Governor Jerry Brown’s New California Climate Target Sends Bold Signal to Business and Fellow PolicymakersEdward Cameron
Last week, California became the latest in a growing list of major economies to commit to a low carbon future. In the midst of what is the worst drought on record, Governor, Jerry Brown, announced a bold target of reducing greenhouse gas emissions by 40% below 1990 levels by 2030 as part of a longer-term decarbonization plan aimed at reducing emissions by 80% by 2050. This is part of a package of measures that aims to increase the state renewable portfolio standard (RPS) to 50%; reduce petroleum use in cars and trucks in California by 50%, double the efficiency of existing buildings; and reduce the release of methane, black carbon and other potent pollutants across industries.
This compares favorably with the recently announced Federal commitment to initiate economy-wide reductions of 26%-28% GHG emissions below 2005 level during the next decade as both the volume of GHG cuts and the decision to choose 1990 as the base year add up to considerably more ambition. In the global context, this also places California in the climate vanguard with the European Union who also announced ambitious plans to reduce emissions by 40% over 1990 levels.
California’s target is important for both signal and substance. The Golden State is the world’s seventh largest economy, home of fifty four of the Fortune 500 companies, and a global hub for innovation and venture capital. This commitment is a significant expression of confidence in California’s ability to build a dynamic economy while leading the world on climate change. It sends a signal to California’s technology industry to continue to innovate with new services and analytics that are essential to enabling ambitious emissions reductions. California is also the largest agriculture producer in the United States, with the industry generating more than $43bn in 2014, and the second largest consumer of energy in the nation. As both are significant sources of greenhouse gas emissions, meeting this target will require collaborating with companies in these sectors to craft business strategies that are ambitious and pragmatic.
The commitment, coupled with continued innovation by business, will create new opportunities for corporate power users and providers of renewables to develop creative arrangements that not only meet but exceed the state’s ambitious goals with additional renewable power.
Companies are already rising to the challenge. Just last week, Tesla unveiled a retail home-energy storage product that will dramatically support the increased adoption of renewables at a price that analysts say is surprisingly low.
Through the We Mean Business campaign, leading American companies and global businesses with a major presence in the US are working together to tackle climate while reducing emissions and costs. Colgate Palmolive Company and Kellogg Company have committed to removing commodity-driven deforestation in their supply chains by 2020. Autodesk, Inc., Honda Motors and Unilever have committed to set science-based GHG emissions reduction targets on a company-wide level. Mars, H&M and IKEA have committed to going 100% renewable.
More companies and investors are committing to leadership on climate action than at any time in history. They are taking action because doing so offers tremendous opportunities for creating growth, jobs, and driving innovation in the new climate economy.
While many leading businesses are already on the right path; many more will follow with clear signals from government. That’s why, We Mean Business, a coalition of organizations working with thousands of the world’s most influential businesses and investors, is calling on government leaders to set a smart policy framework for carbon reductions when they meet in Paris in December. Governor Brown’s announcement sets California on a path toward decarbonization by the middle of the century. We now ask the US government to pursue a path to high ambition – both nationally and internationally – with the promise that business is ready, willing and able to join this journey.