California lessons, continued

July 14, 2022

Lesson # 3: Public investments attract private investments

As Washington state builds a cleaner, more competitive economy, what is the role of private investment and what is the role of public investment? Many believe that states can boost business by investing public funds to demonstrate, incubate, and scale meaningful innovation. 

For evidence of which government programs work, and ideas we can adopt here, Clean & Prosperous Institute led our second study mission to California last month.  We learned so much from briefings and site tours, we want to continue sharing highlights with you here. (If you missed Lesson #1, about dairy digesters, click HERE. If you missed lesson #2, about reducing emissions in overburdened communities, click HERE.)

What we learned

California Climate Investments is putting billions of Cap-and-Trade dollars to work supporting new affordable housing, increasing mobility through transit, advancing low- and zeroemission technologies, facilitating more sustainable agriculture, and more. Across California, these projects are also creating and supporting employment opportunities and improving public health and the environment. Of special note is the fact that at least 35% of these investments are made in disadvantaged and low-income communities. Funding for this division of the California Air Resources Board (CARB) comes from a decade of Cap-and-Trade auction proceeds, something that will be getting started in Washington state next year through the Climate Commitment Act.

These public investments spur innovation.  On the private sector investment side, we ventured out from Sacramento to Silicon Valley in an all-electric tour bus to visit companies large and small and found that they are seizing opportunities funded by California’s Cap-and-Trade program. 

Senator Christine Rolfes tests out Kenworth’s all-electric T680E truck at the PACCAR Innovation Center.

Washington’s own PACCAR, maker of Kenworth trucks, established an Innovation Center in Sunnyvale, CA. On our tour there, Kenworth’s Sean Henebry, Zero Emissions Marketing Manager, shared what they are doing to “drive to zero emissions.” He briefed us on the significance of California’s HVIP (Hybrid and Zero-Emission Truck and Bus Voucher Incentive Program), as well as the EnergIIZE (Energy Infrastructure Incentives for Zero-Emission Commercial Vehicles) program. Both programs, funded in part with Cap-and-Trade revenues, are making it possible for PACCAR to develop and sell zero emission trucks, such as the Kenworth T680E Battery Electric Truck. HVIP accelerates commercialization by providing point-of-sale vouchers to make advanced vehicles more affordable. David Duncan of 4 Gen Logistics in Southern California used the incentive program to purchase 20 all-electric trucks from Kenworth for his commercial drayage fleet. Converting these trucks to electric will reduce carbon emissions while substantially improving air quality in overburdened port communities.

EnergIIZE is the nation’s first incentive project to accelerate the deployment of infrastructure needed to fuel zero-emission trucks, buses and equipment, replacing old, polluting equipment with clean battery-electric and hydrogen options. 

Another highlight of the trip was learning about California’s ZANZEFF project, which helped PACCAR and Toyota to partner on a “shore-to-store” demonstration to reduce carbon emissions from port drayage activities in Long Beach. Toyota’s R&D chief Andrew Lund saidMoving toward emissions-free trucks is more important than ever, and the ZANZEFF project has been instrumental in getting us closer to that goal.

King County Executive Dow Constantine announcing the purchase of a Kenworth all-electric truck on June 9th in Renton.

Because state, county and local governments have significant purchasing power, they can help accelerate the transition from older, dirtier technologies to more advanced clean alternatives not only through incentives but also through their buying decisions. As an example, King County recently announced the purchase of the Kenworth T680E battery-electric heavy duty truck (pictured here with King County Executive Dow Constantine) that will be used to haul garbage. “We are once again catalyzing new markets to accelerate the transition to zero-emission fleets, this time with reliable heavy-duty trucks built right here in King County,” said Constantine. “By leveraging the purchasing power of one of the nation’s largest counties, we are proving to manufacturers that there is strong demand for vehicles that cut greenhouse gas emissions, lower maintenance costs, improve air quality, and reduce noise pollution.

Perhaps the highlight of any trip to San Francisco is a cruise on the Bay. Our group saw Alcatraz and the Golden Gate Bridge from aboard the MV Enhydra, the cleanest boat in San Francisco’s Red and White passenger excursion fleet. This vessel is different from most on the water, as it is a lithium-ion battery plug-in hybrid vessel, built in Bellingham, Washington, by All American Marine. Maritime decarbonization incentives from Cap-and-Trade dollars have also promoted the construction of another Bellingham-built boat, the nation’s first hydrogen fuel cell ferry, the SeaChange.

These are just some examples of how public investments from carbon revenues are catalyzing private sector innovation and investment.  Beginning in the first quarter of 2023, Washington state will hold its first auction under the Climate Commitment Act, generating opportunities here to make similar investments in our net-zero carbon economy of the future.