27 June 2008Wired.com
California's blueprint for slashing greenhouse-gas emissions could transform the world's seventh-largest economy -- and be a model for a nationwide plan in 2009.
The state presented its plan Thursday morning to cut greenhouse-gas emissions by about 30 percent by 2020. Based on legislation passed in 2006, the state is proposing a slate of changes including a cap-and-trade system for greenhouse gases, a requirement that renewable sources power one-third of the state's grid, and taxes on gas-guzzling cars. The state's approach could become a model for the nation, if climate-change legislation of some sort gets passed by Congress and is signed by the next president in 2009 -- as is widely expected.
The state anticipates that implementing the plan will not only attack climate change, but also provide a net benefit to the California economy.
"Setting California ahead of the curve on global warming will give our state a competitive advantage," said Mary Nichols, chair of the Air Resources Board.
That conclusion flies in the face of conventional wisdom that the costs of combating climate change will be high, perhaps several percent of a country's total economic output. That said, most of the debate over the costs of climate change and mitigation has been until now slightly more sophisticated than back-of-the-napkin calculations.
California's Air Resources Board, on the other hand, undertook a detailed, near-term look at the state's infrastructure to decide exactly how to get emissions cuts without economic pain. It was required to do so by the groundbreaking AB32, the "Global Warming Solutions Act of 2006," signed into law in September of that year.
If California's numbers hold up to scrutiny, it could be a major boost for the proponents of fighting climate change.
"The key thing with the AB32 scoping plan is that it really helps California create green jobs, green dollars and a clean environment," said Spencer Quong, a Union of Concerned Scientists analyst.
Quong also noted that consumers stand to economically benefit. The state estimates that car owners will save about $30 per month if all the plan's car regulations are deemed legal.
One intriguing way that California made the numbers look prettier was to include the health benefits of reducing greenhouse-gas emissions.
Cutting down emissions could save over 300 lives and up to $2.4 billion dollars, ARB staffer Edie Chang said. The savings would come mostly from decreasing asthma and lost-work days.
Despite the overall triumphant tone that colored the unveiling of the long-awaited plan, there are some areas where environmentalists, green-tech types and old-line industries continue to disagree.
As with national legislation battles, the issue of emission permits is looming large. In a cap-and-trade system, the government sells or gives away permits to discharge a certain amount of CO2 into the air. As you might expect, utilities and industry want to get these permits for free, while most public advocates and environmentalists want the state to sell the permits, then use the proceeds for green-tech investment or taxpayer refund.
"We think that auctioning is a key element of a plan" that maximizes the public interest, said Chris Busch, another Union of Concerned Scientists analyst.
Meanwhile the industry countered that they would need the permits given to them so that they could make the necessary changes to their businesses to keep costs for consumers low.
"Auction revenues, which are a very scary thing for us ... should be left 100 percent in the hands of those utilities," Bruce McLaughlin, representing the California Municipal Utility Association, told the board.
The issue is unlikely to go away, but most seem to expect somewhere between 25 and 75 percent of the permits to eventually be auctioned.
That number could be the standard that John McCain or Barack Obama looks to when he signs a bill that puts a price on carbon, as either is expected to do if elected.
In that way, the nitty-gritty details of a board meeting in Sacramento could end up having a major impact on the entire globe.
"We believe that this scoping plan is going to be an important milestone, an important framework for other states," said Nichols, the board chair.
