Smoggy skies over the downtown Los Angeles skyline are seen from Griffith Park. (Click to enlarge)
California’s plan to cut emissions heavy on mandates
State’s proposed rules are the most sweeping in the US to cut greenhouse gases.
By Ben Arnoldy| Staff writer of The Christian Science Monitor/ June 26, 2008 edition
Reporter Ben Arnoldy discusses California's cap and trade system.
Reporter Ben Arnoldy
Oakland, Calif.
In the most ambitious effort yet in the US to reduce greenhouse gases, California will mandate dramatic increases in automobile efficiency, cleaner fuels, and renewable power.
The state’s Air Resources Board released a regulation-heavy draft plan Thursday to help implement the landmark Global Warming Solutions Act of 2006. The law, the first of its kind in the US, commits the state to cutting 30 percent of its greenhouse-gas emissions by 2020.
Most emission cuts will be accomplished through government regulations. The remaining 20 percent is left up to industry through a new emissions trading system involving seven Western states and some Canadian provinces.
That ratio pleases some environmentalists and analysts, but disappoints key industries hoping for greater flexibility. The plan touches nearly every aspect of California’s $1.7 trillion economy and is likely to spur large new industries as well as raise fuel and energy costs.
“It’s a balance of big regulation and ambitious market scheme. I think it’s an impressive first effort at a greenhouse-gas plan for the state,” says Charles Kolstad, professor of environmental economics at the University of California, Santa Barbara.
Distrust of market-based mechanisms in California means that the plan had to involve direct regulations, he says.
The ARB chair, Mary Nichols, described the plan as “comprehensive,” and said California’s example will help “motivate other states and our nation to enter into lasting plans to address this problem.”
The largest cuts will come from:
• Transportation: The state renews its fight for autos that emit 30 percent less greenhouse gas. The effort has been blocked at the federal level, but California expects support from the next administration. Refineries must also produce lower-carbon gasoline and diesel.
• Utilities: A third of California’s electricity must come from renewable sources such as solar and wind power. As of 2006, that figure stood at 10.9 percent.
• Energy efficiency: The state will set tougher appliance efficiency standards, green building codes, and water conservation measures.
Regulation will do most of the work in bringing the main sources of greenhouse gases within the state’s new emissions cap. The shortfall will be handled through a cap-and-trade system.
These market-based schemes force polluters to acquire credits for their level of emissions. Government sets a cap on these credits, racheting it down over time. Polluters can buy and sell credits, creating a financial incentive to adopt cleaner technologies.
The system will be developed jointly with a regional coalition known as the Western Climate Initiative. Some initial emission credits are likely to be sold, not given, to polluters. And ARB plans to limit the use of offsets, a way to “reduce” emissions by funding green projects.
It’s unclear what the costs of implementing the plan will be. The ARB will release details later, but claims it will bring an added 1 percent gross domestic product by 2020. California soaked up $1 billion of clean technology investment in 2006, they note.
But others point out the impact of higher fuel prices and job losses in the regulated industries. “I’m skeptical about an end result of economic gains,” says Dr. Kolstad, adding that how the plan affects “average Californians in their pocketbook” will be “the barometer of acceptance of it.”
Some early criticism came from industry groups. “It’s the largest regulatory program I have ever been involved in in 15 years,” says Cathy Reheis-Boyd, chief operating officer for the Western States Petroleum Association. She emphasizes that her industry supports the reduction goals but says cap-and-trade is the cheapest way to get there.
She had other concerns, too. There’s no price ceiling to protect against unforeseen price spikes on the carbon exchange. And the fuel regulations leave refineries nonplussed over how to meet their carbon reductions before someone invents a better biofuel.
Others echoed a preference for less regulation. “If the plan says that only 20 percent of the reductions will be secured through a market, then you better [hope] the government is four times more likely to come up with reductions,” says Josh Margolis, joint CEO of CantorCO2e, a financial services company focused on energy and environment.
But Dan Kammen, an energy expert with the University of California working with the government, argues that many of the regulations build on well-organized programs, helping reduce the unknowns in this new system. “For us to count on cap-and-trade to do the bulk of the work, never having done this system here, would be a little risky,” says Dr. Kammen. He points out that cap-and-trade will affect some sectors more than others; regulations help spread burdens.
