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IN THIS ISSUE – “From Rapid to Anemic Growth: The California Report”
Title of the new UCLA Anderson Business School forecast
- Governor & Legislature Confront Budget Deficit “That is Entirely New Territory”
- State Economy Taps the Brakes: UCLA Forecast
- Newsom’s $6.4-Billion Mental Health Bond Draws Big Voter Support
- Independent Voters Decline; Reasons Complex
- State Senate Leader Ponders Governor’s Race: “A Quality Candidate” in a Growing List
- New State Senate Chief to Take the Wheel in February
- Powerful Unions Buck Climate-Friendly Mandates
- Salton Sea is Planet’s #1 Lithium Source, Study Confirms
- Race to Save the World’s Tomatoes…Will California Ketchup?
- Legislature & Unions Poised to Regulate Artificial Intelligence; the Stakes are Global
Capital News & Notes (CN&N) harvests California policy, legislative and regulatory insights from dozens of media and official sources for the past week. Please feel free to forward this unique client service.
FOR THE WEEK ENDING DEC. 8, 2023
Governor & Legislature Confront Budget Deficit “That is Entirely New Territory”
CalMatters, Politico & Legislative Analyst’s Office
With tax revenues in a free fall comparable to the Great Recession and the dot-com bust, California faces a projected $68 billion budget deficit next year that will require spending cuts and reserve funds to close, state finance officials said yesterday.
The new estimate from the nonpartisan Legislative Analyst’s Office, released as Gov. Gavin Newsom finalizes his January budget proposal, reflects a substantially delayed tax-filing period this fall where collections came in far below what lawmakers expected when they adopted a spending plan over the summer.
This projected deficit would be a record for California. But officials noted that it is partly because the budget has grown so much in recent years — the most recent was more than $300 billion — and that the state has closed similar or worse spending gaps, by percentage, in the past.
Legislative analyst Gabriel Petek cautioned that California is better prepared to respond to the situation than during the economic recession 15 years ago, because it has since built several multibillion-dollar rainy-day funds, though the state is also looking at a structural deficit of about $30 billion annually going forward.
“I go with the word ‘serious.’ A serious budget problem,” Petek said during a briefing with journalists. “I would stop short of calling it a crisis.”
H.D. Palmer, a spokesperson for Newsom’s Department of Finance, said the administration will have different numbers when the governor presents his 2024-25 spending plan next month, but Newsom is preparing to address a significant deficit.
“Both the Governor and the Legislature have a substantial challenge before them in closing a very large revenue gap in this budget,” Palmer told CalMatters. “The IRS, with the best of intentions, created a situation this year that is entirely new territory.”
Severe winter storms prompted the federal government to delay the income tax filing deadline for most Californians from April until November, and the state followed suit, giving an incomplete picture when legislators and the governor crafted the budget this summer.
It already accounted for a $30 billion deficit, after two years of record surpluses driven by economic recovery and federal aid related to the coronavirus pandemic. But those collections were ultimately another $26 billion below estimates — a drop of 25% from the prior year — digging a financial hole based on money the state committed in its spending plan.
This year looks weak as well, according to finance officials. California has been hit particularly hard by inflation, which pinched the housing market; a stock market downturn, affecting capital gains; and a drop in investments in the tech industry, which has pulled back on initial public offerings. Overall tax revenues are projected to be $58 billion below assumptions in the multi-year budget window.
Though the Legislative Analyst’s Office estimates that tax revenues will begin growing again next year, the recovery is likely to be slow, opening up long-term funding shortfalls that could affect essential programs in future years.
“There are enough options available to address this immediate problem,” Petek said. “Our high-level suggestion to the Legislature is just to be judicious about reserves because there’s a lot of uncertainty ahead, so preserving some of that resilience would be helpful.”
His office recommended that Newsom declare a fiscal emergency, allowing the state to dip into as much as $24 billion of its rainy-day funds, and that legislators pull back on one-time spending allocations that have not yet been distributed, potentially saving $10 billion or more that had previously been set aside for transportation, environmental and education programs.
Petek also suggested that California could cut the deficit by nearly $17 billion over the next three years by recalculating its constitutionally mandated funding obligation to schools and community colleges, known as Proposition 98, based on the lower revenues. Though this would decrease the state’s base education funding over the long term, Petek said the immediate effects could be offset with reserves.
That option, in particular, could encounter stiff resistance in the Legislature. Assembly Speaker Robert Rivas, a Hollister Democrat, released a statement last week, when it became clear that tax revenues would be substantially below estimates, committing to a budget that “protects classroom funding.”
