State must remain clean energy leader
May 6, 2010 - Steve Westly - signonsandiego.com
While federal climate legislation bogs down in Washington, China is investing $12.6 million every hour in clean energy technology. Why? Because its government recognizes an opportunity when it sees it.
Energy is the largest sector in the global economy. Clean energy technology, like the last breakout technology revolution – information technology – is a multibillion-dollar market. China has been slow to join international climate agreements because every minute of delay means they gain a greater edge. As Republican Senator Lindsay Graham said, “Every day that we delay trying to find a price for carbon is a day that China uses to dominate the green economy.”
California is well ahead of the country when it comes to putting that price on carbon. In 2006, we passed the Global Warming Solutions Act (AB 32), which requires economy-wide reductions of greenhouse gas emissions to 1990 levels by 2020. Democracy is messy. Unlike China, we cannot establish our technology supremacy by fiat. Instead, we need public policy that helps provide market certainty. AB 32 provides that certainty, and our economy has benefited as a result.
Clean energy venture capital firms began investing at an unprecedented rate after the voters passed AB 32. In 2007, venture capitalists invested nearly $1.8 billion in California clean tech companies – almost a 50 percent increase over the year before. In 2008, this investment reached record levels, almost doubling over the previous year, to $3.3 billion. In 2009, California still led the nation with $2.1 billion in clean tech venture capital.
Today, clean energy jobs represent the most vibrant sector of California’s economy. New data released by the nonpartisan research group Next 10 shows that California green businesses have increased 45 percent in number and 36 percent in employment from 1995 to 2008, while total jobs in California expanded only 13 percent. Total employment fell 1 percent, but green jobs continued to grow by 5 percent as the economy slowed between 2007 and 2008. Interestingly, manufacturing represents 21 percent of all clean energy jobs, while only 11 percent of all jobs in California are in manufacturing. And the growing clean tech sector provides opportunities at every income and education level. This industry now rivals biotechnology and software in creating jobs for Californians.
Clean energy policies in California have been good for consumers. Over the past 35 years, energy-efficiency policies have saved Californians more than $56 billion. This money was spent on job-creating goods and services in our state, creating 1.5 million full-time jobs and $45 billion in payroll. Research shows that AB 32 will continue to fuel that growth, adding over 403,000 jobs to California’s economy by 2020.
But the oil and gas industry, along with other major polluters vested in the fossil fuel economy, are working hard to overturn this law. Many of the same lobbyists and lawyers working to undermine climate legislation in Washington are now engaged in a multi-front campaign to prevent California from transitioning off fossil fuels to a clean energy economy. Their message? The status quo is safe.
But is it? Leaving climate change aside, the projected trajectories of energy demand and fossil fuel supply mean that prices will continue to be volatile and ever higher. Our nation’s most distinguished retired military leaders have called our current dependence on fossil fuels “a serious and urgent threat to national security – militarily, diplomatically and economically.”
The U.S. economy is now growing in fits and starts, but unemployment remains at historic levels – especially in California. California has had more than its share of layoffs, foreclosures and bankruptcies, and state revenues have been dramatically reduced as a result. This crisis has provided opponents of AB 32 with the perfect conditions to stoke public anxiety over economic security with frightening and misleading claims about the impacts of AB 32.
But even the state’s nonpartisan Legislative Analyst’s Office predicts that suspending AB 32 “could delay investments in energy technologies reaping longer-run savings, or dampen additional investments in clean energy technologies or in so-called ‘green jobs’ by private firms, thereby resulting in less economic activity than would otherwise be the case.”
Opponents of AB 32 want to suspend its implementation until unemployment falls below 5.5 percent. What they fail to recognize, or don’t want to admit, is that AB 32 represents our best path to achieve that goal.
We are at a historic moment, facing decisions that will affect us for decades to come. Should AB 32 opponents succeed, California’s leading edge will be blunted, with serious implications for the state and federal economy.
Without policies like AB 32 that unleash market forces to drive clean energy business growth, we will be.
California has been the global leader in innovation and America’s economic engine for the past 60 years. Now is certainly not the time to stop.
Westly is the managing partner of The Westly Group, a clean technology venture capital firm. He served as the elected state controller and chief fiscal officer of California from 2003 to 2007.