Sustainability may be the biggest test for the Golden State, reports Peter Huck.

The California Dream began with a laconic offer: "There it is. Take it." The speaker was William Mulholland, the engineer who headed the mighty Los Angeles Department of Water and Power, opening a sluice in 1913 that brought water from the Owens Valley to the future megalopolis.

The network of dams, aqueducts and reservoirs that sustains Los Angeles is one of America's great engineering feats. It is a vital part of the 20th-century post-urban model: a network of freeways and sprawling suburbs based on cheap fuel, cheap water and cheap land.

California's essence was space and mobility, where anyone was free to chase a dream.

A century after Mulholland delivered water, the world's ninth-largest economy is floundering. Roads are potholed and gridlocked. Energy prices have soared. Water supplies are uncertain. Cheap land is scarce. Once envied public services have atrophied. America's most populous and wealthy state has posted repeated budget deficits and amassed what Governor Jerry Brown calls a "mountain of debt" - US$33 billion ($41 billion). Last month Stockton, population 300,000, declared itself bankrupt.


Yet chinks of light suggest the innovator state is engaging with the greatest economic question of our times: how to retool a fossil fuel-based infrastructure into one that is genuinely sustainable, and still retain economic muscle.

The catalyst for rejuvenation is the state's recognition that climate change threatens prosperity. Charged with reducing greenhouse gas emissions, California is remaking its urban infrastructure, a dramatic shift but also a new business frontier.

The push came from the top when Republican Governor Arnold Schwarzenegger defied conservatives to sign the Global Warming Solutions Act 2006. A 2009 Executive Order that emissions be cut by 33 per cent added momentum.

"The law told us we had to reach 1990 greenhouse emissions by 2020, but it didn't say how," explains Amanda Eaken, deputy director of sustainable communities with the Natural Resources defence Council (NRDC). "The California Air Resources Board identified that emissions reductions could be made from land use and transportation. As a result the state realised they had to target the ever increasing growth in vehicle miles travelled. The result was Senate Bill 375."

Passed in 2008, the Sustainable Communities and Climate Protection Act sought to reduce the use of private cars and light trucks, which account for a third of state emissions, through more public transit and higher-density housing.

"The Senate Bill is changing urban planning quite a bit," says Hilda Blanco, research professor with the Centre for Sustainable Cities at the University of Southern California in Los Angeles. "It set targets for metropolitan departments, primarily transportation agencies. It requires them to conduct land use and transportation planning so as to reduce greenhouse gas emissions."

Hasan Ikhrata, chief executive of the Southern California Association of Governments, (Scag) an umbrella body for 191 cities and six counties, points out that "the cost of energy has quadrupled since the 1970s and 1980s. It's a disastrous course to continue thinking you're going to live many miles away and drive to work."

A study last year, The New California Dream, by the Urban Land Institute, found Southern California had an oversupply of large homes on big lots and not enough small properties. Yet the demand for smaller units near amenities is "immense", says Eaken, as commuters struggle to cope with soaring petrol costs.


"The message is, if you want the housing market to recover, you shouldn't build more of what you already have too much of. Instead, we should build a lot more transit-orientated, walkable product near amenities."

At the same time, political assumptions that more roads mean more votes, more business and more tax revenue, are outdated. When the NRDC co-sponsored a poll last October, asking respondents to name the most effective ways to tackle traffic congestion and poor air quality, the number one response was mass transport, followed by bike lanes and walkable communities. Building new roads came last.

This April, in a seismic break with developer-driven growth, Scag adopted the 2012-35 Regional Transportation Plan/Sustainable Communities Strategy, a US$524 billion, 20-year development plan, as its key policy to curb emissions.

It is a fundamental shift from the free-wheeling car culture. Instead of an economy built on endless geographical expansion, the new model contracts the urban footprint and redevelops neighbourhoods. "We can't keep building out of the urban area," says Ikhrata. As 4.3 million people are expected to swell the 19 million-strong Los Angeles conurbation by 2050 [the state's 38 million total will soar to 60 million], the pressure is on. "That is the biggest challenge for the plan: how do you change the lifestyle of people who live here?"

While market forces were leaning towards sustainability, state leadership was vital. "An incentive-based approach is much more effective than a regulation approach," says Ikhrata. "Having said that, we would not have even started if we didn't have Sacramento [the state capital] saying you have to do this."