Newsom and lawmakers are also likely to confront months of tremendous pressure from advocates arguing that their priorities should be protected in any budget solutions. Statements started rolling out mere minutes after the Legislative Analyst’s Office published its report.
“California leaders have stepped up before to prioritize Californians who are struggling to get by and they must continue this in 2024,” said Pete Manzo, president & CEO of United Ways of California.
Republican legislators chastised their Democratic colleagues for continuing to make new spending commitments in recent budget cycles even as it became clear that the economy was increasingly shaky.
“Hopefully, the supermajority will see it is time for a more realistic budget strategy,” Senate Republican Leader Brian Jones of San Diego said in a statement, “instead of throwing money at a laundry list of projects that sounds nice on the national television debate stage.”
Rivas is starting his first full session leading the body and new Senate leader Mike McGuire is scheduled to take control of the upper chamber in February. It’s unclear if McGuire plans to name a new budget chair (state Sen. Nancy Skinner, a Berkeley Democrat, has held the gig since late 2020), but the deficit will certainly be a telling first test for new Assembly Budget Chair Jesse Gabriel.
On top of it all, you’ve got a Democratic governor who is trying to keep a steady ship at home while growing his national profile. Newsom has been telegraphing fiscal prudence for more than a year, but a $68 billion shortfall would force him to make unpopular decisions and perhaps even scale back some of his signature initiatives.
LAO REPORT:
California Economy Taps the Brakes: UCLA Forecast
Sacramento Bee & UCLA Anderson School of Business
California’s economy is likely to grow somewhat faster than the rest of the country, but progress could easily be thwarted by wars, politics and stubbornly high interest rates, the new UCLA Anderson School state forecast said Wednesday.
“Even though recession worries have faded, increased military activity abroad and a sense of greater geopolitical risks have kept uncertainty about the future high,” wrote Jerry Nickelsburg, forecast director.
The uncertainties, he said, combined with a U.S. economy expected to grow more slowly, “leads to a slower growing California economy,” he said. He titled his forecast “From Rapid to Anemic Growth: The California Report.”
Most national economists see growth slowing in 2024, citing the same uncertainties around wars in Ukraine and Gaza, the presidential election what the Federal Reserve will do about interest rates.
The UCLA forecast sees price increases nationally slowing to 3.1% next year and 2.8% in 2025. It predicts prices in California will go up 3.2% next year and match the national increase in 2025. It sees the state’s unemployment rate dropping to 4.5% next year and 3.8% in 2025.
The seasonally adjusted October rate was 4.8%, above the comparable national rate of 3.9%. Next year’s national average is forecast to be 3.9%.
Even as California and the nation’s economies grow, albeit slowly, the predictions are shaky. “There is less confidence in California outperforming the U.S. in 2024 than three months ago,” Nickelsburg wrote.
The brighter news is that California has seen strong gains in jobs in health care and social services, public and private education and leisure and hospitality. The leisure industry was particularly hard hit during the COVID-19 pandemic.
But last month, it recovered to the point where it employed more than 2 million people, roughly the same as worked in that industry in February 2020, the month before the public health emergency sent the economy reeling.
The biggest job losses in the last three months have come in the information and professional sectors, which includes print media, Hollywood and telecommunications. The drop in the information sector, though, is almost all because of the actor and writers’ strikes this year, which have been settled. Over the next six months, the forecast said “solid growth” in employment is expected.
https://www.sacbee.com/news/california/article282709168.html#storylink=cpy
Newsom’s $6.4-Billion Mental Health Bond Draws Big Voter Support
Sacramento Bee & Public Policy Institute of California
Two-thirds (68%) of likely California voters say they will support Proposition 1, the March 2024 ballot measure that would provide billions in bond money for homeless individuals and restructure the state’s funding model for behavioral health services. That’s the finding of the Public Policy Institute of California, which published its latest survey Wednesday evening. Prop. 1 is supported by 85% of Democrats, 66% of independents and 40% of Republicans. More than half (51%) of likely voters believe now is a good time for the state to issue $6.38 billion in bonds, while 64% say that the Mental Health Services Act — which became law nearly 20 years ago — needs at least minor changes.
California Gov. Gavin Newsom is doing a good job, according to 52% of both likely voters and adults. That opinion varies, of course, by political party, with 77% of Democrats approving of the governor, 46% of independents and just 12% of Republicans doing the same. That’s down from 57% in February and 59% in July. Top concerns for Californians include jobs, the economy and inflation (31%), housing affordability and availability (15%) and homelessness (14%).
https://www.sacbee.com/news/politics-government/capitol-alert/article282747088.html#storylink=cpy
POLL:
Independent Voters Decline in California; Reasons Complex
Sacramento Bee
For the first time in decades, the proportion of California voters registering “No Party Preference” has decreased in the lead-up to a presidential primary election.
