With New Year’s Eve celebrations now in our rearview, it’s time to settle in for 2016 —but what should we expect? Area experts delve into how the past affects our future and, well, by all appearances, 2016 has the potential to be a pretty decent year.
by Simone Aloisio
That 2015 is the hottest year on record is noteworthy for two reasons. First, the previously recorded hottest year was 2014, just the year before. This makes 39 consecutive years of above-average global surface temperature, a trend attributed to the problem we now recognized as climate change. Perhaps it is not so amazing, since 15 of the 16 hottest years on record have been the years since 2001. The fact that it is the fifth year in a row of increasing global temperature is not terribly amazing, but noteworthy to me.
What is more amazing is the second reason, that in 2015 carbon dioxide (CO2) emissions fell despite significant economic growth in the global economy. This was a year with less carbon emission, but more goods and services for people. This happened to a lesser degree in 2014 as well, by the way. What makes this significant is that we are meeting the growing energy demands of our population, improving the quality of life for people, while emitting less of the main harmful pollutant that causes climate change. Many have been saying this could not be done, but we are doing it. I am hopeful that this is the start of another trend.
CO2 is the most significant greenhouse gas (GHG) in our atmosphere and is produced in large quantities when fossil fuels are burned. The amount of CO2 in our atmosphere has been steadily increasing since the Industrial Revolution. It was then that our energy source switched from primarily biofuels to primarily fossil fuels: first coal, then petroleum and natural gas. This cheap, energy-dense and abundant source of fuel led to many changes in society, most of them tremendously beneficial.
One unforeseen and mostly negative consequence of this is the pollution that is emitted as a result of burning fossil fuels. Today in China, for example, 1.5 million people per year die prematurely because of causes that have significant contributions from air pollution, in large part a result of burning coal for fuel. Higher summer temperatures cause a dramatic increase in deaths because of this, not just in China, but worldwide. One of the great co-benefits of reducing CO2 emissions is a decrease in deaths and disease because of air pollution worldwide.
The CO2 that is emitted when we burn fossil fuels is causing our planet’s climate to change. It stays in our atmosphere for a long time and continues to increase even when we emit less of it. The results are much more serious changes in our climate, such as increased temperature and sea-level rise, than we have seen so far. So although we saw a decrease in the emission of CO2 in 2015, we did not see a decrease in the total amount in our atmosphere.
Solving the climate change problem is really an energy issue. Over 80 percent of the energy we use comes from burning fossil fuels. In 2015, we met energy demand by using sources that were less carbon-intensive. This is very remarkable indeed, and a significant step toward solving the problem of climate change. We are making giant strides in the development of cleaner energy sources and ways of using them. These include the renewables — solar and wind and nuclear power, all of which can meet our energy demands without emitting large amounts of CO2. It seems the energy companies themselves are coming around, which is tremendous for potential technologies such as algal biofuels and carbon capture and sequestration. New battery technology to store some of these energy sources is being developed and commercialized.
What is needed is a Clean Energy Revolution. OK, maybe it needs a better name than that, but we need to flip our current energy usage so that 80 percent comes from non-carbon-emitting sources, and we need to do it relatively quickly in order to avoid more serious negative impacts of climate change. It has been a couple of decades since climate change was discovered, but 2015 could be the start of a new trend.
In the meantime, we will have to deal with the climate change that is happening and its negative consequences. For example, Xylella fastidiosa is a bacteria that kills trees by starving them of water. It has been recently detected in southern Europe, where it was previously unknown, and it threatens billions of dollars in agriculture products, such as olive oil. It is transported by sap-eating insects, and mild winters allow the insects to migrate farther north and kill more trees. There a growing number of examples like this worldwide, and we will need to mitigate these problems.
This is my fifth annual article predicting the climate since 2011. Every year, my prediction has been the same, that it would be hotter the next year than the previous one, and for good reason. You could say I have been on a kind of streak. I am a little more optimistic about the future because of 2015, but it was still the hottest year on record. For that same reason, climate change, I have to predict 2016 will be hotter still.
