August 19, 2016 - From the August, 2016 issue

Senator Fran Pavley – TPR Exit Interview Proves that with Focus and Leadership, Government Works

In 2000, a career teacher who served as the first mayor of the City of Agoura Hills ran for the state Assembly. Fran Pavley, outspent 2 to 1 in her 2000 primary race, won her way to Sacramento and has left an extraordinary legacy spanning a 16-year career. As her last legislative session comes to a close, Senator Pavley is working on a portfolio of bills to extend California’s climate programs beyond 2020 and provide certainty to renewable energy and low-carbon business ventures. The author of the historic AB 32, Senator Pavley shares with TPR her perspective on recent efforts to advance climate legislation and protect water and natural resources, as well as the political lessons she learned in the Capitol.


Senator Fran Pavley

“The point of SB 32 is to strengthen our existing commitment to addressing climate change. This particular legislation takes Governor Brown’s executive order that set a 40 percent emissions reduction target by 2030, and puts it into statute by the Legislature.” - Senator Fran Pavley

You successfully passed AB 32 in 2006, as well as many other bills related to climate change and clean technology—around the same time we began VerdeXchange. California’s globally recognized leadership on climate change rests in great measure on your early legislative victories. Your perspective on what’s evolved regarding policy/regulation over the last 10 years would be most welcome.

Fran Pavley: Since I was elected in 2000, I’ve focused on several key policy areas—namely water, energy, and clean technology—that I believe help our environment as well as our economy.

AB 32, the Global Warming Solutions Act, has been tremendously successful. Its components are all things that many of our agencies and the public had already been working on for years: energy efficiency in buildings, energy-efficient appliances, and cleaner, more fuel-efficient cars. AB 32 set the standard of reducing our greenhouse gas emissions to 1990 levels by 2020, and paved the way for the creation of cap-and-trade. The emission-reduction targets in AB 32 have been successful because we did it in a cost-effective, technologically feasible way.

AB 1493, the first legislation in the world to regulate greenhouse gas emissions from passenger vehicles—which I authored in 2002—has become the basis for a national standard for cleaner fuel-efficient vehicles. We’re seeing a robust automobile market for foreign and domestic automobile manufactures and a broader variety of consumer choices for new cleaner cars.

On water policy, I’ve chaired Senate Natural Resources and Water Committee for the last eight years, and served six more years on the corresponding committee in the Assembly. Climate change, clean energy, and water have been my primary areas of focus. Obviously, there have been other interests along the way. It’s been a very productive 14 years.

In the current political discourse, especially in the current presidential race, anti-government rhetoric is common. But your track record is a strong rebuttal to the notion that government doesn’t work any. What is the role of government in addressing climate change and air quality?

We understood, back in 2006, that the best way to achieve our goal of reducing carbon emissions was through a strong market signal for investment and innovation. Facilitating new technology, and new business, would be good for the economy and good for the environment.

Because of those market signals, we saw 60 percent of all the venture capital dollars in the US come to California. CEOs of major solar companies in California have said very clearly that they are successful because of the renewable portfolio standard created in AB 32. They’ve created more than 75,000 jobs here. They have successful business models. They’re in almost everyone’s districts, including several in the Los Angeles area. They’re offering financing options, and people are able to reduce the costs of their utility bills.

We have an amazing record of success from this particular measure. When talking to businesses, it’s all about market signals and providing flexibility in the way to meet the target reductions. Then, it’s often about getting out of the way and watching them exceed our expectations. 

You were successful last year in addressing management of the state’s groundwater. Please share the progress with our readers.

I spent all 14 years in office on the Legislature’s water committees, and I’ve worked on a lot of water quality measures. In the 2014 water bond, I was able to allocate money for things like stormwater capture and reuse for the first time in California’s history.

Scientists are saying that we’re going to start experiencing longer periods of drought. We’re not going to always be able to count on the Sierra Nevada snowpack. The snow level is decreasing every year, meaning less runoff during the long, dry, hot summers.

As a native Angeleno, it is difficult to see, when it rains—or maybe I should say if it rains—all the water rushing down the LA River and out to the ocean.

We’ve got to be smarter. We need smart investment in water in supply and water quality at the local level. We need to become as sustainable as possible and start using water, not just once, but twice or three times.

Another priority I put into the water bond is addressing our contaminated groundwater basins. If we cleaned up the contaminated aquifer in the northeast San Fernando Valley, it could potentially supply one-quarter of the City of LA’s water needs.

Groundwater is important to the rest of the state as well. Here’s a surprising statistic—or at least it was for me: During drought-like years, 60 percent of our state’s water supply comes from our groundwater basins. California has 515 groundwater basins, 125 of which are severely overdrafted, which means we’re taking out more water than is being replaced.

