For part two of our series on the recent Los Angeles Business Council 2010 Sustainability Summit, we’ll be covering the first of the two morning keynotes. These speeches were given by California Public Utilities Commission President Michael Peevey and Los Angeles Mayor Antonio Villaraigosa. We’ll be reviewing Michael Peevey’s keynote here – but stay tuned for a discussion of Mayor Villaraigosa’s keynote later this week.
Both keynotes (and many of the panelists as well) centered around the idea that it’s time to move from talk about sustainability to action on sustainability. Peevey illustrated the magnitude of the challenge ahead by outlining the requirements of AB 32. Today, he explained, California emits 13 tons of carbon per person per day. To meet AB 32 goals, these emissions will have to drop to 10.5 tons per person per day by 2020, and to 1.5 tons by 2050. For comparison, 1.5 tons of carbon per person per day is roughly equal to India’s carbon intensity today.
To meet such aggressive goals, Peevey emphasized, radical changes will be necessary. In particular, Peevey expressed a belief that realignment of market forces, while preferred by many major corporations such as Safeway (as we discussed previously in our review of the first panel), will be insufficient to meet the goals and deadlines set by AB 32. As with many of the speakers at the conference, Peevey was unafraid of controversy, stating that while AB 32 has many “command and control” requirements, he believes such strong mandates are necessary to achieve the state’s greenhouse gas reduction targets.
One challenge Peevey focused on was renewable energy deployment, stating that while there have been many recent renewable energy generation contracts, it has been difficult to translate those contracts into actual, deployed projects. Barriers he identified include permitting, financing, and technology risk. Specifically, the issues of transmission line permitting and first costs, CEQA permitting and litigation, and land & water mitigation (to offset the environmental impacts of developing land and using cooling water) are perhaps more difficult to navigate than they should to be.
To work around these barriers, Peevey offered distributed generation as a potential solution. Because distributed generation occurs on already-developed land, transmission lines and environmental reviews are not needed; as a result, distributed generation projects can circumvent many of the pitfalls of utility-scale renewable generation. However, distributed generation requires new methods to compensate customers who choose to sell power back to the grid, such as feed in tariffs (FITs – more on later this week!), or reverse auctions. And these new approaches come with their own problems. For example, in guaranteeing a $/kWh compensation rate for distributed generation, FITs create a large, long-term liability for utilities. Additionally, it can be hard to determine the most economically efficient $/kWh rate, to stimulate development as much as possible yet not overpay.
Speaking more generally about the challenges facing California, Peevey lamented, “it’s awfully easy to vote for a clean environment,” but much harder to summon the political will to pay the costs necessary to achieve that vision. The real challenge facing us today, he reminded the audience, is to move from talk to action. While we at the Alliance feel that there is in fact a great deal that can be done at low or no cost, we absolutely concur that it’s time to get going on sustainability – and we hope our site can help you get started! Use this space to share your experiences – how are you moving from talk to action? And what kind of tools and resources can the Alliance provide you to help?
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