Simone Aloisio is a chemistry professor and the program chair at CSU, Channel Islands.
by Bill Watkins and Dan Hamilton
The context for this forecast is particularly important.
The Fed has just raised interest rates for the first time since the 2008 Lehman Brothers collapse. More importantly, and missed in most analyses, the Fed increased the interest it pays on excess reserves. This is likely to suppress job growth by making funding small business growth more difficult.
Some very credible analysts believe that the probability of a recession is rising, in part because of Fed policy.
Certainly, the rest of the world is not doing very well.
China’s growth has slowed. Europe’s weak recovery is weakening. Russia is suffering the impacts of low oil prices. Brazil is in a terrible recession. Commodity prices are falling everywhere. It’s easy to see why credible people are forecasting recession.
While we don’t try to forecast recession probabilities, we do believe that the probability of a recession is increasing, and it may be high. Our model, though, predicts continued economic growth. We expect GDP to grow at annual rates under 3 percent in 2016, and that job growth will remain modest.
Investment is likely to remain low. This alone almost guarantees that economic growth cannot achieve pre-recession levels.
California should have a pretty good 2016. It has been doing reasonably well in job creation, at least to the extent that it’s seeing job growth at a faster rate than the United States average. It’s doing better than that, though. According to Kiplinger, a Washington, D.C.-based publisher of business forecasts and personal finance advice, California is the ninth fastest growing state for jobs.
Our forecast anticipates California continuing to outperform the United States, but that the margin of outperformance is likely to decrease. California’s economic and job growth will probably continue to be more volatile than that of the United States.
Growth will vary among California’s geographic regions. In general, the Bay Area, the Central Coast and the South Coast will see faster growth than the rest of the state. Los Angeles will lag the rest of the coast. Inland areas, generally, will see less robust growth.
Some inland areas, though, may see some improved growth. During the previous boom, we saw workers in coastal areas buying inland homes and commuting long distances. High housing prices were driving them to accept incredible commutes. We’re starting to see signs that this may be happening again. The bedroom cities should learn from Stockton and remain prepared for a rapid trend reversal.
The Inland Empire should also continue to see some good growth. Logistics, in particular, is likely to be a continuing source of job growth.
Our Ventura County jobs and economic growth forecast is significantly below our California forecast. Ventura County is more likely to see slower job growth because migration is near zero or negative, while housing costs are high and unlikely to decrease.
We think that forecast risk is mostly on the downside. That is, we believe that our forecast is more likely to be higher than what we actually see than it is to be lower than what we actually see.
Bill Watkins is the executive director and Dan Hamilton is the director of economics for the California Lutheran University Center for Economic Research and Forecasting.
by Herbert Gooch
2016 may, with help from El Niño, alleviate the drought but it is not likely to bring relief for Republican woes in California. In Ventura County, Democrats now hold the main seats in Congress and the Assembly. The registration gap has widened to favor Democrats by more than 12.5 percent, and momentum shows scant signs of slowing.
Though it has the largest cache of electoral votes, California is so lopsidedly Democratic that it will attract little presidential contest once the July conventions have settled on the candidates. Candidates will visit, not campaign. California is a political ATM, a ready source of cash, not votes. Republicans have too few and Democrats too many potential votes for either to spend substantial resources and time here.
The primary season could prove a different story. The Democratic results will have been long foretold: Hillary Clinton. But it is quite possible that the Trump tremors fracturing the Republican Party will still threaten to split it. California could well be the final steppingstone to a brokered Republican convention as the party struggles to settle on a nationally electable candidate.
