California governor Gavin Newsom is being talked up as a future US presidential candidate. In the meantime, he is wrestling with climate change and locking horns with oil companies
On January 7 2019, in his inaugural address after being sworn into office, California governor Gavin Newsom wasted little time before taking aim at the dying throes of President Trump’s administration.
“There is an administration in Washington hostile to California’s values and interests,” he said, before doubling down on the federal government’s climate strategy.
“Where Washington failed on the epochal challenge of climate change, California led,” he claimed, citing progress made under his predecessor, governor Jerry Brown, which included setting stringent goals for slashing greenhouse gas emissions.
Four years on, California’s 40th governor — who is viewed as a potential challenger to President Joe Biden in next year’s presidential election, or as a contender in 2028 — leads a state that is on the verge of becoming the world’s fourth-largest economy, according to multiple estimates.
Climate is at the centre of California politics. Three in four Californians view the state’s role as a world leader in tackling climate change as important to them, according to the Carnegie Endowment for International Peace.
Roughly 45 bills related climate and clean energy were signed into law by Newsom this year, a spokesperson confirmed. These include the infrastructure, climate, and clean energy bills.
“Governor Newsom has really responded and listened to what the public cares about,” says Laura Deehan, state director at non-profit Environment California. “A lot of the bold goal-setting and action that he’s taken has followed one of these extreme weather events.”
Deehan notes that Newsom announced that the state would phase out gasoline-powered cars by 2035 following one of its worst wildfire incidents. This “really jumpstarted the rest of the country in that direction,” she says.
Wildfires, in particular, are costing Californians dearly. In May, State Farm Insurance — the largest property and casualty insurer in the US — announced that it would no longer offer new home insurance policies in California owing to wildfire risk.
“We recognise the governor’s administration, legislators, and the California Department of Insurance for their wildfire loss mitigation efforts,” State Farm said. “However, it’s necessary to take these actions now to improve the company’s financial strength.”
The climate crisis has placed Newsom at loggerheads with oil companies, prompting sweeping legislation and a combative speech at the UN’s climate summit in September, in which he said that “for decades and decades, the oil industry has been playing each and every one of us in this room for fools”.
“They’ve been buying off politicians,” he said. “They’ve been denying and delaying science and fundamental information that they were privy to that they didn’t share or they manipulated. Their deceit and denial, going back decades, has created the conditions that persist here today.”
Carbon markets leadership
California’s state legislature is a hive of climate-focused legislation. Dozens of bills have been tabled this year with the aim of tackling emissions, improving climate-related disclosures and protecting the environment.
Not all of these bills receive Newsom’s backing. The governor approved the California Climate Corporate Data Accountability Act on October 7, also known as SB 253 — one of a number of climate bills to receive his support this month — which will compel large companies active in the state to disclose their carbon emissions.
The bill faced heavy opposition from businesses, although technology giants Apple and Google were among its supporters. California may even have started a trend among states.
For decades and decades, the oil industry has been playing each and every one of us in this room for fools. They’ve been buying off politicians
Gavin Newsom, California governor
California state senator Scott Wiener, who led the bill, told Sustainable Views in a September interview that Washington state is interested in following suit.
But other climate bills have fallen by the wayside. On the same day that he approved SB 253 Newsom vetoed the Voluntary Carbon Offsets Business Regulation Act, which would have banned the certification or sale of voluntary carbon offsets if the vendor knew that any environmental benefits linked to the offset were unlikely to be real, quantifiable or additional.
Newsom blocked the legislation out of concern that the bill “could inadvertently capture well-intentioned sellers and verifiers” by “imposing civil liability for even unintentional mistakes about offset quality”, according to a briefing note by law firm Kirkland & Ellis.
“He doesn’t just sign every bill that comes across his desk, he certainly will veto bills if he doesn’t believe that they’re the right thing,” says former Securities and Exchange Commission lawyer Kristina Wyatt.
“He’s not just rubber-stamping anything that appears to be consistent with his agenda, but rather he’s looking at the economics behind the various bills, the pros and cons,” says Wyatt, who is now chief sustainability officer at consultancy Persefoni.
“He doesn’t want to do anything that’s going to unduly burden business, but he wants to help to build and foster an economy that’s going to be resilient.”
Newsom has approved a separate piece of carbon markets legislation, called the Voluntary Carbon Market Disclosures Act, which will require companies to become more transparent about their use of carbon credits.
The governor has been “at the forefront of trying to figure out the supply side” of carbon markets, says Anthony Catachanas, chief executive of private equity firm Tower Peak Partners.
“He’s leaning on international standards for the demand side,” he adds.
Newsom backs Biden
For now, Newsom’s prospects of fighting for the White House next year appear remote, and he has publicly backed President Biden.
“He seems to be extremely intelligent and capable of taking hard decisions, and balancing various competing interests in a way that would suit him potentially well for the presidency,” says Wyatt.
Despite his support for Biden, he is viewed in some quarters as still very much part of the election. “He’s done a very good job at supporting and enhancing the sustainability agenda in California,” says Catachanas.
“He is a [potential] candidate, on the Democratic side,” he adds. “I don’t think he’s a favourite.”
This article was updated to include the number of climate-related bills signed by Newsom this year.