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# Solving the Golden State's "anywhere but California" problem for clean energy manufacturing
- URL: https://www.quittingcarbonmedia.com/solving-the-golden-states-anywhere-but-california-problem-for-clean-energy-manufacturing/
- Published: 2026-09-10T15:30:48.000Z
- Updated: 2026-09-10T15:30:48.000Z
- Description: In a conversation with Quitting Carbon, California Forward CEO Kate Gordon talks about building a durable green industrial policy in the Golden State.
- Author: Justin Gerdes
- Tags: Q&As

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“Anywhere but California.”

In her time at the U.S. Department of Energy during the Biden administration, [Kate Gordon](https://cafwd.org/about-us/our-team/kate-gordon/?ref=quittingcarbonmedia.com) heard that refrain time and again from clean energy companies looking to expand domestically or to enter the U.S. market.

For Gordon, then a senior advisor to Energy Secretary Jennifer Granholm, solving the “ABC” problem has become a focus of her work.

Gordon is a policy wonk who has spent the past two decades working to solve challenges related to climate risk, energy policy, and green industrial policy, with stops along the way at philanthropies, think tanks, and state and federal governments.

Gordon served as the director of the Governor's Office of Planning and Research and senior climate policy advisor to Governor Gavin Newsom (D) during his first term. 

After leaving the Biden administration, she was named CEO of [California Forward](https://cafwd.org/?ref=quittingcarbonmedia.com), a statewide non-profit organization “dedicated to a more sustainable, resilient, and inclusive economy across every region of the state.”

I recently spoke with Gordon about what it will take to build a durable green industrial policy in California and make the Golden State a destination for clean energy manufacturing.

“What we haven't done is what a lot of other states have done, which is build out an economic development ecosystem to attract industry based on a set of strategic imperatives,” she told me.

The conversation has been edited for length and clarity.

![](https://storage.ghost.io/c/97/a2/97a2d4c5-8e93-4ddc-b34c-aaaff1b1b93a/content/images/2026/09/Kate-Gordon-headshot-1120x1120.jpg)

Kate Gordon, CEO, California Forward. Credit: California Forward.

**At a recent event, you said about California: “We've done economic policy through regulation.” What do you mean by that?**

California has been really fortunate in its economy. We are incredibly fortunate in our geography and our climate, and all these great natural resource discoveries over the centuries. Gold, and then very shortly after that, oil in the 1890s and early 1900s. We have incredible agricultural land, we had forestry. We were on the Pacific Theater for World War II, so we get defense and aerospace in a significant way, and then tech. Hollywood, of course. So, all that incredible opportunity.

Because of that fortune, California's approach to its economy has been more regulating the harms from those industries than planning to attract industries. As a result, we have groundbreaking regulation, particularly in the climate space. When people say California is a climate leader, they usually mean our regulatory structures and our cap-and-trade market.

But what we haven't done is what a lot of other states have done, which is build out an economic development ecosystem to attract industry based on a set of strategic imperatives. And my argument, and we're [doing a lot of work on this at California Forward](https://cafwd.org/energy-industrial-revolution/?ref=quittingcarbonmedia.com), is that we have to shift toward doing that because the unintended consequences of not planning are a lack of diversification of the economy. It makes us less resilient. It provides less economic mobility if you don't build out that supply chain, manufacturing, a more diversified set of industries.

**You've also noted that California doesn't do a lot of planning and strategy in the economic space. Does the state need to take a more active role in overseeing the managed decline of fossil fuel infrastructure such as refineries?**

It's beyond the refineries. Economic shocks in general are hard if you're not thinking ahead to building a more resilient economy. Do I think we need a strategy? Absolutely.

One thing that I internalized in the Biden administration running the coal community strategy is that energy transition strategy is as much about economic development and industrial policy as it is about energy policy. It really comes down to: How do you help a resource-dependent community that exists because of a resource, because there's oil in the ground, because there's coal, because there's a plant? How do you help that place transform its jobs, its tax base, its culture, frankly, in a lot of cases towards something else? That's not an easy one-for-one replacement conversation.

It requires an intentional approach to transition that leans in on asset mapping, workforce analysis, labor market analysis, economic development strategies, and that's a muscle that is underdeveloped in California versus some other states. You could point to New York or Indiana, which has a pretty good economic development structure. Texas, a bunch of other states, are much more robust on this.

