October 21, 2016
Setting a Course to Address Climate Change:
California is Creating Opportunities for the Economy, Education
By Carl Smith
Noel Perry is a businessman, philanthropist, and the founder of Next 10, a nonpartisan nonprofit organization that educates, engages and empowers Californians to improve the state’s future. For years, Next 10 has been an authoritative source of insight into the growth of California’s green economy.
In a Green Technology interview he offers an overview of the impact of California’s commitment to tackling climate change, and the role that schools can play in ensuring students are able to take advantage of the opportunities that are being created.
For years, Next 10 has been an authoritative source of information on the development of California’s green economy. What prompted you to take on that subject?
Thirteen years ago, when I founded Next 10, I was concerned about the future of the state. We had experienced the dot com bust. We also had the electricity blackout. We had 15 billion dollars in debt. Right around that time, we also had a change in the governorship. I was interested to turn my hand to trying to make a difference in California because I have fivesons that I hope will eventually settle down here. I wanted to see if I could make a contribution.
It is my belief that climate change is one of the biggest global challenges that we have. I wanted to see what Next 10 could do, in terms of producing research that could educate, engage, and empower Californians to really understand that issue and how it relates to economic growth.
What are some of the most encouraging trends you have seen?
Next 10 is excited to be here in California because the state is one of the leading entities in the world that is taking action to address the climate change problem. California has been a leader in venture capital investment in clean technology platforms for many years. We’ve also seen the adoption of clean technologies here, particularly solar, which has increased by nearly 1400% over a five-year period. The adoption of zero emissions vehicles has also increased by nearly 250% over a two-year period.
Another interesting trend is the decoupling of economic growth and emissions, specifically on a per-capita basis. If you look at one of the more important graphs in Next 10’s eighth annual California Green Innovation Index, you will see a graph that shows the GDP per capita steadily increasing over the last few years, with a steady decrease in the amount of emissions.
Over the last number of years, we have seen the replication of California policies and technologies throughout the U.S., and also globally. We’ve continued to set ambitious emission reduction targets, with SB 32 as the most recent example. We have a cap and trade program. We have a very aggressive renewable portfolio standard so that we can limit the impacts of climate change.
You published a special international edition of the Green Innovation Index and presented it during the recent climate negotiations in Paris. That report placed California’s energy and economic performance in an international context, comparing it to the world’s 50 largest greenhouse gas emitting nations. What was your impression of the impact of California’s accomplishments on other countries?
I found there was absolute enthusiasm on the part of a number of European countries. AB 32–which was passed about 10 years ago–has been inspirational for other parts of the world, as have the fuel economy standards that leading environmental California legislator Fran Pavley started here and were later adopted nationally in the U.S. Our energy efficiency standards have similarly influenced U.S. federal standards and those in other countries. We are competing in a global economy and the leadership that we see from California is very important.
I went to Paris to present the seventh edition of the California Green Innovation Index, which focused on the 50 largest emitters in the world. The conference was the inspiration for the international edition. California now has the sixth-largest GDP in the world and we wanted to see how we compared with other emitters in the world in terms of a number of different factors. We wanted to really understand California’s place in the world.
Of the various data points that we had comparisons on, one really important one was carbon intensity. Essentially, carbon intensity is a measure of how many emissions come from making a dollar of GDP. California had the second lowest emissions per dollar of GDP. We were almost the leader in that category. France was the leader in lowest carbon intensity because it has a significant amount of energy from nuclear power plants. There is a similar ratio for energy productivity. How much energy does it take to make a dollar of GDP? We were ranked fourth for that. We ranked ninth in total renewable electricity generation and fourth in terms of the percent of electricity from renewable sources.
One thing I should say: California accounts for just one percent of global emissions. While it’s important that we continue to reduce our in-state emissions, it is equally important that we encourage other states and countries to reduce their emissions. Along with the policies that have set a high bar for California, we need to continue to innovate and create technologies that allow others to meet higher standards for emission reduction.
Are you finding that it’s harder to argue that being “green” means losing money?
When we started Next 10, way back when, that perspective was prevalent among some business and government leaders. I find that to be less and less the case, particularly here in California. The economy of California is very important, and we find that in fact we’re not losing money by doing this. Again, we are the sixth largest economy in the world, and we’ve had very strong employment over the last few years. We’ve had strong productivity, and we’re competing on a world stage with Google, Apple, Facebook, and other leading technology companies.
Many countries have signed on to the Paris agreement. The trend, for the foreseeable future, will be for technologists to continue to work to come up with more and more solutions, focusing on renewables, energy efficiency and all that is needed for the success of clean energy policies. It will be, as it is today, a competitive industry. California, which is at the forefront of clean tech investment, will be very well positioned as more and more states, countries, and firms decide to adopt new technologies to solve their problems.
