Aug 21, 2006 (From the CalCars-News archive)
Last week, a group of entrepreneurs and advocates spent the day at the Capitol expressing support for AB32, the Californi Global Warming Solutions Act of 2006. If enacted, this bill will become the world's flagship legislation for evolving economies to reduce carbon. At the highlight event, a press conference with Assembly Speaker Fabian Nunez, and other meetings, my 100+MPG PHEV, which I drove to Sacramento, was repeatedly cited as an example of the economic possibilities of green/clean technology.
AB32 is in late stages of negotiation between Assembly and Senate leaders and the Governor, with the goal of passing the bill by the end of the month. Below is the press release, followed by some of the media coverage. (More info on the legislation at http://www.e2.org/ext/jsp/controller?activityName=GlobalWarmingCA&docId=8819. The same day, a group of California economists released a letter to the Governor entitled, "The most Expensive Think We Can Do Is Nothing." -- you can find this and other info at http://www.climatechoices.org/site/resources.html.
Business and Innovation Leaders Rally to Support AB 32 in Sacramento Call It a "Job Creation" Bill Needed for California Leadership in Greentech
Sacramento, Calif., August 16, 2006 - Six business and innovation leaders from across the state announced their support for the California Global Warming Solutions Act of 2006 (Assembly Bill 32), calling it a "job creation" bill that will spur economic, environmental and health benefits. The group of concerned California leaders, including John Doerr, partner at Kleiner Perkins Caufield & Byers, Bob Epstein, co-founder of Sybase, GetActive Software and Environmental Entrepreneurs, Larry Gross, CEO of Altra, Felix Kramer, founder of the California Cars Initiative, Jack Newman, co-founder and research VP of Amyris, Ellen Pao, KPCB partner, and Dave Pearce, Miasole CEO, met with Assembly members and senators in Sacramento today to share their views.
"Just as California leads in high-tech and biotech, we can lead or follow in greentech," said John Doerr. "The choice is clear: Are we going to innovate and prosper, or stagnate and suffocate? Or, would we rather fund farmers or terrorists? AB 32 may be controversial in its newness and innovation, but it is the right move for California."
"AB 32 delivers solutions to global warming that create new jobs and green sources of energy for all Californians," Bob Epstein said. "California is exporting nearly $30 billion every year - that's $2,500 from every Californian household - to buy fossil fuels. AB 32 will bring that money back to California."
According to the California Environmental Protection Agency, worldwide demand for new technologies developed to reduce global warming emissions will create an annual global market of over $180 million. The California Climate Action Team determined that global warming action would increase Californians' income by over $4 billion and provide approximately 83,000 new jobs.
"The most expensive thing in the world we can do is nothing," said Larry Gross. "Global warming pollution reductions are inevitable, but uncertainty over how governments will enable those reductions is choking economic growth. AB 32 will create market certainty and spur investment in a multi-billion dollar global greentech industry. We applaud co-sponsors Speaker Fabian Núñez and Assembly Member Fran Pavley, as well as the other tenacious members of the House and Senate who worked with them to create and drive AB 32."
Three of California's largest industries, agriculture, wine and tourism, will suffer dramatic losses if global warming emissions continue unabated. Small firms, which operate on slim profit margins are most vulnerable to global warming losses.
"We see California as the beachhead for federal and international change," Dave Pearce said. "California was the first to adopt energy efficiency standards for buildings and appliances in the late 1970s. Now these standards exist across the nation and even in Russia and China. Our clean cars law has been adopted by ten other states and Canada-and will reduce global warming emissions in 2010 by more than 64 million tons of carbon dioxide a year."
These leaders met in May 2006 as part of the Greentech Innovation Network, comprising 50 of the world's leading entrepreneurs, scientists and policymakers from the United States, Asia, Europe and South America. Members of the networking event built a strategic map for evaluating needs and encouraging innovation, and forged new partnerships in support of greentech policy and technology.
Global-warming bill generates political heat
Clean-tech push exposes rift within business community
By Michael Gardner
COPLEY NEWS SERVICE
August 21, 2006
SACRAMENTO - Californians could eventually see subtle and dramatic innovations in grocery stores, new-car showrooms and kitchens if Republican Gov. Arnold Schwarzenegger and leading Democrats agree on legislation aimed at slowing global warming.
