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Commentary By Oren Cass

Do States Have a Role in Making Climate Policy?

Energy, Energy Climate, Regulatory Policy

Editor's note: The following is an excerpt from WSJ's latest Journal Report on energy. Oren Cass argues against state action.

No: It Won’t Work—and This Isn’t the States’ Role Anyway

Most state-level efforts to reduce greenhouse-gas emissions cannot help being incoherent and ineffective. Consider Vermont, which has established a so-called renewable portfolio standard requiring the use of 75% renewable energy by 2032. That may be a laudable aspiration, but it ignores how energy markets work.

Vermont recently shut its emissions-free nuclear power plant, which accounted for the majority of the state’s electricity generation. Without renewable capacity to fill the resulting hole, the state began importing more electricity from other states, generated primarily with emissions-producing natural gas. Ironically, it had already banned fracking, the technology that extracts the natural gas that now keeps its lights on.

“Most state-level efforts to reduce greenhouse-gas emissions cannot help being incoherent and ineffective.”

Meanwhile, rather than rapidly developing its own renewable resources, the state is leading a nationwide backlash against wind power: Vermont added no wind capacity during 2013-16. The issue featured prominently in last November’s gubernatorial race, which saw an anti-wind Republican beat a pro-wind Democrat by almost 10 points. And, just last month, state legislators approved strict noise limits that will further limit development.

Vermonters can confidently reject nuclear, coal, gas and wind from the comfort of their warm and well-lit homes because shirking responsibility for their energy supply has few consequences. They can draw electricity from a regional power grid and import energy-intensive goods by exhaust-belching truck. Their 75%-renewable goal presumes the availability of someone else’s nonrenewable plants to keep the lights on when the wind isn’t blowing and the sun isn’t shining. Those plants will be operating affordably only if other states remain committed to a conventional grid.

But Vermont is not alone. Twenty-nine states have renewable portfolio standards, and lawmakers in both Massachusetts and California have recently proposed 100%-renewable mandates. If everyone tries to reach their goals, and more states feel compelled to join and out-green each other, the grid will fall apart.

This is not only irresponsible, but also fails to address climate change. Since nationwide carbon-dioxide emissions peaked in 2007, states with renewable portfolio standards have achieved smaller reductions, on average, than states without them. And even significant state-level achievements would mean little. The Obama administration acknowledged that its Clean Power Plan for cutting emissions in every state would not have meaningfully affected global temperatures.

The reality of climate change is that the overwhelming majority of future greenhouse-gas emissions will come from the developing world. American emissions cuts are justified primarily as a means of showing leadership. But the symbolic actions of former Vermont Gov. Pete Shumlin and his colleagues are not going to lead developing nations away from their pursuit of economic progress.

Nor is it the role of state leaders, no matter how displeased with President Trump’s rejection of the Paris climate accord, to offset or undermine our national government’s negotiating position on the international stage. California Gov. Jerry Brown is plainly incorrect when he defends his climate talks with China by saying California is a “separate nation.” No one, presumably, would countenance governors opposed to the Iran nuclear agreement traveling to Qatar to coordinate continued sanctions against the Iranian regime.

States will sometimes advance an economic, rather than environmental, rationale for their renewable-energy policies—boosting a promising industry. That strategy makes no more sense here than in any other industry, where politically motivated efforts at market distortion would be rightly recognized as foolhardy.

“Gov. Jerry Brown is plainly incorrect when he defends his climate talks with China by saying California is a “separate nation.””

If renewables are as economically attractive as their proponents claim, then government mandates should not be necessary to spur investment and deployment. Conversely, state policy makers do neither their consumers nor their fledgling industries any favors when they mandate the purchase of things that the market doesn’t want. A strong case exists for funding precommercial research and development in a variety of speculative technologies, renewable energy included. But that already exists and has bipartisan support at the federal level.

States can supplement such efforts in their own universities. If they are looking for other ways to act on climate, they can encourage responsible urban planning and build infrastructure that will be resilient against stronger storms and higher seas. But they should limit their empty political gestures to ones that damage neither the nation’s energy markets nor its foreign policy.

Read the entire piece at The Wall Street Journal (paywall)


Oren Cass is a senior fellow at the Manhattan Institute. Follow him on Twitter here.

This piece originally appeared in The Wall Street Journal