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**You’ve noted that California is one of the only U.S. states that does not have a state-level economic development agency.** [**GO-Biz**](https://business.ca.gov/?ref=quittingcarbonmedia.com)**, in the governor's office, is a recruiter, but you argue the state needs a centralized agency to support building a supply chain for clean energy technologies. Talk a little bit more about the need for California to build that economic development muscle, as you put it, that other states have.**

We’re among the only ones that don’t have government functions at this state and regional level in a coherent state-to-region structure. We have GO-Biz \[the Governor’s Office of Business and Economic Development\] at the state level, and then we have a series underneath it of often nonprofits, business groups – the LA Business Council is a good example, or the Bay Area Council.

GO-Biz does really important work. But for those who understand the national structure, GO-Biz is akin to the National Economic Council. It's a political arm of the governor. It's not an agency. It's not something with a Cabinet-level, legislatively confirmed secretary and a budget and a set of committees in the Legislature and a clear structure of long-term work.

That's challenging because at the federal level the National Economic Council plays a really important role, but it's not the same as the Department of Commerce. What we're missing is a Department of Commerce analog.

In other states, the [New York State Economic Development Council](https://nysedc.org/?ref=quittingcarbonmedia.com), the [Texas Economic Development Corporation](https://businessintexas.com/?ref=quittingcarbonmedia.com), they do labor market data. They do site analysis around the state. They do foreign direct investment trips to drive investment into priority sectors. They coordinate conversations when they're trying to attract a company for county-level siting, and everyone – permitting, state-level economic development, the company – is in a room figuring it out together.

That's something we've been told over and over again by industry in California. They just don't see it here.

They come to California, and it's like, We're happy to have you. Here's a tax credit over here from GO-Biz. Here's what you can maybe get from California Energy Commission. And over here is the CARB regulation process that you're going to be subject to, and over here is a conversation with the Coastal Commission. It's very disaggregated.

They don't have a partner to navigate all those things and figure out a path through them for industries the state has prioritized. We have bits and pieces of that.

GO-Biz has done a good job in recent years prioritizing industries, but then underneath that it's: Who's aligning the funding across the agencies? Who's sitting down with the county? Where are the available sites? Which region is best positioned? Where's the workforce training piece? 

That's all in different places at the moment, and we are losing companies because of this.

**State Senator Jerry McNerney (D) introduced a green industrial policy bill last year (**[**SB 787**](https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill%5Fid=202520260SB787&ref=quittingcarbonmedia.com)**) that passed the Legislature but was vetoed by Governor Newsom. Newsom said the bill was duplicative, that the senior position at the California Energy Commission that was proposed to coordinate the supply chain for batteries, offshore wind, and building decarbonization technologies, already existed within his administration. What did you think of that legislation and of Newsom’s veto?**

That legislation was really important. What we thought was: Look, if these are priority technologies for the state, which we know they are because a number of regions had gone through the [California Jobs First program](https://jobsfirst.ca.gov/?ref=quittingcarbonmedia.com) that helped create, when I was in the governor's office, regional economic development districts around the state and then provide them with planning dollars toward coming out of COVID and building more resilient economies that also were transition economies.

We gave the regions planning dollars, and each of the regions did this incredible regional plan where they did asset mapping and analysis and looked at priority sectors for the region. One thing every region highlighted was clean energy. Every region has it in some form, whether it's Humboldt or the Central Coast and [offshore wind](https://www.quittingcarbonmedia.com/backed-by-the-law-and-voters-the-offshore-wind-industry-must-go-on-offense-to-secure-its-future/); whether it's batteries across Sacramento, but also the Inland Empire and Orange County. And, of course, every region does building decarbonization.

So, we knew this was a priority across the state. The theory was let's have the California Energy Commission, which has expertise in global markets of these technologies, let's have them play a similar role to what DOE did in the Biden administration with the [Liftoff reports](https://www.energy.gov/articles/doe-releases-new-reports-pathways-commercial-liftoff-accelerate-clean-energy-technologies?ref=quittingcarbonmedia.com). The president says, *This is a priority technology*, and then DOE says, *Here's how we get it to market*.

DOE did that because DOE is where the energy expertise is. CEC is the analog to DOE. So, we thought: Let them have a coordinator figure this out, working with all these people, including GO-Biz.