Venture capitalists and entrepreneurs say a commitment from the state to regulate greenhouse gases would send a confidence-building signal to the marketplace, spurring a clean-tech revolution on par with the surge in high-tech and biotech that has helped drive California's economy.
"Sustainable technologies are the next big thing. This is really the mother of all markets," said John Doerr, a billionaire who helped launch Google, Intuit and the Segway scooter.
Unlike Doerr and other entrepreneurs who stand to make money off state-ordered clean technology, industries such as cement makers, utilities and manufacturers remain worried about emissions caps. The California Chamber of Commerce has warned that additional regulations would lead to a spike in energy prices and job losses.
"By placing an arbitrary carbon-emissions cap on California employers, we would be encouraging them to leave our state and take jobs to countries or states that do not impose caps," said Allan Zaremberg, president of the state Chamber of Commerce. "When employers move to other global locations, they may produce even more carbon emissions."
On Thursday, the Senate Appropriations Committee approved the legislation, Assembly Bill 32.
Most researchers agree that unchecked greenhouse gases, primarily carbon dioxide, could disrupt global climate patterns, threaten crops, raise the risk of forest fires and shrink Sierra snowpacks that hold water for millions of Southern Californians. However, a few skeptics say the climate shifts have little to do with human emissions and may be part of historic weather patterns.
Schwarzenegger has made the issue a centerpiece of his environmental agenda as he runs for re-election, proposing a rollback of emissions to 1990 levels by 2020.
Schwarzenegger's push puts him at odds with the state Chamber of Commerce, one of his closest allies. But other business interests are eager to see the measure pass, convinced that state regulations will prod demand for their energy-saving products, from hybrid cars to solar panels.
Doerr, who led a contingent of investors and entrepreneurs on a Capitol lobbying trip last week, said Californians should not be surprised to see big and small changes.
"Seven years ago, there was no Google. That's how fast Californians can change the world," Doerr said.
Grocery stores already are starting to adapt by putting goods such as milk and eggs behind doors instead of in open refrigeration units. Time-of-use metering, common on farms and in other industries, may come to the kitchen and laundry room as power companies seek to discourage the use of large appliances by charging more during periods of peak energy demand.
California already has moved to push car makers to curb greenhouse gas emissions in their fleets starting with the 2009 models. Demand for hybrids such as the Toyota Prius and Honda Civic continues to outstrip production.
Moreover, said entrepreneur Felix Kramer, state-required reductions from all industries would spark investment interest in his venture, a hybrid car that plugs into a wall socket and gets the equivalent of 100 miles per gallon of gas.
"It's important to have a long-term market and stable demand. That's what we need," Kramer said. "The legislation and regulations will provide that."
The endorsement of leading entrepreneurs with a stake in clean-air technologies has helped shift the debate and has handed business-friendly Democrats a reason to support the legislation in an election year.
"It's bringing new voices to the fight. When you have new voices, it makes good political sense to exercise them," said Ann Notthoff, state advocacy director for the Natural Resources Defense Council.
Schwarzenegger appears confident that a compromise bill will reach his desk before the Legislature ends its session for the year by the end of the month.
"There will be some environmentalists who say this is not perfect and there will be other people in the business community who will say this is not perfect," Schwarzenegger said Wednesday. "For us, the challenge is to prove that we can protect the environment and also protect the economy at the same time."
That may be impossible, economist Margo Thorning said. She argued that fuel prices will soar as utilities and refiners recoup their investment in reducing emissions. In turn, consumers and businesses will squeeze their spending to pay higher energy bills.
"People don't have unlimited resources," Thorning said.
However, a recent study by the University of California Berkeley concluded that California's economy will see a net gain in jobs amid an injection of new investment in technology.
Although Democrats and the governor are in agreement on a broad framework, they remain split on three major points: how much industry should be allowed to buy pollution credits elsewhere to meet required targets, what powers to grant a regulatory agency and how to temporarily relieve businesses of obligations in a natural or economic disaster.
Environmentalists say California is positioned to show the way nationally, leading to lowered expenses as more technology comes to the market.
