Bay Area Council Leads Northern California Businesses in Pursuit of Fixes to California's Water Challenges

A year ago, the Bay Area Council and 275 of the largest employers in Northern California were supporting AB 32. You said that the Bay Area Council recognizes the vital importance of staying ahead of the technology curve. How pleased are you with the passage of AB 32 and its implementation so far?

It's what we see as a work in progress, and lately there's obviously been some politics involved, which we hope will be addressed by the governor's appointment of Mary Nichols as chair of CARB. We're still very interested in ensuring that there's a forward-thinking cap-and-trade system that will be the centerpiece of AB 32 implementation, and we're going to push hard in that direction.

How important is the issue of climate change to the agenda of the Bay Area Council?

Climate change is tied into a number of issues that we're working on, particularly the land-use pattern in the Bay Area, which is an obvious opportunity to replace what has been a very haphazard land-use pattern with a denser, urban-infill-oriented approach to help address California's greenhouse gas emissions in a big way.

We are certainly cognizant of the impact that global warming is going to have on run-off and the water system in California. Obviously, our whole region is built around the Bay and the Delta estuary. When the water level rises over the next decades, it's going to have profound impacts.

We recently interviewed Tom Graff of Environmental Defense, and he was critical of the governor's current water plan, stating that the it was significantly flawed in its reliance on dams. He went on to suggest that new dams would make very little difference in the state's water picture if the problems of Delta conveyance remain unsolved. What's the Bay Area Council's position on the governor's water plan?

We think the water issue is a major risk for the state, and it's time we solved it. We've got to be sophisticated enough as a state to get our arms around this and move past historic resistance-not just by the environmental community, but all communities-and find a way to partner on a solution that's going to work. We've been working on that, but we have not taken a specific position on the governor's proposal associated with new storage facilities. We do believe that some new storage is part of the solution, whether it's those particular dams or others.

But we also think that the conveyance system is equally important. Likewise groundwater and conservation efforts are going to be very important. We need to bring together all of these good ideas, with market solutions, to come up with a comprehensive plan that is going to impact everyone a little bit, but will result in a solution we can all live with, and that will address the economic perspective, environmental perspective, land use perspective, and so forth.

The San Jose Mercury News carried an article in June that announced the reemergence of the Delta Diversion Canal in state political discussions. Given the Bay Area Council's proximity to the Delta and Sacramento (and given that in 2007, Northern and Southern California have a much improved alliance compared to the last time this issue faced a vote), how will this new water delivery debate take shape?

We've been holding regular meetings and conversations with the Southern California Water Committee for about two years now, which has been productive. Just a couple of weeks ago, the Southern California Water Committee adopted a set of principles that we developed mutually over the last six months that our own executive committee is scheduled to approve this Thursday. So we're going to be moving forward with a set of principles, for the North and the South, which we think is going to be very helpful.

We're not just speaking for the Bay Area Council; we've been working with Northern California groups, including environmental groups, groups with direct ties to the Delta, and key water agencies here in Northern California who depend on the Delta. Jim Levine, who runs a company called Montezuma Wetlands, has been leading the charge on the behalf of the board of the Bay Area Council. He's a very savvy engineer with a good history in this area. We've also been serving as a part of the governor's stakeholders group on the Delta Vision task force.

We feel we're solving a lot of the challenges with good solutions that incorporate conveyance systems, possibly including a diversion or peripheral canal.

It looks like the history of the peripheral canal is still political baggage. How can leaders respond to the challenges of water conveyance given the negative connotation of the labels that were used thirty years ago to defeat a new N-S conveyance system?

The Delta, as it's currently configured within the conveyance system, is a huge risk lacking a long-term solution. So we actually need to start there. The environment of the Delta and the Bay are very important in Northern California, not just environmentally, but economically. Despite the tremendous amount of time spent on scientific study through CalFed and other processes over the last decade or so, they haven't directly assessed the impacts of the peripheral canal, Delta diversion solutions, or using the Delta as a secondary conveyance system.