Last year I worked on the Sustainable Groundwater Management Act, which is now in effect. Over several years, as agencies are formed they will comply with a groundwater management policy that, over a period of time, will manage the groundwater basins so we’re not affected by such severe overdrafts.

A particular challenge to groundwater management in California is property rights: All overlying property owners have access to the groundwater basin below them. In many basins that aren’t managed—which is the vast majority of them—whoever can drill the deepest well can take the most water, leaving their neighbors high and dry.

In the Central Valley, in areas like Porterville, hundreds of thousands of Californians have inadequate access to water. Groundwater management is incredibly important, not just to the environment, but just as important to the economy of the state, too. 

Share your California legislative success in reducing greenhouse gas emissions, the “Pavley Standards.”

Fifteen years ago, as a freshman in the Legislature, one of my first bills was a simple idea: Lowering greenhouse gas emission reductions by reducing tailpipe emissions. It turned out to be controversial, with auto companies, auto dealers, and auto manufacturers all opposing it.

One of the biggest arguments against it was that our policy would be different from the policies of the other 49 states. General Motors, for example, didn’t want to make one kind of car for California and a different model for everywhere else. They kept saying to me: “We want a national policy.”

But we went forward with our state policy. And after withstanding lots of court challenges, 14 other states adopted California’s regulations.

I was able to attend the historic ceremony to see President Obama, surrounded by all the major automobile manufacturers—foreign and domestic— announce that California’s policy would be the basis of a new national standard.

The irony is that after years of lawsuits arguing that they couldn’t meet the standards; the automobile sector has surprised us by doing more than we ever thought they could. They’re economically successful. They’re creating a broad array of new cars for the future. And for the last several years, they’ve been inviting me to the LA Auto Show to show me all the new cars they’re producing. In fact, I’m proud to say I was even named “Legislator of the Year” by the Automobile Alliance.

Representing California’s 27th Senate District, the Santa Monica Mountains long have been a natural focus of yours. Of what are you most proud?  

At the local level, one of my passions has been the importance of outdoors and open space to the public—not only because it helps improve our air quality, but for local recreational programs. I taught middle school for years and was involved in outdoor education, so I’m passionate about that.

Throughout my tenure, I served on the Natural Resources Committee, and on the Santa Monica Mountains Conservancy Advisory Committee. I was able to help prioritize the acquisition of Ahmanson Ranch and King Gillette Ranch.

If you compare a map of the Santa Monica Mountains from 40 years ago to one made today, you’ll see that more than 150,000 acres have been acquired as open space, whether through the national or state park system, the Santa Monica Mountains Conservancy, or local governments. It’s a wonderful patchwork quilt of open spaces for the City of Los Angeles, and it’s the largest urban park in America. A lot of it is wilderness, but there are also recreational components to meet all interests and all needs, from the recently opened 65-mile Backbone Trail to areas for bicycling or picnicking. 

We could go on and on about your legislative successes; but let’s now focus on the present termyour last term. In a sense, you’ve come full circle with Senate Bill 32 now being determined by the legislature. Speak to SB 32’s impact and legacy.

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The point of SB 32 is to strengthen our existing commitment to addressing climate change. This particular legislation takes Governor Brown’s executive order that set a 40 percent emissions reduction target by 2030, and puts it into statute by the Legislature. Executive orders are well and good by the governor, but governors come and go. A statute provides enforcement ability and a strong market signal, both of which are necessary to make sure that these targets become a reality.

The major businesses that I’ve talked to—for example, the Silicon Valley Leadership Group—want to know that people will still be investing in alternative fuels in the future. They need certainty that the Low Carbon Fuel Standard and similar policies will be in effect post-2020.

It’s incredibly important to place the executive order into statute.

Governor Brown has opened a committee to raise funds for a possible initiative in two years that would take the state’s climate program, including cap-and-trade, to the ballot in 2018. Senator, what are your thoughts on the merits of the ballot initiative vs. negotiation with the Legislature on climate policy renewal?

The governor is working very hard to ensure legal certainty regarding the cap-and-trade component of AB 32.

One potential legal challenge AB 32 faces is when voters approved Prop 26 a few years ago; Prop 26 classified certain fees as taxes, which means the Legislature may need to pass them by a two-thirds vote. SB 32 is proving to be politically challenging because we will probably need to have all the Democrats supporting the measure, plus a handful of Republicans, in both houses.

In my view, the ballot initiative is a good idea, but it should be a distant Plan B. The vote wouldn’t take place until November of 2018. That means businesses wouldn’t know from now until then whether these policies would be in place. But businesses are making choices right now.

