Recently, Bill Gates said the world needs an “energy miracle” to stem climate change.It’s safe to say that the Resource Revolution’s best hope for this “miracle” will come from California. In many ways, it already has. The combination of forward-looking policies and technological innovation is creating a desired future that is less dirty, more secure and far better for impacted communities.
California is a global leader on climate policy. This leadership is spurring and activating the clean energy industry. As the first state to pass comprehensive climate legislation and by working with its neighbors across state lines, California is both an early mover and an innovator. The real eye-opener is the state’s ability to grow its economy while shrinking its greenhouse gas emissions.
"With one of the world's largest economies, California is growing its GDP while shrinking its carbon footprint. It is a prime example of the decoupling of economic growth and energy use that is beginning to happen among the world's most productive nations."
F. Noel Perry
California Businessman and Founder of Next 10
OPPORTUNITIES
California has experienced significant economic growth in the clean technology sector, attracting $5.7 billion of global cleantech venture capital in 2014 and receiving the highest ranking in global cleantech patents. SolarCity, Tesla, and the Ivanpah solar farm are now known the world over as success stories of the emerging low carbon economy.
The state’s Cap and Trade program has shown leaders in Washington, D.C. and in state capitals that reducing emissions is an economic opportunity, not a burden. Its success to date – in terms of emission reductions, cost-effectiveness, business compliance, and state revenue – suggests that new emerging policies may also consider the mechanism as an effective approach to pricing carbon pollution.
The results speak for themselves. In 2015, California ranked as the eighth largest economy in the world and the second least carbon-intensive economy globally. In other words, for every dollar of goods and services, California emits less carbon than any nation except France.
The results speak for themselves. In 2015, California ranked as the eighth largest economy in the world and the second least carbon-intensive economy globally. In other words, for every dollar of goods and services, California emits less carbon than any nation except France
While $5.7 billion represents a huge start, it pales in comparison to the predicted investment risk of uncurbed global warming. If unabated climate change will cost up to $44 trillion in lost GDP by 2060, according to CitiBank. To meet international climate goals (thereby limiting “catastrophic” global warming) the world will need to invest $400B per year in renewable energy by 2020.
This huge economic shift demands significant capital, especially as California’s experiment encourages the rest of the country to join the Resource Revolution.
SOLUTIONS
The state’s legislative push in recent years has set a high bar for governments everywhere looking to shift from a fossil-fuel based economy. Legislation that has passed or remains in consideration includes:
- Require utilities to generate at least 50 percent of their electricity from solar, wind and other renewable energy sources by 2030.
- Create a 50 percent increase in energy efficiency in new and existing buildings by 2030.
- Require California Air Resources Board to reduce petroleum use by cars and trucks by 50 percent by 2030.
- Launched a Cap and Trade Program that now applies to almost 85 percent of the state’s greenhouse gas emissions, and has raised nearly $2B to be reinvested in public projects to reduce emissions and create jobs.
While such legislation created staunch opposition from business and political organizations fearing it would crush the economy, the opposite has occurred, opening exciting new investments in the low-carbon economy.
When it comes to energy, California’s Resource Revolution is far ahead, calling back to a waiting world to come and see what potential exists out in this grand new frontier.
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RESOURCES
Citibank. “Energy Darwinism: Why a Low Carbon Future Doesn’t Have to Cost the Earth.”
http://climateobserver.org/wp-content/uploads/2015/09/Energy-Darwinism-Citi-GPS.pdf
Environmental Defense Fund. “Carbon Market California: A Comprehensive Analysis of the Golden State’s Cap and Trade Program.” http://www.edf.org/sites/default/files/content/carbon-market-california-year_two.pdf
International Business Times. “Bill Gates Says Energy Miracle Needed to Battle Climate Change.”
http://www.ibtimes.com/bill-gates-says-energy-miracle-needed-battle-climate-change-2319177
International Energy Agency. “Special Report on Energy and Climate Change.”
https://www.iea.org/publications/freepublications/publication/WEO2015SpecialReportonEnergyandClimateChange.pdf
Next 10. “California Green Innovation Index.”
http://www.next10.org/sites/next10.huang.radicaldesigns.org/files/2015-Green-Innovation-Index.pdf