We're looking hard at a dual-conveyance system, where the diversion would be one portion of it. We think a dual-conveyance could possibly be a wonderful and practical solution. But the analysis of existing data needs to be done to see what effect dual-conveyance actually has.

Back to your question about the political charge of the term peripheral canal, at the end of the day, you can change the words, but it's really window dressing. I think we need to make an effort to educate Californians-in the North, South, and Central Valley-so they understand what they're facing in terms of risks, for example, the damage an earthquake could cause the Delta and the drinking water for two-thirds of California. Many of those with the highest risk would actually be in Northern California, because if we lose the Delta, there's really little storage capacity up here. So we really need to educate. I think the Bay Area Council and other groups are as responsible for that as anyone else.

I don't think we can ignore the needs of the Central Valley, the agricultural community, and Southern California. There's a huge population base and a huge economy at stake, but we do have to deliver a solution that is going to take into account the environmental needs of the system. The Southern California Water Committee agrees with us on that.

How do you find the political will in California to solve the long-term challenges of water conveyance in today's term-limited political environment?

I think this is a very difficult issue to expect political leadership to drive home the solution. Last year, we met up in Sacramento with five major leaders on the subject, and they all said great things, but they were five different things. I think that we need to provide the solution to them, and give them the cover to be able to endorse something that Northern California, Southern California, the Central Valley, and the Delta can live with. It may not be unanimous, but the situation is so risky and so dangerous right now that we can't afford to have sacred cows.

How satisfied are you with the budgeting of the bonds that voters passed last year in support of dealing with the Delta and water?

I think the first priority has to be to address areas where the greatest risk exists, and I think that the governor and DWR have made some practical steps in that direction. The longer-term solutions are still going to be based on science and some negotiation and coming together of interests. The most important decisions on those expenditures are still in front of us.

This has been one of the driest years on record in Southern California. Kern and Riverside counties have declared a water emergency, and many water agencies are pitching conservation. Is Northern California similarly dry?

We're seeing the same thing in the North, depending upon where the particular agency is situated. We've seen several who have already required conservation. When the pumps were shut off, Santa Clara County lost 50 percent of its source of supply. It's taken us a very short time to get into a tough situation, which underscores the level of the predicament that we're in. Our issues in Southern California and in the North are virtually the same on this.

A solution is not going to come cheaply. Water agencies are going to have to encourage their ratepayers to understand that major investments need to take place, both at the local agency level and the state level, to solve this problem. That's going to have to become a statewide priority, and I think it's important for water agencies to protect their ratepayers, but they also need to be honest with ratepayers that this is an issue that's going to have to be covered through increases over time. There's no way to avoid that.

Amid all the political debate about the Delta diversion canal and the infrastructure bonds, the Delta smelt is fighting extinction. How is this issue working out in conversations about water policy, and what the thoughts of the Bay Area Council on the resolution of this matter?

It's a serious cause for concern, because environmental groups have been pointing out for several years that the declining smelt populations required action on the part of the state, and it took a judge to take the action. It's a complex ecosystem, and there are a lot of potential reasons why the smelt population could be seeing these reductions. The action of the pumps is certainly one of those potential reasons that needs to be further explored. We've also seen an increase in some predatory clam species that could be affecting the population. So we shouldn't just assume that the pumps are the only reason, but they may be a major factor, and this can't be ignored.

We began with a discussion AB 32 and climate change. How does the Bay Area Council's agenda intend to both protect the environment and encourage economic growth in the Bay Area?

We would like to see a system of incentives put back in place in California that have been missing for several years now. We support helping industries where the government could see strategic value in having growth; green technology and renewable sources of energy would be a couple of those areas. We would hope that tax credits and other methods would be put into place that would encourage the development of these businesses.

That said, there's a lot of development that's being driven from private sources. The venture capital community down on Sand Hill Road is laser-focused on clean technology, and we're seeing a lot of investment in this area and in research institutions driving green innovation. There's work going on, and AB 32 has given the state of California a leg up on the development of these new technologies. We should take every advantage of that position whenever possible, and that applies to Southern California as well as Northern California.