California Department of Water Resources

Increased flood risk in the Sacramento/San Joaquin River Delta has people worried about the economic impact on the farmers and residents located there.

Here’s the bad news for Delta farmers: A new report concludes that the worst climate impacts on the Sacramento-San Joaquin Delta could affect a relatively small number of people — the farmers whose land is below sea level and protected by a vast system of levees. Maintaining and repairing those levees falls on local reclamation districts, which can’t necessarily count on state or federal bailouts in the event of catastrophic flooding in the future. It can be expensive if a levee breaks. The Public Policy Institute of California (PPIC) studied the economic impacts of changes to the fragile Delta ecosystem and has produced some recommendations that are not likely to warm the hearts of some Delta landowners.

The most flood-prone areas could see their local economy shrink by 15% over the next several decades as waters rise, reclaiming land and wiping out cropland. This area is called the “primary zone” in flood-manager lingo. It makes up almost two-thirds of the Delta’s area but accounts for only four percent of its economic activity. That’s because the population centers and accompanying services are mostly in the “secondary zone,” where the land is higher and development less limited.

The report takes a pragmatic approach: As flooding threatens more Delta land, it may not make sense to repair every levee, especially as state and federal funds for flood protection dwindle and local reclamation districts are left taking up the slack. On some islands, “The economic value of the assets on the island and the value of agricultural production is not high enough to cover the cost of fixing an island after the levees would break and the island would flood,” Ellen Hanak, an economist with PPIC and one of the authors of the report told me. She recounted the story of a  2004 levee break on the Jones Tract, one of the Delta’s islands, which cost $90 million to repair. “That was the state that paid it,” she said.

California Department of Water Resources

The Blacklock restoration area near Suisun City.

Hanak and her colleagues say state planners should think beyond resisting change in the area. They recommend a Delta levee policy that focuses resources to protect the most valuable land. They also recommend taking steps toward mitigating the economic impact on the people living in the primary zone. “There really is a need to think about softening the cost of adjustment that residents within the inner-Delta are likely to face as a result of changes in the landscape from flooding” she warned. The good news, she says, is that if the state is faced with compensating landowners, the bill should be relatively digestible for California taxpayers.

The Delta does not grow as many high value crops as the rest of the Central Valley. “A lot of times people describe Delta agriculture as high-value fruits and vegetable agriculture,” Hanak explained. “But in fact within the Delta there is actually much more land devoted to what people call ‘field crops’ — grain and hay — rather than fruits and vegetables and nuts.” That’s likely because farmers don’t want to risk tree crops in the flood-prone area. It also means that the value of the agricultural assets isn’t as high and thus repairing flooded islands may not be worth it when budgets at every level are stretched thin.

What happens to the beach economy when the beach is vanishing?

Craig Miller

That’s what a new study seeks to answer in some of the most specific terms yet attempted.

The projections are from a team at San Francisco State University led by economist Philip King, who says in the study release that “Sea level rise will send reverberations throughout local and state economies.” He expects those reverberations to come from the effects of temporary flooding, beach and upland (cliffs and dunes) erosion, which King has estimated for five California locations, using sea-rise scenarios ranging from one-to-two-meters (6.5 feet) by the end of the century.

In addition to damage from extreme weather events and tides, the disappearing beaches themselves represent an opportunity cost. For example, the study estimates that under a mid-range sea rise scenario the “recreational value” of San Francisco’s Ocean Beach could shrink 23% by 2050, and tax revenues from that resource could dwindle by $300,000 (17%) annually. That scenario, which assumes an overall sea rise of 1.4 meters (4.5 feet) this century, estimates the beach’s recreational value at zero by 2100.

Similar scenarios are laid out–with generally less dramatic results–for Malibu, Venice Beach, San Diego (Torrey Pines), and Carpenteria on the south-central coast. King figures that L.A.’s legendary Venice Beach could lose $440 million in tourist dollars by the end of this century.

CA Dept. of Boating & Waterways/SF State University

Locations of the five study sites examined in the King study

Prior studies have put values on the total amount of coastal real estate “at risk” from sea level rise but have mostly stopped short of predicting actual damages.

The complete study is not available online but more information will be posted at the SF State site. The peer-reviewed work was commissioned by the state Dept. of Boating & Waterways.

Grand illusion? Water rushes over the spillway at Nicasio Reservoir in Marin County. (Photo: Craig Miller)

A high-profile team of experts is calling for a major overhaul of the way California manages its water. In a 500-page report from the non-partisan Public Policy Institute of California, the authors say decades of well-intended water policies simply haven’t worked, leaving the state vulnerable to major crises, including water shortages, catastrophic floods, decline & extinction of native species, deteriorating water quality, and further decline of the Sacramento-San Joaquin Delta.

