Skip to comments.Stunner: California’s cap-and-trade on track to deliver 14% of promised revenue in first auction
Posted on 12/11/2012 5:17:26 PM PST by Ernest_at_the_Beach
Just think if Democrats win the midterm elections in 2014, we could see this kind of success on a national scale! California has struggled with massive budget deficits for years, but the political class in Sacramento stumbled on the perfect solution to falling revenues and rising costs soaking the business world to seize more capital for further spending. The state held its first auction of cap-and-trade credits, and projected that businesses would spend a billion dollars in buying, er, vapor. Those projections were just a teensy bit optimistic, as Bloombergs Steven Greenhut explains:
In late November, the California Air Resources Board held its first of these auctions, in which businesses such as oil refineries and utilities bid for credits that allow them to emit greenhouse gases. They must cut back their production or buy enough credits to cover all their emissions. Statewide emission caps will drop each year as California pushes businesses to produce fewer greenhouse gases or pay more to buy the declining number of credits for auction in this newly created government marketplace.
That is the plan anyway. First cap-and-trade auction a bust for California budget, read the headline in the Sacramento Bee. Budget planners expected that the state would receive $1 billion from the sale of credits, but the 2013 credits went for a low price and there was little demand for 2015 credits. As the Bee story explained, The nonpartisan Legislative Analysts Office estimates that if trends hold in the February and May auctions, the state may only raise about $140 million in the first year.
So theyre on track to miss their target by only 86%. Some people might consider that a failure, but in California, that $140 million will fund eleventy-billion dollars in new spending. Winning!
As if to prove my point, Governor Jerry Brown wanted the proceeds to fund the high-speed rail project that California has begun, which will transport people from Bakersfield to somewhere near Fresno, two places people love to leave but dont want to arrive. Even at the rate of income projected by the geniuses in Sacramento, it would take 100 years of cap-and-trade sales to fund that project without taking interest payments into account. At the rate of actual sales, it would take 714.28 years.
Of course, there might not be many people to move between Fresno and Bakersfield by that time:
While they count on money from the auctions, California officials have imposed new costs on businesses, raised utility rates and put the states industrial products at a competitive disadvantage so that it can set an example for the world on how to reduce global temperatures. Democratic officials argue that the new green-energy model will energize the states business climate, but even the Air Resources Board admits that the state will suffer from what it terms jobs leakage.
The leakage might be a floodage, according to Dave Roberts, who reports for the website CalWatchdog. A study sponsored by pro-business groups estimates that the state will have 262,000 fewer jobs in 2020 because of the climate-change law. Roberts also cited a Boston Consulting Group finding that as many as 51,000 jobs might be lost due to refinery closings alone. California farmers and food processors are concerned that the rising state-mandated production costs will cause job losses as low-cost Chinese and Mexican processed-food imports take some of their business.
Leakage. Job destruction is more like it. Seizing capital from businesses in order to fund a government that hasnt been able to accurately project a budget since the Los Angeles Dodgers were last in the World Series isnt exactly a model for growth. The cap-and-trade system imposed by California will necessarily hike energy costs, as businesses pass along the burden to consumers, and energy producers will continue their exodus from the Golden State.
that much? that is unexpected. I was thinking single digits.
Well,....the fat cat politicians were expecting 150%,....cause the climat is so nice out here.
Cap and Trade legislation reaks of Enron. We all know how that worked out.
Philosophically, how is this different from the Pope selling indulgences?
Did someone mention Enron?
As far as cap and tax goes, I think money is secondary to the ultimate goal which is to completely control the people.
why don’t they build a Bullet Train to Texas?
The state —in which I’m sitting— would get their stupid train nobody wants, and soon-to-be-former residents would get a final reminder of why they don’t want to live there anymore.
Surprisingly enough, United Health Care is an off-shoot /partner with AARP, a strong supporter of Obamacare.
Sigh. Didn't work.
If only I could be oblivious.
Please, let them "cut back production". If constant brown-outs and huge increases in utility rates, economic failure and job losses are what it is going to take to wake people up in California, then let it happen. Let Californians suffer from the choices they made at the polls.
And I am truly sorry that Free Republic and it's creators would also be on the receiving end of the Liberal/DemocRAT Party imposed adversity and lunacy. Perhaps they can find a way to get out of the state in the near future.
They have already spent many times that in anticipation
They have already spent many times that in anticipation
Have Republicans been blamed yet? That’s the important thing. Blame is job #1.
International redistribution, from us to them
Interesting parallel. And, I like your tagline.
Its a Twofer!
...as many as 51,000 jobs might be lost due to refinery closings alone.
Please pass the popcorn ... this is going to be fun to watch for those not living in the State.
Obviously they just didn’t explain it well enough to the little people.
The create a problem; then sell the solution. Sounds like protection money being charged by the mob.
Attention owners of small business in California: get out before the state hires Wesley Mouch, a bureaucrat who cripples the economy with endless regulations.