With such massive Democratic majorities, the contest for state offices is mostly an affair of Democrat v. Democrat. They are not only more numerous, but recent electoral rules benefit them: It is far easier to register to vote, and greater numbers of youth, minorities and lesser-educated people are expected to join the voting rolls. Most of them tend to vote Democratic, and now the top-two vote winners in the primary, regardless of party, face off in the general election. For instance, the U.S. Senate race could simply end up a contest between Northern and Southern California Democrats, Attorney General Kamala Harris and Rep. Loretta Sanchez.
On the local level in Ventura County, the seats of U.S. Rep. Lois Capps, state Sen. Fran Pavley, state Assemblyman Das Williams and county Supervisor Kathy Long are open. The first three have Democratic registration advantages, will be vigorously contested, and will likely end up in Democratic hands. The last is nonpartisan and if there is no majority winner in June, the winner will be decided in a runoff on Nov. 8. Given the number of candidates expressing interest already, the winner is not likely to be known until the fall.
Presidential politics aside, California will live up to its version of political warming in the second half of the year. A tsunami of initiatives is headed for the November ballot, possibly as many as 20, which would make this one of the longest ballots in history. Initiatives can roil emotions and are often targeted to increase or depress certain voters. Their effects are difficult to predict.
The county also may have two of its own propositions: one to extend SOAR and a second to levy a small transportation gas tax.
2016 promises to be fascinating and not wholly predictable. The momentum is Democratic. But as in the game of poker, who wins is not always decided by who holds the highest cards.
Herbert E. Gooch is a professor of political science at California Lutheran University.
by Paul Witman
Change, change and more change! Technology is a field that is constantly innovating, and those innovations have impacts far beyond the technology industry. Many of those technology impacts are often referred to as disruptions — markets that are fundamentally changed by the advent and uptake of a new technology.
So what markets are ripe for disruption now? Some disruption is already happening in the taxi business. Uber, Lyft and others provide a service similar to taxis but at a lower cost and, some would say, with some bending of the regulatory environment. What’s next? Lyft, among others, is looking for ways to allow ride-sharing along your path from point A to point B, reducing your cost without a major increase in time. While the outcome for any particular company is hard to predict, that new competition is usually a good thing for consumers.
The delivery business could easily be next for disruption. It’s not hard to imagine a service like Uber that connects people needing goods picked up to people who have the vehicle and ability to make that happen. In fact, Uber has just such a service, called Rush. These services will come with the predictable, and reasonable, objections from existing industry competitors, who may object to inconsistent rules applied to the new players.
The payments industry is another place where technology is providing new tools to enable changes in funds movement. Newly issued “chip cards” will become ubiquitous as the industry phases out use of the venerable stripe on the back of the card. Like many new technologies, getting used to those chip cards has been hard — for both consumers and retailers — but they’ll get better as we get better.
The so-called “Internet of Things” will continue to blossom, but this will not come without risks. This foreshadows a world in which lots of mundane devices are connected to the Internet for control and monitoring — baby monitors, security systems, solar panels and even teakettles (really — the iKettle). And all those Internet-connected things are often not as well-protected as even your home computer — so we find thousands of active baby monitors visible to anyone who cares to look. It’s not just the massive data breaches we have to worry about; though, unfortunately, those will also continue.
Despite all those changes, there are some things that we shouldn’t expect to see in large-volume use any time soon. Self-driving cars are making great progress, but there’s much to do before they’re routinely set loose on the roads with the rest of us. Drone aircraft are making great strides, but don’t expect Amazon to deliver a package to your front yard by aircraft any day soon. The legal system to ensure safety and manage liability hasn’t caught up with the ability of technology to accomplish such a delivery.
Bottom line for 2016: Buckle up and enjoy the ride, and pay attention not just to the technology, but also to all the disruptions that stem from it.
