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CA Moves Forward with Renewable Goals

33% by 2020: It’s (almost) The Law

After two failed attempts, California is moving ahead with the most aggressive renewable energy goal in the country. Today the State Assembly passed SB 2x, a bill that requires utilities to get 33% of their electricity from renewable sources like solar and wind, by 2020.

By all accounts, utilities will need to add an unprecedented amount of renewable energy to meet the goal. Peter Miller of the Natural Resources Defense Council says that will spur new technology and green job opportunities. “There’s worldwide competition to lead this industry, which is the growth industry of the 21st century,” said Miller. “And this moves us, I believe, to the front of the pack.”

If the 33% renewable portfolio standard (RPS) doesn’t sound new, that’s because it isn’t. The goal was originally set by former Governor Arnold Schwarzenegger in a 2008 executive order. Supporters knew that an executive order could be overturned by a future governor, but two previous bills aiming at cementing the goal failed to make it into law. Continue reading

AB 32 and the Economic Road Ahead

87712532By 2020, California will see two million new jobs whether the state implements its climate law AB 32 or not, according to a revised analysis from the California Air Resources Board.

The report, released Wednesday, predicts modest growth in the state economy over the next 10 years, including growth of 2.4% in both personal income and gross state product with or without the law.

During a Wednesday conference call,  CARB chairman Mary Nichols told reporters that sectors where California is strong, such as renewable energy and informational technology, will benefit from AB 32.

“California is uniquely positioned to benefit because this is the direction in which our economy is going anyway,” she said.

Nichols added that industries heavily dependent on petroleum will also benefit, but that they will have to go through a transition.

“We will see economic benefits overall by 2020,” said Nichols, “but it will be easier for some than for others.”

The report was reviewed by the 16-member Economic and Allocation Advisory Committee (EAAC), an independent panel of policy, business and economic experts appointed by Nichols and California Environmental Protection Agency Secretary Linda Adams.

The report finds that AB 32 provides, “neither a huge boost nor a major negative impact on California,” said Larry Goulder, chair of the EAAC and of Stanford’s Economics Department on a call Wednesday with reporters.  “These findings are not that different from other studies that have been done.”

The Air Board’s original analysis was questioned earlier this month in a report from the non-partisan Legislative Analyst’s Office, which projected a mixed bag of pluses and minuses, with a short-term negative impact on jobs.

CARB’s first economic projections were criticized by others, including UCLA economics professor Matthew Kahn.   Kahn said he is much happier with this new report because of adjustments made to the baseline scenario and because of the independent review made by EAAC panel, which he called a “dream team” of economists.  However, the report still falls short, Kahn says, because its macroeconomic approach doesn’t identify how specific industries and businesses will fare under AB32.

“The report released today is about averages. And where I think we need more research is in how individual firms will be affected,” said Kahn. “When I was in graduate school, I had a professor who used to say ‘if your feet are in the fridge and your head is in the oven, on average, you’re ok’ and I always thought that was a funny joke, but I think it’s apropos about California today.”

Also on Wednesday, Kahn published an opinion piece in the LA Times with co-author James L. Sweeney, director of Stanford’s Precourt Energy Efficiency Center, arguing that a study frequently cited by opponents of AB 32 is seriously flawed.  The study, known as the Varshney/Tootelian analysis, estimates that the law will cost small businesses $50,000 a year and each household $3,857 a year once the new rules kick in.

Opponents of AB 32 are advocating for a ballot initiative that would suspend the law’s regulations until the state economy improves and the state unemployment rate drops to 5.5%. It’s currently pegged at 12.5%, officially.

Wind and Solar Incentives Pass Senate

And speaking of solar power…  After months of roadblocks, the extension on tax credits for renewable energy is one step closer to reality after the Senate yesterday approved the $17 billion package with a 93-2 vote. The credits for wind, solar, and energy efficiency projects are part of “The Renewable Energy and Jobs Creation Act of 2008,” a larger tax bill (HR 6049) that has been stalled in Congress as legislators wrangled over how to fund the credits. If they are not renewed, the incentives will expire at the end of this year, undoubtably having a negative impact on future solar and wind innovation and expansion in the United States. 

You can read more about of the current situation in a piece by Ben Gemen at E&E Daily, but to access the article directly, you must be a subscriber.  For the rest of us, Climate Progess has posted the story here.