magine that the electricity system in a country with an economy as big as France's was teetering on the brink of collapse. Limited blackouts already plagued several major cities. A few hotter-than-normal summer days could trigger a general power failure. Recovery might take weeks. The country would be plunged into economic recession and millions of citizens would be threatened with heat stroke, food shortages, and dehydration and disease from lack of running water.
It didn't happen in France, but it almost happened to the world's sixth-largest economy, California, in 2000 and 2001. What spared the most populous state in the union from social and economic upheaval was a crash campaign to conserve electricity. The state-led mobilization, with full cooperation from California's financially buffeted electric utilities, succeeded magnificently. "For a while," says Kateri Callahan, president of the Alliance to Save Energy, a nonprofit coalition of businesses, governments, and public-interest groups, "California had the lowest per-capita energy consumption of any industrialized country in the world."
When the crisis hit, California was already among the most frugal states in the country in terms of per-capita energy use. Thanks to a sustained era of progress from the 1970s through the early 1990s, the average resident of the Golden State used 40 percent less electricity than the average American. But California fell off its pedestal in the late nineties as a result of its flubbed first attempt at utility deregulation. Efficiency programs floundered for years. A new breed of private energy brokers like Enron thrived while traditional utility companies like Pacific Gas & Electric went bankrupt.
Since 2001, California has bounced back, fashioning a new framework of utility regulations that places greater emphasis on efficiency than ever before. Through 2008, utility companies plan to spend $2 billion -- a record for any state -- to help Californians save energy. The investment will yield a net gain of $3 billion in economic benefits for the state by reducing utility bills. "This efficiency campaign will avoid the need to build three large power plants," says Brian Prusnek, a senior staff member at the California Public Utilities Commission. "In terms of greenhouse gas emissions, that's the equivalent of taking 650,000 cars off the road. How many other investments yield a 50 percent financial return and reduce pollution?"
Leading-edge policies and technologies that encourage efficiency have long been a California export, right along with merlot, movies, and semiconductors. Energy policy makers in other states as well as in the federal government look to California's energy-conservation measures the same way political analysts view the New Hampshire presidential primary -- as a bellwether for the nation. California was, for example, the first state to adopt efficiency standards for appliances. These went into effect in 1977 and were upgraded throughout the 1980s. Florida, Massachusetts, Connecticut, New York, and other states followed California's lead, sometimes copying the California code verbatim. This shift at the state level convinced appliance manufacturers to join with efficiency advocates in lobbying for a uniform national standard, which Ronald Reagan signed into law in 1987. Thus began a process that continues to repeat itself. Since 2004 several other states have adopted at least some of California's latest standards, many of which also wound up in last year's federal energy bill. "The general pattern," says Devra Wang, a staff scientist at the Natural Resources Defense Council, "is that California adopts new standards, other states follow, and then they're adopted at the federal level."
California's efficiency standards for new buildings, introduced in 1978 and known as Title 24, have been replicated all over the world. The code governing new construction in Russia, for example, is cutting energy use by more than 40 percent, thanks to California. A similar effort now under way in China could wind up as California's most enduring global legacy (see The California-China Syndrome). If the planet is to tackle the twin challenges of finding adequate energy resources to drive hungry economies while averting the worst consequences of climate change from burning fossil fuels, the West Coast is the place to look for leadership.