Boasting the fifth largest economy in the world, the Golden State is a beacon for various American industries, such as entertainment, technology, and agriculture. Yet population growth has halted. Some who reject the “California Dream” attribute the decline in growth to a so-called West Coast migration, pointing to Tesla’s recent move to Texas, along with that of tens of thousands of other Californians. Others attribute it to a baby bust and a downward trend in international immigration. While these factors, along with the devastation of an international pandemic, have led to the state’s population standstill, the high cost of living seems to remain at the heart of the issue. Although housing costs are largely to blame for the rising cost of living, numerous natural disasters have posed an insurmountable direct and indirect cost to residents. California’s public policy response to climate change could serve to foreshadow what is to come for the nation as a whole.
Among the most outspoken states in favor of zealous climate change policy, California is also one of the most vulnerable, encountering some of the first largescale effects of climate change in the United States. It has most notably been struck by worsening drought, widespread wildfires, and rising sea levels. With more wildfires than any other state in the country, California suffers from extreme pollution and the worst air quality in the nation. The August Complex fires of 2020 were the largest in California’s history, burning over 1.03 million acres. Similar fires have incurred insured losses of more than $2 billion. With shorelines statewide projected to fluctuate dramatically, while nearly 26.7 million Californians live in coastal counties, some estimates predict $8 to $10 billion of existing property in California will be underwater by 2050. Beyond the social and health implications that these disasters pose, climate change has exacerbated the economic burden on residents as well, namely the cost of living.
The high cost of living in California is largely attributed to rising housing costs. The typical home in California is valued at $717,854, more than double the typical national value of $303,288. Likewise, the values have increased by 21.8% over the past year alone. Recently, Governor Newsom signed a series of housing production bills to address the housing supply crisis that has led in part to such extreme housing costs. Included is SB 9 which puts an end to single-family-only zoning rules that hail a 100-year legacy of limiting construction of anything but single-family homes in certain areas. While legislation aimed directly at affordable housing may address rising housing costs, it does not address the internalized costs that Californians must pay not only regarding the immediate consequences of climate change, such as increased insurance rates, but also regarding indirect costs associated with ambitious climate change policy.
California faces a choice: pay for the negative effects of climate change now or later. The state has taken an aggressive position on climate change policy early on. In passing SB 100, the state has committed to a 100 percent clean energy target by 2045. With a GDP greater than that of the United Kingdom, this legislation makes California an example of a major economy setting ambitious, but now more realistic goals. This bill comes after the landmark legislation of AB 32 which set the first greenhouse gas emission targets. After passing SB 32, the state has aimed to reduce overall greenhouse gas emissions to 40% below the 1990 levels by 2030. Likewise, the state legislature passed AB 398 which extends its cap-and-trade program through 2030, effectively “capping” emissions and creating a market with incentives for polluters to reduce emissions. Along with strict automobile emissions standards (AB 1493) and requirements for expanding electric vehicle charging infrastructure (AB 1236), California has set goals to achieve five million zero-emission vehicles (ZEVs) on the road by 2030 (E.O. B-48-18) as well as the goal that all new cars and passenger trucks sold in the state be ZEVS by 2035 (E.O. N-79-20). All this legislation is, at a minimum, a bold effort to stop the growing threat of climate change, yet the everyday cost of living in the iconic state is burdening millions, some even to the point of migration.
California appears to always try to strike the perfect balance between shifting the costs of its large-scale climate change policy to major polluters and corporations and not driving them to other cheaper markets, while also not passing the burden on to the consumer. This is an incredibly difficult task, especially as climate change puts lower income individuals with fewer liquid assets at a severe, disproportionate disadvantage. In California, “inverse condemnation” is a remedy derived from the takings clause that allows property owners to be compensated by government agencies, as well as public utilities, if their property is damaged by a public use. The bar for recovery, however, is very high and was updated in a recent California Supreme Court decision. The court acknowledged the burden placed on public agencies’ already limited resources by imposing strict liability.
Despite holding utilities accountable, the state has written in various exceptions for utilities to disperse the costs of wildfires and other natural disasters among ratepayers, the subject of fierce debate. Some residents pay 80% more than the national average for electricity, with between 66% to 77% of their electricity bill used just to offset various costs associated with utility company programs like wildfire prevention. Suspended in 2017, California even imposed a Fire Prevention Fee directly on residents. Furthermore, residents pay the highest price in the country for gas due in part to the low-carbon fuel requirement and the cap-and-trade system. One town even charges almost $8 per gallon. In addition, a recent mandate requires solar panels on all new homes in 2020 likely added nearly $10,000 to the price of a home. Though the panels could save more than $16,000 in energy bills, it makes it even more difficult for lower income residents to purchase a house. These factors, among others, such as the highest state sales tax and personal income tax in the country, have directly affected the enormous cost of living, particularly damaging for lower class Californians. Climate change continues to exacerbate the already stark income inequality in one of the richest states in the country.
California’s climate change policy and rising cost of living could foreshadow similar issues that the entire nation is soon to face. While the state’s aggressive policy to combat climate change has placed a great economic burden on residents, it is a challenging but necessary measure to save the state from future physical and economic disaster. California may be drastically more expensive than other states, leading to a “West Coast migration,” but this could only be temporary until other parts of the country experience the same effects of climate change at home and begin to address them through sweeping public policy at the state or federal level. In this way, the California cost of living could very well become the national average. Notwithstanding the high cost of living and threat of natural disaster, thousands continue to flock to California, predominantly educated, high income individuals. The same people who can easily move into California can also move out of California, leaving the lower class with not only the burden of a high cost of living but with the burden of addressing centuries of environmental exploitation and degradation.
About the Author: Thomas Silva is a 2L at Cornell Law School and the Vice President of the Cornell Association of Law and Economics. He graduated from the University of New Mexico with a Bachelor of Arts in Economics. He is currently an associate for the Cornell Journal of Law and Public Policy.
Suggested Citation: Thomas Silva, The West Coast Migration: How California’s Battle with Climate Change Has Affected the Cost of Living, Cornell J.L. & Pub. Pol’y, The Issue Spotter, (February 10, 2022), http://jlpp.org/blogzine/?p=3884.