Governor Brown’s ‘Big Ideas’ for Energy & Climate

January 20, 2015 By Jon Costantino

Jon Costantino

Governor Brown was sworn into office earlier this month and gave his fourth inaugural address, which also doubled as his State of the State (a rare double feature). Though he touched on a variety of other proposals, the Governor kept his laser focused on climate and energy issues. He proposed three carefully worded, but ambitious, goals for California to accomplish within the next 15 years:

  • Increase from one-third to 50 percent our electricity derived from renewable sources
  • Reduce today’s petroleum use in cars and trucks by up to 50 percent
  • Double the efficiency of existing buildings and make heating fuels cleaner

Together with his 2015-16 budget proposal, which was released a few days later and includes the largest dollar value to date of Cap and Trade revenues to be expended, over a billion dollars, due to this year’s inclusion of transportation fuels in the program, there will be plenty to digest and debate in Sacramento this legislative session.

Governor Brown also vowed to continue a host of the state’s most progressive energy policies, which include expanding distributed generation, rooftop solar, microgrids, energy storage and electric vehicles. He also called on the broader minds (think Silicon Valley and Academia) within California to make it all work. He said, “It will require enormous innovation, research and investment. And we will need active collaboration at every stage with our scientists, engineers, entrepreneurs, businesses and officials at all levels.”

“Taking significant amounts of carbon out of our economy without harming its vibrancy is exactly the sort of challenge at which California excels,” he said. “This is exciting. It is bold, and it is absolutely necessary if we are to have any chance of stopping potentially catastrophic changes to our climate system.”

This sounds like a leader who just doubled down on this policy area.

Raising the state’s renewable portfolio standard (RPS) has been widely anticipated in California, which is on track to meet its current target of 33 percent. The 50 percent renewable number, though it isn’t presented as an RPS increase, surprised many, as it seems to be the choice over the alternative being discussed, a new low-carbon “Clean Energy Standard.”

Equally aggressive is the state goal of up to 50 percent reduction in petroleum use. The California Air Resources Board simultaneously put out a road map on how to achieve this standard. With the biggest programs to date only getting the state less than half of the way to the stated goal, there is a lot left to be done.

California is also openly discussing setting a new target for carbon dioxide emissions, above its existing goal of reducing emissions to 1990 levels by 2020. This discussion is necessary, as AB 32 only set in statute a 2020 GHG reduction goal. With the U.N. Paris Conference of Parties at the end of the year, California is looking to remain a leader in this area. An early bill already introduced by Sen. Fran Pavley (D), SB 32, this legislative session would require the state to set a 2050 GHG target equivalent to 80 percent below 1990 levels.

Brown also noted the need for reducing methane, black carbon and other contributors to climate change, as well as managing farms, forests and wetlands to store more carbon dioxide.

“All of this is a very tall order,” he said. “It means that we continue to transform our electrical grid, our transportation system and even our communities.”

Brown called for cooperation and “pragmatic caution” in pursuing his goals.

“How we achieve these goals and at what pace will take great thought and imagination mixed with pragmatic caution,” he said.

These goals are aggressive. The Governor, with this action, made it very clear to all industries (cleantech, oil, renewable, automotive, and others) that climate issues will remain a priority for his final term. Electricity, fuels, and energy efficiency are his big three policy legs, which have been the cornerstones for some time in the world of GHG mitigation. Though the topics provide no real surprises, the aggressiveness does.

The speech sets up a series of questions: Will there be a legislative package to promote this? How much can already be done via executive branch authorities? Who will be the biggest supporters and opponents? As mentioned earlier, there will be much to discuss in the halls of the Capitol in 2015.

Jon Costantino is a senior advisor at Manatt, Phelps & Phillips, LLP in the Sacramento Government practice group. He manages complex political and regulatory issues for clients in the areas of climate change, clean energy and environmental issues. Mr. Costantino previously served as Climate Change Planning Manager within the Office of Climate Change at the California Air Resources Board, where he oversaw the development and publication of the original AB 32 Scoping Plan. He can be reached at (916) 552-2365 or jcostantino@manatt.com.

This column is part of a series of articles by law firm Manatt, Phelps & Phillips, LLP’s Energy, Environment & Natural Resources practice.

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