Paul Witman teaches information technology management as an associate professor in the School of Management at California Lutheran University.
by Jason Isaacs
In 2016 the wheels of technological progress will continue turning, seemingly more quickly every day. We are living in an exciting time to be a technologist. 2016 will see continued advances in the fields of mobile Internet, augmented and virtual reality, 3-D printing and the use of Bitcoin and its underlying technology, blockchain (potential to change online security). The cost of computing, data storage, communication and sensing will continue to decrease, mainly due to the success of the smartphone industry. As the costs of the basic building blocks for modern technology continue to decrease, many new applications are emerging, including the following three areas whose importance to the economy of California are ever increasing.
Internet of Things (IoT)
Arguably, the technology benefiting most from this decrease in computing costs is the Internet of Things (IoT). The Internet of things refers to the connection to the Internet of “things” other than traditional computers. Examples include household items such as televisions, thermostats, refrigerators and ovens as well as items outside the home such as cars, traffic signals, even parking meters. There are many competing predictions out there, but by a conservative estimate, in 2016 we can expect there to be more than one Internet-connected device per human on the planet. The next key to the proliferation of IoT devices will be a common protocol or way in which they connect and communicate with the Internet. Google is currently developing an IoT platform called Google Weave that promises to usher in an even more rapid expansion of Internet-connected devices.
Another promising (and troubling to some) line of technology continuing a rapid expansion in 2016 will be drones or as I like to call them, Remotely Piloted Systems. The Federal Aviation Administration (FAA) estimates that over 1 million drones were sold during the Christmas 2015 period alone. A technology previously held only by the military is now a household toy. With so many drones in the sky, the FAA has struggled with how to reasonably regulate their use to ensure the safety and privacy of the general public without stymying the burgeoning industries built around domestic applications such as precision agriculture, aerial videography, land and resource management and infrastructure inspection. Recently, the FAA announced a new rule requiring the registration of all pilots of drones weighing between 0.5 and 55 pounds. With 1 million freshly minted pilots from Christmas, the jury is still out on just how the FAA will be able to enforce such a rule.
Recent advances in the field of artificial intelligence coupled with cheap computing, sensing and communication, along with a constant connection to the Internet, will give rise to a new class of technology referred to as autonomous systems. The key differentiator of these systems is their ability to sense the world around them and make seemingly intelligent decisions about future actions. Autonomous systems can take several forms and include various levels of semi-autonomy such as self-driving cars, robots and drones. Also included in this category even though they aren’t moving objects are the virtual personal assistants such as Apple’s Siri, Google’s Google Now and Amazon’s Echo.
As we enter into the new year, let’s take a moment to reflect on ways that our lives have been improved by technology over the years. When we consider how computers, the Internet and mobile phones have impacted our lives in a positive way, then it may make it easier to embrace the latest technological advances with an open mind.
Jason Isaacs in an assistant professor of computer science at California State University, Channel Islands.
an end to water shortage
by Matthew Fienup
After four years of severe drought, there is hope for an end to Ventura County’s water shortage. The source of this hope is not the 30 to 50 inches of rain that the county expects this winter — without other changes, we would need four straight years of 30-inch rains to replenish local aquifers. Rather, hope springs from water users themselves, in particular from irrigators in the county’s $2 billion agricultural industry. In a surprising partnership, irrigators are working with local groundwater regulators to fundamentally change how Ventura County’s water is managed. Once implemented, these changes will make Ventura County a leader across the state in sustainably managing this scarcest of resources.
At the center of the contemplated changes is an acknowledgement that there is a difference between a drought and a water shortage. A drought means that little rain and snow have fallen. If the demand for water is cut sufficiently, a drought need not lead to major problems. A shortage means that the demand for water exceeds the available supply. Shortages lead to serious consequences, such as saltwater intrusion and declining water quality. Ventura County is suffering from a man-made water shortage, one that persists in average rainfall years as well as in droughts. This need not be.
