Category Archives: Government & Business

What’s brewing in Sacramento, Silicon Valley, and beyond

Government & Business

Climate Summit Set to Start as L.A. Smolders

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The Governors’ Climate Summit convenes Tuesday against the poignant–and salient–backdrop of the multiple wildfires and smoldering ruins ringing Los Angeles.

Governor Arnold Schwarzenegger is hosting the somewhat hastily arranged conference, which is “co-hosted” by the governors of four other U.S. states; Florida, Illinois, Kansas, and Wisconsin. Governors of four other states have pledged to send delegates. Two of these states, Utah and Washington, are already partners with California in the Western Climate Initiative, which recently rolled out a framework for its regional cap & trade program, set to take effect in 2012.

Governor Schwarzenegger said in September that “all 50” US governors would be invited. Sacramento-based AP writer Samantha Young documented invitations to at least 36 governors.

Those who made it are joined by representatives from a dozen other nations, including Mexico, Brazil and importantly, China and India. These last two are linchpins in the success of any concerted effort to control emissions of greenhouse gases. Brazil can make a major contribution in the preservation of tropical forests. And Mexico–well, they’re right next door. And annoyingly, GHG emissions tend to flout international borders. It’s been estimated that on certain days, a quarter of L.A.’s air pollution can be traced to China, though today was certainly not one of them. The odor of smoke from surrounding wildfires followed me down I-5 from Castaic, into the L.A. Basin.

Tuesday’s summit agenda is dominated by breakout sessions devoted to specific sectors and topics, such as energy, transportation and cement manufacturing. Discussions will include representatives of diverse interests, from The Nature Conservancy to Wal-Mart. By Wednesday organizers expect delegates to sign a “joint declaration agreeing to pursue collaborative action to reduce greenhouse gas emission and create opportunities to grow green economies.”

I’ll be following the proceedings and blogging daily from them.

Government & Business

Governor Orders Plan for Rising Seas

Governor Schwarzenegger today issued an executive order (S-13-08) requiring state agencies to assess and plan for rising sea levels caused by climate change.

Wave

The order instructs the California Resources Agency, Dept. of Water Resources, Energy Commission and others to come up with a game plan for coping with the risk of encroaching sea water in coastal areas, and gives them two months to convene an “independent panel” to study the problem and make recommendations.

According to the Governor’s order:

“California’s water supply and coastal resources, including valuable natural habitat areas, are particularly vulnerable to sea level rise over the next century and could suffer devastating consequences if adaptive measures are not taken…”

The nation’s oldest continuously operating sea level gauge, located at Fort Point in San Francisco,  logged a seven-inch rise during the last century. Current projections, which combine data from traditional ground-based meters with satellite telemetry, project that with a lax response to climate change, the Pacific could rise three times that much this century.

The order goes out three days before Schwarzenegger hosts a Governors’ Climate Summit in Beverly Hills.

Government & Business, Power, Water

The Cost of Sloth

The changing climate could cost Californians “tens of billions of dollars a year.”

Money Man

Those are just the direct costs, toted up in a new report by economists at U-C Berkeley.
“California Climate: Risk and Response” is billed as the first comprehensive report on the costs that may be inflicted on California from the effects of climate change. The 127-page report was co-authored by Fredrich Kahl and David Roland-Holst of Berkeley’s Center for Energy, Resources and Economic Sustainability (part of the Dept. of Agricultural and Resource Economics).

Higher energy demand, heat waves, scarce water, wildfire and rising sea levels–even the “collapse” of the state’s half-billion-dollar ski industry–are just some of the potential cost drivers. The “good news,” according to the report, is that much of this cost could be avoided by immediate investment in strategies to prepare.

A key question is where the money will come from—especially in tough economic times—to invest in the energy and other infrastructure needed to stave off the worst damage. Skip Laitner of the American Council for an Energy-Efficient Economy, says we’re not necessarily talking about finding “new” money for these investments. “In the US economy,” says Laitner, “we’re looking at almost two trillion dollars of investment anyway, regardless of how tight the market is. The point I think is a smart re-deployment of investment to more productive uses.”

That includes rapid development of renewable energy and measures to use water more efficiently. The study was funded by the nonpartisan think tank known as Next 10 and is just the latest in a repeating chorus of studies making the point that a full-on confrontation with climate change will, in the long run, be good for the economy, and may even provide some near-term stimulus.

