David Friedman & Jennifer Hernandez. California, Green House Gas Regulation, and Climate Change. Research Brief, Center for Demographics and Policy. Chapman University Press. 2018.
California has adopted the most extensive climate change policies, laws and regulations in the United States, and the state’s climate leaders are routinely heralded for taking bold and generally unilateral action to reduce greenhouse gas (GHG) emissions within California’s borders to combat climate change. Although California can also claim to be the fifth largest economy in the world if it were a separate nation, the state’s actual GHG emissions account for less than 1% of the world’s anthropogenic GHG emissions. Given the state’s miniscule share of global GHG emissions, Governor Brown has often proclaimed that California’s GHG reductions will be “meaningless” unless other states and countries can be persuaded to follow California’s example.
This paper examines California’s GHG reductions between 2007 (when the landmark Global Warming Solutions Act (AB 32) took effect), to 2017, when the California Air Resources Board adopted the most recent “Scoping Plan” prescribing existing and proposed new GHG reduction mandates (Scoping Plan) that CARB deems required to achieve the state’s legislated mandate of reducing GHG 40% below the state’s 1990 GHG emission inventory by 2030, and the unlegislated Executive Orders issued by the current and prior governor directing the state to achieve an 80% reduction in GHG by 2050.
This paper also examines the performance of California’s economy as experienced by California residents, which presents a substantially different story than the aggregated statewide data used by CARB to conclude the state is enjoying a successful boom. In fact, California has the nation’s highest poverty rate, and by far the largest number of Americans living in poverty: about 8 million Californians, and more than 2 million children, live below the federal poverty level. California also has the nation’s highest homeless rate, and again by far the largest number of homeless Americans, including more than a quarter of a million families, children, and adults. California’s largest city, Los Angeles, counted more than 50,000 homeless individuals in 2017. California has a low unemployment rate, but extraordinarily high costs for basic necessities, including housing, electricity and transportation. For decades, California has also declined to authorize new housing construction, and experts as well as political candidates now concede that California now has a shortfall of about 3 million homes.
Although California’s overall economy grew substantially since state leaders made climate change the state’s top policy priority in 2007, the state expanded even more rapidly in the previous decade, and in a far more regionally and racially equitable pattern. During the last 10 years, as opposed to earlier economic growth patterns, California’s economy has been disproportionately focused within the San Francisco Bay Area, 1 a region with just 16% of the state’s population. The Bay Area’s economic prosperity was, in turn, driven by a relative handful of technology and social media companies. A substantially disproportionate share of the new wealth created in California since 2007 was absorbed by more affluent Bay Area white and, to a lesser extent, Asian workers and households in the Bay Area.
This paper shows that as housing and energy (electricity and transportation fuels) costs rose well above the national average, income growth for the remainder of Californians largely stagnated, particularly for Latino, African American and poorer, less educated workers and households. Homeownership rates also fell significantly, and are now especially low for the state’s minority-majority and poorer, less educated population.
The paper concludes that California’s prioritization of climate change policies have resulted in disparate and damaging social and economic impacts for most Californians, including the following:
1. The CARB Scoping Plan results in highly regressive cost burdens that particularly affect basic living expenses, including housing, transportation, heat and electricity for the state’s historically disadvantaged, and now majority minority populations, as well as less affluent and educated residents in all demographic groups. The carbon-intensive activities of wealthier Californians, however, such as air travel and high-value, technologically complex consumer goods imported to and sold in California, receive scant, if any attention in the Scoping Plan.
2. California’s climate costs are also disproportionately borne by those living outside the most temperate coastal climate zones in the state’s largest employment hubs, such as San Francisco/Silicon Valley, and West Los Angeles County. The state’s influential environmental movement is largely supported by wealthier residents in coastal regions where decades of “no growth” and “slow growth” policy advocacy — and opposition to growth in peripheral areas adjacent to existing development or existing “backbone” infrastructure like major freeways — has helped engender the nation’s most severe housing shortages and highest prices. Only the very wealthy can afford to live in the parts of the state where energy costs for utilities and travel are substantially lower due to the mild climate and proximity to employment. In contrast, climate policy related energy cost increases have a much more damaging effect in California’s inland regions, where winter and summer conditions are much more extreme than in coastal areas, and where Latino and less affluent households have increasingly clustered to find affordable housing. The state’s inland population is also required to commute longer distances to work. Climate strategies that include intentionally increasing highway congestion in a failed attempt to persuade more people to commute by bus or, in some places, trains have not resulted in greater but less transit use. At the same time highly regressive transportation fuel price increases, force generally less affluent, minority-majority inland residents to disproportionately bear the greatest cost burdens for California’s climate programs.
3. California’s climate program also reduces the state’s ability to generate higher wage jobs for residents without college degrees in manufacturing or other industries highly sensitive to energy and housing costs. This is a particularly important gateway to middle class income levels for the state’s multi-decade educational decline including the increasing number of California residents who lack even a high school diploma. From 2007-2016, the number of adults 25 years and older with less than a high school diploma fell by over 3.2 million in the rest of the U.S. but grew by about 6,000 in California. In 2016, nearly 18% of the state’s adult population did not graduate from high school compared with 11.9% in the rest of the country.2 Manufacturing jobs fell more rapidly in California during the 2007-2009 recession, and have recovered much more slowly. Since 2010, the rest of nation has generated over 855,000 new manufacturing jobs, an 8.4% increase, while California generated just 60,000 jobs, just a 4.8% growth rate.3
4. California’s wealthy, coastal environmental advocates also routinely lobby to shut down or deny approvals of projects that would create working and middle class jobs, even when such jobs would help achieve global greenhouse gas reductions. For example, California has vast forest lands which can be managed to protect species and habitats, encourage tree growth to sequester carbon, produce electricity from woodwaste biomass fuels, create substantial jobs in poorer, inland regions of the state by manufacturing wood products, and lower housing production costs with locally-produced materials to build the three million homes that, as all leading California candidates for Governor agree, must be built to alleviate the state’s housing crisis. Instead, environmental advocacy, litigation, and the resulting bureaucratic paralysis have created vast areas of mismanaged forest lands with dense underbrush and stunted tree growth uniquely susceptible to catastrophic wildfires that emit far more GHGs from combustion and the subsequent decay. Rather than facilitate the removal of dead trees and long term management required to sustain healthy forests that sequester GHGs in trees and plants, California has instead pursued policies that increase the risk of death and property damage from forest fires, escalate funding for state fire fighters, and require California to import all of its building material wood products from China, Canada or other states.
5. Although California’s climate programs include the allocation of at least some of the new, highly regressive GHG-related fees and taxes to assist poorer Californians affected by higher energy and housing costs, most of the available funding has benefitted the acquisition of rooftop solar and electric vehicles by wealthier residents comprising the top 20% of the state’s income earners. Climate subsidy programs for poorer Californians, such as a $200-300 million fund to help fund affordable housing, are particularly unimpressive when the cost of producing affordable housing in urban areas can exceed $700,000 per unit.
In summary, the imposition by the state’s Democratic party leaders of highly regressive climate schemes have engendered disparate financial hardships on middle and lower income workers and minority communities, while providing direct economic subsidies to wealthier Californians in environmentalist strongholds like Marin County. This represents a significant departure from more traditional Democratic party values. 4