California, Clean Energy, and the Obama Promise

What does the President’s vow not to “walk away from the promise of clean energy” mean for California?

By Alison van Diggelen

President Obama made a strong State of the Union commitment not to walk away from the promise of clean energy. Was it a shrewd long-term strategy or a political liability that will result in even more “Solyndras” here in California?

On the one hand, Obama’s clean energy focus has helped expand the clean energy job market, into a sector with more than 2.7 million jobs, with investments in smart power grid, energy efficiency, electric cars and renewable power. In 2011, the federal clean energy push led to a remarkable $56 billion investment in the sector, surpassing even China’s.

These investments have helped boost California’s green economy, particularly in the renewable power industries.

A new report entitled “2012 Many Shades of Green, California’s Shift to a Cleaner, More Productive Economy” confirms that California’s green economy showed greater resilience at the height of the last recession, performing better than the overall economy and retaining more jobs. Employment in California’s green economy grew by 53% from 1995 to 2010 compared to a 12 % job growth in the wider economy. And this trend looks set to continue.

As TriplePundit reports, California started the New Year with five approved alternative energy projects, stimulated by the state’s Renewable Power Standard (RPS), a mandate to draw 33% of electricity from renewable resources by 2020.

Critics are quick to point out that the $16 billion federal loan guarantee program is out of cash, subsidy programs are under threat…

Sunnyvale’s Bloom Energy has benefited from federal investment tax credits, spurring the installation of Bloom box fuel cells throughout the state, from Google and Adobe in Northern California to Caltech in Southern California; and the creation of 1,500 green jobs. In addition, the California Air Resources board recently approved new rules to accelerate the move to zero-emission electric cars which will encourage California electric carmakers, Tesla, Fisker, and CODA. Tesla Motors has set up shop in Fremont’s old NUMMI (GM-Toyota) plant and expects to create 400 jobs this quarter as it ramps up production of its Model S sedan.

But Fremont is also home to the solar manufacturer, Solyndra, which went bankrupt last year and has become toxic evidence for critics of the president’s green vision. His green mantra has been described as a Captain Ahab-like folly that will result in Obama’s final demise — politically that is.

Critics are also quick to point out that the $16 billion federal loan guarantee program is out of cash, subsidy programs are under threat; and some say, much of the president’s political green capital has been exhausted.

Democrats and Republicans appear to have deep philosophical differences on green energy investment, including a seemingly uncrossable chasm over climate change. GOP front-runner Mitt Romney has an energy plan that calls for concentrating alternative energy funding in basic research. His Believe in America plan states:

“We should not be in the business of steering investment toward particular politically favored approaches. That is a recipe for both time and money wasted on projects that do not bring us dividends.”

Yet the Obama administration remains committed to Green. Last week in a Fresh Dialogues interview in Silicon Valley, David Axelrod, the president’s chief strategist, reaffirmed the administration’s commitment to clean energy. “We need to command the clean energy technology of the future,” said Axelrod. “Or we’re going to see that go to other parts of the world.”

So the stage is set. If the president succeeds in getting support for his green vision and passing clean energy tax credits and renewing subsidies, the Golden State, with its clean energy and cleantech focus, is poised to benefit. If not, the state is likely to continue to pursue its green path, but at a slower pace, and the US may cede the race for clean energy dominance to China and India.