Windmills Spin, Returns Vanish, Taxpayers Foot The Bill – Watts Up With That?

Guest Post by Willis Eschenbach (@weschenbach on X)

Let’s put one more log on the sacrificial fire of California’s “green” crusade, this time using someone else’s tax money as kindling. The California Public Employees’ Retirement System—CalPERS, the genius shop that manages pensions for the state’s lifers—took $468 million of other people’s money and, with the zeal of a true believer, plowed it into “clean energy and technology.”

The bottom line: they lost 71% of it.

Yes, you read that right. More than $330 million, vanished.

You want to see a cautionary tale? Here it is—with taxpayers set up as the deep pockets of last resort.

The money went into something called the CalPERS Clean Energy & Technology Fund (CETF), launched in 2007 at the peak of the “U.S. will save the world with solar panels” mania. What did they actually back? Hundreds of companies promising the moon in sectors like:

• Solar (the eternal golden child, per the green clergy),
• Wind,
• Biofuels,
• Building efficiency phantasms,
• Biomass and waste-to-energy projects,
• Every “renewable” fever dream that caught the eyes of VC bros and the Sacramento bloatocrats.

The exact portfolio is a closely guarded secret—CalPERS and its partners still won’t fully disclose which magic beans they were sold or which unicorns never made it out of the barn. We do know this: Private equity fees topped $22 million, even as the principal turned into smoke.

How did these clean technotopias fail?

• Some crashed with falling solar panel prices as China flooded the market and wiped out most American start-ups;
• Others died slow deaths waiting for subsidies that never materialized, or for technological leaps that never came;
• Wind and biomass overpromised, underestimated maintenance and grid costs, and then just faded away;
• Efficiency companies found real customers were more interested in simple, proven products than bleeding-edge ESG pet projects.

“Green energy” as an asset class, at scale, turned out to have all the romance and reliability of a timeshare in Kabul. Meanwhile, CalPERS could have parked the same money in public equities—simple, boring S&P 500 stuff—and gotten actual returns for a fraction of the cost and none of the illiquidity.

Reality check: if CalPERS had invested $468 million in the S&P 500 at the start of 2007 with dividends reinvested, it would be worth approximately $2.993 billion by October 2025. Instead of losing $330 million, we would have made OVER TWO AND A HALF BILLION DOLLARS!!!

Instead, the CalPERS official chased climate “leadership”, and while they personally lost nothing and likely learned nothing, the taxpayer got expensive lessons in physics, market discipline, and financial groupthink.

All the while, California’s pension fund is already 21% under water, and CalPERS has a $180 billion hole it wants someone to fill—the “someone” being me, California taxpayer. If the fantasy returns don’t materialize (spoiler: they won’t), expect more budget shortfalls, more bailouts, more taxes.

And let’s not forget: the private equity managers got paid either way. The friends of the CalPERS honchos who drew up the plan will pocket their $22 megabucks, buy mansions and private jets, write white papers touting “lessons learned” and insist the next round of clean tech—EVs, hydrogen, direct air capture—is different. The political class, of course, will find a new target for their sacrificial investments, anything to appease the state’s green faith.

And naturally, the CalPERS officials who made the catastrophic decision to lose THREE HUNDRED AND THIRTY MILLION DOLLARS won’t suffer in the slightest. They won’t be demoted or fired, and they’ll still draw their pensions. Thomas Sowell, a true genius of our time, puts it well …

And how much do the megabrains responsible for this financial catastrophe make? Here are the salaries and benefits of the top two contestants, the CalPERS Chief Executive Officer Marcie Frost, and the Chief Information Officer Stephen Gilmore.

They are each making two million plus per year, and will retire on a quarter million per year … after CalPERS lost $330 million of your and my money. Disgraceful

There’s a simple solution. END PUBLIC SECTOR UNIONS AND GOVERNMENT PENSIONS.