“Our system has been dying a death by a thousand cuts,” says co-author Ellen Hanak, an economist and policy analyst at the PPIC. Hanak says that the state’s water management efforts have been “incremental” and “piecemeal,” with little success to show for it.

Among many other conclusions, the report says water management in the state is too fragmented among hundreds of local agencies and the funding for future improvements should shift from bond issues to a system of fees paid by water users.

“It’s not gonna be easy. It’s not gonna be popular. It’s probably cheaper than the alternatives,” said Jay Lund of UC Davis, one of the co-authors. “There’s not much state money and there’s not much federal money, so if you want to accomplish things for the environment and for water supply and flood control, it’s gonna have to be financed largely locally,” Lund told reporters during a Wednesday conference call.

The report also echoes other recent warnings that Californians are dangerously overdrawn on the state’s underground aquifers.

But there were some notes of optimism. The team of authors, drawn from the PPIC, U-C system and Stanford, say that if cities can cut back water use by 30% from 2000 levels, it would remove a huge strain on the crippled Sacramento-San Joaquin Delta.

The map below, featured in the report, shows areas where Californians are “overdrawn” in their water use.

Detail of an interactive map of the world's innovative "cleantech" companies (Image: Guardian UK)

Of all the companies around the world that the UK’s Guardian called out for its second annual Global Cleantech 100, roughly a third are based in California. The list spans technologies including energy generation, storage and efficiency; water and waste water; transportation and others.

The special report includes an interactive map of where the firms are located. It makes an interesting study by itself, showing a dense cluster of 31 firms over California, with a smattering of others around the US. About a dozen are concentrated in a few northeastern states. Four are located in China, two in India.

The California contingent is diverse, with firms such as Oakland-based BrightSource Energy, a builder of large-scale solar power plants — but also companies working on LED lighting, desalination, plastics recycling, algae-based biofuels and other technologies. Also making the list is Potter Drilling, a little start-up with fewer than 20 employees, that has created a buzz in energy circles. Google is among the funders backing Potter, which is developing a specific new technology that uses water to drill for geothermal energy.

Politicians, including former governor Arnold Schwarzenegger, often like to point out that California soaks up an enormous share of the total venture capital flowing to “clean technology.” The Guardian list provides a useful glimpse of where and how some of that cash is being deployed.

(Photo: Craig Miller)

One day after the midterm congressional elections, President Obama was already talking about cap & trade in the past tense: “Cap & trade was just one way of skinning the cat. It’s not the only way,” the President told reporters. “It was a means, not an end. And I’m gonna be looking for other means to address this problem. Senator Joe Lieberman put it more bluntly. “Cap and trade is off the table,” Lieberman said. “We have to start on the presumption that the table is clean, that nothing is on it.”

But while Washington is “looking for other means” to reduce the carbon emissions that cause global warming, the table is set for cap & trade in California. By day’s end Thursday, the state will likely have the nation’s first system that covers more than electric utilities.

If the California Air Resources Board formally adopts a set of proposed regulations from its staff, as expected, then starting in early 2012, major emitters of greenhouse gases will come under the program. That ‘s anything that puts out more than 25,000 tonnes of C02 per year; we’re talking power plants, cement kilns, glass factories and of course, oil refineries, where carbon emissions are measured in the millions of metric tons per year.

In 2015 the program will expand and follow these oil and gas products downstream; that means producers will have to account–and eventually pay for–not just the emissions from drilling and refining, but for that carbon produced when the fuel actually gets burned in trains and planes and automobiles.

I say “eventually” because the pay-to-play part doesn’t really kick in right away. At first, the state will give away 90% of emissions permits. That will help ease the transition for industry and, in theory, keep companies from fleeing California.

Jamie Fine, a policy watcher with the Environmental Defense Fund in Sacramento, figures that by 2015, more than half the carbon permits will be auctioned off.

That will mean billions of dollars in permit revenues funneled through Sacramento — estimates are at least $7 billion a year — maybe double that. And what we still won’t know, exactly, even after today’s vote, is what the state will do with all that money. Fine says that will likely fall to lawmakers to decide. In a recent Field poll, more than half the respondents favored using the cash to shore up the state budget.

More likely — and more desirable, says Fine — is a system, where the proceeds find their way into households and businesses through tax breaks, utility rebates, or incentives to make energy upgrades.

