California Dreaming

GLOBE-Net - California Governor Arnold Schwarzenegger wants to follow through on his pledge to reduce greenhouse emissions to 1990 levels by 2020, despite the financial crisis spreading around the world. His plan got a big boost this week when it was endorsed by the state’s utilities regulator. But critics still wonder if he has not over extended his reach.

 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.

You can return to the main Market News page, or press the Back button on your browser.