About 22% of voters in early October did not claim a party preference, down from about 27% before the last presidential primary in 2019, according to new statistics from the California Secretary of State.
The proportion of “No Party Preference” voters had previously increased before each of at least the last seven presidential primaries. Analysts say the figures may not represent a big shift in voter attitude; rather, they are largely a result of a recent change in the way millions of people register to vote when visiting a Department of Motor Vehicles office.
“The entire registration shifted after the DMV changed their process,” said Paul Mitchell, vice president of Political Data Inc, a bipartisan voter data firm.
Even so, the change could matter in the upcoming presidential primary. Any “no party preference” voter who wants to cast a ballot in the Republican, Green or Peace and Freedom primary elections for president must re-register as a party member.
“No Party Preference” voters can cast ballots in California’s Democratic, Libertarian and American Independent primary elections for president, but only if they first request one of those parties’ ballots.
But there is a discrepancy in California’s figures that is rooted in a major shift to the voter registration process. In the mid-2010s, California passed a “motor voter” law that automatically registered people getting a driver’s license or ID at the DMV, as well as those changing their address — unless they opted out of registration.
Voter registration boomed, rising by nearly 5 million, or 28%, from January 2016 to October 2023.
At first, a huge proportion of the new voters registered as “no party preference.” When Mitchell explored why, he noticed that the DMVs registration form asked residents if they wanted to pick a political party.
If they answered “yes,” it would take them to another page where they would choose their party. “You had to actively say, ‘I want a party,’” he said. The problem, Mitchell and others said, is that many people don’t like standing in front of a computer at the DMV. To get away quickly, many chose “no.”
https://www.sacbee.com/news/politics-government/capitol-alert/article282491978.html#storylink=cpy
State Senate Leader Ponders Governor’s Race:
“A Quality Candidate” in a Growing List
LA Times commentary by George Skelton
State Senate leader Toni Atkins is thinking seriously about running for governor of California. And hopefully she’ll enter the race.
Not that she necessarily should be elected. Maybe. Maybe not. It’s way too early in the election process to decide who should succeed Gov. Gavin Newsom, who will be termed out at the end of 2026.
But it’s not too early to know that Atkins, 61, would be a quality candidate worth considering — based on her experience, knowledge and demeanor.
Judging by her record of leadership in both houses of the state Legislature, the San Diego Democrat could be a productive governor.
She’d certainly enhance the field of choices for California voters.
The election won’t be until 2026. But candidates have been running — or trotting barely noticed — for months. The field is almost certain to expand.
In California, gubernatorial candidates — particularly those who are little known outside political circles — must leap into the fray early. It takes time to to organize local support groups and raise the necessary tens of millions of dollars to compete in this far-flung, highly diverse state where TV advertising in major metropolitan areas is extraordinarily expensive.
There have been 40 California governors and all have been white males — in this, ironically, the nation’s most diverse state. But the odds are good that the 41st will be a woman or a man of color.
Atkins already has set a trailblazing history. She was the first female Senate president pro tem. Before that, she was the first lesbian Assembly speaker. In fact, she was only the third legislator — and the first in 146 years — to lead both legislative houses.
That says a lot about Atkins’ pleasant, nonthreatening personality and leadership skills.
Asked if she plans to apply for the job of leading the state, Atkins told me: “I am seriously considering it. Giving it serious thought.’’
She’ll decide “soon,” the senator said.
“One of my biggest challenges” is raising enough money to get known statewide, she acknowledged. Over the last decade, however, she has raised roughly $60 million to help Democratic colleagues get elected. So she does have fundraising skills.
But hitting up interest groups for money when you’re the Senate leader with the power to kill or pass legislation is one thing. It’s another when you’re only a lame duck or retired lawmaker.
Atkins will step down as president pro tem on Feb. 5 and be replaced by Sen. Mike McGuire (D-Healdsburg), who represents a sprawling district on the North Coast. Atkins will be termed out after 2024, ending a 14-year legislative career.
She’s charming on the outside but tough inside — like the time she ignored Newsom’s request to shelve an environmental protection bill and sent it to him anyway. He immediately vetoed it.
“That was one of our toughest moments,” she said. “But you move on.”
She may be too liberal for many moderates and certainly is for conservatives. But she’s also a pragmatist. Her forte is to negotiate with all sides — and even to work occasionally with Republicans, although they’re essentially irrelevant in Sacramento.
