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CalChamber Recommendations for California’s Climate General Obligation Bond

Climate Environment Water WInd 300x180 1The California Chamber of Commerce recently submitted recommendations for changes to a potential general obligation bond measure being considered by the California Legislature that would finance infrastructure to mitigate and address impacts from a warmer and more volatile climate.

In its letter, the CalChamber urged investments in clean energy and water supply infrastructure to ensure California not only meets its ambitious climate goals, but also furthers economic growth. The Legislature was recommended to approve a climate bond that includes funding for:

  1. Water infrastructure;
  2. Support for hydrogen refueling infrastructure;
  3. Carbon capture technology; and
  4. Port infrastructure to support the development of offshore wind resources.

“Successful deployment of these technologies can generate tens of billions of dollars in economic activity and tens of thousands of jobs,” the CalChamber said. “Voters have recently been reluctant to pass additional spending measures absent demonstration of direct benefits to their communities and the economy. No bond measure will succeed unless voters are convinced that their economic well-being will be satisfied, along with the environmental goals.”

Water Infrastructure

The CalChamber recommended funding for the following four key items:

  • The Healthy Rivers and Landscapes Agreements. Previously called the Voluntary Agreements, this modern approach to improving water quality, habitat, and water supply reliability in the Sacramento-San Joaquin River Delta area includes state and local water district financial contributions to habitat restoration and continuing research into the complex hydrology of the Delta. The Delta is a critical and vulnerable hinge-point for the state’s water supply, and work done here to improve quality and reliability will benefit all of California.
  • Repairing Levees and Conveyance. Water conveyance and flood protection infrastructure is aging and vulnerable to catastrophic failure due to conditions like long-term subsidence. This not only creates significant reliability concerns in the event of a disaster like an earthquake, but also means more energy is required to move water through damaged canals.
  • Water Storage. Severe drought followed by flood events shows the importance of capturing and storing water when it is available in anticipation of the dry times. Even as the state needs more storage, several reservoirs are unavailable while awaiting seismic retrofits. The bond must include funding to support both new and improved water storage, both above and below ground.
  • Drinking Water Treatment Upgrades. Standards for drinking water safety are becoming more and more stringent in California. Meeting these high safety standards requires significant upgrades in treatment facilities, which is very expensive for water providers. The bond must include funding to help offset these costs, which will keep water rates affordable for all Californians.

Without the necessary investments, California is likely to lose up to10% of its water supplies over the coming decades. Modernizing the state’s water infrastructure is a key component to job growth in California and is a critical requirement for the development of new housing stock, the CalChamber pointed out.

“With affordability hinging on housing costs, investing in water infrastructure today is a key step toward making life in California more affordable tomorrow. This investment helps ensure that communities will have reliable and safe drinking water supplies long into the future,” the CalChamber stressed.

Carbon Capture

Accelerated investments in Carbon Capture and Storage (CCS) will be needed for the state to meet its goal of becoming carbon neutral and to reduce its statewide emissions 85% below 1990 levels by 2045.

Larger stationary sources in California might not have access to both the Low Carbon Fuel Standard (LCFS) and 45Q tax credit and might not see any economic benefit in investing in CCS. This is because LCFS is weighed toward transportation rather than stationary sources of emission.

The Climate Bond offers an opportunity to create added incentives for investments in CCS. Investment in CCS will enable facilities to reduce emissions, likely preserving thousands of good paying jobs and leading to the creation of thousands more, the CalChamber said.

Offshore Wind

The climate bond should also allow voters to consider investing in seaport infrastructure, which offers both economic gain while advancing clean energy goals.

The state’s ambitious targets for offshore wind generation will require a massive investment in port infrastructure to serve offshore facilities. At a minimum, the Legislature should include $1 billion for port infrastructure readiness investments in the proposed climate bond. This will signal to the offshore wind developers that the state is a willing partner in a clean energy transition that presents a path toward high-paying jobs at port infrastructure projects throughout the state.

Hydrogen

California’s proposed greenhouse gas emissions reduction targets will require a transformation of the transportation sector not seen in more than a century. Currently, California’s transportation sector accounts for about 40% of the state’s greenhouse gas emissions.

California can achieve this ambitious economy-wide decarbonization goal only by welcoming an “all-of-the-above” investment strategy that focuses on the goal of reducing emissions rather than preferring some technologies over others, the CalChamber said.

A goal-focused, technology-neutral strategy would include hydrogen refueling infrastructure, which should be a part of any climate bond, especially investments targeted toward the medium duty/heavy duty sectors. Cost-effective and reliable transition of these sectors is vital to support business growth and maintain a healthy supply chain, which in turn will garner support from the broader business community, as well as from voters.

According to the California Air Resources Board (CARB) 2021 hydrogen refueling self-sufficiency analysis, dedicated resources totaling just $300 million would bring a level of self-sufficiency to the medium-duty and heavy-duty hydrogen refueling infrastructure. This is in part because of the significant federal investments that have been made combined with private investments.

Studies have shown that for every dollar the state spends on hydrogen mobility, private investments total between $5 and $6.70. Those investments lend themselves to high-paying jobs as well.

The Biden Administration recently announced that California is the recipient of $1.2 billion  to establish a hydrogen hub in California. This is largely due to the fact that California has long been a leader in advancing innovative solutions that can advance both our economy and our environmental goals.

California’s historic public-private partnership through Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES) played a critical role in the Biden Administration’s decision in awarding California a hydrogen hub. Through this partnership, California has set forth a clear path to achieving our ambitious climate targets. Additional investments to support California’s hydrogen hub could ensure that the state is able to achieve a target of 200,000 new jobs to be created. Hydrogen represents a real opportunity to further advance California’s clean energy workforce as that workforce will be needed for production, delivery, storage, and end-use solutions.

“California can achieve its ambitious climate goals with balanced approaches that attract new investment, foster job creation, and provide the foundation for continued economic growth,” the CalChamber said. “Voters have consistently responded well to policy proposals that advance economic growth and ensure reliable water and energy supplies, and we encourage the Legislature to incorporate funding to support these initiatives.”

Staff Contact: Ben Golombek

Ben Golombek

This post was originally published on this site

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