I recently visited AltAir in Paramount, and they’re talking about expansion. But if they’re waiting on Low Carbon Fuel Standards or market signals to be renewed via a ballot measure, they may choose to wait. If you were a business owner in that situation, would you invest in expansion with all of this uncertainty?

If I were governor, I would start by sending a strong signal with the emissions targets right away. I would want businesses to know that those executive orders will be around in 2030, and that gives businesses the clarity they need for the next 14 years. Then I could spend the next year or two figuring out how to get cap and trade through a two-thirds vote of the Legislature.

You’ve also been deeply involved in other clean energy and climate legislation, including a bill you authored regarding increasing energy storage. Although the bill, SB 886, was held in committee, elaborate for our readers what needs to happen to increase the use of energy storage and achieve California climate and clean energy goals.  

There was an article in the L.A. Times’ Business Section the other day about a German company in North Hollywood. They are really doing extremely well in selling battery storage for residential customers. One of the challenges for renewable energy, and the reason we’ve had problems ramping it up and have to supplement it with large amounts of natural gas, is that we need storage.

The wind doesn’t blow 24/7 and the sun doesn’t shine 24/7, so it’s all about storage. If I were an investor, I’d put my money in storage. And here’s this local business doing extremely well in the residential sector, so a homeowner or a business could have solar panels on their roof, have a storage component, and pretty much have control of their energy situation and reduce their utility bills over time, and certainly not be subjected to the volatility of whether Aliso Canyon will stay open or not.

Aliso Canyon is in my district. We found, with that natural gas leak, and it being the largest natural gas reservoir in California and supplying the power for 17 of the power plants in Southern California, that we’ve become so dependent on natural gas—on this one particular facility—that we’d better start figuring out other options to reduce our dependence on natural gas. Not only is it a fossil fuel, but also I’m more concerned about having our energy needs and economy potentially held hostage if that facility goes offline. What are some alternative options? That’s why it is incredibly important to ramp up the amount of storage within the state’s renewables portfolio.

Los Angeles, I know, would love to do more in renewables. They’re doing a great job of ramping up renewables. But one of those obstacles is the battery storage component.

Your career in public service parallels that of Mary Nichols, Felicia Marcus, and Governor Brown, who have been active on these issues for decades, and whose successes rest in part on your legislative successes. Can you speak to the value of their policy expertise that comes with long tenure, that’s really difficult to replace and respond to current term limits?

When I first came into office in the Legislature, I had this moment of panic: There are so many issues that I could address in this state, a state of 38 million people—more than all of Canada!

Fortunately, then-Senator Sheila Kuehl gave me some advice. She said, “Pick two or three areas of interest that you’re passionate about. Become a leader in those issues. Focus on them and make them your priority, and you can make a difference.”

It was very good advice. I focused on transportation, education, water, and energy throughout my 14 years in office. It has helped me to be more effective and productive, and to develop relationships with people in key agencies

California is unique in the nation for the expertise we have in our agencies. We have some of the best agencies in the world implementing policies—led by leaders including Mary Nichols and Felicia Marcus, two amazing people who I idolize and love working with. It’s important to understand that these policies take years to implement, but legislators have term limits.  

When it comes to the drought, the underground injection control program, and groundwater management—Felicia Marcus is on top of it. She has been, and will be, a tremendous steward for these programs over many legislative terms. Similarly, Mary Nichols has done amazing work—in Jerry Brown’s first term and now back again. You just can’t beat that type of knowledge.

There’s no doubt that California is the great place that it is in large part because of the commitment and expertise of our long-term policymakers. That being said, I think it’s also very important that the Legislature is engaged, not only in oversight, but being able to own and support these policies that are needed.

If you were to leave a letter in your drawer for your successor (and you’ve campaigned for your staffer Henry Stern to succeed you), what would be the top three things you would recommend your successor carry on with?

Hire good staff, because you have to learn to delegate. You’re going to have so many issues in front of you every day; you can’t be a master of all.

Our constituents elect us, so paying attention to your district and constituents is important.

And I would reiterate what Sheila Kuehl told me: Pick those two or three issues you’re passionate about—and I’m guessing with Henry it might be energy, environment, and maybe transportation issues—and make a difference in those policy areas.

People in California who are interested in public service should know that, with perhaps a 12-year commitment to public policy, you can make a difference.

Lastly, what civic role are you contemplating assuming after you leave the State Senate?

Other than going to the VerdeXchange Conference?

I haven’t figured it out exactly; I’m still so busy. I’m very interested in water and energy policies, and I would like to work in the policy world, but I’m not running for any other office.

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