“I’m a pragmatic person — a progressive who has gotten things done,” she said.
Atkins counts among her proudest achievements passing abortion rights legislation, permanent state funding to help low-income families buy affordable housing, earned income tax credits for low-income people and a $7.5-billion water bond.
Atkins has a hardscrabble, rural Appalachian background that has shaped her desire to help the poor.
She grew up the daughter of a miner and a seamstress in southern Virginia, in a small rented house with no running water and a privy outside. The family had no health insurance, and she never saw a dentist until age 24.
After college, she moved to San Diego to help a pregnant sister whose military husband was shipped overseas. She got involved in community service and was elected to the City Council.
Atkins would be an intriguing, worthwhile addition to the mix of gubernatorial wannabes:
Lt. Gov. Eleni Kounalakis. Raising campaign money isn’t a problem for her. Kounalakis and her housing developer father are mega-rich. She could practically pay for her own campaign. Additionally, she was a major Democratic fundraiser for years — that was her ticket to becoming the U.S. ambassador to Hungary in the Obama administration. And she has access to big-time political contributors.
But she has been an obscure lieutenant governor. Unlike her predecessor, Newsom, who also was a former mayor of San Francisco, Kounalakis hasn’t made any attention-getting waves in her first elective office. So she has a lot of public selling to do.
State Supt. of Public Instruction Tony Thurmond.: The former assemblyman has done little to attract attention as the state schools chief. He’ll need to raise lots of money to sell himself. But he’s undoubtedly the only candidate who can claim memberships in the legislative Black, Latino and Jewish caucuses.
Former state Controller Betty Yee.: She’s got a sharp accountant’s eye and is thoroughly familiar with the state’s budget books — a veteran policy nerd who has long advocated unsuccessfully for tax reform. But she’s not exactly a household name and needs tons of money.
State Atty. Gen. Rob Bonta.: The former assemblyman from Alameda County, who was born in the Philippines, is expected to run. And the attorney general’s job has always been a good springboard for higher office.
U.S. Health and Human Services Secretary Xavier Becerra.: Former state attorney general and a 12-term influential congressman from Central Los Angeles — he is very tempted to run, I’m told. He would immediately become a leading candidate.
And it’s conceivable that if either U.S. Rep. Adam B. Schiff of Burbank or Rep. Katie Porter of Irvine loses next year’s U.S. Senate race, they might run for governor.
New State Senate Chief to Take the Wheel in February
Politico
State Sen. Mike McGuire will be sworn in as the next leader of the California Senate on Feb. 5, setting a speedy timeline for him to replace outgoing Senate Pro Tem Toni Atkins.
Senate leadership announced the planned transition date Monday in an email to staffers. The expedited timeline puts McGuire in charge as lawmakers grapple with a large projected budget deficit that could require steep cuts to state spending.
McGuire earned enough votes in August from his Democratic colleagues to be confirmed as the next Senate leader, but a transition date had not been set. Many Capitol insiders originally expected he would succeed Atkins later, in the spring.
Atkins praised McGuire in a statement, calling him a “real team player.” McGuire responded in kind, saying, “everything we have done throughout this transition has been in partnership.”
McGuire’s leadership stint will be brief — no more than 2½ years since he’s termed out in 2026. The moderate North Coast Democrat has been quietly negotiating a transition with Atkins in recent months.
Atkins, the first woman and openly gay lawmaker to lead the Senate, is termed out after next year and has said she’s considering running for governor in 2026.
The incoming pro tem — who represents a sprawling district that stretches from Marin County to the Oregon border — has been a member of Atkins’ leadership team as the chamber’s majority leader since 2022, a role that often has him conducting traffic on the Senate floor.
Monday’s email to Senate staffers included a photo of Atkins and McGuire standing side-by-side on the Senate floor, underscoring the smooth nature of the transition.
https://www.politico.com/news/2023/12/04/mike-mcguire-senate-transition-00129997
Powerful Unions Buck Climate-Friendly Mandates
Politico
One of California’s most powerful unions is not loosening its grip on oil jobs.
Despite the Biden administration and California lawmakers pouring billions of dollars into new climate-friendly industries like electric vehicles, hydrogen and building electrification, a key player in state politics is still defending fossil fuel interests that provide thousands of well-paying jobs.
President Joe Biden’s investment in clean energy sectors through a pair of massive spending bills — which promise lucrative tax credits for projects that pay union wages — was supposed to speed up the labor transition away from oil and gas. That hasn’t happened in deep-blue California, home to the country’s most ambitious climate policies — and most influential labor unions.
