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How Business Advocacy Pushed California’s Progressive Climate Policy

November 10, 2017

By Zachary Slobig - Skoll Foundation

On a windy morning this past July, California Gov. Jerry Brown signed a bill to extend that state’s historic cap-and-trade program to 2030, doubling down on climate action just months after the Trump administration announced its plans to withdraw from the Paris climate accord. Brown stood behind a podium on Treasure Island in the San Francisco Bay, oil refineries visible in the distance, and told the crowd that just a few weeks prior, the prospects of the bill passing were dismal.

“It’s a little bit of a mystery of how this happened,” he said. Brown credited the unlikely backing from a broad array of the business community for the bill’s success. “It’s people representing oil, agriculture, chamber of commerce, food processing, Foster Farms, Gallo Winery, environmentalists, the whole crowd,” he said. One California lawmaker called the bill a “legislative unicorn” because of the diversity of support from entities often at odds.

Kirsten James, director of California policy and partnerships at Ceres (2006 Skoll Awardee), recently stopped by our offices in Palo Alto to offer some clues to how this climate policy success was accomplished. Ceres is a sustainability nonprofit organization working with powerful investor and business networks to tackle the world’s biggest sustainability challenges, including climate change, water scarcity, and pollution. In California, a top priority for Ceres has been to protect and strengthen climate policies limiting greenhouse gas emissions put in place by former California Gov. Arnold Schwarzenegger in 2006.

The cap-and-trade program, says James, is a big piece of the puzzle of how California will achieve its goal of a 40 percent reduction below 1990 levels of greenhouse gas emissions by 2030 and the program can be replicated elsewhere. “Ceres really sees an opportunity to use California’s successful market-based based approach as a model for other sub-national settings,” she said. “By all accounts, it’s working in California. We’re ratcheting those emissions down.”

California’s cap-and trade-program is now partnered with two Canadian provinces, an expanding “carbon market” that creates bottom line incentives for climate action—companies can buy and sell allowances that permit a certain amount of emissions. A legislative push in Oregon could create a cap- and-trade system there next year, and nine New England states have a regional compact to reduce emissions through a similar market-based program called the Regional Greenhouse Gas Initiative, or RGGI. “Market-based approaches have been used for a long time globally,” said James. “But it’s really picking up steam here in the States.”

Through the Ceres BICEP Network, Ceres builds strategic alignment across sectors and within large and influential companies to advocate and advance stronger climate and clean energy policies. Bipartisan support for California’s ambitious climate policy is an outcome influenced by the leverage of that powerful network. “As we do in many of our policy engagements at Ceres, at both the federal and state level, we work with individual member companies to advocate,” said James.

This advocacy can take many forms. In the case of California’s cap-and-trade extension, Ceres worked with Trillium Asset Management—responsible for the investment of $2 billion in assets—to voice its opinion in the San Francisco Chronicle as the bill was in mid-discussion. Another partner, Dignity Health, one of the nation’s five largest healthcare systems, met with lawmakers in Sacramento to urge continued action. “It doesn’t matter whether a member is a health care organization, a textile company, or a food and beverage company; it is our story to tell together,” said Rachelle Reyes Wenger, director of public policy and community advocacy at Dignity Health. “We have to articulate the impact of climate change on our mission and business.” Executives at Clif Bar explained to lawmakers how the changing climate and water scarcity has impacted the California almond crop and the Clif Bar supply chain.

“Usually when these companies meet with legislators it’s about tax policy or other traditional business concerns,” said James. “It’s eye opening to bring in businesses on environmental legislation—it’s powerful to have different messengers.”

The bill passed with a two thirds super majority—but just barely—and is now seen as a promising international model of achieving aggressive emissions reductions. “We had to get folks from both sides of the aisle, so that was a challenge,” said James. “But it’s quite the message that California put forward a very progressive climate policy.”

This week and next, Kirsten James and her colleagues at Ceres are leading a delegation of U.S. investors, companies, and state lawmakers—including California Gov. Jerry Brown—to the 23rd session of the United Nations Conference of the Parties, or COP 23, in Bonn, Germany to showcase the power of sub-national actors to push ambitious climate action. To join the conversation, tune into the live webcasts from the U.S. Climate Action Center, or follow live Twitter updates via @CeresNews.

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