GREEN GROWTH: FROM RELIGION TO REALITY - Sustainia

Chapter 5strands. For reference we have included a chronologicaloverview of relevant state history.2 Three strands of green growth2.1 Energy efficiencyFrom the late 1970s onward electricity use per capita inCalifornia stayed flat, while increasing by 50% nationally.Over the same time period the state experienced longtermeconomic growth—successfully decoupling growthand electricity consumption (Roland-Holst 2008). In thisscenario California was able to successfully capture significantgreen-compatible growth – that is, growth inwhich economic growth is compatible with emissionsreduction or control. (Note, however, that this was anunintended consequence of energy efficiency policy; atthe time, carbon emissions were not a policy focus.)This success was due at least in part to deliberateenergy efficiency policy measures and to a legacy of pioneeringair pollution regulation and infrastructure alreadyin place in California as a response to serious airpollution problems in the 1940s and 1950s. In the laterpart of the 1970s the state put into effect an aggressiveenergy efficiency policy package comprised of buildingand appliance standards and utility programs. In addition,to encourage utilities to adopt energy efficiency technologiesand programs, the state introduced policies todecouple utility profits from total electricity generation.These policies provided a compensatory revenue streamand performance incentives for utilities that met or exceededefficiency savings. Regulators used a new investmentmetric – “cost of conserved energy” – to calculatesavings from avoided use and thus justify the programcosts (Rosenfeld and McAuliffe 2008; Rosenfeld and Poskanzer2009).The political will and successful implementation ofthese policies stemmed from a myriad of inter-connectedfactors, including a history of air pollution problems andthe resulting established regulatory infrastructure andgrants of regulatory latitude to the state by the federalgovernment; the OPEC embargo and rising fuel prices;and an absence of an entrenched fossil fuel sector. In the1940s California began experiencing severe air pollutionproblems in the LA Basin area resulting in an acrid haze.The geography and quickly expanding population in theauto-centric city helped explain the unique severity ofthe pollution. California created a series of administrativebodies to regulate and address this problem, developingfinally into the California Air and Resource Board1967. In conflict with less stringent national air pollutionregulation passed a decade later, California was theonly state awarded the legal right to pass more stringentair pollution regulation that at the national level due tothe state’s “extraordinary conditions” and “pioneering efforts.”These existing regulatory bodies and legal rightsplayed a central role in the later implemented energy efficiencymeasures (Hanemann 2007).Momentum for further clean-air regulation was initiallyunable to overcome Republican and industry objectionuntil the critical juncture of the OPEC oil embargoand resulting rocketing oil prices. An absence of coalPer capita electricity sales(kWh/person) (2006 to 2008 are forecast data)14,00012,00010,0008,000United States2005 Differences= 5,300kWh/yr= $165/capita6,000California4,0001975 2005 % changeUS GDP/capita 16,241 31,442 94%Cal GSP/capita 18,760 33,536 79%Per Capita Income in Constant 2000 $1960196219641966196819701972197419761978198019821984198619881990199219941996199820002002200420062008Figure 1: Per Capita Electricity Sales comparisons between California and the U.S. as a whole over the last 30 years.Source: Rosenfeld 2008.52