“We believe we’re still going to be working in the oil and gas space for the foreseeable future,” said Chris Hannan, president of the State Building and Construction Trades Council of California, which represents nearly 500,000 members across dozens of local unions, from pipefitting to electrical work.
Unions’ longstanding — and well-founded — distrust of the renewable energy industry as a reliable source of labor-friendly jobs is slowing the “just transition” that Biden, Gov. Gavin Newsom and Democratic leaders around the country have pushed.
With federal officials trying to get clean energy funding out as fast as possible ahead of the 2024 election, and California politicians cracking down on the fossil fuel industry, unions’ reluctance to relinquish fossil fuel jobs undermines Democrats’ aggressive climate targets, according to a lawmaker who serves both a union- and oil-rich area of the state.
While the union embrace of fossil fuels is unique to California — one of the few blue states with significant oil production — the struggle highlights a larger question over how states can quickly build massive amounts of clean energy infrastructure without undercutting labor.
“We’re at that crucial fork in the road,” said state Sen. Anna Caballero (D-Salinas), who represents the Central Valley. “The impact of making the wrong decisions is going to be long-lasting and pretty devastating. I don’t think that it’ll be easy to undo the damage.”
The Trades’ ties to California’s fossil fuel industry date back more than a century.
Its workers have benefited from project labor agreements with major corporations like Chevron, which guarantee projects are staffed by union employees and set wages, benefits, hours and other labor standards before workers step on a job site.
These collective bargaining agreements are less common in renewable energy sectors, where companies are often resistant to working with unions.
And despite a steady decline in the state’s oil production since the mid-1980s, California is still the seventh largest producer of crude oil in the United States and ranks third in oil refining capacity, according to the U.S. Energy Information Administration.
This relationship makes the Trades a key ally for oil and gas, which has watched its political influence in Sacramento wane in recent years.
“Certain parts of the Trades are extra sensitive to the main industries they work for,” said state Sen. Henry Stern (D-Sherman Oaks). “When Chevron rings the alarm, okay, that’s tens of thousands of jobs there, so we’ve got to be super attentive.
“Some of these splits over things like carbon removal and hydrogen are to me missed opportunities, where I don’t think the answer can just be, ‘Heck, no,’” Stern said. “Because there’s the olive branch in the trades, right? Hey, let’s use these fields for something, or let’s use these refineries for something.”
The Trades, alongside the oil industry, fought against legislation last year to create a buffer zone between oil and gas wells and sensitive locations like homes and schools. That bill passed, but is on hold after oil companies bankrolled a referendum that will put the question of whether it can be enacted on the November 2024 ballot.
The union also opposed a bill in the California Legislature this fall that requires large businesses to report greenhouse gas emissions through their supply chains.
The bill passed, but the Trades’ opposition — on the grounds that the bill would increase costs for in-state businesses, making them less competitive — carried more weight than the oil companies’ among the state’s increasingly progressive Democratic supermajority.
“We believe we should be making things better, not overly burdensome for the sake of making things overly burdensome,” Hannan said. “We need to have business in the state of California. We need to all have places to work.”
The Trades aren’t reflexively opposed to green jobs. Offshore wind has the potential to be a bright spot: The group’s immediate past president, Andrew Meredith, joined offshore wind developer RWE Energy in July as director of labor relations.
“As long as there are technologies that are ready to come out of the ground as we’re losing other segments of the energy sector, I think you’re going to see a pretty smooth transition,” Meredith said.
The United Steelworkers, whose members operate oil refineries around the state, has endorsed a 12-year transition roadmap developed by economists at the University of Massachusetts Amherst, which proposes California spend $470 million annually to support workers laid off from fossil fuel jobs.
In October, USW joined a new labor coalition, including chapters from United Auto Workers, Service Employees International Union and American Federation of State, County and Municipal Employees, that released policy priorities including wage replacement, healthcare coverage, retraining and relocation support for displaced workers.
But the sheer number of jobs required is an obstacle. The Trades is not signed on as a member of that labor coalition, and has pushed back against proposals that put a timeline on the phaseout of fossil fuels, arguing there aren’t enough well-paying green energy jobs yet to offer all its members.
California has around 112,000 workers in fossil fuels, compared to 115,000 in the solar industry, according to the Energy Department. Those fossil fuel jobs pay around $30,000 more annually than solar, the highest paying clean energy sector, a union-commissioned report found.
That same report estimates that a 50 percent reduction in the oil and gas sectors by 2030 — as envisioned under state policy that aims for carbon neutrality by 2045 — would require more than 30,000 workers to find new jobs.
