrocarbons over any other source. Plus, environmentalists don’t want hydroelectric dams or nuclear power plants. Wind costs 4x and solar 6x other sources and is heavily subsidized. Electric cars use electrical power which comes mostly from the burning of fossil fuels. Burning hydrocarbons produces CO2. There is only so much energy in a gallon of gasoline or any other fossil source, we can only squeeze so much out.

    So the only way to meet the goals of the environmentalists is to cut energy production and raise the cost of energy hugely. This will bankrupt our nation or at least put it into a permanent recession. And we haven’t even touched on whether warming is caused by carbon dioxide or other natural processes and for that matter whether or not it is a good thing.

    The free enterprise system will find more and better efficiencies as they always have. We don’t need to be put in the poorhouse by government rationing of energy. And we certainly don’t need more Central Planning. Think about the millions who died in poverty due to starvation and the lack of other necessities of life in the Soviet Union and Communist China.