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California air board announces plan for carbon-credit trading  

California air regulators today announced a bold plan to slash greenhouse gas emissions that would alter the way utilities generate electricity, automakers build cars and developers construct buildings, and launch the nation’s broadest market in carbon-credit trading.

California’s blueprint is the first comprehensive effort to combat global warming by any American state, and comes nearly three weeks after the U.S. Senate threw out a national greenhouse gas bill that would have set similar targets.

Virtually every sector of the state’s economy would be affected by the air board’s plan, including coal-fired power plants and oil refineries, landfills where rotting garbage emits methane gas and forests, which would be cultivated to reduce fires.

But the California Air Resources Board’s draft road map for implementing the state’s landmark 2006 global warming law faces daunting obstacles, among them resistance from the Bush administration, legislative snarls and some industry opposition.

The federal government has blocked California’s 2002 law to cut carbon dioxide fumes from automobile tailpipes, opting for a less strict mileage standard. The controversial attempt to get utilities to generate one-third of their energy from renewable sources died in the Legislature last year and is pending before the Assembly, along with several green-building bills.

Meanwhile, the Western Climate Initiative, a group of seven states and three Canadian provinces, has yet to agree on the basics of a trading plan, much less cope with political skepticism.

In a media briefing, board Chairwoman Mary Nichols called the 99-page document “an ambitious goal that translates into a 30% cut in carbon emissions over business as usual,” adding that it might “motivate other states and the nation.”

The price tag for individual industries has yet to be calculated, and some companies fear it could be exorbitant. But Nichols said that overall, the benefits to the state’s economy, including healthcare savings from fewer breathing ailments, would slightly outweigh the costs.

Given the projected fallout from global warming, which include increased wildfires, water shortages and illness from heat-induced pollution, “The potential costs of implementing the plan pale beside the cost of doing nothing,” the document asserts.

Although most environmental and industry groups will not see copies of the plan until today’s board meeting, many have been briefed and offered guarded approval.

Shelly Sullivan, executive director of the AB-32 Implementation Group, an alliance of the California Chamber of Commerce and the California Manufacturers and Technology Assn., praised the plan as “balanced and cost-effective.”

“We’re encouraged that this draft acknowledges the effectiveness of market systems like cap-and-trade to deliver greenhouse gas emission reductions at a lower cost for California consumers.”

If California succeeds in reducing emissions from a projected 596 million metric tons in 2020 to 427 million metric tons, it will have ratcheted itself down to the amount it emitted in 1990, about 10% below today’s level.

That would mean, on an average per capita basis, reducing the annual carbon footprint of every Californian from 14 tons to about 10 tons, according to the air board.

“This is the beginning of a process,” Nichols acknowledged. “Now is when we begin to talk through how the program will go into effect.”

Many public workshops and meetings with industries and civic groups, as well as more detailed economic modeling, remain before the board would adopt the plan, slated for November. It would take another two years to develop regulations to lock the goals in place, officials say.

Beyond 2020, the board is committed to even more dramatic action: reducing emissions by 80% by mid-century, the level that most scientists say will be needed globally, if Earth is to avoid a dangerous level of heat-trapping gases in the atmosphere.

Gov. Arnold Schwarzenegger has endorsed the 80% goal in an executive order.

State Sen. Don Perata (D-Oakland noted that bills to implement the plan’s efficiency and renewable-energy goals are pending, but he added, “I am concerned that the plan relies on a ‘cap-and-trade’ scheme that raises more questions than it answers.”

Under such a system, similar to one the European Union has adopted, governments set a limit on overall emissions but allow some industries, such as coal-dependent utilities, to purchase pollution credits. The credits can be traded on the market. Heavy polluters could offset their emissions by paying to clean up other industries where costs are less prohibitive, or invest in other projects that decrease carbon.

What proportion of pollution permits or allowances would be given out free and what proportion would be auctioned has yet to be worked out. That decision is likely to spark debate among industries and environmental groups.

Offsets could involve projects outside of California but within the regional Western market. They would be subject to scrutiny to certify the reductions as authentic. International offsets might be permitted for Mexican border projects or for imported cement, a benefit for state cement firms that say it would be too expensive to cut carbon.

Nichols said the partners in a Western carbon-trading alliance are “committed to this process” but said that if a stalemate persists after two years, “We have time to reassess and either go forward on our own or look at other options.”

David Nahai, chief executive of the Los Angeles Department of Water and Power, who had expressed strong reservations about the air board’s direction before the plan was issued, said in an e-mail message that “the plan goes a long way toward addressing the concerns we have voiced over using a cap-and-trade auction as the primary device to lower greenhouse gas emissions.”

The DWP relies on coal to generate almost half of its electricity, potentially putting it in a position of paying huge sums to offset the pollution, money the utility says it would rather spend on switching to cleaner sources. The plan, however, would support the DWP’s efforts to switch to renewable fuels “as opposed to thwarting our efforts, as prior proposals would have done,” Nahai said.

Patricia Monahan, director of the California office of the Union of Concerned Scientists, noted that the plan, “while still a proposal, represents the furthest step forward any state has taken in the fight against global warming.”

But Chris Busch, a Union economist, added that the Western Climate Initiative needs to be strengthened: “Until the details are filled in, the jury remains out.”

From an economic viewpoint, the air board sought to head off the sort of industry attack that has stymied national legislation, by highlighting what it said would be “a green tech business boom.”

Moreover, it added, the plan could save taxpayers $2 billion in medical and other costs by 2020, by reducing harmful air pollution that would otherwise cause 340 premature deaths and 9,400 cases of asthma, it estimated. Energy-efficient buildings would save money for their occupants, and clean cars would cost less to drive, the board noted.

“Making our state more efficient will make our state grow,” Nichols said. “We can protect our economy and our environment at the same time.”

By Margot Roosevelt
Staff Writer

Los Angeles Times

26 June 2008

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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