Even with all that loot looming, Washington and most states are watching from the sidelines, to see how this plays out. Once again, California is the lab rat in the cap & trade maze. From his vantage point inside the Washington beltway, at the think tank Resources for the Future, economist Richard Morgenstern says the world is watching California with cautious approval. “They’re saying California has adopted a basically sensible policy,” says Morgenstern, who has modeled the proposed carbon trading system and its likely impact on the economy (minor, he says).  “They are clearly mindful of the economic and political downsides. California has a good record of experimenting in the environmental field and I suspect this will be successful.”

Some business groups remain skeptical. Michael Shaw, who helps run the California branch of the National Federation of Independent Business, says he’s still concerned about the “general ignorance” of how cap & trade could hurt small businesses by pushing up prices for fuel, electricity and other commodities.

While carbon trading has been the subject of both hope and derision, it may be getting more than its share of attention in the attack on carbon. It’s just one component of California’s climate strategy under AB 32. The state is hoping to get about 20% of its greenhouse gas reductions through cap & trade.

(Photo: Craig Miller)

The Field poll of about 500 Californians, taken right before Thanksgiving, shows two-thirds (66%) of respondents still favor (either “strongly” or “somewhat”) the 2006 climate law known as AB 32, including the cap-and-trade provisions (64%). About one in four oppose both.

The studies released with the poll point to an economic anticlimax under the cap & trade regulations of AB 32, with net benefits in the long-term. One of the lead investigators, David Roland-Holst, calls it a “small ripple in a giant teapot,” the teapot representing the massive California economy. A “synthesis of the findings” released by Next 10 shows a “very small” impact on the state’s economy, and “very small” changes in retail electricity rates. It also concludes that so-called “leakage” — the regulation-induced exodus of business from California is “likely to be small.” That’s not to say there are no losers. “We’ve got to be honest and say there will be trade-offs,” said Roland-Holst.

Next 10 founder Noel Perry says the research was commissioned nine months ago, with the hope that it would be ready before voters went to the polls to decide on the fate of Proposition 23, which would have frozen AB 32. But, Perry says, the work wasn’t ready until now. The release is still timely, as next week the California Air Resources Board is expected to formally approve a huge package of AB 32 regulations, including the carbon trading program.

That program will almost certainly go forward with the staff recommendation that 90% of carbon allowances be given away, at least at first. Environmental groups have pressed for a “100% auction” of permits, in which all carbon allowances would have to be purchased by industry. The Next 1o study, which may be the first detailed comparison of the two methods, suggests that selling permits would provide a bigger boost to the state’s economy than giving them out. Roland-Holst says that’s because funneling the proceeds back through households in the form of utility rebates or tax relief, would fuel the kind of spending that supports more jobs than providing direct relief to industry. Roland-Holst says a 100% auction would bring in anywhere from $7 billion to $15 billion annually, with full implementation of carbon trading.

When the poll asked respondents what should be done with the money, 54% of respondents favored using it to plug holes in the state budget — the largest single response by far. Thirty-nine percent preferred that the money be “returned to residents.” The poll has a margin of error of four-to-five percent.

US Secretary of Energy Steven Chu appeared to pull some punches while speaking at the US Center in Cancun on Monday. (Photo: Gretchen Weber)

The UN climate negotiations in Cancun may be the official attraction, but in many ways, there’s just as much happening at the “side events” here at COP16.  There are dozens everyday — last week there were more than 150, and that number is increasing this week as more people arrive for the final days of the talks.  While the negotiations are limited to representatives from national governments, the side events provide a stage for non-governmental organizations (NGOs), scientists, business leaders, and local and regional government officials, many of them, it turns out, from California.

On Monday, US Secretary of Energy Steven Chu, (former head of Lawrence Berkeley National Lab) took the stage to talk about emissions reductions in the US at the national level, and raising eyebrows in the room by taking no questions.

Earlier Lauren Faber of the Cal-EPA spoke on a panel about what California is doing to reduce emissions, highlighting the defeat of Prop 23 (which got a round of applause from the international audience of about 150), California’s efforts to implement a cap-and-trade system, and the state’s vehicle emissions standards, which served as a model for the new federal rules.

Neither talk broke any new ground. In fact, I’d already heard much of Chu’s talk at Stanford earlier this year. He predicted increases in the cost of oil and warned that the damage now being inflicted on the planet won’t be felt for 100 years.  Here in Cancun, however, he left out much of the “call to action” that characterized that Stanford speech, opting instead to catalog many of the clean energy tax incentive and R&D programs that the federal stimulus package has funded in the US, under the American Recovery and Reinvestment Act.

