Powering California’s Economy amid the Energy Transition

Beyond achieving climate goals, California aims to grow the state's economy through its transition to renewable energy. At a recent conference on the energy transition, Tani Cantil-Sakauye, PPIC president and CEO, moderated a discussion on the economic opportunities and challenges created by California's energy policies.

Today, California is "the number one manufacturing state in the country," said Lance Hastings, president and CEO of the California Manufacturers and Technology Association, and continued growth in the sector revolves around the availability of energy. While industry leaders support ambitious changes for clean energy, Hastings cautioned against current strategies and timelines to meet climate goals, requesting greater collaboration: "We'll happily sit at the table to find the best way to reduce emissions, in a way that doesn't disrupt the economy."

Sustaining jobs amid the energy transition has forced the state to take a hard look at its energy reality, according to Lorena Gonzalez Fletcher, president of the California Federation of Labor Unions (AFL-CIO). Despite legislation to phase out refineries, the state continues using oil, especially for cars; furthermore, the refineries have provided middle class jobs.

"When we use California oil … it is the cleanest. It is utilizing the best labor standards in the world," Gonzalez Fletcher said. While California still relies on oil, the state needs to retain refinery workers as well as create "a workforce within renewable energy [with] good middle class jobs, ensuring the same standards [from] the fossil fuel industry are available to the next generation of workers."

Meanwhile, the switch to renewable energy may fuel growth in the building sector because "the amount of building we have to do is massive," said Ana Matosantos, managing director at Boston Consulting Group. "Infrastructure jobs traditionally have been very good jobs. The good news is we have enough land and enough water … to power the grid [we will] need. What we do not have is the pace of building" to do that, which requires clarity, foresight, and flexibility with plans-from training to purchasing.

Cantil-Sakauye questioned how leaders can ensure that the energy transition does not leave any region behind.

With projects like large-scale solar, lithium, and offshore wind, "there is a lot of opportunity for places that we don't normally think of as job centers," Gonzalez Fletcher said. "We have to make sure jobs are subject to the same standards as those that existed before-with collective bargaining, good wages, and health care."

Hastings touted the good pay and career mobility available in the manufacturing sector, saying, "You can have a good job anywhere in the state if it's the right job. The right job is one that contributes to the community and the economy-those are manufacturing jobs."

"Sometimes we think about climate and economic opportunity as being at odds," Matosantos said. "To invest in what we need to fuel our system and our energy, it's a huge opportunity to … expand opportunities across the state. We need land and we need space … it can be a way to help lift up more regions."

"This is an inflection point for California, we're hearing it in the legislative oversight hearings … in the governor's plan," Cantil-Sakauye said. Ultimately, "[the energy transition] will take a pallet of resources," including fossil fuels. "We still have momentum; we want to be smart about that momentum" to achieve California's energy and economic goals.

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PPIC's Speaker Series on California's Future invites thought leaders and changemakers with diverse perspectives to participate critically, constructively, and collaboratively in public conversations. The purpose is to give Californians a better understanding of how our leaders are addressing the challenges facing our state.

PPIC is a nonpartisan, nonprofit organization. PPIC does not take or support positions on any ballot measure or on any local, state, or federal legislation, nor does it support, endorse, or oppose any political parties or candidates for public office. Any opinions expressed by event participants are theirs alone and do not necessarily reflect any position of the Public Policy Institute of California.