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I had the honor recently of spending an afternoon of deep thinking with California Governor Jerry Brown’s “kitchen cabinet” a group of people from California Governor Jerry Brown’s first administration (and others) interested in energy policy and helping Brown succeed.
I worked in Brown’s Office of Appropriate Technology — a policy incubator in the Governor’s Office — during his first administration. In part because of that experience, I’m cautiously optimistic — about his ability and commitment to get something done in very difficult circumstances. (California’s been using smoke and mirrors to kick huge budget deficits down the road for years.) And I welcome to opportunity to offer some counsel.
In this “open letter” to Governor Brown, here’s what I suggest he say to the people of California. (I wouldn’t mind other governors borrowing from it; I don’t think he would mind either. 😉

Fellow Californians,
I’m mostly thinking about two things these days:
1) How do we solve the financial crisis we’ve inherited, caused by decades of kicking the can down the road, of thinking about today at the expense of tomorrow, instead of dealing with things as adults.
2) What California is going to look like 50-100 years from now.
You’ve heard my plan for the first. Here’s my plan for the second.
The key: Investing in critical infrastructure for the economy of the 21st Century.
California’s historic success — as an economic engine, a fountain of innovation and creativity, and a mecca for millions — came in large part from the investments we made in the critical infrastructure for the economy of the 20th Century: roads and highways, the State Water Project, a great university system.
There’s a temptation in times of economic difficulty to focus on the belt-tightening and neglect the investment. Both — belt-tightening and investment — are necessary. We have only to look back to the investments this country made in the depths of the Great Depression of the 1930s. The WPA and CCC and other programs built, fueled as much by will as by money, built much of the infrastructure — roads, bridges, buildings, schools, parks and more — that we have all taken for granted. We have the opportunity and the responsibility to do that again.
There are five key components to this investment: the green economy, education and workforce development, trade leadership, protecting the breadbasket
California has long been a world leader in the green economy, with four decades of imaginative, pragmatic, bipartisan leadership in energy and environmental policy. Our energy and climate policies will reduce waste and cost for our businesses, making them more competitive in the carbon-contrsained future we all face; they will cut cost for consumers that get with the program and reduce their own energy waste; and they will continue to improve quality of life for us all.
But it’s not just about energy. Water, agriculture, transportation, and community and economic development all interact in a tightly knit web of impacts. As just one example, managing water accounts for nearly one-fifth of all energy use in California; water issues ARE energy issue. The wisest, most effective and most economic actions will take these issues and their interactions, into account. We need to take a carful look at six key policy changes that can help bring that about.
Green Chemistry
California has been making world leading effort rewriting toxics regs with the inspiration of the Cradle to Cradle protocol. There’s been some recent lobbying drama, but it’s essential to get this one right. There’s an opportunity for world-leading leverage, as we’ve done with AB32. There’s great actualbusiness interest (and habitual business resistance) to carve out leadership in the emerging green chemistry markets — which will be big.
Kill pollution subsidies
In what ways does government policy — or worse, government spending –subsidize pollution by letting companies avoid cost and liability? If we don’t know, let’s find out where, and stop it. (There’s a synergy possible here between fiscal conservatives and environmental progressives.) One way to address this is through extended producer responsibility (EPR). There’s been recent legislation across the country, and even more recent policy proposals, including Natural Logic’s EPR White Paper.
Tax shift
Institute a revenue neutral tax shiftto reduce taxes on corporate and personal incomes and increase taxes on resources and pollution. AB32 is part of the story, but not enough. Key to this: eliminate or sharply limit carbon allowances to legacy producers under AB32. There will have to be a phase in (hitting them with the full charge all at once could be extremely dislocating) but there should not be a giveaway. It’s not sensible — financially or ethically.
Green business assistance
Small business, the source of innovation and jobs, lags behind business in green implementation, as a result of limited knowledge, R&D capacity, and credit. All these could be addressed by leveraged state efforts: use state agencies (business as well as “environmental” agencies) as channels of information and support to local green business certification programs; encourage financial institutions to provide bridge financing. There’s a role for the University of California (and CalState University — along the lines of the old California Energy Extension Service) in many of these.
Performance-based regulation
This is another opportunity to gain business sector support for aggressive environmental initiatives. When you get down to it, businesses don’t object to “regulation” as much as they object to burdensome regulation and regulatory uncertainty. Streamlining regulation to focus wherever possible on performance rather procedure can reduce regulatory costs for government as well as for business, reduce burdensome reporting requirements and better protecting environment, health and safety, all while driving — not constraining — innovation. Coupled with open data initiatives, this could open the door to pioneering innovation in real time regulationand also provide a boost to California’s tech industry.
Open Data
Following in the path of the US Federal Government (http://data.gov) and the British Government (http://data.gov.uk), make http://data.ca.gov a leader of the burgeoning movement for government transparency. Doing so can automate important functions of regulatory compliance (that are currently human resource intensive), dramatically reducing costs — for both government and industry. (Cost reduction and ease of use are critical factors that will determine whether the State will be able to successfully implement and enforce AB32 and the Green Chemistry laws). As bonus benefit, data.ca.gov would further fuel new green tech innovation and jobs in Silicon Valley and throughout the state.

(Disclosure: I chair a startup, Open Data Registry Inc., that holds some key enabling open data technology.)