Look West, Obama

In addition to Chu, Obama has filled a number of key posts with Californians. Nancy Sutley, the new head of the White House Council on Environmental Quality, was deputy mayor of Los Angeles; John Holdren, the new White House science adviser, spent decades as a professor at Berkeley, as did Christina Romer, one of Obama's top economic advisers. Californians are also taking the lead in Congress: House Speaker Nancy Pelosi, who represents San Francisco, is deeply wired in with the clean-tech crowd in Silicon Valley. Ditto for Sen. Barbara Boxer, who chairs the Committee on Environment and Public Works, and Rep. Henry Waxman, the new chair of the House energy committee.

In other words, it's clear that America's energy future will be shaped in large part by Californians. The question is, what will that future look like?

First, expect a big push on efficiency. "That's the big story in California," says Dan Kammen, head of the Renewable and Appropriate Energy Laboratory at UC Berkeley. "It's all about using less to get more." In California, the patron saint of energy efficiency is an 82-year-old physicist named Art Rosenfeld. During the oil crisis of the 1970s, Rosenfeld found himself sitting in long lines at gas stations and thinking about how much energy Americans wasted in their cars, homes and offices. At the Lawrence Berkeley lab, he founded a group called the Center for Building Science that developed key technologies for compact fluorescent light bulbs, efficient refrigerators and energy-saving windows. More important, Rosenfeld pushed California to develop the nation's first efficiency standards for appliances and buildings, as well as requiring utilities to "decouple" their profits from the amount of electricity they sold. As a result, the energy needed to cool a new home in California has declined by two-thirds since 1975, even though today's homes are about 50 percent bigger. "If California's electricity demand was still growing at six percent a year like it was in the 1970s," Rosenfeld says, "the coast between San Francisco and San Diego would be dotted with nuclear plants."

Efficiency is a no-brainer for Obama because it pays back so quickly. Since 1975, California's building codes have resulted in energy savings of $30 billion — more than $2,000 per household. Roll those policies out nationally, and the savings would be immense. A nationwide investment of $21 billion in building efficiency, one study estimates, would save consumers more than $8 billion in energy bills every year. And when you reduce energy consumption, you also reduce pollution. Nationwide, the amount of electricity saved by federal refrigerator standards alone — $15 billion a year — is equal to the annual output of about 80 coal plants. A recent report by the McKinsey Global Institute, a leader in energy research, concluded that further improvements to America's energy efficiency could offset 85 percent of the projected national demand for electricity by 2030. In other words, if the rest of the U.S. followed California's lead, we could more or less kiss new coal plants goodbye — a huge leap forward in the fight against global warming.

Pushing efficiency also creates jobs. All told, California's policies have created an estimated 1.5 million new jobs, with a combined payroll of $45 billion. These are not traditional "green jobs" — installing solar panels, erecting wind turbines. These are jobs created by the simple fact that people have more money to spend on things other than energy bills. "When people save money on energy, they spend it outside the carbon supply chain, on local goods and services," says Roland-Holst. "These are bedrock jobs that can't be outsourced."

Besides efficiency, the other big success in California is something called a renewable portfolio standard — a policy designed to force energy providers to diversify their power sources. In 2002, the state decreed that utilities must get 20 percent of their power from renewable sources by 2010. Energy companies quickly moved to add more than 5,900 megawatts of renewable power, leading Gov. Arnold Schwarzenegger to bump the requirement up to 33 percent by 2020. Twenty-eight states now have some kind of renewable portfolio, and Obama has called for a national standard requiring 25 percent of America's electricity to be generated from renewable sources by 2025.

Much of that new power is likely to come from solar energy. In California, the push has been driven not just by the state's plentiful sunlight, but by good old-fashioned greed: Whoever figures out how to harvest the sun's power cheaply and efficiently will be the Bill Gates of the 21st century. It also helps that building a photovoltaic cell is not much different than building a computer chip — T.J. Rodgers, one of the pioneers in the chip business, is now the primary financial backer of SunPower, one of the fastest-growing solar companies in Silicon Valley.