For many years and in many arenas, California has been a trendsetter for the U.S. From McDonald’s hamburgers to Intel’s microchips, the Golden State has influenced the nation’s culture and economy in countless, sometimes controversial, ways. Here is part 2 of this article.

AB32 Agenda
On the surface, the cap-and-trade provisions of AB32 appear to promote free-market solutions to tough energy problems. This is a big reason for the law’s favor among Silicon Valley executives. However, these entrepreneurs likely do not yet understand that there is a fundamental difference between selling products that people want to buy (e.g., computers) and selling products that people are forced to buy (e.g., CO2 removers).

Regrettably, the California legislature demonstrated it was more interested in centralized control of energy than free-market solutions by the way it structured AB32. If Sacramento had truly wanted AB32 to spur innovation and conservation, they would have eliminated the auction tax (estimated at $75-1400 per person per year going directly to Sacramento) and abandoned the anoint-a-pet-technology slush fund created thereby (up to $53 billion per year available to help innovative technologies). Enacting a revenue-neutral (and reasonable) cap on GHG emissions would have maintained momentum in green-tech without soaking up taxpayer dollars (not to mention the higher energy costs for consumers).

Poor Prognostication
Government is notoriously bad at predicting which ideas will succeed in the marketplace. Private investors have a difficult enough time picking winners, but they at least are putting their own wealth at risk, not that of taxpayers. Government has no place subsidizing uncertain new technologies and ventures with public capital. Regulators should be traffic cops, not be kingmakers.

If state legislatures beyond California have been contemplating GHG regulations and are feeling empowered by the failure of Prop 23, citizens in those states must speak up to halt the taxation, centralization and coronation provisions being considered. Bad legislation is one California trend we can all do without.