He suspects cap-and-trade will prove more effective at cutting emissions than the plan outlines. If so, some of the regulatory time lines could be relaxed, he says.
Over the summer, the ARB will take comments and make revisions before approving a plan in November. Then it will be implemented through government rule making – a process the ARB believes it has wide authority over.
“It’s a strong, independent board, and they are really the last say, except the law does allow the governor to delay any of the rules for a year,” says Bill Magavern, director of Sierra Club, California. He applauds the ARB’s proposal, calling it “balanced” and “comprehensive.”
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Comments
2. Brian Hamlin | 06.26.08
The rhetoric of obstructionists is obviously alive and well. Its profitable to provide highly polluting services and the market is not solving this. Personally I’m impressed at the thorough and open process that has come so far. The Governor has my vote for his appointments at Cal EPA. I live and work in California.
3. Mike Higgins | 06.27.08
The picture of a smog-filled Los Angeles skyline is not consistent with the subject of this article, which deals with reducing greenhouse gases, primarily carbon dioxide (CO2), which is neither visible nor a pollutant. Carbon dioxide is colorless and odorless. It is not responsible for creating smog. Catalytic converters on automobiles were purposely created to convert smog-creating gases into nitrogen, oxygen and carbon dioxide - all of which are invisible to the human eye and all of which are commonly-occurring gases vital to the sustenance of all life on Earth.
Most importantly, contrary to the claims of the global warming alarmists, no scientific evidence exists that links CO2 to increasing global temperatures. This belief system has been propagated by the UN, misinformed politicians and a compliant media contrary to scientific evidence that shows that temperature changes over the past 400,000 years have always occurred before changes in CO2 levels, completely refuting the claims of human-induced global warming. In the simplest terms possible, human-induced global warming is a fraud!
Climate Change - Is CO2 the cause?
http://www.youtube.com/watch?v=FOLkze-9GcI
4. Joe Cook | 06.27.08
The primary supposition that this “plan” attacks is terribly flawed. There is no scientifically verified linkage between atmospheric CO2 levels, man assisted and otherwise and atmospheric temperatures. The temperatures are dependent on sun cycles and orbital variations, not CO2.
CO2 is not a “pollutant”, it is a necessary part of the carbon cycle of life on earth. There is absolutely no reason to attack CO2 generation as an evil.
It is well and good to promote alternate energy sources besides petroleum, we will definitely run out of oil, for all practical purposes, eventually. But each alternate source should be able to stand on its own economically and not be subsidized by the populace on the premise that it is “less carbon intensive”. That is extremely misguided and wasteful of the public resources.
And where is the cost/benefit analysis in this “plan”. CARB tells us they will reveal their estimates of the economic costs “later”! That must be a sick joke. The bureaucrats should be held accountable for the costs of their schemes right from their introduction. If it doesn’t stand the cost/benefit scrutiny, it should be scrapped forthwith. We already have far too many boondoggle schemes imposed on us, in California and the U.S., where the costs have, and will continue to, far outweighed any real benefit to the citizens.
I have been a Californian all my life (75 yrs) and have grave doubts about the intelligence and agendas of those legislators who invent draconian programs like this. They want to “mandate that the oil companies invent and distribute a lower carbon fuel”? Right! Everyone should be happy with lower mileage to reduce his “carbon footprint”!
If you can only inform yourself and come to the inescapable realization that man assisted CO2 doesn’t matter, then all this nonsense goes away.
Global Warming - or Global Governance?
http://www.brightcove.tv/title.jsp?title=1489157285&channel=1418562965
5. Richard B. | 06.27.08
Mr. Kammen is so confident that he is correct. The problem is, unlike employees in the private sector, if Mr Kammen and his ilk are incorrect, none of them are out of work. Just the poor blue-collar workers in all that ‘dirty’ business
6. J Baustian | 06.27.08
These policies will make California a cleaner state, as they will drive away the industries, the agriculture, and 50% of the population. I’m not sure how the rest will survive, maybe handouts from the Mexican government? Good luck, California bureaucrats, without any tax revenue how will you receive any paychecks or pension benefits.
Of course, since California’s economy is a huge share of America’s economy, California will drag the whole rest of the country down. Not down to the rock-bottom level of California, but they will still be in a world of hurt.
I’ll stick around as long as I can, but I’m planning to get out before Arizona, Nevada, and Oregon close the borders.
