Milton Friedman famously declared that “one of the great mistakes is to judge policies and programs by their intentions rather than their results.” While California desperately needs to apply this wisdom across the policy spectrum, arguably, the gap between policy leaders’ intentions and the empirical results are the widest when it comes to the state’s global climate change policies.
California wants to generate all of its energy from renewable energy sources (e.g. wind and solar) while still promoting robust economic growth. As I have argued in several studies (see here, here, and here), California is achieving the exact opposite. Thanks to the state’s global climate change policies, energy costs are among the highest in the country, energy poverty is an ever-present threat to lower-income families, and, ironically, California’s greenhouse gas emissions (GHG) are declining at a slower rate compared to the U.S. average.
The fundamental flaw in California’s approach is that the stated intentions are unattainable given the current technological constraints. Take the problems with wind power. Wind is often touted as the workhorse of the future energy grid. But, there are reasons to be skeptical, as documented in a report from a utility in Washington State (Benton PUD).
According to the report, a utility perspective is important because “utilities must balance environmental benefits and concerns with costs and power grid reliability; and (the Benton PUD) will be held accountable if (they) fail on any of these dimensions.” This point is worth emphasizing. Utilities are “held accountable” if they promote technologies that increase emissions or if they promote technologies that are unreliable. They have, consequently, the incentive to promote the technologies that will, on net, promote the general interest most efficiently.
So, what is Benton PUD’s perspective?
Wind is unreliable, since wind power relies on natural weather conditions decoupled from electricity demand, it is not dispatchable generation and therefore will not help us resolve our seasonal energy deficit problems.
For an electric grid that leverages hydro and nuclear resources, wind power, will not result in consequential reductions in national or global GHG emissions attributable to Washington State utilities and will do very little to mitigate the increasing risk of northwest power grid blackouts; which could grow to a 26% probability by 2026 if utilities are unable to replace the reliable generating capacity of shuttered coal plants.
Wind power is expensive meaning increased wind power, will unnecessarily contribute to increases in northwest utility retail electricity rates which could erode the economic development advantage low rates has given our region for many years. …
Building more wind farms in the PNW will contribute to untimely energy supply gluts and low short-term market prices which reduces surplus hydro energy sales revenues, increases net hydro power costs and puts upward pressure on retail rates….
As for the right way to achieve the goals of lower GHG emissions while still promoting economic growth, the utility suggests transitioning “coal power to natural gas and then natural gas to nuclear”. In fact, this market-driven transition is why other states have reduced their GHG emissions faster than California while providing cheaper, more reliable, energy.
The lessons for California are clear. State political leaders must stop supporting global climate change policies based on their intentions, and instead take a hard look at each policy’s impact. Such an approach is our best hope of setting policies that promote a clean environmental and a strong economy.
Wayne Winegarden, Ph.D. is a Sr. Fellow in Business and Economics and the Director for the Center for Medical Economics and Innovation at the Pacific Research Center
