Cost and Taxes in the Green Economy

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

The 12th annual Verdexchange Conference kicked off in Los Angeles this week with a discussion on how the recent election results will boost environmental politics and the green economy in California. But in the tradition of the old Rodney Dangerfield joke that, “I went to a fight the other night and a hockey game broke out,” the panel discussion on elections and climate change took a wayward turn and targeted Proposition 13. Taxes seem to be on the mind of panelists to move the green agenda ahead.

The Verdexchange conference is designed to bring together green tech marketers to advance the new energy economy.

California Air Resources Board Chair Mary Nichols was optimistic that members of the newly sworn-in legislature would be competing with each other to push transformative energy and environmental laws. But she also warned that there are those who want to stand up to change. She claimed that attitude along with underinvestment (and other disreputable and harmful positions) were “part of the legacy of Proposition 13.”

State senator Bob Wieckowski indicated that the super majority Democrats were ready to do a number of things, and while saying he would not give away specific ideas, he did mention some overall topics including Prop 13.

Seems the 40-year-old ballot measure better suit up with armor because it is a target again.

Wieckowski was convinced that the votes are in place to raise taxes. He cited newly minted senate majority leader Bob Hertzberg as someone who can make it happen. While declaring Hertzberg was no LBJ, legendary in his role as taskmaster of the U.S. Senate before he became vice-president, Wieckowski explained if there were six uncertain votes on a tax bill and three votes were needed, Hertzberg would line them up and apply pressure to find the three votes he needed.

When asked if some remaining Republicans in the senate would be good votes for climate change legislation, Wieckowski said he expected some Republicans would vote with Democrats because they were in “survival mode” and concerned with making it through their next election.

The cost of renewable energy was the key topic of a second panel that looked at the chances of reaching the goal of 100% of renewable energy for California by 2045. Governor Jerry Brown signed a bill last year to set that goal.

While a panel of experts suggested it was hard but not impossible to reach the goal there are obstacles in the way. Storage of back up energy was one mentioned a number of times; the cost, especially on Californians on the lower end of the economic ladder, was another.

California currently has the fifth highest energy rates in the country.

Green energy developers are spending billions of dollars to reach the renewable goals. Los Angeles Department of Water and Power Senior Assistant General Manager of Power System Strategic Policy, Reiko Kerr, said renewable energy increased from 6% of the department’s energy in 2006 to 34% in 2018. For perspective, she said the renewable energy generated in 2018 would be enough to cover the combined communities of Burbank, Glendale, Riverside and Anaheim.

But the cost is still a concern. Steve Berberich, president of the California Independent System Operator that maintains the state’s power grid, said he wondered how a police officer and teacher couple in Fresno could cover their energy bills during a hot period under potential cost increases for the renewable energy.

As renewable energy moves ahead, the questions that trouble other government run efforts —costs and taxes—are still to be conquered to satisfactorily meet the 2045 goal.

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