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Last week, due to a technical glitch, the Brown Administration unintentionally released the Governor’s proposed budget a few days earlier than expected. Through $10.3 billion in cuts and increased revenues, the proposed budget would close a $9.2 billion deficit, compared to last year’s $26 billion gap, and build a $1.1 billion reserve. The most severe cuts will be inflicted on CalWORKs, Medi-Cal, child care, and the Cal Grant Program. The budget is contingent on voters approving a temporary increase in the sales tax and a higher levy on wealthy residents. If voters reject the ballot initiative in November, the state would be forced to cut another $4.8 billion from schools and community colleges; a cut equivalent to 3 weeks of instruction. ‘Trigger cuts’, as they’re called, would also strip funds from courts, public safety officers and flood protection.
So how did the environment fare in the proposed budget? Overall, environmental protection did better than many other programs, though there are significant cuts to key programs, and much of the funding that has been allocated is for projects that are controversial even within the environmental community. The Department of Parks and Recreation will see $22 million in cuts, twice the reduction from last year’s budget, which would result in the closure of up to 70 state parks. Additionally, if the Governor’s tax initiative does not pass, it will trigger the elimination of all seasonal lifeguards on state beaches and a 20% reduction of the Park Rangers workforce.
Programs that will see more funding in 2012 include highly contentious projects, like California High Speed Rail and the Delta conveyance program. The budget allocates $15.9 million to usher along the development of a high speed rail system, which is under increasing scrutiny due to governance, routing and financing issues. The budget would also allocate more funding to the Department of Water Resources for its work on the highly controversial Bay-Delta conveyance research and planning processes; specifically, for 135 positions for preliminary engineering work to support the Delta Habitat Conservation and Conveyance Program.
The budget also earmarks $1 billion that are to be received by auctioning pollution credits to California companies to be used to “create jobs and deliver public health, economic and environmental benefits” as part of the state’s effort to curb global warming. Businesses have complained that this cap-and-trade program, a critical piece of California’s landmark legislation aimed at cutting greenhouse gas emissions to 1990 levels by 2020, represents an unfair tax. Cap-and-trade is also controversial among the environmental and environmental justice communities, some of whom believe it merely commoditizes dangerous pollution rather than directly and more aggressively curbing it.
The governor’s proposal still needs to be debated by the Legislature, and the Brown Administration will release an updated version in May. The deadline to have a budget passed by lawmakers and signed by the governor is June 30.
Last Thursday, California became the first state to establish a conditional standard for greenhouse gas (GHGs) emission limits – known as the cap-and-trade program. The California Air Resources Board (CARB) voted to adopt final the rules that will regulate carbon emissions across a broad cross section of the state’s economy, including oil and gas producers, utilities and transportation companies, farmers and the building industry.
The goal of the program is to decrease GHG production to 1990 levels by 2020.
Starting in 2013, CARB will give polluters an allowance of carbon credits (the amount of carbon they can emit) at the beginning of each year based on emissions reductions benchmarks. If a company doesn’t use all of its credits, it can sell them to companies that cannot, or will not, reduce their carbon levels.
This new market approach to lowering carbon emission will likely create a new industry, where firms functioning much like stockbrokerages and financial consultants will manage permit purchases and other trading tools for polluters to distribute from one to another. The Intercontinental Exchange (NYSE:ICE) powered organization Chicago Climate Exchange is such a company, being the largest and longest running carbon exchange firm in North America.
Perhaps most importantly, it will make California a model for national air pollution control. Whether this is good or bad depends on your perspective. While many businesses support what they see as an innovative approach to environmental regulations, others are becoming more vocal about how they believe costs imposed by the program – including increased electricity and gasoline prices – will drive companies out California. At the same time, there is a split among the environmental community as well. Some groups laud the market-based approach while others decry it as a distraction from more effective regulatory schemes and a strategy that unfairly benefits historically major polluters and has a checkered track record.
According to CARB Chairwoman Mary Nichols, “Cap-and-trade is a new tool that for the first time allows us to reward companies for doing the right thing.” Time will tell whether this tool will indeed fulfill its promise to make California the leader on being climate friendly.
Last week, The Solar Foundation released its “National Solar Jobs Census 2011 Report.” The new study found that one in four solar energy jobs in theUnited States are held by Californians; and that nationwide, clean tech jobs are on the rise. With 25,575 of the 100,237 solar-related jobs nationwide, California leads the pack and holds four times as many positions as the runner- up, Colorado with 6,186 solar jobs recorded last year.
While the nation continues to struggle with job creation – overall United States job growth was only 1% for the twelve month period ending in August – employment in all areas of the solar industry increased by nearly 6.8% in the same time period; with projected growth of another 24% over the next year, creating 24,000 more jobs.
The release of this study comes on the heels of the bad publicity the solar industry received with the $535 million federal bail out loan the bankrupt solar panel manufacturer Solyndra received last month. Arno Harris, a chief executive at Bay Area solar developer Recurrent Industry stated, “we have to look beyond the failure of one company and see the tremendous success that’s occurring here.”
The Renewable Portfolio Standard, passed in the legislature and signed by Governor Brown this year, requires 33% of California’s energy to be derived from renewable sources. As California continues to push forward with ambitious goals to reach renewable energy usage, solar is proving to infiltrate itself into mainstream markets and as Michelle Kinman from Environment California stated, “the solar industry is not only creating green jobs across California but that the industry is forecast to continue growing at a much faster pace than the overall U.S. economy.”
A recent report by the Energy Information Administration (EIA) found renewable energy production in the United States has increased by a little over 15 percent since the first quarter of 2010, and has increased by more than 25 percent when compared to the first quarter of 2009, which puts it ahead of nuclear energy production and closer to surpassing domestic oil production.
The EIA Monthly Energy Review reported in the first three months of 2011, the country’s biomass/biofuel, hydropower, wind, geothermal, and solar energy generation plants produced a combined nearly 12 percent of U.S. energy production, while nuclear produced about 2 percent. The Monthly Energy Review reported that “energy produced from renewables is 77.15 percent of that from domestic crude oil production.” Nuclear power experienced a minimal increase, but has mainly stayed steady.
In California, just a few months ago, Governor Jerry Brown signed into law a directive requiring that 33% of the state’s electricity must come from renewable energy sources by 2020. While this law, known as the renewable portfolio standard (or RPS), is the most ambitious in the country, many are left with concerns of how and where the renewable energy is to be produced (centralized, industrial-scale facilities or localized distributed generation) and the feeling that the percentage should be higher. Governor Brown has stated, “While reaching a 33 percent renewable portfolio standard will be an important milestone, it is really just a starting point – a floor, not a ceiling… Our state has enormous renewable resource potential.” Governor Brown’s statement reinforces the trend the EIA Monthly Energy Reviews are tracking on the national level – renewable energy continues to be the most equitable energy source of the future.
