No free lunch on emissions

California Gov. Arnold Schwarzenegger is on a snake oil sales tour. To much fanfare, the Governator is traveling the country promoting his “California model” for fighting global warming. But he is an emperor without clothes, his vaunted California model an illusion.

Late last year, Mr. Schwarzenegger became the first prominent state executive to discover that “doing something” — or being seen to be “doing something” — about global warming makes for great politics. His popularity went through the roof after he signed into law the Global Warming Solution Act, the nation’s first binding greenhouse gas emissions reduction targets.

At first, the immediate and favorable reaction from the public and press caught the governor off guard. After all, he had only signed a bill that had already been deliberated and passed by California’s Democratic-controlled legislature. Mr. Schwarzenegger, ever the consummate politician, quickly caught on, and soon made climate change his signature issue. He has since managed to remain in the public spotlight preaching to fellow governors the virtues of this scheme.

Mr. Schwarzenegger’s California model is premised on the notion that government can facilitate precipitous reductions in greenhouse gas emissions without affecting the economy. Indeed, he claims global warming policies will somehow boost the economy. “We can grow the economy and simultaneously protect the environment,” he admonishes, “it’s not a choice.”

Unfortunately, his rhetoric is catching on. At the National Governors Association meeting last week, Arnold’s influence was palpable. Minnesota Gov. Tim Pawlenty told reporters there that emissions reduction policies, “correctly” done, “will be a boost to the economy.” Sound familiar?

And the California governor’s influence reaches across the country. Florida Gov. Charlie Crist recently hosted a global warming summit in Miami, where Mr. Schwarzenegger was a conspicuous presence. Mr. Crist capped the conference by signing executive orders to reduce Florida’s carbon emissions by 80 percent by 2050 — emissions targets identical to California’s. “We will follow the great governor of California’s example,” gushed Mr. Crist at the signing ceremony. “He has set the lead.”

But it is questionable whether Mr. Schwarzenegger’s lead is worth following. The Global Warming Solutions Act binds California to drastic and difficult emissions reductions, but offers no ideas on how California might reach those targets. Instead, it delegates responsibility for California’s climate strategy to state regulatory agencies. These overwhelmed agencies have yet to propose any significant measures to mitigate California’s emissions — which is unsurprising given the enormity of this task. Nearly a year after it was passed, the Act has yielded little in the way of real solutions.

There are other problems with the “California model.” The Act stipulates that emissions reductions begin in 2012 — two years after Mr. Schwarzenegger’s term expires. His administration even went so far as to direct the lead regulatory agency on climate change to limit “early action” items — emissions reduction measures that could be begun by 2010 — to only three. All the pain of energy restrictions, taxes and mandates will, conveniently enough, be unleashed on citizens only after the Governator is out of office and working on his next film. No wonder he signed the Solutions Act.

Meanwhile, the situation in California puts the lie to the contention that emissions reduction regulations can be painless. In June, the state’s lead regulatory agency on climate change, the California Air Resources Board (CARB), nearly disintegrated after the governor fired CARB’s chairman for refusing to take it easy on California’s construction industry. The board’s chief executive officer resigned in disgust.

Now Democrats in the state legislature are holding hostage CARB’s budget while they bicker with the Schwarzenegger administration over the proper balance between enforcement and incentives to compel emissions reductions. Because business and environmental regulation are not simpatico, the “California model” is imploding.

Mr. Schwarzenegger and his emulators pose a curious threat to the people who voted them into office. On climate change, any sacrifice they mandate is far off and vague, so, with nothing to lose politically, politicians can promise the moon and the stars to their constituents, and write these promises into law — without any idea of how those promises might work. Yet their promises will carry an enormous price tag to be passed on to future generations.

Iain Murray is a senior fellow and William Yeatman is an energy policy analyst at Competitive Enterprise Institute.