GREEN GROWTH: FROM RELIGION TO REALITY - Sustainia

Chapter 5world, standards set for the California economy have asignificant ripple effect (Lifsher 2010).Partly because of their national or international implications,the policies have not been free of opposition.For instance, vehicle GHG Standards have been challengedby national automakers in federal courts, but havethus far not found success. The LCFS has also receivedcriticism from US ethanol interests, oil and truckingfirms, Brazilian ethanol producers, and Canadian officials(Bhanoo 2010; Power 2009). But thus far, Californiahas maintained its legal right, built upon the state’s earlierenergy efficiency work, to implement more stringent environmentallegislations than national standards.2.3.3 VC growth: California’s clean tech industry respondsto an expanding marketCalifornia has established a leading role in clean tech VCboth nationally and internationally and its market dominanceis growing.In 2009 California captured 57% of U.S. clean techventure investments totally 3.3 billion and 25% of worldwideinvestment. By the last quarter of 2010 Californiahad captured 70% of all U.S. clean-tech venture investmentand 50% of global venture investment (BACEI2010). The state leads the U.S. in clean tech patents with458 registered clean tech patents between 2007-2009,30% more than that of the second place state. Clean techand green business have had positive gains on Californiaemployment as well. Between 1995-2008 it is estimatedthat employment in green business in the state grew 36%.Moreover, during the 2007-2008-recession period in Californiawhere total state employment fell by 5%, greenjobs grew 5% (BACEI 2010).Capturing fundingThe California clean tech industry has thrived in partas it has managed to capture a disproportionate amountof federal funding in the sector. The number of top-tierresearch universities exploring the issue, and their establishedconnection to a network of early developers andventure capital has enabled the state with a competitiveedge (Randolph 2011). Federal support has boosted thealready present resources and further charged cleantechdevelopment."In the last ten years, however, DOE funding has rapidlyincreased, supercharged by the U.S. stimulus inresponse to the 2008 financial crisis"Federal funding for Clean Tech has come in boom andbust cycles over the last 30 years. Following an initial fervorof investment in the 1970s following the OPEC oilembargo, federal funding for research, development, anddeployment of renewable energy technologies fell significantly(Nemet and Kammen 2007). The CongressionalBudget Office indicates that since 1978, adjusted for inflation,federal spending on all fields of energy researchDOE spending by state, excluding contractsDollars, Billions21.510.502004 2005 2006 2007 2008 2009 2010Fiscal YearCaliforniaMichiganNew YorkFigure 3: DOE spending, contracts excluded. Note the five statesshown above are the recipients of the largest percentages of grantmoney from the DOE. (OMB 2011)Source: Xhttp://usaspending.gov/PennsylvaniaTexashas decreased by over seventy-five percent (CBO 2010).In the last ten years, however, DOE funding has rapidlyincreased, supercharged by the U.S. stimulus in responseto the 2008 financial crisis.California received the lion’s share of US stimulus fundingin a number of green initiatives. Out of the 34.19billion of stimulus funds available through the nationalDepartment of Energy (DOE), California received morefunding than any other state in the categories of: renewableenergy, modernizing the electricity grid, and scienceand innovation. It also received large sums of fundingfor energy efficiency work. It should be noted that withabout 10 percent of the United States population livingin California the per-capita percent of funding the statereceives is at times actually lower than if evenly distributed(www.recovery.gov; US Census Bureau 2010).California did, however, receive almost ¼ of total DOEstimulus funding on Science and Innovation, although asignificant section of this funding takes the form of contractsearmarked for security and maintenance of nucleararsenals in the state.DOE funding supports both R&D basic research andcontracts at the national laboratories in the state andmore advanced stages of clean tech development. Between2008 and 2010 The Lawrence Berkeley National Laboratoryand Lawrence Livermore National Laboratoryreceived between 49 and 76 percent of total DOE fundingto California (usaspending.gov). These facilities arecurrently most concentrated in focus on energy efficiency,biofuels, batteries, and nuclear fusion (LLNL 2009).DOE funding for more developed stages of clean techtakes the forms of loan guarantees, tax credits, energybonds in the forms of grants in place of tax credits, anddirect grants (dsireusa.org). A number of clean tech VCshave profited indirectly from recent DOE loan guaranteesof considerable size. In 2011 California solar gene-Green Growth: From religion to reality 57