Dennis Rodriguez, Head of External Affairs, Western U.S.
My 17 years entrenched in Los Angeles infrastructure and local government have given me a front row seat to California becoming the most progressive state related to the green economy. This is a combination of policy and projects related to sustainable and clean technologies such as renewable energy, power distribution, battery storage, and, of course, zero emission and electric vehicles.
The state’s bold approach does come at a price, as Californian’s shoulder some of the highest electric utility rates, fuel prices, rents and home prices, and taxes in the country. And as the global pandemic has produced reported losses in public dollars, I’ve wondered: Will the COVID-19 pandemic slow down California’s march towards a greener economy?
While the crisis has had a noticeable cooling effect, I believe that optimism and the will to lead in this market space will continue to drive the California green economy forward. Here are some trends and policy developments supporting this perspective.
First, both global and national green economy trends continue to show signs of growth. Globally, analysts have differed, but many believe that the global growth outlook for clean technologies and renewables generally remains intact. This applies even if stimulus plans prioritize employment and direct support measures to the economy over green growth, especially in emerging markets. In terms of the global energy economy, investments could shrink 20 percent by the end of the year, according to the International Energy Agency. But again, this represents a temporary cooling effect, not a collapse.
Meanwhile, the results of the November election are indeed relevant (the green economy has continued to grow during the Trump Administration, and Biden Administration policies could accelerate it). Yet the main drivers of the US green economy continue to be individual State mandates, tax incentives, and corporate initiatives, such as Siemens’ commitment to be carbon neutral by 2030. And, as it happens, there’s pent-up green growth legislative action in California.
Like in many other states, state legislators were forced to take an unprecedented mid-spring, two-month pause to their legislation session when Governor Gavin Newsom declared a state-wide stay at home order. Upon their return to the state capitol in May, they faced the daunting task of a shrunken budget. They set aside legislative bills that did not immediately address the state’s most pressing issues. Thus, a few significant green economy bills were paused, including the launching of California’s Green New Deal, which would have built on existing climate change policies to accelerate the state’s decarbonization.
All of that said, State regulators and policymakers continue to advance the state’s green agenda. The California Energy Commission (CEC), which regulates California’s energy sector, envisions long-duration storage as a key to stabilize the grid and deliver on the state’s decarbonization goals. Mary Nichols, who serves as the Chairwoman for the California Air Resources Board (CARB), stated recently, “We’re exploring a lot of ideas, and, needless to say, in a time when the economy is going to be very challenged for a few years while we come back from the COVID recession, we’re going to have to be more creative.”
And from the executive standpoint, Governor Newsom has continued to push the green agenda as he recently announced his executive order mandating all new car and light duty truck sales must be zero emission vehicles (ZEV) by 2035. Thirteen states and the District of Columbia then followed California’s lead in setting stricter standards, meaning that the California rules, by some estimates, cover more than 40 percent of America’s population.
Accelerating change, these new green policies in California are set against the backdrop of the most recent wildfire season. This year alone, California has experienced wildfires burning close to 4 million acres, double the old record from two years ago. One solution, according to some experts, is to strengthen the electrical grid and reduce its wildfire risk.
So, ultimately, California’s green-economy agenda is not just about pursuing sustainability; it’s about addressing the climate change already well underway. Green economies also are more resilient economies. And in California, both the public and the private sector will need to build this future together. Which is why Siemens will continue to be a thought leader and innovator in this market space.
In California, we employ approximately 5,000 employees, many working at our North America Rail Rolling Stock headquarters in Sacramento. Clean energy, zero-emission vehicles and renewables continue to be prioritized as part of our mission to be an asset to the state.
The long-term perspective shows continued growth in the state’s green economy. And Siemens look forward to supporting this opportunity to build a more sustainable future – demonstrating its potential to spark innovation, support good-paying careers and strengthen economies along the way.