It doesn't solve this problem of not having an economic development agency, but it's a piece of the puzzle.

We were really surprised by the veto. I don't think that capacity exists otherwise.

It's coordination from a position of expertise that's just not what you have at GO-Biz, which is very good on business development generically. Something like energy and batteries, for instance, you have to pay attention to where the market is, because you could end up otherwise investing in – just as an obvious example – a Solyndra. Solyndra is a huge investment that's made without sufficient attention to where China was on next-gen solar technology.

Just because a region wants to have a thing and you have a piece of land available doesn't mean it's competitive for California or good for the community.

**In July, the sodium-ion battery startup Peak Energy** [**announced plans**](https://peakenergy.com/news/latest/gigafactory-announcement?ref=quittingcarbonmedia.com) **to build a factory in Sacramento. The project** [**received**](https://www.gov.ca.gov/2026/05/06/governor-newsom-announces-1b-in-private-investment-generated-through-california-competes-tax-credits-driving-business-expansion-in-key-industry-sectors/?ref=quittingcarbonmedia.com) **$10.5 million in tax credits from the** [**California Competes**](https://business.ca.gov/california-competes-tax-credit/?ref=quittingcarbonmedia.com) **program. Are there lessons learned that can be applied to future clean energy manufacturing projects in California?**

In the solar supply chain and the battery supply chain, we have the potential to be really competitive. We have a fair amount of raw material. We have the innovation ecosystem. And we have a huge consumer base.

I'm super excited they got a CalCompetes grant. CalCompetes is one of the tools GO-Biz has to help individual companies. We've had a couple of tries and misses with some other solar companies, frankly, in Sacramento. Sacramento is a region that, through their Jobs First process, determined it really wanted battery manufacturing and clean energy manufacturing.

CalCompetes is really important. We've had a number of situations where people have gotten CalCompetes grants and not stayed.

I'm excited Sacramento has done the work at the county and regional level, and through nonprofits like [Valley Vision](https://www.valleyvision.org/?ref=quittingcarbonmedia.com) and the [Greater Sacramento Economic Council](https://greatersacramento.com/?ref=quittingcarbonmedia.com). They’ve made it easier. They've paved the way for manufacturing. They've created industrial land and space for these companies. They've really leaned in.

The question for me is: Are we going to be able to scale up? Or will we continue to be the place where the initial manufacturing is happening and then folks leave? We've seen that story over and over. [Lyten](https://lyten.com/?ref=quittingcarbonmedia.com) started in the Bay Area. [Sila](https://www.silanano.com/?ref=quittingcarbonmedia.com) started in Alameda. Both companies left – one for Nevada, one for Washington state. People start stuff here and commercialize elsewhere.

I would love to see the commercialization happening here because that's where the jobs and the tax base come from.

Washington state has a very coordinated clean energy manufacturing strategy where they [identified Moses Lake as a key place for clean energy manufacturing](https://medium.com/wagovernor/clean-tech-takes-off-in-moses-lake-211294767929?ref=quittingcarbonmedia.com). It teed up a workforce strategy, a state support strategy, worked very closely with that region and those counties. That has really paid off for them. It's worth looking at other states and learning from what they've done.

📖

****Read more:** [****California has a new plan to decarbonize industry**](https://www.quittingcarbonmedia.com/california-has-a-new-plan-to-decarbonize-industry/)

**Your former boss at DOE, Secretary Granholm, just** [**endorsed**](https://yesonprop45.com/2026/09/03/former-u-s-energy-secretary-jennifer-granholm-endorses-prop-45-to-accelerate-clean-energy-development-lower-cost-of-living-for-families/?ref=quittingcarbonmedia.com)[**Prop 45**](https://calmatters.org/california-voter-guide-2026/proposition-45-environmental-review/?ref=quittingcarbonmedia.com)**, a ballot measure here in California that would streamline environmental approvals for “essential” projects like housing and clean energy development. Do you support Prop 45? And what are your thoughts about the need for CEQA reform to boost clean energy manufacturing?**

California Forward hasn't endorsed it. We are considering it. Prop 45 does shorten the shot clock, essentially, shorten the timeframes in CEQA \[the California Environmental Quality Act\]. One thing it does that's not getting enough attention is it preempts all the local process. That's a big concern, as you can imagine, for a number of people. The building trades came out against it and the environmental community.

