By Iain Murray and William YeatmanEnergy Policy Experts, Competitive Enterprise Institute

As goes California, so goes the nation. Nowhere is this adage truer than in environmental policy, thanks to Democrats' eagerness to impose the Golden State's radical eco-agenda on all Americans. Yet it is exactly such policies that have helped lead California to financial ruin.


On Tuesday, for example, President Barack Obama announced his intention to apply California's fuel efficiency regulation to all 50 states. You might think that the Constitution reserves such lawmaking to Congress. After all, there is a robust interstate trade in automobiles and in 2007 Congress revised the Department of Transportation's Corporate Average Fuel Economy (CAFE) standards to require cars and trucks sold in America to become 40 percent more fuel efficient by 2020.

The 2020 CAFE standards are ambitious--they require efficiency improvements at nearly two-and-a-half times the historical rate. Yet they weren't ambitious enough for liberal California legislators, who passed a law to accelerate Congress's time line by four years.

Of course, it doesn't make any sense for automakers to conform to two different fuel efficiency regulations which is why the Bush administration refused to allow California to set its own standard. President Obama simply substituted Congress's 2002 CAFE targets with California's.

An automobile's carbon footprint is proportional to vehicle weight, so the new regulation will make larger cars more expensive--work trucks will cost a lot more for blue collar Americans in the country's heartland. But that's of little concern to Prius-driving coastal urbanites.

At the same time that the president was announcing the Californication of the country's automobile fleet, House Energy and Commerce Committee Chairman Henry Waxman (D-Beverly Hills) was working to push through an anti-energy bill designed to export the Golden State's failed energy model to the rest of the country. The bill, the Clean Energy and Security Act, borrows liberally from California's climate initiatives, including a cap-and-trade scheme, a renewable energy requirement, and a low-carbon standard.

That should worry all Americans, because California's energy policy is an unmitigated disaster. California's expensive energy has driven industries out of the state. According to the Energy Information Agency, California has some of the highest electricity prices in country, due in part to the laughably-misnamed "deregulation" of California's electricity industry. Californians were actually left with an over-regulated energy supply that cannot deliver energy at the affordable prices the rest of the country can. No wonder, then, that it has exported most of it electricity generation to other states.

The Republican Governor Arnold Schwarzenegger was left bemused recently when it became apparent that he cannot even build a solar power plant in the middle of the Mojave Desert, due to the federal Endangered Species Act which prohibits any construction that disturbs the habitat of species designated as endangered. The state's remaining hydro-power plants are offline because of the drought, so rolling blackouts like those of 2005 will be inevitable. This is the energy policy that President Obama in now trying to impose on the rest of the nation--to cut out all affordable sources of energy and cause bills to, as he once famously said, "skyrocket," to encourage development of alternative energy sources.

The effect on California's economy has been disastrous. Heavy manufacturing in the state is dead. The industries it has left--entertainment in Hollywood and technology in Silicon Valley--are not enough to supply the tax base the state needs to support its expansive social welfare programs, which in turn have seen demand spike because of high unemployment caused by the energy policy.

Voters have decisively rejected Proposition 1A, which would have raised taxes to cover spending. The Governator will therefore have to become the Terminator again if he wants to avoid the state going bankrupt.

In the past California certainly had some golden years, culturally and economically and America becoming more like California might once have been a good thing. If the president still believes that, he hasn't been paying attention.

Iain Murray and William Yeatman are energy policy experts at the Competitive Enterprise Institute and contributors to Globalwarming.org.