Consider the example of our friends Down Under. From 1995 to 2009, Australia suffered from the infamous Millennium Drought. Prior to 1995, Australia undertook reforms to sustainably manage its water. First, total water use was capped at a sustainable level. Then robust water markets were created, giving water users maximum flexibility to respond to changing water availability. Under water trading, as water becomes scarcer, remaining allocations of water become more and more valuable. This increases the economic returns for conservation and brings alternative forms of supply on line. Water trading equipped Australia to endure the worst that Mother Nature could dish out.
Water trading has shown similar benefits in the United States, most notably in Oregon, Colorado, Nebraska and California. Fox Canyon, which comprises about 50,000 acres of prime agricultural land in Ventura County as well as three major cities, is considering adding its name to this list. The Fox Canyon Groundwater Management Agency (FCGMA) is currently working with local farmers to significantly reduce total groundwater extraction and then to design a system of water trading that will give farmers needed flexibility.
This ongoing collaboration between regulators and the regulated is a real bright spot for Ventura County in 2016. Together, farmers and FCGMA are looking increasingly likely to end the water shortage. And the beauty is that we don’t need 50 inches of rain — although no one will complain if we get more than our usual share of the wet stuff.
Matthew Fienup is an economist at the California Lutheran University Center for Economic Research and Forecasting and teaches environmental economics to graduate students.
impacts of prolonged drought
by Donald Rodriguez
There are numerous environmental consequences associated with four years of drought in an era of climate change. One of the biggest impacts of warmer temperatures has been that they intensify the effects of drought, increasing evaporation and drying out the soil. The 2015 water year saw the highest average temperature in 120 years of record-keeping. According to the California Climate Tracker, the state’s average temperature was 58.4 degrees — more than three degrees warmer than average and almost a full degree warmer than the previous high in 1995-96.
California’s precipitation deficit over the past four years has been huge, leading to more than 15 million acre-feet of groundwater and reservoir depletion — equivalent to 74 Lake Cachumas — and very dry watersheds. It will take a long time to recover from this deficit, especially because much of it is groundwater in the driest parts of the southern Central Valley, making it hard to refill. What will be the impact of an El Niño event on Southern California? An intermittent weather event that begins in the Pacific Ocean’s warm equatorial waters, El Niño tends to skew weather patterns across the West whenever it hits. While above-average precipitation could help ease the four-year drought, the anticipated rainfall will likely only affect Southern California. But the state relies on the northern Sierra Nevada snowpack for more than 60 percent of its water supply.
The damage to the ecosystem from the drought is likely to take more time to recover. California’s ecosystems were highly stressed before the drought and were further stressed by the drought. Many native fish populations are at their lowest levels ever, and some native species have been wiped out in many streams. The need to manage and dedicate water to restoring these fish populations will likely prolong the drought’s effects into wet years. This happened following the 1988-92 drought, when accumulated damage to ecosystems brought additional endangered species listings that have since reduced many water deliveries.
In addition, wildfires during drought years have had a significant impact throughout the state, leaving crystalized topsoil that is hydrophobic (unable to allow water to saturate the soil). This coupled with the loss of vegetation results in mudslides on a scale we haven’t seen in some time (Mt. Shasta in September and the recent slides along the I-5 corridor).
Finally, this drought has served to sharpen our collective focus on water policy and public thinking about water use and management.
Californians have reduced water use by 27.1 percent in the five months since emergency conservation regulations took effect in June, continuing to meet the Governor’s 25 percent water conservation mandate. Agriculture, which withdraws over 80 percent of the state’s water annually, has continued to increase their conservation efforts. The state’s new Sustainable Groundwater Management Act will bring groundwater use into better balance over the long term. This is particularly important for both agriculture and rural communities, which heavily rely on groundwater to get by during droughts. Balancing groundwater use, however, will require reduced use of surface water and groundwater in wetter years and, for some areas, substantial overall reduction in irrigation.
Many of the actions taken during this period to reduce statewide water consumption will continue to impact the state’s water budget for years to come.
Donald Rodriguez, Ph.D., is professor and chair of environmental science and resource management at California State University, Channel Islands.