Saturday, September 29, 2007

State Government & Global Warming

Brendan Miniter in the WSJ ($$$):

North Carolina's global-warming activists are in hog heaven. Late last month, Gov. Mike Easley, a Democrat in his second term, signed legislation mandating that more electric power in his state come from "green" sources such as wind, solar energy, and hog and chicken waste.

Today, North Carolina gets about 2% of its electricity from "renewable resources." By 2021, under the new mandates, Progress Energy and Duke Energy will have to find 12.5% of the power that they sell to Tar Heel residents from renewables. Hog-waste-generated power -- as required by the new law -- will nearly triple to 0.2% of the electricity used in the state over the next decade as farmers capture and sell the methane gas given off from tons of decomposing manure.

It's gone largely uncovered outside the state, but there is an energy revolution underway in the Tar Heel State that will cost residents more for the energy they use in the name of cutting greenhouse gases. Even while they make little headway in Congress, advocates of heavy-handed regulations to head off global warming are working to enact laws on the state level. They're succeeding in North Carolina.

The immediate cost to consumers will be higher electric bills. For residential customers, an annual fee will eventually reach $34, and for industry the annual fee will grow to as much as $1,000.

The new hog mandate is only the beginning. The state has set up a special commission -- the Climate Action Plan Advisory Group -- to study ways to cut CO2 emissions. It's already adopted a list of 53 recommended new mandates and is drafting a report for the state legislature.

A few ideas the commission will recommend in its report next month include mandates for "higher-density" housing developments, something thought to reduce suburban "sprawl," and, of course, new subsidies for farmers to produce biodiesel.

It will also recommend imposing new costs on the driving public. One thought is to force drivers who put more miles on their odometer to pay higher car-insurance premiums than those who drive less. And it will recommend a CO2 tax or a cap-and-trade system, assuming such a system could be worked out on a state level.

I'm wondering if global warming policies by state governments make any sense in general? It seems to me that concern about global warming involves a problem that is global in geographic scope, not statewide in geographic scope. As such, I suspect state government mandates such as these noted by Mr. Miniter are unlikely to yield much in the way of their stated goal, which is presumably a reduction in global warming. Isn't it likely, therefore, that the economic benefits from mandates such as these are quite small? If so, then it would seem that state government policies such as these will be quite effective at increasing costs to the residents of the state, but in return for the increased costs the residents can probably expect to enjoy virtually no benefits from less global warming.

And, then, there are the actual policies that are being mandated. What's up with policies like forcing higher insurance premiums? Why does anyone think auto insurance has anything to do with carbon emissions and global warming?

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