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July 26, 2010

Welcome to California, the 11th most ambitious state for clean energy

Governor Schwarzenegger has constantly highlighted the jobs potential of clean energy projects driven by the state's renewable energy targets, but now stands in the way of the targets he praises

What is happening in California? Far and away the best state in the union for installing renewable energy, its ambitious 33% renewable energy target tentatively penciled in for the year 2020 is in danger of being wiped away by a huge eraser.

The state doesn’t actually have a formal Renewable Portfolio Standard of 33% in place – so far, there’s just an executive order signed by Governor Arnold Schwarzenegger requiring the state’s Air Resources Board to put one in place by the end of this month.

Governor Schwarzenegger has now called for this move to be postponed by the ARB until at least September.

His decision highlights the fact that without a formal law in place to require such a target, rather than a Governor’s executive order, either himself or a future Governor could remove such a target at a moment’s notice.

A risky situation for anyone that might want to invest in California’s renewable electricity sector, and it would be understandable for major clean energy investors to want to hold off until that 33% Standard is put in place this fall.

Law

The Governor’s request for delay relates to efforts to enshrine the 33% target in California law, work that Governor Schwarzenegger is also currently holding to ransom with demands for the bill to include measures to streamline the state’s permit process, having vetoed a bill last year setting such a target.

You can understand the Governor’s insistence that the state’s permitting program be in a position to support the 33% target before it is put in place, but to threaten the entire target for that reason is a little like throwing the baby out with the bathwater.

So, without the 33% target California has only the 20% target it has in place for this year (2010).

That means that Colorado, Connecticut, Hawaii, Illinois, Minnesota, New Hampshire, New Jersey, New York, Oregon and West Virginia now have renewable energy standards in place that are tougher than California’s.

Jobs

Governor Schwarzenegger is opposing attempts to suspend state greenhouse gas limits, but his decision to sit on the state’s 33% renewable energy target is somewhat perplexing given his consistent views that the clean energy sector creates jobs – at a time when California is facing a 12.5% unemployment rate.

Here are some of the Governor’s own quotes, from every month so far this year:

• “California has led the world in enacting policies that harness the private sector to create the clean and renewable technologies needed to combat climate change and reduce our dependency on oil. And our efforts are paying off” (July 2010)
• “Because of our forward-thinking policies, some of the most advanced technology companies in the world are investing in California and creating jobs” (June 2010)
• “Because of our energy policies and environmental policies, we have so much investment coming into the state of California. We have 57 percent of all venture capital in green technology coming to California” (May 2010)
• “In 2009, while a terrible recession strangled economies all around the world and we have seen the economic slowdown, the biggest since the Great Depression, clean energy was the one bright spot” (April 2010)
• “Since 2005 green jobs in California have grown 10 times faster than in any other industry. We lead the nation in clean energy businesses by more than 10,000 and we attract more venture capital here than the rest of the nation combined” (March 2010)
• “This is also about job creation, this is also about being independent of foreign oil. This is good for the environment, this is good for the economy, for everything.” (February 2010)
• “I would like to also say that what is good for the environment is good for the economy and this is, again” (January 2010)

The point, of course, is that you can’t spend every single month of the year lauding the employment and economic potential of clean energy and then threaten to veto the very target that is driving a lot of that employment and economic potential.

Meanwhile, a big movement backed by anti-tax groups and the oil industry is seeking voters to overturn the state’s greenhouse gas emission limits under Assembly Bill 32.

A vote is tabled for this November for the so-called Proposition 23, which a group of business leaders has now warned will mean increased electricity costs and healthcare costs, as well as a threat to half a million jobs in the state.

California’s clean energy reputation risks being well and truly lost in the smog.