“We don’t really have a great plan for building high-quality, unionized jobs in the clean economy in the industrial sector,” said Sam Appel, a researcher at UC Berkeley’s Labor Center who wrote a report finding that around $13 billion out of $32 billion in state climate investments isn’t connected to workforce standards.
“There’s a lot of risk in proceeding without a plan or without making sure that the workers, the community, and the path to decarbonization are all being very carefully tended to, because when you leave one out, you’re going to run into political problems,” he said.
Fighting between unions and renewable energy companies, which have cited costs in pushing for nonunion workforces, has added another layer of difficulty. Nowhere is that clearer than in the rooftop solar industry, which has drawn criticism even from environmental groups.
“We want to make sure that we learned that lesson, and that we’re not using new industries as a way to undermine labor standards,” said Alex Jasset, director of Physicians for Social Responsibility Los Angeles’ energy justice program.
https://www.politico.com/news/2023/12/04/california-unions-oil-green-jobs-00129724
Salton Sea is Planet’s #1 Lithium Source, Study Confirms
Grist
A federal analysis released this week confirmed Southern California’s Salton Sea contains enough lithium to meet the nation’s needs for decades.
Salton Sea has the potential to produce an estimated 375 million lithium batteries for electric vehicles — more than the total number of vehicles currently on U.S. roads, according to the analysis commissioned by the Department of Energy.
Those numbers dwarf the estimated lithium deposits available in Nevada’s Thacker Pass, long touted as the largest known source of lithium in the nation.
The long-awaited analysis was conducted by DOE’s Lawrence Berkeley National Laboratory. It’s the most comprehensive analysis to date quantifying the domestic lithium resources in California’s Salton Sea region.
If the Salton Sea lithium can be extracted, it could give the U.S. the ability to produce domestically sourced lithium, ending the nation’s dependence on rival countries for a supply of the metal.
But that opportunity hinges on whether emerging technologies can make extracting lithium from brine cost-effective on a commercial scale. Over the last 12 months, the price of lithium has plummeted from roughly $85,000 per metric ton to less than $19,000, a plunge attributed to increased global production and unexpectedly soft demand.
Generating electricity from the Salton Sea, a geothermal hot spot, requires extracting hot brine from underground aquifers to produce steam that drives turbines. Brine used for geothermal energy also happens to be rich in lithium that can theoretically be extracted in a more environmentally friendly closed system.
The Salton Sea is believed to have the highest concentration of lithium, contained in geothermal brines, in the world.
Some researchers say integrating lithium extraction into geothermal operations can minimize the environmental impact of conventional lithium mining practices, like open-pit mining or evaporation ponds.
Three companies — Berkshire Hathaway Energy, EnergySource, and Controlled Thermal Resources — have been working for years on plans to extract lithium by taking advantage of the Salton Sea’s rich geothermal resources.
MORE:
https://grist.org/energy/salton-sea-could-meet-nations-lithium-demand-for-decades-study-finds/
Race to Save the Worlds’ Tomatoes…Will California Ketchup?
Wall Street Journal excerpt
In the heart of one of the world’s top vegetable-growing regions in California, scientists are on a mission to save ketchup.
Plant breeders at the Woodland facility of German pharmaceutical and agriculture giant Bayer are testing whether tomatoes meant for processing into pizza sauces and ketchup can survive on a fraction of their traditional water needs, without sacrificing taste or juiciness.
Using a small set of tweezers, Taylor Anderson carefully removes the part of a tomato plant that allows it to self-pollinate. He extracts pollen from the flower of a second plant and places it on the first, creating a new hybrid.
Anderson, a vegetable breeder at Bayer, leads a team that is mixing and matching tomato varieties that have historically done well under drought conditions or have a stronger root system, aiming to produce varieties capable of growing with 20% or 50% less water.
“We haven’t hit the doomsday scenario of just not having just enough water to do our basic agricultural needs,” says Anderson, “but that day is coming and it’s coming soon.”
In California, droughts and severe weather conditions in recent years have wrecked some of the state’s most valuable crops, such as tomatoes, almonds and alfalfa. California produces more than 90% of U.S. processing tomatoes, used for sauces and pastes.
That is powering a race among seed companies, where executives say they are harnessing their billion-dollar research and development budgets to create hardier crops.
Those efforts include less-water-intensive rice and shorter corn that can handle higher winds, as well as chemicals to battle pests that spread in warmer temperatures.
Bayer’s tomatoes are one example of how the agriculture industry is now trying to stay ahead of a changing climate that could disrupt the food supply chain and drive up prices for consumers.
