A Moment of Truth for the Golden State

This week, California faces a moment of truth. Will we live up to our aspiration to re-power the Golden State with clean, renewable energy and advanced efficiency technology, or take a rain check on the new energy economy?

As senior executives of California-based companies in the technology and entertainment industries respectively, we strongly believe that now is the right time to invest in clean energy. Such investment promises to be California's salvation in the deepening global recession, and our path to a new era of economic leadership and environmental progress.

The defining moment we face is a vote by the state air resources board on whether to implement California's landmark Global Warming Solutions Act, known as AB 32, or instead to fold under pressure from the fossil fuels industry, and from naysayers in traditional industry who portray every swing of the economy, either up or down, as an excuse for inaction.

AB 32 calls on Californians to reduce our global warming pollution to 1990 levels over the next 12 years with a variety of strategies such as boosting energy efficiency and producing at least a third of our electricity from wind, sun and other clean power sources. The ultimate target is an 80 percent reduction in global warming emissions by 2050, the level scientists think necessary to avert the worst impacts of climate change and ocean acidification.

When Governor Arnold Schwarzenegger signed AB 32 into law two years ago, he said that it would be good for business and create "a whole new industry to pump up our economy." He was right on the money. That's one reason the bill garnered support from more business organizations and leaders than from environmental ones.

Since then, two important factors have changed: both the economy and the polar icecaps appear to be experiencing meltdown much faster than experts previously predicted. That's why California needs AB 32 now more than ever.

Implementing AB 32 will revitalize our economy by generating tens of thousands of good-paying jobs - jobs that use the skills California's workforce already has. Moving forward with AB 32 will help us gain control of our own destiny by breaking our addiction to fossil fuels, and enable us to lead the rest of the country toward energy independence.

Sure it will cost money. But if history is any guide, the return on investment will be spectacular. Consider California's remarkable experience with the limited investments we've made already in energy efficiency. By setting high statewide standards for the efficiency of appliances and buildings, each Californian's electricity consumption has remained constant despite our ever-increasing appetite for gadgetry. Meanwhile, per capita energy consumption nationally has increased nearly 50 percent. That's saved California households $56 billion, according to a recent U.C. study - money that was redirected to other goods and services, creating 1.5 million jobs in the process.

Energy efficiency is the cheapest and fastest way to reduce global warming emissions from burning fossil fuels, but we can also benefit economically by developing our capacity to generate clean power. California is blessed by its natural resources, including prodigious amounts of wind, sun and geothermal energy. It's nature's gift to us, but so far we've squandered most of it. Why not capture that free energy and simultaneously become the market leader in designing and manufacturing clean power technology for the rest of the world?

Our companies are not in the energy business, but both of them are making substantial investments in energy efficiency and clean power. We're doing that not just to be good corporate citizens but because we've penciled it out and know that those investments are good for the bottom line. That's just as true for the state as a whole.

California was ahead of its time when it adopted the Global Warming Solutions Act two years ago. Let's capitalize on that lead. Now is not the time for hesitation or half-measures. As the President-elect has demonstrated with his economic stimulus proposals, now is the time for bold investments that will get our economy moving again and put it on a path of sustainable growth.

Eric E. Schmidt is the chief executive of a technology company based in California. Alan F. Horn is president of an entertainment company based in California.

Comments

[saibotchilizm]

There is some misunderstanding in this forum about AB32, the Global Warming Solutions Act. Here are some clarifications:

1) The nitty-gritty details are still being worked out on how the cap-and-trade system will work. It's a shifting terrain, and we should all cross our fingers that the ideals of the plan don't get shot down by politics and bought out by constituents.

2) It will cover the entire economy, top to bottom, from consumers to producers. This will encourage conservation, reduction of speed limits, you name it. This also makes AB 32 the most comprehensive climate-change legislation in the world.

3) Shifting to renewable energy production is the easiest way to reduce California's carbon footprint. "Government-mandated" energy quotas like the 30% goal in AB 32 have successful track records. For example... California will achieve 10% renewable energy production by 2010. Which is exactly in line with the government's prior mandate.

4) Cap-and-trade works. There is MUCH less acid rain in the northeastern states because of a cap-and-trade system there for sulfur emissions. The wild success of that program is the reason we talk about cap-and-trade at all.

There is no comprehensive cap-and-trade system for CO2. It is unprecedented. Europe's is less comprehensive and has not had time to establish itself.

California is the global proving ground for carbon trading. We should all hope it works, since it will be the template used for carbon reduction worldwide.

