Verde Laguna: A view from outside the country

Traveling outside the U.S. for the last two weeks, I had the chance to flip last year news trying to find a different perspective for the forces playing in our world today. Year end is always a time for review of what happened, to understand what is going on as the basis for designing a better tomorrow. Everything starts by recognizing year ups and downs.

Talking about the environment, one down moment last year occurred when the Senate failed to debate the Clean Energy & Climate Act, a bill the House passed in 2009 that aims to reduce U.S. greenhouse gas (GHG) emissions below 1990 levels by 2020, an act which—despite the flaws—was a comprehensive layout for the implementation of strong energy and climate measures. The odds for the next Congress to reconsider these measures are close to zero. The good news happened in California, when against the political tide around the country voters by rejected Proposition 23 and saved AB 32, California’s landmark anti-global warming law—the first comprehensive program of regulatory and market mechanism to achieve real, quantifiable, cost effective reduction of GHG.

Yet another low note was one more missed opportunity to control the state’s deficit. The Legislative Analyst’s Office, California’s non-partisan fiscal and policy advisor, forecast a state budget problem of $25.4 billion between now and the time the legislature enacts the 2011-2012 budget plan. However, despite the severe recession we experienced the last two years, with a gross domestic product of $1.9 trillion in 2009 California is still the largest state economy in the U.S., well ahead of number two Texas with a GDP of $1.1 trillion. (Source “Report for Continuing Study of California Economy”)

A continuing negative, the Bureau of Statistics reported 12.4% unemployment for the month of November for California. The lack of job creation remains a hurdle for the economy as a whole, but new data shows that green business has increased from 1995 to 2008 and that, while the economy slowed between 2007 and 2008, green jobs grew by 5%. (Source “Next 10”)

A week after the midterm election, there was one more low moment, when Texas filed seven lawsuits against EPA climate regulations. This after oil corporations from Texas had AB 32 in their gun sights. But another state with a Republican governor, Arkansas, on Dec. 10 became the first state in the Southeast to adopt a comprehensive set of policies on utility energy efficiency programs, including Energy Efficiency Resource Standards (EERS). Arkansas Gov. Mike Beebe was quoted: “The world as we once knew it has changed, and the world we’re living in is going to require new behavior from all of us. I believe that all Arkansans can take steps that will help protect our precious natural environment and move us toward a greener economy.”

A disappointing moment was when the FHA decided not to allow Fannie Mae & Freddie Mac to underwrite property assessed clean energy ( PACE) retrofit loans, putting on hold programs proposed by several local cities and municipalities throughout California and across the nation. PACE is a much needed bipartisan initiative that allows financing for energy efficiency and renewable energy projects for homes and commercial buildings.

For voters last November, the main issue was the economy. So how we can encourage economic growth and job creation? The people at the national level have spoken and “in the new congress, half of the freshman are climate change skeptics, and 86% oppose any climate change legislation” as reported in the LA Times on Nov. 6. Balancing the budget and saving the Bush tax cuts are clearly over weighing proposed policies supporting green innovation and a sustainable economy. Yes, the same tax cuts that didn’t create any job for too long.

But the people of California had spoken too, in a different direction.

This week Arnold Schwarzenegger left the governor’s office with a landmark global warming law legacy for the state. At the same time, Jerry Brown becomes governor with the campaign promise to revive the economy through an aggressive expansion of California’s green energy industry, a program he estimates would create half a million jobs.

Many fear that the lack of comprehensive energy legislation at the federal level will lead many companies to leave the U.S. for other markets such as Germany or China where the cost of doing business is much more affordable. Perhaps it’s time to understand that most new jobs in California will be created by the private sector, and that the government can play a role streamlining regulations that promote new business and investment in new technologies that will lead the private sector to pump job creation. I believe that providing economic opportunities and security to the private sector will boost innovation. Indeed this offers the greatest return of investment and growth.

Our city, our kids and grandkids, and the state of California will benefit if we rise to the challenge, because a clean energy economy is the path for a sustainable future. The question then is not if we can afford these projects, but if we can afford not to do them.

As I was traveling, Laguna Beach experienced serious flooding that caused $10 million in damages. It’s astonishing how much good nature can bring, as well as how much harm. As the cleanup effort continues we still need to pursue happiness even during this emergency. Have a happy 2011.