Partly it is defense. Droughts and rising temperatures globally have taken a heavy toll on agriculture in recent years, and some scientists and agriculture officials expect a changing climate to make extreme weather events more common.
“There is a unique sense of urgency,” said Bayer’s head of vegetables R&D, J.D. Rossouw——to stay ahead of the changing climate, and the competition.
At Kraft Heinz, executives said conditions in California have prompted the ketchup maker to consider Washington state for growing tomatoes needed to help produce the seeds for 40% of all tomato products sold in grocery stores worldwide.
“It is very hard right now,” said Kraft Heinz CEO Miguel Patricio in an interview. “There’s a lack of tomatoes in the world.”
California farmers are eager for a solution. Jim Beecher produces roughly 160,000 tons of tomatoes a year 45 miles southwest of Fresno, Calif. He says most Americans have probably tasted his tomatoes, which will eventually be turned into ketchup for Kraft Heinz.
Drought the past few years has made it hard for Beecher to make his farm profitable. Some members of his family business have talked about selling the farm, he said.
Planting acreage for processing tomatoes fell more than 20% from 2014 to 2022, largely because of persistent drought in the region, according to the U.S. Department of Agriculture. If water becomes more scarce, the long-term viability of California tomatoes could be in jeopardy.
It can take companies more than a decade to develop new seed varieties, and there is no guarantee they would be enough to help farmers mitigate the effects of climate change in the long term. Developing hardier plants is one way to help farmers cope without migrating crops from one growing region to another, which would be excruciatingly difficult or impossible, industry officials say.
Moving crops would require purchasing new equipment that could cost hundreds of thousands of dollars, said Jeff Rowe, incoming chief executive of seed and pesticide company Syngenta. The supply chain infrastructure and processing plants built around crops such as corn and soybeans in the Midwest would have to completely change, he said.
“Innovation has never been more important,” Rowe said.
Legislature & Unions Poised to Regulate Artificial Intelligence; the Stakes are Global
Politico
Silicon Valley’s freewheeling artificial intelligence industry is about to face its first major policy roadblocks — not in Washington, but in its own backyard.
Efforts to control the fast-spreading technology — where machines are taught to think and act like humans — will dominate Sacramento next year as California lawmakers prepare at least a dozen bills aimed at curbing what are widely seen as AI’s biggest threats to society.
The legislative push will target the technology’s potential to eliminate vast numbers of jobs, intrude on workers’ privacy, sow election misinformation, imperil public safety and make decisions based on biased algorithms.
The upcoming clash will cast California in a familiar role as a de facto U.S. regulator in the absence of federal action, as has happened with data privacy, online safety standards for children and vehicle-emission requirements — and a force multiplier for the European Union’s more stringent approach.
It will set lawmakers eager to avoid letting another transformative technology spiral out of control — and powerful labor unions intent on protecting jobs — against the deep-pocketed tech industry. Democratic Gov. Gavin Newsom, an innovation evangelist who wants to impose safeguards while maintaining California’s economic edge, will undoubtedly shape negotiations behind the scenes.
“Generative AI is a potentially world-changing technology for unimaginable benefit, but also incalculable cost and harm,” Jason Elliott, Newsom’s point person on artificial intelligence, said in an interview.
“I don’t know that anyone in the world — not Google, not (OpenAI founder) Sam Altman, certainly not Gavin Newsom — knows what the full trajectory of this technology is.”
California lawmakers have already ensured 2024 will be far busier than past years by unveiling legislation to limit the use of actors’ AI-generated voices and likenesses, stamp watermarks on digital content, root out prejudice in tools informing decisions in housing and health care and compel AI companies to prepare for apocalyptic scenarios. More bills are coming — including a long list of union-backed measures seeking to limit the negative fallout for workers.
“I hope we’re learning lessons from the advent of the Internet, where we didn’t act in a regulatory fashion in the way we needed to,” said Assemblymember Rebecca Bauer-Kahan, a Bay Area Democrat who chairs the Assembly’s Privacy and Consumer Protection Committee and is reviving legislation that would safeguard against bias in artificial intelligence.
Propelled into public consciousness by tools like ChatGPT, a chatbot that creates human-like conversations and has been used to write legal motions, news releases and essays, next-generation artificial intelligence has captured the public imagination and drawn billions of dollars in investment.
It’s also drawn scrutiny from the White House, whose sweeping AI framework has informed California’s work, and statehouses where lawmakers are discussing potential legislation.
