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September 19, 2006

On Energy, California Does Everyone's Thinking

By Froma Harrop

President Bush recently invited a few columnists (not me) to the White House and showcased his "visionary" thinking. He asked the columnists, reported one who was there, "to think about what the world could look like 50 years from now, with Islamic radicals either controlling the world's oil supply or not."

Here's a counter-vision: How about a world 50 years from now in which no one gives a damn who controls the oil supply? How about a world in which Islamic terrorists, al-Qaida-funding sheiks and Venezuelan fruitcakes have to work for a living, because the West has slashed its demand for the oil that gushes from their ground?

That's not the kind of vision you hear from the president and the right-wing boobery -- a group, let me note, that excludes many good conservatives who are pushing to get us off of oil. They range from Christian conservative Gary Bauer to former CIA Director James Woolsey to former National Security Adviser Robert McFarlane. If the oil men don't like their stance, that's OK with them.

California's got the vision. Over the past 30 years, per-capita use of energy has risen 50 percent nationally, but close to zero percent in California. That's because California has passed a bunch of legislation to get there.

The state now boldly plans a 25-percent cut in carbon-dioxide emissions by 2020. Carbon dioxide is a greenhouse gas tied to global warming. California hopes to hit its target through a combination of regulations, incentives and a market-based cap-and-trade system.

Environmentalists, especially from California, seem to make many right-wingers crazy. The editorial writers at The Wall Street Journal, for example, would rather sell their children to OPEC than concede that the same policies that will save the planet from burning up will also save Western civilization from Mideast madmen.

Instead, they copy and paste their usual cliches about California and "feel-good environmentalism" under the clever headline "California Dreamin'." They warn against the dire economic consequences of even trying. Let's pin a white flag on all those lapels.

Funny, but the people who make big money in California think the new program is going to make them bigger money. Real capitalists understand that only mandatory caps can hit the accelerator to develop new technology. That California's greenhouse-gas reductions could be swamped by increases from China kind of misses the point. This is about finding ways to cut dependence on oil. The world will gallop to California for the how-to.

But won't this plan raise energy prices in California? Initially, perhaps, especially if businesses switch to expensive (but clean) natural gas. Then prices will probably go down. The Berkeley Institute of the Environment sees that happening as renewable-energy sources become a bigger part of the mix. Those are upfront costs. It may take a lot of money to build a wind turbine, but once it's up, the wind is free.

And renewable energy protects businesses from the volatility of oil prices. Gyrating energy prices make it very hard to plan. An economy less hooked on oil doesn't have to worry about pipelines getting blown up in Saudi Arabia.

Economists at the University of California, Berkeley, predict that the program will unleash a flood of R&D money into California, creating new companies and 17,000 jobs. And Silicon Valley venture capitalist John Doerr sees the new regulations forcing businesses to innovate, which will make them stronger.

So let Bush plan an energy policy based on who's on top in the Middle East. No one's listening anymore. America is looking for a modern vision, and California has it.

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