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California’s Energy Strategy Holds Lessons for Bush

President Bush could discover something important if he puts down his talking points long enough during his trip to California this weekend. Bush is using the visit to tout his energy policies; but the country would be better served if he took the time to learn from the state’s energy strategy, which is emerging as an integrated alternative to the president’s incomplete plan.

Piece by piece, Gov. Arnold Schwarzenegger and Democrats in the state Legislature are fashioning a comprehensive response to two of America’s most pressing problems: the intertwined challenges of global warming and energy independence. Their approach -- call it the California Idea -- challenges both the means and assumptions of Bush’s approach to energy.

In his first term, Bush focused almost entirely on promoting more domestic production of oil and gas. This year, he’s also proposing more federal research money for solar and wind energy and for futuristic cars that could run on fuel produced from agricultural waste or hydrogen.

But Bush has unwaveringly opposed any mandates that would encourage conservation or accelerate the commercialization of those clean technologies. He’s fought requirements for automakers to improve the fuel efficiency of their vehicles; for utilities to generate more electricity from renewable sources; and for the United States to reduce its overall emissions of carbon dioxide, the gas associated with global warming. On each front, Bush’s central argument is that mandates would hurt the economy.

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California is pursuing the opposite strategy. It is formulating a series of mandates to speed the transformation toward an economy that uses less oil and emits less carbon dioxide. And it is imposing those mandates in the belief that they will bring jobs to the state by spurring technological breakthroughs -- the historic engine of California’s growth.

Rejecting Bush’s analysis, state leaders are aligning themselves with companies like General Electric that see great opportunity in the evolution to a clean-energy and low-carbon future.

Across each critical choice in the energy debate, California represents the path not taken in Washington.

In last year’s federal energy bill, Bush’s opposition helped doom a requirement that utilities generate 10% of their electricity from renewable sources such as solar or wind by 2020 -- a mandate that would have substantially reduced carbon emissions. But Schwarzenegger recently implemented a requirement that California utilities generate at least 20% of their electricity from renewable sources by 2010; he wants to raise the mandate to 33% by 2020.

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Bush, along with most congressional Republicans and many industrial state Democrats, has also blocked all efforts to mandate meaningful improvements in automotive fuel economy. (Bush has accepted some minor administrative changes.) California, by contrast, has passed legislation requiring automakers to sharply reduce greenhouse gas emissions from their vehicles. That would require the companies to achieve engineering efficiencies that could also improve fuel economy and encourage more use of alternative fuels.

Ten states say they intend to follow California’s emission standard -- a movement that could increase pressure on the auto companies to sell more fuel-efficient vehicles nationwide. But the California rules have been delayed by a lawsuit from the auto industry, which claims the proposal impinges on Washington’s authority to set fuel economy levels. State officials fear the Bush administration intends to enter the suit for the auto companies.

California’s latest move is its boldest. Bush has rejected any mandatory reductions in greenhouse gases. But a Schwarzenegger task force recently issued a thorough plan to reduce the state’s emissions of greenhouse gases by 25% through 2020.

Two Democrats, Assembly Speaker Fabian Nunez of Los Angeles and Assemblywoman Fran Pavley of Agoura Hills, have introduced legislation that would meet Schwarzenegger’s goals by limiting greenhouse gas emissions through a “cap and trade” system beginning in 2012. Schwarzenegger is encouraging that proposal, which would mark a new height in American efforts against global warming, and his aides say he hopes to entice neighbors such as Oregon and Washington into a regional pact to reduce greenhouse emissions.

Two economic assumptions guide the California Idea. One is that the energy mandates will create a mass market that lowers the price for clean technologies like solar electricity or ultra-low-emission cars. The mandates “say everybody is going to have to do this, and that spurs the mass production that brings the price down,” says Terry Tamminen, Schwarzenegger’s special advisor for energy and the environment.

The second assumption is that the mandates will help California capture a leading share of the jobs and investment created by the transition to a clean-energy economy. The requirements on renewable energy, tailpipe emissions and potentially on greenhouse gases will create enormous demand in the state for new products and processes -- from solar energy to biofuels to the retrofitting of manufacturing plants. And that should encourage many of the companies meeting that demand to locate in California.

Strikingly, some of Silicon Valley’s top venture capitalists such as John Doerr and Vinod Khosla and technology executives from Google and Sun Microsystems are enthusiastically promoting the California energy strategy. They recognize that reducing America’s reliance on fossil fuels is not only a national security and environmental imperative but also a potential gold rush.

Too bad so few people in Washington share their confidence that American innovators will not only adapt, but prosper, if government mobilizes the nation to truly break its addiction to oil.

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Ronald Brownstein’s column appears every Sunday. See current and past Brownstein columns on The Times’ website at latimes.com/brownstein.


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