[Bladernr1001]

I still cannot think of any success stemming from government mandate of energy production.

You want 1/3 of our energy produced by wind and solar....then the environmentalists better keep quiet when huge portions of the desert and other places are covered over with solar panels and windmills.

I think nuclear is a much better way to go. I don't want to have to rely on the sun being out or teh wind to be blowing to get teh energy I need.

[indy100]

And I'm sure you'll be fine with the nuclear waste being buried in your hometown right? Think of it as the gift you'll give your kids, grandkids, great-grandkids; it just keeps on giving. For 1000 years. Now that's a legacy.

[profus]

The total US electricity consumption of about 800GW max is about 1/3 of total energy consumption (during summer ~783 GW and 640 GW for winter in 2007 see http://en.wikipedia.org/wiki/Energy_use_in_the_United_States).

If we assume that we use concentrator arrays, one can generate 2000GW (to account for night, and bad weather) with less than 4,000 square miles of solar arrays (SW of the US). That is less than 4% of the area of the state of Nevada, and roughly the size of Esmeralda County in Nevada with a population of

[Wilburrr]

The cost of energy is only going to increase. Investing in clean, renewable energy now also saves the increases that are bound to come in the future. Putting solar panels on my roof is one of the best things I've ever done... economically or environmentally.

[canuckmoose]

Thank you, Mssrs. Schmidt and Horn for your article.
Is there provision in the Act for conservation?
Is there provision for reduction of speed limits?

Are we really serious about energy self-sufficiency?
If so, we will take personal responsibility, voluntarily driving current speed limits, and lobbying for lower speed limits.

[WorkingClass]

California should play to its strength. Prison capital of the world. Just go ahead and start locking people up at random. After all - freedom is just another word for nothing left to lose.

[Wilburrr]

...is that all that Bobby gave you?

[TomBrentwood]

Better health for anyone with lungs might be a point worth mentioning and lower health costs...

[LeeCalif]

Sounds good as long as there is no nuclear (deadly) or clean (really dirty) coal squeezed in here.

[ndem]

The best way the heads of Google and Warner Brothers could help the country is by paying all their taxes inside the Us and not offshoring them!

[RickO]

Google has actually helped us green our company a bit. By replacing our email and other applications with gmail and Google docs, we've eliminated a bunch of servers in our own data center. these efforts also helped make it easier to go completely virtual and now we have no office occupancy costs or the big power bills that come with them. Cloud-computing, delivered by energy-efficient and environmentally conscious providers, is something everyone can do and the technology is mature and getting better all the time. (Disclaimer: I have no connection to Google other than being a customer and, frankly, a fan.)

[NeverADullMoment]

RickO, you make a great point. Big applause to you for achieving a virtual workplace. I am a relatively recent user of gmail and Google docs for group workflow and a big fan, too. I think about the possible impact that virtual workplace solutions could bring by eliminating needs for commuting, and, as in your example, office costs. Such solutions would also untether workers from big cities, free to go to where the cost of living if far more affordable and with better quality of life.

Such solutions should be pushed to the front burner wherever possible, in my opinion. I've worked in a few virtual workplaces in jobs I've been in, but such opportunities are difficult to find. One would expect that in the IT industry, which is the field that I work in, it would be a more established practice. In my experience, working in a virtual workspace has mostly been far more productive than working in offices.

[hiprogloho]

The cost of living is so high in CA that more people are leaving the state than coming. And when an electric bill for a west coast apartment is more than a house or mansion back east, then the least of our worries is green energy. If only the rich can afford it while everyone else is priced out, then what's the point?

[NeverADullMoment]

hipro -- I am in Boston and I am trapped here, dependent on the job market but killed by the housing costs. While housing prices will inevitably fall in various markets around the country, I believe that here housing prices will remain artificially high. Many parts of California will probably have the same fate going forward.

[HTooley]

Having lived in both Michigan and California, the amount of cost to me has been significantly lower in California. My home is fully insultated, dual pane windows, energy efficent appliances (heating and cooling), and water conserving devices. Some of the costs have been subsidized by utility programs that promote efficent use. This has been going on for years.

Growing up in the 60's in Los Angeles, there was many times I couldn't see the mountains behind me. That occurs less frequently now. While the cost for homeownership was high, it has fallen significantly the last couple of years.

