California Green: Promises and Pitfalls on America’s Environmental Frontier

California Green: Promises and Pitfalls on America’s Environmental Frontier
Arnold Schwarzenegger, Governor, State of California

Notes from Wall Street Journal ECO:nomics Conference
Santa Barbara, California
March 12-14, 2008

Schwarzenegger described alternative energy as a boon for the California economy -- certainly a very wise business decision to nurture it from a sustainable economic perspective. Generally speaking, Schwarzenegger came across as a savvy business man who was working through the challenging organizational politics of getting anything done in government.

He explained that a Carbon Cap like the one instituted in California sets a standard of acceptance - and attributed GE’s decision to lobby in Washington for a National Cap to the success the company experienced in sales of (I’m assuming) Ecomagination products in California.

The Business of Government

Schwarzenegger spoke about the need to reengineer [excuse me for using a business term] the California state budgeting process so that it allowed for more long term stability rather then defensive reactions to economic shifts.

He described his role in Sacramento as the “Tax Terminator” – this of course got a laugh from interviewer Kimberley Strassel of the Wall Street Journal Editorial Board. According to Schwarzenegger taxes were being issued to deal with deficits that were a result of poor financial management. He stated emphatically that we need to fix the budget system because the process was simply flawed. The issue needs to be addressed so that the rest of the important issues in California can be addressed.

I personally found it rather ironic; he sounded as if he'd been prepped well by a solid speech writer who had been at the conference from the beginning. He was basically repeating the same message that the CEOs delivered when explaining the need for Carbon Caps. It's very difficult to make spending decisions when you don’t know how much you have to work with (in the case of the California Budget) or if you don’t have a baseline for evaluating the value of how much you have to work with (in the case of companies trying to determine an effective strategy for achieving share holder value, while making significant new technology investments to meet existing and new demand while reducing waste/increasing efficiency).

Schwarzenegger provided a few nice quotes. “We need to hand this world to the next generation in better shape then we inherited it.”

I particularly enjoyed his response to an audience comment, when he stated, “We don’t want to force anybody to do anything.” Schwarzenegger at that moment sounded like a seasoned change management consultant, going on to explain that you can never force anyone to do anything. Instead Schwarzenegger talked about modeling - Do! and Inspire! - Using the words inform, guide, demonstrate, and good ideas. He reiterated that Washington needs to recognize that this is important. We need a vision for a country and world. We need to come up with an energy policy where we are not reliant on fossil fuels. “It’s all about technology.”

John Bryson, Chairman, President and CEO of Edison International, was called upon to comment and touted the success experienced by Edison in California. Schwarzenegger passed the accolades back, exclaiming we need to come together and we need good partners to get things done.

What About Nuclear?

This was a common question. All of the CEOs had stated that nuclear should be on the table as a possible option. There was a lot of reiteration that we need to consider all the options if we want to be able to transition from current use plus new use (from growing population and growing energy using appliances) to an 80% reduction in CO2 by 2050.

The reason that everyone generally seemed to agree that nuclear should go back on the table was because of the tremendous reduction of nuclear waste that had been achieved as well as a belief that the capacity to store the minimal waste that was left was feasible and something that should be evaluated as a possibility.

A Slow Process to Get Things Done in a Consensus System

When an audience member asked, “how are we going to get utility grade and scale solar into the grid (referring to current “Caps”)?” Schwarzenegger provided an entertaining comment. He explained that in government it’s much more difficult to get things done than in private industry. He asked the audience to imagine the governor's role as that of a painter having to consult with 120 artists (legislators) on how to make a stroke of paint. Consider the complexity of selecting color, thickness, weight and texture, the discussion of every aspect considered, an approach that has its benefits but takes a much longer time to get anything done.

Reconciling a Love for Big Cars

Another really fun aspect of Schwarzenegger’s interview was his response to the recurring question about what the speakers are doing in their own lives. Schwarzenegger answered that he loved big cars and admitted that he owned 2 Hummers. One had been converted to run on Bio diesel, the other he apparently fitted with a test hydrogen engine. Schwarzenegger added that he had a third car that had a special engine that recycled its exhaust and converted it into Hydrogen which could then be reprocessed through the engine. Finally, the hill by Schwarzenegger’s home had been fitted with Solar panels as well.

Another question that came from the audience was whether government can help with solar energy transmission issues. Apparently the issue so far has been the physical environmental impact of running wires and creating eye sores. Schwarzenegger agreed that there is a need to build more delivery lines. Uniformity and certainty in the laws was desired.

Schwarzenegger reiterated that the government consensus decision making process takes more time.

I personally found the conference generally optimistic. We have some really solid leaders in our industry leading companies who are in touch with the realities of the issues, would like to have more information, resources and support in helping them figure this out, and who, regardless, are each deeply committed to figuring out what each of their companies is going to do...

Why? -- Because this is the unquestionable reality of today’s business context…

There is simply nothing more to it….

About the author; Revi Schlesinger heads RVN Consulting, a network of experts aligning to support the success of large-scale corporate sustainability integration initiatives. Continue the conversation at www.ReviSchlesinger.com/blog.html