"The entire country is looking to California to lead," said Jim Marston, an Environmental Defense attorney involved in global warming issues nationally.
Business generally agrees on that point. But Kevin Fay, who represents a consortium of large corporations that included DuPont, Boeing and General Electric, called the legislation "a big gamble."
"No economy this size," Fay said, "has gone it alone in the world."
Businesses divided over warming bill's bottom line Mark Martin, Chronicle Sacramento Bureau Thursday, August 17, 2006
(08-17) 04:00 PDT Sacramento -- A push to make California the first state in the country to cap greenhouse gas emissions has many businesses split over whether the new limits would hobble the state's economy or create jobs and big profits.
The debate has intensified as Democratic lawmakers and Gov. Arnold Schwarzenegger, a frequent ally of big business who also touts his efforts to fight global warming, try to reach a compromise before Aug. 31 on what is perhaps the most closely watched piece of environmental legislation in the country.
Traditional business groups such as the state Chamber of Commerce and Farm Bureau Federation oppose the legislation. The chamber is running a radio advertising campaign that seeks to torpedo support for the measure as the legislative session winds down.
But several venture capitalists and entrepreneurs promoting the legislation argued Wednesday that new regulations would create a boom in industries such as solar power and biofuels that will power the California economy for decades.
Also on Wednesday, a UC Berkeley study predicted that reducing greenhouse gas emissions in the state would create 17,000 new jobs and add $60 billion to the gross state product by 2020.
"Green technologies, sustainable technologies, are the next big thing,'' said John Doerr, a partner in the powerhouse Silicon Valley venture capital firm Kleiner, Perkins, Caufield & Byers. "This really is the mother of all markets."
Business groups opposed
A coalition of business groups, however, forecasts higher gas and electricity prices and fewer jobs if California adopts the first-in-the-nation caps.
"It's just not appropriate for California businesses to go this alone,'' said Dorothy Rothrock, an executive with the California Manufacturers and Technology Association. "We are already in a state where it costs 24 percent more to do business, and this will only increase that.''
The legislation, AB32, authored by Assembly Speaker Fabian Núñez, D-Los Angeles, and Assemblywoman Fran Pavley, D-Agoura Hills (Los Angeles County), would require a 20 percent reduction in the amount of carbon dioxide and other greenhouse gases emitted into the air by 2020. Industries would be required to begin making reductions in 2012. Schwarzenegger and lawmakers are still negotiating over some aspects of the bill, including who would set up new regulations for businesses and draw up other plans to meet the target.
Some measures to cut greenhouse gasses, such as a law requiring automakers to reduce car emissions and efforts to boost the use of solar power, already have been approved by state agencies.
The legislation has a key hearing today in the state Senate Appropriations Committee and could be voted on by the full Senate as early as Monday.
Governor supports caps
Schwarzenegger, who signed an executive order last summer setting state targets to reduce greenhouse gas emissions, has indicated he supports setting caps into law. But the administration has proposed amendments to the bill that some environmentalists say will weaken it by allowing deadlines to be delayed.
Both Núñez and Linda Adams, head of Schwarzenegger's Environmental Protection Agency, said this week they were working closely to come up with a bill that both lawmakers and the governor can support. And a legislative source familiar with the negotiations said an agreement could be announced as early as today.
The heart of the broader debate is how a major change in the energy use of businesses and individuals will affect the economy.
The coalition opposing the legislation predicts that limits on companies' energy use will be disastrous. The group has cited studies by Margot Thorning, a Washington, D.C.-based economist who works for the American Council for Capital Formation, a business-funded think tank.
Thorning argues that companies will move out of state to avoid the regulations, causing a loss of jobs in California. She also notes that greenhouse gas caps are likely to force some companies to simply slow down production, which also would hurt the economy, and could force electricity utilities to increase prices as they seek other sources to produce electricity.
The business coalition's push against the bill, which has included radio advertisements around the state, has angered some.
"The Chamber of Commerce needs to back off,'' Núñez said at a Capitol news conference Wednesday. "They've cried wolf one too many times.''