But the stakes for the industry’s future are highest in California given the state’s market-shaping massiveness, its tendency to model legislation for other blue states, an emerging artificial intelligence sector that is driving a resurgence in San Francisco’s beleaguered tech economy and enormous Democratic margins that make it a policy factory at a time of paralysis in Washington.
“I think everyone’s radar is up for AI bills in California and all across the country,” said Adam Kovacevich, who heads the Washington-based tech industry group Chamber of Progress.
Newsom recently issued an executive order to study how the state can deploy and nurture the burgeoning industry while limiting the risk — a balancing act that could squeeze him between executives that include campaign donors and regulation-eager lawmakers.
Yet the Democratic lawmakers who control Sacramento are determined to act soon. Many of them draw parallels to social media, arguing policymakers failed to realize the downsides until it was too late. They are backed by polling showing widespread public concern in California about election disinformation and job-erasing automation.
In just the last few months, suddenly everyone wants to run an AI bill.
“It’s night and day,” said Landon Klein, a former consultant for the California Assembly committee that hears AI bills who now oversees U.S. Policy at the Future of Life Institute.
The organization seeks to limit the fallout of AI and spearheaded an open letter — signed by Elon Musk — urging a halt in experimentation. “Even up until January of this year, I would see an AI bill come to my desk very occasionally.”
California’s supermajority-Democratic Legislature regularly advances ambitious progressive policies that set the national agenda. But proposals to regulate AI will need to overcome a formidable industry counteroffensive.
Groups that have spent recent years battling California lawmakers on social media liability — like a bill imposing penalties for harms to kids that is currently tied up in a court fight — are now preparing to play defense on AI. Their opposition stalled a bill last year that would have addressed bias in decision-making algorithms.
In the coming year, they will likely be fighting on multiple fronts. They are already studying Newsom’s executive order and contending with draft regulations from the state’s digital privacy watchdog that would allow Californians to opt out of having their personal data included in AI models. The Legislature will represent another hurdle.
“In the tech space, this is going to be the issue,” said an industry lobbyist who was granted anonymity to discuss legislative strategy. “This is the topic we’ll all be dealing with this legislative session into the next couple of years.”
As industry groups prepare to confront a wave of legislation in California, they are using a familiar talking point, one that Altman of OpenAI made to Congress in May: We want to be regulated as long as we can help shape the rules.
“We as an industry want to take a proactive stance when it comes to these bills, we want to be at the table and we want to be part of the solution,” said Dylan Hoffman, a former California legislative staffer who is now a lobbyist for the tech employer group TechNet.
Some of the bills under discussion seek to address a range of hazards, such as AI-driven bioweapons — a prominent concern in President Joe Biden’s executive order. State Sen. Scott Wiener (D-San Francisco), who is pursuing legislation to curb public safety threats like AI-powered bioweapons and cyberattacks, said policymakers must move with urgency.
“Some of this is not futuristic,” Wiener said. “These are risks that are with us right now and we’re way behind in addressing them.”
Elliott, Newsom’s aide, agreed that public safety should be the preeminent concern. But Elliott warned policymakers should proceed cautiously because “it’s too early in the life cycle of this technology” to make assumptions about how AI will affect society. That warning may be a window into the governor’s cautious approach, a stance that could put him at odds with lawmakers’ zeal to reign in the industry.
“I would be assuming a very great level of understanding about where this technology is headed in the next six months, two years, 10 years,” Elliott said, and “we as a government don’t have that.”
Newsom already prized innovation over safety and workforce fears this year when he vetoed a labor-priority bill limiting the deployment of self-driving trucks. In the coming year, labor unions who wield significant clout in Sacramento are expected to play a significant role in pushing for limits on AI in ways that affect jobs and working conditions.
“We brought our unions together with experts and historians to really talk about how we approach this,” said Lorena Gonzalez, a former state lawmaker who’s now the top official at the California Labor Federation, an umbrella group of major state unions. “We have to talk about jobs — we can’t just be fascinated with technology and not realize that technology is going to have an effect on jobs.”
Elliott said Newsom was focused on protecting Californians from the downsides of the new tools, including by guiding how government agencies procure and use artificial intelligence. But the governor — never one to shy away from the spotlight — also sees an opportunity to lead. Elliott noted that Biden selected San Francisco for an AI summit — and then sat next to Newsom at the June event.
“The same way that for example, California is a global leader on setting clean car standards,” Elliott said, “we have the market size, and we have the ability to lead and start to define what government responsible use looks like in this emerging space.”
“We are not Austin, Texas,” he added. “We are not Miami, Florida. We are not Phoenix, Arizona. California is the epicenter of global innovation.”
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