Over the weekend, I attended the first-annual Gigaton Awards, which was hosted by Sir Richard Branson’s Carbon War Room and by the Gigaton Throwdown, a group founded by San Francisco-based clean tech investor Sunil Paul that “encourages entrepreneurs, investors and policy makers to grow companies that stabilize the climate.”  Awards were given in five categories to companies that had made significant cuts in their own emissions, and, depending on the category, on the influence their products have had on outside emissions.

None of the winners were from California, but the Golden State was well represented at the awards dinner.  Attendees included executives from HP, Google, and Hara, a San Mateo-based company that develops software for energy-and-carbon-accounting.

While the side events allow regional governments and businesses to share ideas and celebrate what they consider their achievements, they’re also a venue for organizations and scientists to raise awareness about issues they think are not getting enough attention.

Tony Haymet, director of the Scripps Institute for Oceanography was doing just that on Friday, across the lawn from the UN negotiations at a briefing about ocean acidification.

“Sometimes I feel the science that’s talked about here is from 1965,” he said, adding that the word “ocean” is  barely mentioned in the UN climate change negotiating documents.

“This is sort of the tyranny of the atmosphere here at the climate talks,” he said.

Haymet says that because CO2 in the atmosphere “inevitably” dissolves into the ocean, the amount of carbon in the ocean has increased by 30% over the last 150 years.  This change in ocean chemistry is harmful for organisms that rely on their calcium carbonate shells.

“If we persist in putting CO2 in the atmosphere and then in the ocean, eventually those organisms won’t be able to make their shells at all,” he said, which would destroy coral reefs, disrupt ocean food chains, and have negative consequences for the world’s commercial fisheries.

“We’re trying to raise a red flag that CO2 has another bad effect,” said Haymet.  “The conclusion of all this is very simple.  We just have to make electricity without making CO2.”

COP16 attendees waiting in line for the UN bus (Photo: Gretchen Weber)

For a conference aimed at lowering the world’s greenhouse gas emissions, COP16 sure looks like it has big carbon footprint.  Just the air travel alone for the thousands of people coming to Cancun from literally all over the world is a huge source of emissions.  But once you get here, the excess emissions continue.  Cancun’s hotel zone is one long line of huge beachfront resorts boasting luxury accommodations, all-you-can-eat buffets, and — in the case of my hotel — giant jacuzzi tubs in every bedroom, despite the sign on the bathroom sink suggesting that guests remember to conserve water.

Fortunately (or unfortunately), there isn’t really time for taking baths in enormous tubs, because attendees must spend so much time on the road.  Special UN buses are shuttling people back and forth between the Hotel Zone and the negotiations constantly, commutes made more arduous and carbon-intensive by the added miles and long circuitous routes the buses have to make due to security.  Most of the hotels are located north of the negotiations, but security to attend them is located to the south. Therefore, attendees must first travel south, then north (up the same road) to get into the conference.   A common conversation on the buses is wistfully recalling how wonderful it was at COP15 last year, when attendees could simply take public transit (or walk through the streets of Copenhagen) to reach the talks.

At least the long intervals spent standing in line at bus stops provide a chance to warm up in the hot sun and recover from the Arctic conditions inside the conference centers.  Despite the fact that attendees were encouraged to “dress down” this year: traditional Mexican shirts for men and cotton dresses for women, so that the venues could save emissions with less air conditioning, many of us are wearing jackets and sweaters inside the venues.

One journalist described this year’s conference to me as “an island within an island.”  Military blockades have closed roads at various points, diverting local traffic.  Because of the geography, it would be very easy for people to come to COP16 and never actually see the town of Cancun, which, is a far cry from the Hotel Zone.  There’s a sharp divide between rich and poor here, with the opulence of these resorts just a few miles from abject poverty — which may be a fitting metaphor for the climate talks themselves.

Rich nations and poor ones are, in many ways, lined up on opposite sides of a fence as they sort out how to level the field.  Last year, as part of the Copenhagen Accord, a coalition of developed nations, including the United States, agreed to provide funding to help developing nations deal with climate change: $30 billion by 2012 and $100 billion by 2020. A major issue at this conference is working out how to allocate this money. While much of that money has been pledged, much of it has yet to materialize.

While the United States is moving forward with building and solidifying the Copenhagen Accord, according to chief negotiator Johnathan Pershing, some people (and nations) are concerned that this path will not be enough to stop the Earth from warming to dangerous levels. Even UNFCCC Executive Secretary Christiana Figueres, who heads the UN climate effort, said on Monday that if all the emissions-reduction promises made in the Copenhagen Accord were delivered, the world would be on track for warming more than the two degrees Celsius that the accord was designed to meet.

