California key to climate change

The state is a hub for investment in “cleantech”, which could be at risk with any policy change, and has a governor and senior congressional representatives who have led President Obama’s push for a US climate change law.

The face-off to replace Republican Governor Arnold Schwarzenegger in November offers a clear choice on the issue, which for many will come down to whether laws on climate change help the state lead in new ‘green’ industries or drive firms out of business or out of state in reaction to higher costs.

“It’s a pivotal race, certainly for California, but for the rest of the country” too, said incoming Sierra Club Executive Director Michael Brune, echoing the thoughts of many businesses in the US state with the largest population and economy.

Former eBay chief Meg Whitman and Silicon Valley colleague Steve Poizner, the Republicans vying for the job, both would put the 2006 landmark air pollution law on hold. State Attorney General Jerry Brown, the unofficial Democratic candidate, would defend it.

California’s 2006 law begins the experiment of creating a market to price carbon, putting a cap on emissions of carbon dioxide and other greenhouse gases and letting polluters trade emission permits. It sets new building, automobile and planning rules for efficiency and embraces alternative energy.

An initiative which has just begun gathering signatures to get on the November ballot would suspend the law until the state’s double-digit unemployment rate drops to 5.5 percent or less – which economists say will be years – and has won Poizner’s support.

Whitman, ahead in Republican polls, aims to put key provisions of the law on hold for a year for study.

Brown, a former California governor who supports the law, led Whitman in a January Field Poll by 10 percentage points – half his lead in an October poll.

Overreaching regulation or grounds for growth
“Colorado, Utah, Texas, they are competing for our jobs,” Whitman said recently. She believes “overreaching environmental regulations” are part of the problem, although she supports a target for the state to get a third of its electricity from renewable sources by 2020, arguing it will create jobs.

Poizner in a statement said the climate change law “sent a message to every business and every manufacturer that it’s going to cost you more to do business in … California.”

As attorney general, Brown sued the federal government to force it to regulate greenhouse gases, saying on his website, “I am committed to doing everything in my power to ensure that California meets its greenhouse gas reduction targets.”

The prospect of leaving the 33 percent renewable energy target in place and suspending the broader law is sure to create controversy. Companies focused on cleantech, the catchall phrase for technology related to the push to cut greenhouse gases, want both.

Matt Golden, president of building efficiency start-up Recurve, says putting a price on carbon, as the 2006 law will do, is the key to leveling the playing field with dirtier power, and suspending the law would set back the state.

“You throw all this risk into the equation and venture capital firms are banking on us building this new order, this new market. If you stop this evolution, it is going to be a hell of a lot less bankable,” he said.

And if California puts its law on hold, the chance of a federal move drops close to zero, he argues.

“I think it might put a nail in the coffin of climate change nationally,” he said.

Field Polls show that voters in the state, which has double-digit inflation and faces a new budget gap – are dissatisfied with legislators and think the state is headed in the wrong direction.

But in a January poll for a non-profit, Field found nearly 70 percent agreed that California could cut greenhouse gases and expand jobs at the same time, and only 12 percent in a separate question said that recent changes to encourage clean energy would take away jobs.