Given the recession and California's aversion to property taxes, federal seed money has been granted to kick-start the scheme. Brown is pushing a small rise in sales tax and higher income taxes for the rich, both temporary measures.


Los Angeles already has the third busiest light-rail system in the United States [the base Metro fare of US$1.50 can be used for multiple stops]. Rider numbers have grown as lines are added. The most recent route, the Expo line from downtown Los Angeles to Culver City, opened last month. It is expected to reach the ocean at Santa Monica in 2016. Scag plans to adds 12 new routes, almost doubling the 103 stations and increasing the 195km network to 380km.

This vision echoes the old mass-transit network of electric street cars, buses and light rail that criss-crossed Southern California on more than 1600km of track - the world's largest public transport system - peaking during World War II before giving way to freeways.

Dealing with more remote "edge" cities is another matter. Plans to cut commuting focus on telecommuting, either from home or satellite job centres, exploiting high-speed audio and video links.

This may cut fuel costs but the demand for energy - critical to such Californian success stories as Apple, Google and Facebook - is unlikely to plateau.

The 2006 law addresses this issue by requiring the state utility giants to get at least 33 per cent of their power from renewables by 2020.

Solar energy has taken off, helped by US$70 billion in federal stimulus. California supplies 1.2GW of solar power, out of 2.5GW nationwide. More than 100 projects are pending, many in the Mojave Desert. Out on the Nevada line, the Ivanpah project, built by Oakland-based Bright Source Energy, touts itself as the world's biggest solar array. Spread over 1457ha and due to go online next year, the array's 347,000 mirrors, computer programmed to track the sun, will capture enough sunlight to power 140,000 homes.


Back in the city, photovoltaic panels are appearing on warehouses and parking structures, and government incentives encourage homeowners to go solar. However, water remains a problem. The reasons are myriad.

Since Mulholland's time, other Southwest cities such as Las Vegas and Phoenix have demanded their share of Colorado River water. Wildlife concerns in the San Francisco Delta, another LA water source, threatens this supply. Early snow melt in the Sierra Nevada Range means water must be spilled from dams before summer droughts, while leaky pipes and a history of cheap water thwart conservation efforts.

Still, Scag's sustainable development programme is expected to save water. Vision California, funded by the state's Strategic Growth Council, predicts that sustainable development - shifting from suburban homes with lawns to walkable neighbourhoods - will save 50 times the capacity of the Hetch Hetchy reservoir, a major source for the San Francisco area. Cost hampers desalination, despite the state's technical expertise, but a plant is due to open at Carlsbad in 2015, supplying 10 per cent of San Diego County's needs and reducing dependency on the Colorado.

Plans for an LA-San Francisco bullet train service have also meet difficulties. Opponents, including airlines, freight carriers and conservative groups, rail against the cost, but Brown and the Obama Administration are in favour of the scheme, which promises to link the two cities in 2 hours 40 minutes.

Back by the Pacific, the twin ports of Los Angeles and Long Beach - which carry 40 per cent of imports from Asia, key to the regional and US economies - are part of the World Ports Climate Initiative to reduce emissions, providing shore-to-ship electricity to docked vessels so they don't use polluting diesel engines. Half of the container ships that visit California must use shore power by 2014.

The most striking aspect of Scag's plan is the recognition that 21st-century economic clout rests on far more than economic output. "The reason these plans are being embraced in the region," says Eaken, "is because of the broad recognition that [we can] reduce emissions, help the housing market recover, reduce household transportation costs, clean the air, improve public health, save open space and farmland from consumption, save local government and save water."


Take health, for instance. Eaken says physicians proved "gamechanging" in public debates on Scag's plan. "The American Lung Association certified elected officials who supported walkable communities, noting the plan was the best prescription for a healthy Southland as it both improved air quality and tackled the obesity crisis."

A healthy workforce - now that's a democratic innovation.

California's economic past, from the gold rush and railways, to the freeway and clean-tech eras, has involved radical leaps. Sustainability may be the greatest test yet.

"We are ahead," says Ikhrata, noting the state's prestigious higher-learning institutions, Silicon Valley and the biotech sectors. "But we can't live on that forever. Smart people are popping up across the world. If we don't provide infrastructure to make it cheaper to move around and house people, we lose to the rest of the world."