The California Air Resources Board (ARB) approved the plan to reduce the state’s greenhouse gas emissions to 1990 levels by 2020. “This plan is California’s prospectus for a more secure and sustainable economy,” said ARB Chairman Mary Nichols. “It will guide capital investments into energy efficiency to save us money, into renewable energy to break our dependence on oil, and promote a new generation of green jobs for hundreds of thousands of Californians.”
By moving first in the nation,” added Nichols, “California maintains its position at the front of the line in attracting venture capital, and positions us as a leader in the race to develop the clean technology products, patents and projects the global market demands and needs.”
The ARB will begin developing detailed strategies to implement all of the recommended measures that must be in place by 2012. The Board’s decision makes California the first state in the nation to formally approve a comprehensive greenhouse gas reduction plan that is required under statute and that involves every sector of the economy.
The California Global Warming Solutions Act of 2006 (AB32), was meant to bring the state into compliance with the Kyoto Protocol. Currently, the state is responsible for 1.3 percent of worldwide greenhouse gas emissions and eight percent of United States’ emissions.
An important component of the plan is a cap-and-trade program covering 85 percent of the state’s emissions. This program will be developed in conjunction with the Western Climate Initiative, comprised of seven states and four Canadian provinces that have committed to cap their emissions and create a regional carbon market.
The plan will allow businesses to buy and sell emissions credits; raise water fees to between $100 million and $500 million annually; require utilities to generate 33 percent of electricity from renewal sources; impose strict limits on vehicle emissions; and provide strategies to reward buyers of fuel-efficient cars. The mix might cost Californians as much as $1.5 billion a year, says The San Diego Union-Tribune.
Critics of the plan, including some economists, argue the analysis upon which it is based is full of rosy assumptions and ignores potential problems. Many companies fear rising electricity and other costs will put them out of business. “This plan is an economic train wreck waiting to happen. Up until now, that train wreck has only existed on paper,” said California Hispanic Chambers of Commerce Legislative Affairs Chairman James Duran.
“There are some people who say that we can’t afford the fight against global warming while our economies are down, but the exact opposite is true,” says Governor Arnold Schwarzenegger. “The green rules and regulations that will help save our planet will also revive our economies.”
His plan has received full support from green-related groups, including the Environmental Defense Fund. The non-profit argues in a report that clean technology is responsible for a significant percentage of employment in California.
Between 1990 and 2006, the number of green technology businesses - principally related to solar, energy efficiency, and transportation - grew by 84 percent in the state. This means that adapting new green regulations will not disrupt the economy because California has been at the forefront of environmental change for nearly two decades.
The world’s eighth largest economy should also be getting firm support from Washington. In November, the chairman of the U.S. House of Representatives Energy and Commerce Committee through which global-warming bills must pass, John Dingell, was replaced by Henry Waxman, a Democrat from California.
This raises an issue. Henry Waxman represents a district that includes influential Beverly Hills and Santa Monica, two of the wealthiest enclaves in the United States, far from the gas guzzling hinterlands of Detroit fiercely defended by John Dingell, and suffering under the threat of massive layoffs if the big three automakers fold due to the current financial crisis.
As a result, Congressional support for Governor Schwarzenegger’s push to curb greenhouse gas emissions may widen a rift between those who think the world needs to turn green and those who fear their jobs will be lost if environmental measures are taken swiftly without guardrails.
“The risk now is that environmentally-minded lawmakers will over-reach, and push for a measure that big business cannot stomach,” writes The Economist. “To get meaningful, lasting laws on climate change passed and implemented, industry must be reassured, not alienated.”
Already voters defeated a clean power initiative put on the ballot during last November’s presidential elections. The measure would have required the state’s utilities to generate 50 percent of their electricity from renewable sources, including wind mills, geothermal reserves and solar panels. Critics charged that the measure would have driven up electricity rates, delayed the state’s transition to clean power and put small renewable energy companies out of business, according to the Associated Press.
Schwarzenegger’s goal of greening California must still deal with many challenges. In these turbulent economic times, he must cajole a doubtful industry and convince state residents that paying a little extra today means a better place to live tomorrow. From our perspective at GLOBE, bold, measured action is both necessary and appropriate at this time.