7. danboy | 06.29.08
It is true that there are necessary sacrifices of the economy in combating global warming. This is a natural element of human progress if we are to survive. The capitalist economic system is destructive and, inherently, temporary. Global Warming is the most important concept that has ever confronted modern day human beings. Bring on the carbon tax. Ditch the fossil fuels. Welcome the energy revolution!
8. Someone | 07.01.08
I have lived in Maryland for some time. When I first started living here, it snowed a lot in the winter. That blizzard from a years ago was a a freezing ****. Then I noticed that it started to snow less…and less…and now, all we get is freezing rain with VERY light snow with hotter summers. From where I am standing, I find it hard to believe when comparing notes with my elders that this is part of nature’s cycle. California, good for you guys. Care to help us clean our Bay as well?
I also find it funny that when California is trying to clean up, I hear all this rubbish about them wanting to be part of Mexico. There is no proof. It is just as ridiculous as saying Obama was Mccain’s brother! It is the same as saying those veterans coming from and now oppose the war are not “real” soldiers. Utter rubbish. If that was true, say that to New York as well with all the immigrants there.
To those that say that free market will take care of everything…wake up! First of all, a free market does not exist and if it did, would be controlled by the same corporate monsters except they won’t be callled lobbyists anymore. We had a mixed market ever since the people found out what **** the market put in our stuff and how they treat people without regulations! The entire basis of the free market arguement is that the people will desire greener energy. Stop. Any meaningful measures againist global warming involves redoing our entire infrastructure which, ironically, is falling apart right now. The fact also is that going really green is costly. It is also a fact that people, deep down, do not want to change. They want to go back to the old infastrure when gas was cheap and we didn’t give much thought about our enviorment. Oil, coal, and nuclear will do anything to hold onto power. Government has to step up and add pressure and a lot of money unless Gates feels extra generous and feels like donating to the cause.
To the people talking about Co2 being harmless, well, guess what? They are not the only thing causing global warming. Even the water from being used for those way too hot nuclear reactors is causing an impact. Methane is another.
Even if you DON”T believe in global warming, the government has to step up either way. Like I said, the infastrucre is falling apart. Power grids were not meant for this much use. Suburbs…no longer appealing. Mass transit is falling behind. All that paving is contributing to flooding, not to mention the roads and bridges are falling into disrepair. How to fix this? Let the market do it? With what money if they don’t control them? Either way, the government must be heavily involved.
If they fail…well, I believed that after 7 years of Bush, we were doomed either ways.
9. George Schilling | 07.03.08
There is an engine being developed in California that uses no oil, burns any fuel, eliminates transmissions, costs less than a V-6 engine, uses an 81:1 expansion ratio, produces far less pollution than a hybrid has a positive displacement variable-size combustion chamber, is 85%+ efficient converting energy to rotary movement, will give vehicles well over 100 mpg pushes a vehicle 65mph at 500rpm, makes 0 to 2000 horsepower, has usable torque at 0 rpm, integrates electric motor and I.C.E., was designed to use water as fuel
can be used wherever power is required. This is the future for reducing emmissions in transportation as well as electric power plants. http://www.thegreenengine.com
10. Arthur E. Lemay | 09.28.08
My wife is a seventh generation Californian, and we plan to leave California because these environmental laws are insane. They will do nothing for the climate, stop growth, kill employment and ruin property values. We cannot stay and we will leave before the end of the year. We will close down our businesses, and put many people out of work.
I expect that we are in the vanguard, but by 2012, it will be a flood of people leaving. The Sierra Club officers and other radical environmentalists should be put in jail.
Trackbacks/Pingbacks
1. California Unveils Ambitious Emissions Plan - 30% Cut By 2020 · Environmental Leader · Green Business, Sustainable Business, and Green Strategy News for Corporate Sustainability Executives | 06.27.08
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1. Mike Higgins | 06.26.08
Let the transfer of power and wealth from the people to the bureaucrats, lobbyists and government-favored corporations continue unabated by science, logic and history.
We have witnessed, in our lifetimes, the utter failure of central planning and central government control when the Soviet Union disintegrated 20 years ago. Yet the people of California march in lock step toward increasingly central control of their lives and economy. To believe the false hopes of economic growth coming from these policies is to disregard the lessons of history.