Technology could add jobs
And other studies predict an economic boom. A Schwarzenegger-created task force formed to come up with ways to reduce greenhouse gases suggested that a cap would add more than 80,000 new jobs.
And the study released Wednesday, by David Roland-Holst, an adjunct professor of agricultural and resource economics at UC Berkeley, suggests that California businesses and consumers would save money through energy efficiency that will lower electricity bills. The report also suggests that businesses with lower power bills will invest money elsewhere and create jobs.
"Yes, there will be adaptation costs,'' said Alex Farrell, a UC Berkeley professor who helped with the study. "But those up-front costs will easily pay for themselves.''
Some companies that have already made moves to reduce greenhouse gas emissions agree.
Sonoma Wine Co., which bottles 1.5 million cases of wine per year and which supports the legislation, is planning a $2 million investment that will reduce its greenhouse gas emissions by 50 percent per case.
The changes will largely come through better insulation of its 135 wine tanks, which will dramatically lower electricity costs, said Natasha Granoff, director of business development for the company.
"It absolutely makes bottom-line sense,'' said Granoff, noting the company estimates it will recoup its investment in two years through lower energy bills.
E-mail Mark Martin at markmartin@....
Posted on Thu, Aug. 17, 2006
Supporters rally around emissions bill
Problem areas are governing board makeup, role in
meeting caps and opponents say it increases energy costs
By Mike Zapler
TIMES SACRAMENTO BUREAU
SACRAMENTO - A hotly contested bill to reduce greenhouse gas emissions in California would spur a wave of new clean energy technology, prominent Silicon Valley venture capitalist John Doerr predicted Wednesday.
Entrepreneurs "are going to go out and compete and innovate to bring enormous solutions to the market" if the legislation passes, Doerr, a leading partner at Kleiner, Perkins, Caufield & Byers, said at a news conference at the Capitol. He was joined by Assembly Speaker Fabian Nunez, D-Los Angeles, and executives from several alternative energy companies.
Assembly bill 32, authored by Nunez and Assemblywoman Fran Pavley, D-Woodland Hills, would mandate cuts in statewide greenhouse gas emissions to 1990 levels by the year 2020 -- a roughly 25 percent reduction. The bill, one of the most contentious issues pending in the Legislature this summer, has drawn intense opposition from some business groups that say it will drive up energy costs and prompt some companies to leave the state.
But Doerr's appearance underscored that sentiment within the business community is divided. He said that companies stand to gain by embracing conservation and alternatives to burning fossil fuels.
"I think the losers will be those who don't change," Doerr said.
His comments came on the same day that a UC Berkeley study was released that predicts the greenhouse gas legislation would spur billions in economic activity and create thousands of jobs as companies invest in new energy technology. But opponents countered that the study did not account for the actual costs of complying with the legislation.
The bill's prospects appear bright. Gov. Arnold Schwarzenegger has endorsed the basic framework; he is negotiating with Democrats over how it would be enforced. Among the sticking points are the makeup of a governing board that would oversee the program, and a dispute over what role a pollution-trading system would have in meeting the caps. That system would essentially create a market for carbon emissions, allowing companies that fall below the caps to sell credits to businesses that are unable to meet the mandatory limits.
Schwarzenegger and Democrats are also at odds over a proposed "escape hatch" that would allow the governing body to ease the emissions deadlines under certain circumstances, including if it finds that compliance would be "detrimental to the economy." Administration officials insist the clause is meant to give the state flexibility to respond to an emergency, not to let industry off the hook.
Nunez criticized the California Chamber of Commerce for what he called its "knee-jerk" opposition to the bill. The chamber has labeled AB 32 a "job killer" and is working to block it.
"The Chamber of Commerce needs to just back off," Nunez said. "They've cried wolf one too many times" about legislation that would purportedly harm the economy.
A spokesman for the Chamber of Commerce said Nunez's comments indicate that his constituents are starting to understand the consequences of the bill -- and they are relaying their concerns to the Assembly speaker.
"The bill is going to increase energy costs in California," the chamber's Vince Sollitto said. "That makes California companies less competitive and California a less attractive place for businesses to invest."
A business umbrella group and environmentalist organizations have launched competing advertising campaigns to promote their positions.