Just weeks ago, Roland-Holst unveiled a separate study on the potential for job creation from promoting conservation and a shift to renewable energy. Earlier this week, a Cal State Fullerton study put a $28 billion-dollar current price tag on air pollution in the south coast and San Joaquin Valley regions.

Roland-Holst will be one of the guests on KQED’s Forum program tomorrow (Friday). He’ll be joined by representatives from Next 10 and Environment California, in a robust discussion of the cost of climate change.

Government & Business, Power

Seizing the Moment

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All the hand-wringing about seized-up capital markets hasn’t stopped environmental visionaries from promoting their scenarios for a clean, green–and robust–economy. Indeed, many have seized  the moment to suggest that an all-out attack on climate change and pollution could be just what the doctor ordered.

They’re being egged on by the President-elect, who offered this nugget in a recent pre-election interview with Time magazine:

“…we are just going to completely revamp how we use energy in a way that deals with climate change, deals with national security and drives our economy, that’s going to be my number one priority when I get into office, assuming, obviously, that we have done enough to just stabilize the immediate economic situation.”

That’s a whopping assumption. Nevertheless the advocacy group Environment California has released its own vision, asserting that clean energy is “the foundation of America’s economic future.” The group’s Blueprint for Economic Recovery and Environmental Protection Through Clean Energy Solutions is not groundbreaking but rather an aggregation of ideas and studies that have been put forth already, leading to the same general conclusion.

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The report attempts to bundle the potential of renewable energy sources such as solar, wind and geothermal, coupled with aggressive conservation measures, which it says could alone cut the nation’s electric use by a quarter.

For example, Environment California suggests that we might set aside 9% of Nevada (that’s about 10,000 square miles–imagine Massachusetts covered border-to-border with solar panels) for solar-thermal installations or harness the wind potential of five interior states (the Dakotas, Kansas, Montana and Texas), either one could cover the nation’s entire electric bill. Of course, either of these approaches would require massive, intrusive distribution networks to get the power where it’s needed, so I these ideas may be intended as inspirational, not literal.

Another idea, which requires very little distribution infrastructure, is carpeting the nation’s rooftops with photovoltaic solar panels. The group says that would provide about 70% of our energy needs.

The report also advocates for cutting our oil consumption in half, though it does not specify by when.

How does all this translate to economic redemption? By creating “millions of jobs.” According to the report:

“…repowering America will plant the seeds of economic growth and revitalization across the country. And by creating the world’s largest market for renewable energy and energy efficient technology, we will give American companies a leg up in the most important economic competition of the 21st century – the race to supply environmentally sound technologies to the rest of the world.”

The report cites several studies to support this conclusion. Some were done several years ago and may contain assumptions that don’t quite hold up in today’s recessionary, capital-constrained environment. The more recent work includes a University of Tennessee study from 2006, which projected that converting a quarter of U.S. electric production and transportation fuels would, over about 20 years, yield more than five million jobs.

You are guaranteed to hear a great deal more on this theme, as a new administration takes charge with it’s “number one priority.” Still unanswered is who will provide the capital–and the incentives to steer capital–into the clean, green economy of our dreams.

Photo: Installing solar panels on the roof at KQED.

Government & Business, Power

Punting the Issue

oil-refinery-300.jpgWhen California creates a cap and trade system to deal with greenhouse gas emissions, as it is planning to do, there’s going to be the question of what to do with the revenue. Actually, first there’s the question of if there will be any revenue, as Mary Nichols, Chair of the California Air Resources Board (CARB), told a roomful of Silicon Valley venture capitalists and green tech leaders this week at the offices of fuel cell innovator Bloom Energy.

California’s cap and trade planning is tied to the Western Climate Initiative, but the consortium is leaving the decisions about how to dispense credits up to each state.

Nichols said that those who would be buyers in the potential cap and trade system are “very resistant” to the idea of an auction. Not exactly surpising.

But many clean energy innovators see the revenue from a cap and trade auction as the perfect opportunity to help new green technologies survive the tenuous period between venture capital funding and commericial viability. Funds from a cap and trade auction could help mitigate the risk private companies take on to develop the innovations that will be needed for a greener future.

Nichols admitted that how much of the credits to auction and where the money should go is the most controversial issue around AB 32. She cited the “cap and dividend” option, a scenario in which all the revenue would go “right back to the public, like in Alaska,” as a politically popular option. She also mentioned using the funds to reduce corporate taxes.

