Region is primed to profit from U.S.-China deal on climate change

Doug Henton
Doug Henton

The worldwide market for clean technologies will benefit from the historic pact between the U.S. and China to accelerate carbon emission reduction efforts. Northern California – already a leader in the state’s world-class clean economy – is well positioned to profit.

Nearly 60,000 people in the Bay Area and 14,000 in Sacramento are currently working in the state’s core clean economy, which includes businesses that provide the products and services that allow the entire economy to transition away from fossil fuels and use energy resources more efficiently.

Northern California is ground zero for information technology, venture capital investment, world-class research institutions, entrepreneurial spirit and forward-looking utilities. Since the region’s clean-tech economy is already up and running, it’s more than ready to expand capacity, according to two new reports by Next 10 and Collaborative Economics. Expanded capacity is exactly what the world’s two biggest economic powers will need to meet the demands of their recent agreement.

The reports show how Northern California is leading innovation in advanced transportation, energy storage, building energy efficiency and residential solar in particular. California has demonstrated over the past several years that market certainty for the clean-tech sector, created by forward-looking policies such as Assembly Bill 32, can help attract investment, spur innovation and drive new business creation.

We have already seen how agreements that set goals for emission reductions, energy efficiency or clean energy – like the U.S.-China deal – have helped our local economies. For example, through an executive order in 2012, Gov. Jerry Brown called for new or renovated state buildings to achieve the U.S. Green Building Council’s LEED silver certification or higher by 2025. This is increasing the energy efficiency of commercial buildings in Sacramento and elsewhere.

Solar in the region has received a boost from a mix of policies, incentives, innovative business models and entrepreneurs. Local municipalities have approved incentives for solar installation, and progressive utilities such as the Sacramento Municipal Utilities District allow customers to buy power produced at a local solar farm. New data show that residential solar grew sixfold in Sacramento between 2007 and 2013 to a total of nearly 33 megawatts.

The city of San Jose demonstrates how strategic partnerships can also drive growth in the clean energy economy. Through a partnership with the nonprofit Prospect Silicon Valley as well as Cisco and Siemens, San Jose is launching an innovation zone where companies can test and showcase their technologies in living labs. Companies will test smart streetlights, devices to improve pedestrian safety and automated traffic systems.

Meanwhile, the city of San Francisco is developing its electric vehicle infrastructure. In 2008, it was the first city in the world to install ChargePoint stations for its vehicle fleet and offered residents with electric cars free charging through the end of 2013. Such programs are one the reason why the Bay Area is now home to about 11 percent of all the plug-in electric vehicles in the United States.

Northern California is a leader in clean technology development and deployment. The new U.S.-China climate change pact will no doubt open up new markets and strengthen existing ones. Northern California will have a jump on the competition to serve these markets because our region began working strategically decades ago to develop a strong clean energy economy.

F. Noel Perry is a businessman and founder of Next 10, a nonpartisan nonprofit seeking to foster a deeper understanding of critical issues facing California. Doug Henton is chairman and CEO at Collaborative Economics, which analyzes the clean economy for businesses, foundations, government agencies and others.