One of the things about shortening the shot clocks is that all the staff implications get put on the local government because they've got to do the permitting, and they have very little staff. California got rid of redevelopment during the \[Gov. Jerry\] Brown administration, and now there's almost no staff at the local and county level to do planning and permitting. There's a lot of concern in the local government world about how to implement this if it passes.

I am in no way opposed to CEQA reform. CEQA is a policy that was designed to deal with local environmental impacts of projects, so is NEPA \[the National Environmental Policy Act\]. You shouldn't relax basic environmental standards, but you're building toward a new kind of economy that's better for the climate, which is not about local environmental impacts.

We don't really have a regulatory structure that's fit for purpose for this at all. Our cap-and-trade system is not really fit for purpose because it's measuring carbon emissions from local sources, but those then go into the atmosphere and become global. You could argue it incentivizes offshoring of manufacturing because it gets rid of emissions within this artificial local boundary. CEQA doesn't really account for the impact of a project on the broader clean energy transition, which is good for the environment.

It's all outdated regulation that we need to think through. How can we restructure regulation, so it provides incentives for something that's creating a new kind of economy that'll have lower emissions overall? That's not easy to do because an individual project – even if it's a battery manufacturing plant – probably increases emissions in a local area. It will have some impacts because there is no development anywhere in the world that does not have any impact on the local area. How do you think through that balancing act?

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I don't think CEQA is very good at doing it. I'm not yet convinced Prop 45 does it well either. We need to start having creative conversations about things that are *not* CEQA. CEQA is a tool that everyone leans on to be the answer to everything in California.

What if we talked about clean industrial zone development, where we're pre-permitting based on a set of standards and input from the community and the local government? You're speeding up, but you're not doing it through this one tool that's not fit for purpose. What about we talk about building a state and regional economic development system where we're prioritizing certain industries because they're meeting state goals, and then we're leaning in on a package to support them? 

We've got to get beyond this CEQA tunnel vision because it's not a policy that does a particularly good job at planning.

I have seen firsthand that exemptions from it don't keep people here necessarily. [Pacific Fusion](https://www.pacificfusion.com/?ref=quittingcarbonmedia.com) is the example I always give: born at Livermore Lab, went to New Mexico. What they will say is: “We went to New Mexico, and the governor, and economic development director, and the county, and Sandia Labs all sat down with us and figured out how we were going to do this.”

CEQA is not always the answer, but it's everyone's favorite tool to play with.

**It's incredibly likely California’s next governor will be Xavier Becerra. He doesn’t have many long-standing positions in the green industrial or clean energy policy space. Do you have thoughts on what his policy priorities might be?**

It's a great point. He's not coming out of an energy background. You've got Health and Human Services; you've got being in the attorney general's office. He was involved not only in setting up the environmental justice unit there, but also thinking through things like: Does the state sue oil and gas companies under attribution science? But being attorney general is really different from being governor.

I'm encouraged by what I've heard. He's listening to a lot of people and learning a lot.

It's a time in state government where, honestly, a lot of stuff has to happen. We're facing a complicated budget situation because we have a combination of extremely volatile revenues.

We have increasing spending. Spending is not going down, and that's related to having a huge safety net because a lot of people in the state living paycheck to paycheck. We have a big inequality problem, and we also have natural disasters, which are creating more and more costs.

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The key is going to be: Is he willing to come in and break some glass and change some things to get the systems to work better? We're adding thing upon thing, goal upon goal, policy upon policy, and they're not being coordinated particularly well toward a set of clear outcomes.

We and others are doing a lot of work on playbooks for the next governor to say, Look, some of this is structural. You need to have an economic development agency. You need to prioritize things you want to build toward in the state. And then we need the governor's office to have some muscle to align around that, to get the Cabinet, the agencies, the regulatory structures aligned toward those goals. Working with the Legislature on policy that needs to change. 

We need a strong governor coming in and doing that coordination and alignment and becoming more effective and efficient and transparent about the goals.

Number one is structural. Number two is what is the vision? What kind of California do we want to be living in in 2030 and 2035, and how do we work toward that? Do we have metrics we're stocktaking along the way? Are we seeing tangible progress on the ground? 

Too many things have been left to figure themselves out. We need a governor who's able to set a path. We're all making that point. Is that going to happen? I don't know. But we can try.