Bloom Energy CEO KR Srindhar likened the “cap and dividend” option to “giving people a fish” (I can only assume as a reference to the old adage about how teaching someone how to fish is better than giving him a fish).

“In the early stages, if we [California] want to be a leader in this field, we need to be seeding it to create jobs. When we do, then, month after month, they’ll be getting that dividend,” Srindhar told Nichols, asserting that money invested in green tech would pay off in the form of job creation and a better economy.

Nichols reponded by saying that she was “thinking about punting the issue for awhile.”

As we have blogged before, CARB is tasked with implementing AB 32, which requires that the state reduce its greenhouse gas emissions to 1990 levels by 2020.

According to rumors, Nichols may be influencing more than just California’s climate policy soon. Unnamed sources in recent reports have cited her as a potential Obama pick for EPA head in the new administration.

Government & Business, Power

The Mystery Cities in Prop 10

Every ballot measure has its fine print and every piece of legislation its earmarks and “ornaments.” Prop 10, officially the California Renewable Energy and Clean Alternative Fuel Act is typical of this time-honored tradition, except in one respect. Usually these quirks can be explained by the people promoting them.

On page 16 of the measure, Prop 10 specifically allocates multi-million-dollar grants to each of eight cities in California. Los Angeles, San Diego, Long Beach, Irvine, San Francisco, Oakland, Fresno and Sacramento (listed in that order) would each get $25 million:

“…for the purpose of capital projects and operating expenses promoting and demonstrating the actual use of alternative and renewable energy in park, recreation and cultural venues, including the education of students, residents and the visiting public about these technologies and practices.”

Seems straightforward enough–except nobody seems to know how these eight cities were chosen. It’s not merely a list of the state’s eight largest cities. It’s close, except that San Jose (#3) is conspicuously missing but Irvine (#17) makes the cut.

John Dunlap, former head of the state Air Resources Board and a paid consultant to the Prop 8 campaign, appeared to be stumped when I asked him for the rationale. His best  guess was that they might be locations with significant transportation infrastructure, such as major port facilities. Again, the mystery of Irvine…and Fresno isn’t quite the Rotterdam of the West Coast.

I called the official office of “Yes on 10” and a media representative told me that she thought the cities were chosen for “geographic distribution” but admitted that she hadn’t been asked before. She promised to get back to me with a definitive answer. That was last week. Election Day is tomorrow. If Prop 10 goes down to defeat, it won’t matter. If it passes, it’ll be even more important to have an answer.

Government & Business

The Other Greenhouse Gases

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Carbon dioxide is the 900-pound gorilla of greenhouse gases. There’s little doubt of that, whether you’re tracking news coverage or policy measures.

But lately, some of the other beasts are getting more scrutiny. Reuters published a story last week that focused on nitrogen triflouride, a by-product of semiconductor manufacturing and a key ingredient in flat-screen TVs.

Researchers at Scripps Institution of Oceanography in San Diego have been tracking the gas, which goes by the shorthand NF3, and concluded that the atmospheric load of the stuff is growing at 11% a year. What makes that a little scary is that NF3 is said to be 17,000 times more potent than CO2 as a greenhouse gas, though over all it’s still a much smaller factor in global warming.

At the same time, Kirk Smith of UC Berkeley is taking his show on the road, with a lecture he calls “CO2 on Steroids.” It’s about the role that methane plays in the warming equation and what he believes are the opportunities to make relatively fast headway against global warming by attacking methane emissions. Smith will present his findings at the state air board’s Chair’s seminar series in Sacramento. You can watch a webcast of his lecture on November 10.

I interviewed Smith for an upcoming Climate Watch radio feature on the methane issue in California. Listen for it on The California Report in mid-November.

Government & Business, Power

400,000 Jobs or Bust. Or Both.

There’s an interesting juxtaposition nowadays between the grim economic/public funding forecasts and the eye-popping estimates of job growth in the “green-collar” economy…at least in the ever-optimistic Golden State.

Given the current meltdown in the capital markets, there is understandable fear that investment in renewable energy and carbon-reducing technology will be nipped in the bud. Recent articles in the New York Times and Times of London reflect the new angst.

But against this backdrop of doom, predictions are popping out all over about the coming economic boom, if we can somehow stay the course toward a low-carbon economy. This week number-crunchers at UC Berkeley issued the bold declaration that through energy efficiency alone, California can add 403,000 new jobs. David Roland-Holst and his colleagues assume a scant 1% annual improvement in overall energy efficiency, in order to get there. And by the way, they say, you can pencil an extra $76 billion in gross state product into the bargain. We’ll be spending so much less to light, heat, cool, and move us around, that it will free up billions of dollars and an outbreak of general prosperity will ensue. Sound like Pollyanna gone wild? The authors say we’ve done it before.

