California Struggles to Find Ways to Fulfill Its Green Objectives

Last Updated Jan 13, 2010 10:49 AM EST

Despite its image as a haven for the liberal and green-minded, California is having a hard time balancing its various budgetary difficulties with its desire to cut energy use and use more renewables.

Going green isn't going easily for the state, which has the most ambitious greenhouse gas targets in the nation. Initial installations of smart meters have run into customer complaints and lawsuits; transmission projects have been challenged, and the state's own senator Dianne Feinstein has sought to block solar power in some parts of the desert.

Add another, more recent issue: In the Bay Area, where yours truly lives, the local transit system -- one of the better ones in the country, though that's not saying much -- is actually losing commuters to cars. Transit advocates report that a nasty cycle is in the works: as buses and trains cut services in response to the recession, more passengers get in their cars, leading to more budget shortfalls.

In Sacramento, the capital, politicians continue trying to find ways to meet the state's emissions and renewable energy targets, despite the problems.

Yesterday, governor Arnold Schwarzenegger visited Cobalt Biofuels, which wants to make fuel from wood waste, to tout a plan to temporarily remove the state sales tax for green manufacturing equipment. That would also benefit companies like Nanosolar, Solyndra and Tesla Motors, who all plan to expand manufacturing in the state.

A day earlier, on Monday, a state panel proposed returning funds from auctioned carbon permits and higher energy prices to consumers, as much as $1,000 for families of four. However, since the funds would come as tax cuts or delayed dividend checks, consumers would still get high energy bills in the mail, spurring them to reduce usage.

For companies -- other than those making solar panels or electric cars -- all of these moves probably sound rather risky, so business opposition will probably remain strong. And given how things have gone so far, California's efforts might have yet to hit their worst difficulties.