When Utopias Collide: Slow-Speed Rail and the Politics of CO2
Have you heard about California’s high-speed rail project? In 2008, voters in the nation’s most populous state narrowly approved a $10 billion bond measure to support construction of a $45 billion bullet train system servicing the state’s major cities. The bulk of the funding, the story went, would be kicked in by the Federal Government, with private investors participating to validate the fiscal soundness of the project.
Fast forward to present day: Projected costs have more than doubled for a downsized system; the completion date has been pushed out into the 2030s; federal money is nowhere in sight; the estimated fare for a San Francisco to Los Angeles ticket has increased a whopping 59 per cent. Government as usual.
All this would sound the death knell for a fiscal white elephant but for that tantalizing $10 billion of already-approved wealth to spread around the cash-strapped Golden State.
So the California political establishment is furiously racing down the alphabet, trying to sell the electorate on plan B, plan C…whatever it takes.
Plan B isn’t faring so well. Last week Governor Brown announced a revised construction program reducing the official price tag to $68 billion by making use of existing train track in the vicinity of Los Angeles and San Francisco—track incapable of supporting high-speed travel, by the way—and connecting fewer cities.
Ignoring for a moment the absurdity of spending $68 billion for a brand new train system where the only high-speed attributes are the name and aerodynamic locomotive shape, the funding for this latest installment of what the California High-Speed Rail Authority [sic] proudly headlines as “California’s Green Future” remains as elusive as ever.
Enter another utopian program of the future: The California Global Warming Solutions Act of 2006 (AB32). AB32 mandates reducing California’s greenhouse gas emissions to 1990 levels by 2020. Authority for making this happen, by any means necessary, apparently, is conferred on the California Air Resources Board (CARB), which is preparing a cap-and-trade market to permit the state’s dwindling number of industrial companies to emit “pollutants,” as innocuous carbon dioxide is now euphemized in the local press. Since CO2 emissions are a surrogate for energy consumption, this amounts to a tax on energy, with the rate set by unelected bureaucrats to achieve a meaningless and arbitrary aggregate level.
Which brings us to Plan C: Why not use cap-and-trade revenue from the AB32 energy control program to subsidize construction of the Slow Bullet Train to Nowhere? The San Jose Mercury News reports.
The latest proposal refers repeatedly to the possibility of tapping money from California's new cap-and-trade program. That plan, which is set to begin in November, requires companies to buy permits from the state to offset their annual greenhouse gas emissions. It was part of California's landmark 2006 global warming law, which aims to reduce those emissions to 1990 levels by 2020.
Companies that are able to meet their emission limits—the cap—can sell credits to companies that cannot. Numerous experts have said the money funneled to the state as fees must be used to help reduce greenhouse gas emissions.
High-speed rail officials say they would only seek to use the cap-and-trade money if other funding sources come up short. So far, California has secured $3.5 billion in federal money and $9 billion in construction bonds approved by voters in 2008, which lawmakers must approve selling.
There's a reason why statist California's unemployment rate remains stubbornly high at 10.9 percent against the national average of 8.3 percent. CARB has been empowered to use taxes and regulation to constrain economic activity in the state in furtherance of a symbolic environmental goal. The revenues from its activities are now being touted as a means of funding another utopian pipe dream: a low-speed "high-speed" rail network. Meanwhile, the consequent lack of economic growth is steepening California's slide into insolvency.
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