But one thing that can be done now to help the entire economy would be to mandate the "Big 3" to install California emissions on all of the vehicles they produce....worldwide. They already have the technology, they produce it for a large part of their fleet today, no retooling required. It is cleaner and if produced in even larger quantities of vehicles would drive the price even further down. It's not the ultimate answer, but it is a start that can happen NOW. California cannot solve this problem alone, we need to also think globally as well as locally.

[joebaggadonuts]

Nice work. Thanks again.

By the way, Kristoff has a good idea. Food Secretary instead of Secretary of Agriculture.

Read it here:

http://www.nytimes.com/2008/12/11/opinion/11kristof.html

[joethesolarplumber]

Solar energy works... Germany has gov't support and is leading the world in installations... and they only have the solar resources of Alaska: http://bit.ly/16AmK

[KillTheMessenger]

German politics has discovered a while ago that green energy creates local jobs that can't be outsourced. And since unemployment is political enemy #1, fighting it with green energy turned out to be a win-win. Let's hope the Obama administration can do the same.

[mioffe]

In the world media idea of conservation of energy by increasing efficiency of all equipment and appliances prevail.
Is it true?
If we will increase efficiency of our motors, equipment, appliances, home heating and cooling systems, etc. from average 25% right now to impossible 100% it will mean only that four times more people will live on the same level as middle class in USA today. It is not enough even for USA population, not mention all countries in the world.
Demand for better living in the world will increase faster than our ability to increase efficiency of our equipment, etc.
"Green" energy, solar cells, windmills, geothermal, nuclear are disaster for environment and only blind persons can"t see that.

[KillTheMessenger]

Nobody says we won't need more energy in total tomorrow. Humanity uses about 6TW right now an in 2100 we will need maybe 30-40TW. And that's OK because we will be able to generate that energy in a carbon neutral way.

But for now, with the current technology, what we need to do is to conserve energy because we do not generate most of it in a carbon neutral way and we won't for quite some time.

I hope that logic is not too hard to follow.

[mioffe]

"we will be able to generate that energy in a carbon neutral way."
Dear KillTheMessenger you not only one person who think that carbon neutral way will be contribute to global cooling. Everything in these direction, ethanol, hydrogen cells, solar cells, windmills, geothermal, nuclear are disaster for environment, if we will close analyze every of offering carbon newtral way.
It is not only carbon dioxide.
It is wind, which send hot air to cloud level.
It is reflection, which send short wave back to space.
It is water evaporation, which take a lot of energy on the ground level and send vapor as lighter gas to cloud level, where infrared radiation escapes to space. We need to use them.
We can stop global warming, be energy independent and reduce weather disasters during 5 years.
We can create 100 % of employment during one year. It will be job for scientists, engineers, farmers and workers all across USA, Mexico and Canada.

[brodon]

Oh yes, California is ahead of it's time.

............ and sinking in billions of dollars in debt, begging for a bail-out.

[research]

And Who isn't?

Wind has a 2 year payback. It's cheaper than nukes or coal, yes even including the 30-40% wind availability. See my profile for links and details.

[KillTheMessenger]

Huh? Why would CA be begging for a bailout? Where did you read that? Ohhh... you just made it up!

[Bonobo]

Is that a trick question? Arnie went to Barack two days ago. It was in the news. To get you up to speed, California is going bankrupt because we need a two-thirds supermajority vote on budget issues, and Republicans have been stonewalling for years. Not that Democrats are completely blameless, but that's the crux of the problem. Arnie helped, too, by wiping out the $6 billion a year in car tax revenues.

[Emlyn]

We would do better in California if we got rid of the Republicans. They do nothing but make trouble. Yes, we are in debt. Also, it would be nice if we could get ALL of our taxes back instead of paying for many of the smaller states' welfare, etc. But then every big populated state in the USA has the same problem re the taxes. I don't know about the Republicans.

[Bonobo]

We don't actually need to cleanse ourselves of Republicans completely, just get rid of the "one no vote equals two yes votes" system and restore majority rule. This could be done just with an initiative, which only requires 50% plus one. Fun how that works, huh?

Caveat. As Illinois demonstrates, prolonged one-party rule often has poor results. Trouble is, the GOP is a crappy alternative. We should convert our legislature to statewide proportional representation to give some new parties a chance to grow.

[45245]

yes, CA will be next in line for a bailout

[luke150]

CA generates by far most of any other state revenues for the federal government. And I am sure the other states were happy when they were getting pork, partially from CA revenues. So yes, CA should get a bailout.

[45245]

no one should get a bailout

[MsMeryMac]

And California has the eighth largest economy in the world, larger than any other state. So try getting along with out us and see how much worse off the federal government and the other states are.