On Tuesday night I attended a community prayer vigil in downtown Cancun.  There were about 200 local people from different denominations, including Pentecostals and Catholics, gathered to sing songs and say prayers for the Earth.  Victor Menotti, head of the California-based International Forum on Globalization described the Copenhagen Accord as a path to “collective suicide.”

“The Copenhagen Accord doesn’t get us what we need in terms of emissions reductions, financing, and technology transfer,” he said. “All it is, is a collection of voluntary pledges that don’t add up.”

For the farms and towns that depend on deliveries from the SWP, the outlook for the coming year is better than in recent years, which is not to say ideal.

State water managers today made their preliminary estimate that customers would get one quarter of the water requested from the system. That beats last year’s initial estimate of five percent–the lowest on record. Mark Cowin, who heads the state Department of Water Resources, says these early estimates are intentionally stingy:

“Over the past few dry years, CA has made good progress in improving our ability to conserve water,” Cowin told reporters in a conference call today, but cautioned that “We must continue to promote an ethic of using water efficiently—regardless of  the day-to-day outlook for water supplies.”

But Cowin says that between the wet spring and early start to the rainy season this fall, chances are good that the initial 25% projection will rise.

A key reservoir on the system, Lake Oroville, stands at more than three-quarters of its average for this time of year, whereas last year at this time, it was only about half full. By the time the water year was winding up, DWR officials had raised the allocation to 50%. They added that with average precipitation the rest of the way, customers could end up with about 60% of their hoped-for deliveries in 2011. So far this season, precipitation is running ahead of the long-term average.

You can check on how the state’s major reservoirs are doing throughout the year, with our interactive map.
View KQED: California Reservoir Watch in a larger map

View KQED: California Reservoir Watch in a larger map

Water in the State Water Project, like the federally run Central Valley Project, comes in large part from the mountain snowpack of the Sierra and lower Casdade ranges. Growers typically make up for shortfalls by pumping more groundwater.

(Photo: Craig Miller)

The $40 million fight over Prop 23 presented two opposing themes: (a) AB 32 will wreck the economy, or (b) AB 32 will save the economy. Both visions for California’s climate law were hyperbolic. It would be fascinating to be able to tap into some parallel universe where it did pass, just to see what would really happen. More than likely some middle ground would prevail, as it will now, in this Universe.

Funny thing is, when California lawmakers passed the Global Warming Solutions Act in 2006, it was never intended to be a jobs program. But by Election Day 2010, it had been transformed into one by the alchemy of campaign rhetoric. Think tanks such as Berkeley-based Next 10 rolled out studies to document how California’s environmental leadership had produced hundreds of thousands of jobs. Tech investors pointed to the impressive share of venture capital flowing into “clean tech.” Outgoing governor Arnold Schwarzenegger made AB 32 a tent pole of his legacy. In an October media call, Alan Salzman, CEO of the California-based VantagePoint Venture Partners said we’re on the cusp of “a second industrial revolution,” that California could well lead the way in clean tech, if it seized the moment.

And it worked. AB 32 will stand, for now, headed for full implementation in two years with all the trimmings, including a statewide, if not regional cap-and-trade program; an actual “price on carbon,” for the first time in the West.

But this was the battle, not the war. Carbon regulation is under attack far and wide. Climate legislation remains stalled in Washington (Ryan Lizza’s piece for The New Yorker is a must-read). In this morning’s press conference, President Obama seemed almost to bury prospects for a national cap-and-trade program. “Cap-and-trade was only a means to an end,” he told reporters. “I’ll be looking for other means to address this problem.”

In a few weeks, negotiators will gather in Cancun for another round of UN climate talks. Some believe this round will be the last of its kind, a final collapse of the UN “framework,” as it’s been known.

In California, the next battle may already be here, in form of Prop 26, which appears to have passed with a margin of about 53-47%. With its requirement of a two-thirds vote to impose “certain” government fees, it could pose a more permanent threat to the full implementation of environmental measures like AB 32. Those fees purportedly include “those that address adverse impacts on society or the environment, caused by the fee-payer’s business.” Sounds a lot like the permits that companies would have to buy, to balance their carbon emissions.

But Nichols, still feeling the afterglow from the Prop 23 defeat party, asserted in an email to Climate Watch this morning that:

“Prop 26 does not impair the scoping plan adopted in 2008 or any regulations developed under that plan. AB32 is on track, with renewed vigor thanks to the resounding defeat of Prop 23 by the voters.”

Nonetheless, regulators may want to gird for the next skirmish.