A recent economic analysis by the California Air Resources Board predicted that full implementation of the sweeping Global Warming Solutions Act of 2006 (CA AB-32) would add 100,000 jobs by 2020. The astute reader might wonder how, since energy efficiency is just one facet of AB-32, can the Berkeley number be so much higher. The answer, according to Roland-Holst, is that the Air Board estimate is “innovation-neutral.” In other words, it assumes that nothing new is invented on the efficiency front.

Hear more details as KQED’s Peter Jon Shuler speaks with  Roland-Holst about his methodology.

Government & Business

Proposed Plan for Reducing Emissions in CA

California is one step closer to implementing the Global Warming Solutions Act of 2006, or AB 32, the law that requires the state to reduce greenhouse gas emissions to 1990 levels by 2020. Today, the California Air Resources Board (CARB) released its proposed scoping plan for how to achieve this goal.  CARB president Mary Nichols said more than 40,000 comments were submitted in response to the draft plan released in June, which we wrote about last month.  Today’s plan will go before the Board for approval in December.

One of the biggest changes to the scoping plan is that the target for reducing Regional Transportation-Related Greenhouse Gas emissions by 2020 was more than doubled from two to five million metric tons. CARB anticipates meeting this goal with a combination of improvements to alternative transportation infrastructure (such as public transit and biking lanes), building sustainable developments, and reducing vehicle trips through incentives and education strategies.

Another change is the addition of a goal for local governments, which was not articulated in the previous version of the plan.  CARB is recommending local governments reduce greenhouse gas emissions by 15 percent below today’s levels by 2020.

A big component of the scoping plan is a cap and trade program that covers 85 percent of the state’s emissions.  The plan is being developed in conjuction with the Western Climate Initiative, which includes seven states and four Canadians provinces that have agreed to work together to cap emissions and create a regional carbon market.  In September, we wrote about the carbon trading market set up by ten eastern states, the Regional Greenhouse Gas Initiative (RGGI). 

Questions still remain about how California’s carbon credits will be divided up and whether they will be handed out, auctioned off, or, more likely, a combination of the two.  WCI has left this decision up the individual states with a recommendation of a minimum auction for 10 percent at the outset of the program increasing to at least 25 percent by 2020, and perhaps higher in the future. Nichols said today that California is considering auctioning 20 percent.  Of course, for many environmentalists, the closer to a 100 percent auction, the better. 

For more information and analysis on the plan, listen to our own Craig Miller, Senior Editor of Climate Watch, on KQED Radio talking with host Sarah Varney. Listen to Miller’s report on AB 32 that aired on the October 16 edition of the The California Report.

Government & Business, Power

Three Bucks a Ton

You load 16 tons and whaddayou get? The late Tennessee Ernie Ford’s answer to that was “Another day older and deeper in debt.” But in the emerging carbon market, we now have a real answer: about $48.

At least that’s how much you’d use up in carbon credits if you participated in the nation’s first “cap-and-trade” auction for carbon emissions, which set the price for a ton of carbon in that particular market at $3.07. That auction last week was for RGGI, the Regional Greenhouse Gas Initiative, casually known as “Reggie.” It’s the carbon trading market set up by a group of ten northeastern states and it may give us a preview for when trading begins by the Western Climate Initiative, a consortium of eleven western states and Canadian provinces, including California. As I reported last week, the WCI just made public its general gameplan for carbon trading to begin in 2012. The first RGGI auction raised $40 million, which the states can now spend on developing low-carbon sources of energy (let’s hope “Reggie” fares better in the long run than “Fannie” and “Freddie.”)

Actually, 16 tons isn’t even enough to get you noticed in these carbon markets. Burning a gallon of gas in your car typically releases less than 20 pounds of CO2. Only facilities that pump out 25,000 tons or more per year will have to comply with WCI, which has yet to decide what portion of its credits to give away or auction off.

On Friday, we expect staffers at the California Air Resources Board to release the last version of their “scoping plan,” before it goes to the board for approval. It’s the master plan for implementing the state’s comprehensive law to combat the effects of climate change. Part of it hinges on California’s participation in the WCI, so the successful first auction of credits by RGGI bodes well.