Three New California Climate Programs to Watch
Newsom signed over a dozen climate-related bills this weekend, but these stood out.
California’s governor, Gavin Newsom, signed more than a dozen climate and clean energy-related bills into law on Saturday. As the Golden State is one of the nation’s most important labs for climate policy, there were three developments in particular that I think will be interesting to keep an eye on as they progress over the next few years.
First, and probably most relevant on a national level, Newsom put his signature on two bills that will require large businesses to disclose their greenhouse gas emissions as well as any risks to their business due to climate change. I wrote about these bills a month ago when they were up for a vote in the state Assembly. They mirror similar policies under consideration by the Securities and Exchange Commission that could soon be adopted at the federal level, but go further because they apply to private companies in addition to publicly-traded firms.
The new laws were sold as a measure to help investors understand how exposed different companies are to future carbon regulations or climate change risks, but they could also go a long way to standardize the reporting of corporate emissions data. That data could help activist groups hold companies accountable for their climate promises and help consumers compare the sustainability efforts of different brands. The next step will be for the California Air Resources Board to develop rules for the new disclosure system by 2025, with reporting to begin in 2026. I’ll be following that rulemaking process closely, as it’s likely to bring up ongoing debates about how companies should account for emissions from indirect sources, like their purchased electricity and supply chains, as well as how to account for carbon offsets.
The second development is a set of laws that are designed to help California overcome major obstacles for its inchoate offshore wind industry. Almost a year ago, the federal government auctioned off the first-ever leases to develop offshore wind in the Pacific, selling five parcels in total. California sees offshore wind as an essential component of its climate goals, as it has the potential to generate power at night when the state’s abundant solar resources disappear. But because the continental shelf drops off abruptly just a few miles from the California shore, plunging thousands of feet, the turbines will have to be built on floating platforms — a much more expensive proposition than the wind projects under development on the East Coast, which are already threatened by cost overruns.
These will be big, risky, projects, and developers need certainty that there will be a buyer for the energy at the end of the road. But it would be hard for a traditional utility to make that kind of commitment at this point, Molly Croll, the director of Pacific offshore wind at the trade group American Clean Power, told Canary Media last month. “It’s new technology,” she said. “It requires some new infrastructure; it requires a contract signed much longer in advance of commercial operation than typical renewable projects require.”
Under the new legislation, California will set up a central procurement program, tasking the Department of Water Resources, which owns and operates hydroelectric power plants in the state, to enter into long-term energy purchase agreements with wind developers. This is similar to programs in place in the northeast, like the New York State Energy and Research Development Agency’s offshore wind solicitation program. Notably, the department will also have the authority to enter into similar contracts with other expensive, risky, but potentially game-changing clean electricity projects like geothermal power plants and energy storage facilities. Meanwhile, a second bill that Newsom signed will get the ball rolling for the state to develop strategies to upgrade its port infrastructure to support the new industry.
The third development is interesting mainly because it’s one of those ideas that sounds so obvious that after you hear it, you can’t believe it’s not already a thing. The new law will enable the state to make use of the tens of thousands of miles of land it owns alongside highways for clean energy development. It instructs the California Department of Transportation to develop a plan to lease the land to utilities or other entities to build solar, storage, and transmission projects.
A recent analysis commissioned by the nonprofit advocacy group Environment California found that just three counties in southern California — Los Angeles, Ventura, and San Diego — together have 4,800 acres of suitable space for roadside solar development, which, if filled with panels, could power more than 270,000 homes. The group Environment California also points out that this could be a way to generate revenue for the state through lease fees and energy sales.
Land use for solar is contentious, especially in California, and putting as much as possible in the rights-of-way alongside highways could avoid battles over the use of undeveloped or agricultural land.