A Free-Market Energy Blog

Lessons from California

By Kenneth P. Green -- February 3, 2009

One hopes, as Obama constructs his energy and climate policy, that someone points him to an interesting article by Stephen Moore in the Wall Street Journal. In the article, Moore points out something that I experienced first-hand in California and that, in fact, guided me into a career in economic and environmental policy. What I noticed, while doing my doctoral intership at Hughes Aircraft, was that California’s environmental policies virtually always failed cost-benefit tests unless those tests were rigged, with benefits inflated and costs under-estimated. I also noticed that the regulations, despite the blue-sky analysis of the state environmental regulators, was hollowing out California’s economy and driving major industries, such as the aerospace sector, largely out of the state.

What Moore points out is that going green is not a low-cost venture, in terms of either jobs lost, or industries lost:

California’s unemployment rate hit 9.3% in December, up from 4.9% in December 2006. There are now 1.5 million Californians out of work. The state has the fourth-highest housing foreclosure rate in the nation, has lost more businesses than any state in recent years, and is facing a $40 billion deficit.

Let’s hope that Obama is paying attention to the real lessons learned from California—that excessive haste on going green is a great way to push one into a lot of red ink.


  1. BlogReader  

    The counter to this is that more public money should be spent to promote “green” jobs, negating the loss of jobs by companies leaving the state. I’m always boggled by that reasoning, Mayor Nickels in Seattle is always using it.


  2. Ed Reid  

    Principle Lesson:

    Don’t begin vast programs with half-vast ideas.


  3. California Commits Hari-Kari: For What? — MasterResource  

    […] Green’s post on California’s global-warming policy commented on the sad state of California’s […]


  4. California’s Economic Hari-Kari: What’s the Climate Effect? — MasterResource  

    […] Green’s post on California’s global-warming policy commented on the sad state of California’s […]


  5. E.M.Smith  

    You ought to put an update on this article. Last I heard we were at 12% or so unemployment and rising with the cause being continued job loss as companies continued to abandon the state. Jumping the sales tax to over 10% (it varies by location due to city add ons) has not helped to spur sales or encourage consumers… (10% sales tax, 11% income tax, property tax, etc. pretty soon your talking real money…)

    Tax beatings will continue until business morale improves …

    I really wish politicians would take an Econ minor rather than learning it all “on the job” at my (our) expense by repeating the same mistakes again and again and again…


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