California turned green into gold
The Trump administration is working hard to roll back the nation’s environmental regulations on the grounds that they’re a burden on business. But evidence from California tells a very different story: The state has been on the cutting edge of environmental innovation throughout its history — protecting its coasts, restricting oil drilling, curbing greenhouse gas emissions — and has also been the nation’s richest state since 1971.
In recent years, California has grown more rapidly than any other state and is the world’s sixth-largest economy. This shows not only that rapid growth and stringent environmental rules are compatible, but also that many of the state’s environmental regulations have been a boon to business and spurred new industries.
California was, for example, the first government in the United States to impose pollution controls on motor vehicles. The effort was strongly supported by the Los Angeles business community — most notably its powerful real estate developers, who feared that city’s worsening air quality would make it unattractive for new residents and businesses.
During the 1970s, L.A. averaged 125 Stage 1 smog alerts per year, but thanks to the steady strengthening of both state and federal emissions controls, it has not had a single alert since 1999. In 2015, the city recorded its lowest smog level since reporting began. It’s hard to imagine that L.A. would have continued its high growth trajectory or remained the center of the world’s entertainment industry and the location of so many high-income communities had its air continued to be so hazardous.
These pollution controls grew out of a long history of collaboration between the state’s policymakers and business interests that began in the 19th century, when the steamship companies and the Southern Pacific Railroad backed protection of the sequoias and the creation of the nation’s first protected wilderness, Yosemite. Their goal was to promote tourism.
Most recently, California businesses have backed wideranging initiatives to reduce greenhouse gas emissions. The historic 2006 Global Warming Solutions Act was backed by more than 200 individual firms and business associations, including high-tech and venture capital firms in Silicon Valley. By 2006, VCs had already invested nearly $2 billion in clean technology. As one state policymaker noted, “The legislation ... sends a signal to people that there is a market where people can invest.”
Thanks to the state’s promotion of renewable energy, 1,700 solar companies are based in California; the state accounts for half the country’s rooftop solar installations and a quarter of solar-energy jobs. All told, more than 500,000 people are employed in the state’s growing renewable-energy sector.
The state’s Advanced Clean Cars Program and its zeroemission mandates have led Californians to buy or lease more than 200,000 pure electric vehicles — roughly half of all such vehicles registered in the United States. This has made California, along with China, the world’s largest market for this new automotive technology. Thanks to Tesla, the state has become the center of electric vehicle technology, with several other manufacturers opening design facilities here.
Revealingly, when two Texas-based oil companies launched a California ballot initiative in 2010 to roll back the state’s climate-change commitments, their effort was met with strong in-state business opposition, especially from the cleantechnology sector — which by then had investments of $6.6 billion.
California’s forward-thinking regulations have made it a clear leader. Over the past 30 years, energy consumption per person in the United States has increased by nearly 75 percent, while the state’s per-person energy consumption has remained nearly constant. Energy-savings programs, building codes and appliance-efficiency standards have reduced Californians’ energy bills by nearly $90 billion and also saved the expense of building up to 50 new power plants.
With Washington’s aggressive retreat from environmental policymaking, more states can learn from what California has accomplished. Those concerned about their state’s economic growth and competitiveness should work with businesses that stand to benefit from a greener growth trajectory. When a state protects its scenic beauty, improves air quality, reduces energy use, and promotes renewable energy, it not only protects its environment, it becomes a more inviting place to live, work, visit and invest.
For California, going green has certainly brought golden opportunities.