Can California Save the World?
So maybe the title is overstating a bit. Okay, it’s a bunch of hyperbole. But there still is some truth within it. An article I read talked about how California passed two cap-and-trade bills fairly recently. Now, knowing what these bills will do (starting January) is important. Their main purpose is to put a price on nonrenewable energy. However, I would like to focus on something else: how California is now using these two cap-and-trade bills to hopefully lead the rest of America into taking action. Daniel Stone, author of the article, claims California has lead the rest of America environmentally before:
” [California] adopted the first automobile tailpipe emissions in the nation in 1966, four years before they were enacted by Congress. After the Arab oil embargo, California acted more quickly than the U.S. government to cut the waste of energy-hogging appliances, with efficiency standards signed into law by Governor Ronald Reagan in 1974. California’s standards were the model for the deal President Barack Obama forged with carmakers to double fuel economy to 55 miles per gallon by 2025.”
What he is saying here is that California has always been doing environmentally friendly things before the rest of America, and thereby leading America to start being eco-friendly. Truly, California is America’s greatest leader in terms of environmental protection.
California is also setting an example for how helping the environment won’t mess up the economy. In an earlier post of mine, The Economics of Global Warming: Why We Are All Doomed, I talked about how most eco-friendly solutions to energy would kind of mess up the economy. Well, thankfully California Governor Jerry Brown knows better:
The original idea of cap and trade was to create a flexible, business-friendly system . . . . Instead of imposing rigid regulations, or an explicit tax on carbon, the government either hands out or sells tradable “permits” . . . Each permit allows the holder to emit one ton of CO2, and the number of permits issued declines over time so that they become an ever-more-valuable commodity. Companies that can cut emissions quickly can profit by selling their permits to companies that are having a hard time
Essentially, because permits are limited, they become a potential source of income. If your company runs low on money then you can sell some of your permits to other companies. It creates an incentive to emit less greenhouse gasses so your business can get more money. I think that this is a very smart plan, as it can easily reduce carbon emissions by forcing companies low on money to emit less CO2.
So what we are hoping now, is that history will repeat itself and the rest of America will follow California’s example to become even more green. Because although it is doubtful that California will be able to motivate too many people outside the US, if all of America were to suddenly go green, then suddenly any business that wants to go to the US to gain popularity is forced to change their standards. And it doesn’t make any sense for one part of the company to be green while one isn’t. So the entire company will go green. And any other competing companies might be forced to change their standards to gain a bit more popularity. And it turns into a huge cause and effect. And California ends up saving the world. It will happen.