How important are things like SB 32, and SB 350 in regard to creating the confidence that California is a place where you can sell solar panels, wind farms, high-efficiency heating and cooling, etc.?
SB 32 and SB 350 are very important for the future of California. They are going to result in continued investment in clean technology and funding for start-ups. As we know, SB 350 sets a goal of 50 percent renewable energy by 2030. One of the things that businesses always like is certainty. The fact that a market is going to be there, and it’s not going to go away, creates certainty that the rug’s not going to be pulled out from under investors who are trying to meet certain goals. We need policies like these to drive innovation but innovation requires trial and error, so while there will continue to be great successes in clean technology development, some failure will also be part of growing and problem-solving.
Based on your research and your interaction with investors and industry leaders, what “green sectors” do you expect to create the most jobs in California?
Speculating on what the future may bring is always difficult, but I think solar is going to continue to be an opportunity for job growth. We’re going to see electrified transportation, which is very, very important. One third of all emissions in California are from the transportation sector, and as I look to the future of California I think it will be the most challenging area for emission reduction. I’m more confident about electricity in the home because of renewables, with both distributed solar and large-scale solar.
I see a number of opportunities in regard to transportation. Increasingly, you see that more and more electric and plug-in hybrid car companies locating in Silicon Valley and Los Angeles are becoming part of the innovation ecosystem.
Related to the issue of increased electrification is storage: battery storage for rooftop solar, battery storage for large commercial enterprises and transportation systems, and the continued reduction in size of the battery in an electric car.
These are important areas, and there’s investment in companies here in California in all three of them.
We have strong policy. We have innovators. We have investors. What factors could prevent California from realizing its goal of a vibrant, low-carbon economy?
Year after year over the last decade, polls in California have consistently shown that Californians believe that we can reduce emissions and grow our economy. That’s been a bedrock for policy makers in California. It inspires them to be comfortable providing leadership in terms of policies that address climate.
If that were to change, which I don’t expect that it will, that might be a risk. Then the legislative leaders and the governor might begin to reflect that change in opinion. That’s what I would say could be one of the biggest factors, but again, I don’t see that happening.
Do schools have a responsibility to cultivate environmental literacy?
I think that schools in California should focus on teaching environmental literacy, particularly because students need to be informed about the challenges they are going to face. Hopefully there will be areas that will spark their interest so that they can choose careers in those areas. I think that it’s important for young people to make contributions to making the world a better place. They need to learn where the opportunities are, where there might be something that they would want to do, whether it’s a simple recycling program, the conservation of wetlands or involvement as a volunteer in a local environmental organization.
Is there any reason that climate change should be presented in schools as a “theory” rather than a reality?
They should definitely present it as a reality and not a theory. I read a statistic today in the New York Times, that 90 percent of all scientists in the world believe that climate change exists, and that it’s man-made. One would be on solid ground to present it that way, and then to also say that there are some out there who have a different perspective, and explain what it is and why they have a different perspective.
What kinds of things could help put more young people on paths to careers that could enable them to prosper and, quite possibly, also save the future?
I think it’s important for young people to have an interest in STEM—science, technology, math, computer science and engineering. Those all help to whet an appetite and enthusiasm for innovation. It is really important to competently teach in those areas. The arts are important too, because there’s a lot to learn about creativity, originality and fulfillment through the arts.
Many public schools in California are adopting solar and energy efficiency. It can be very inspirational to use these projects to provide hands-on learning opportunities to students, to help them understand their impacts and to measure them in a real-world environment.
For Next 10, it is really important to foster civic engagement. As you know, we have the California Budget Challenge and the California Carbon Challenge, and the California Water Challenge for this purpose.
Our future leaders, the kids that are in elementary and high schools today in California, are going to inherit the problems that we created. It is incredibly important to explain to them what’s going on, why it’s happening, what can be done and what roles they can take as they grow up and evolve.
As a next step, Next 10 wants to look at what California can do in terms of working with other countries around the world, to take some of what we’ve learned to help them as they grow and evolve, and address their challenges. Similarly, we in California can also learn from the innovations coming from other parts of the globe. Exciting technology and policy developments coming out of Europe and Asia can provide us with important lessons to learn. We need to work hand in hand with other states and countries to push things forward as fast as we can.
Another part to this is looking at what the impact has been already. Solar efficiency, clean cars and policies have been exported. What’s been the impact to date? What are the areas for future impact? If the rest of the world is moving towards where California is already, what are the possible benefits for California?