Despite economy, states gear up greenhouse gas reduction efforts
It has been three years since CALIFORNIA Gov. Arnold Schwarzenegger (R) signed AB 32, the Global Warming Solutions Act. A host of other states and Congress have since followed suit with measures of their own. But now, with the economy in the most turmoil since the Great Depression, supporters and opponents alike are struggling to come to grips with how much these measures will cost.
On the surface, AB 32's directive is fairly straightforward: reduce greenhouse gas emissions to 1995 levels by 2020 — about a 25 percent decrease. What it will take to achieve that, however, is much more complicated and, to many critics, far too expensive.
But to staunch supporters like CALIFORNIA Air Resources Board (CARB) Chairman Mary Nichols, the person tasked with ensuring AB 32's implementation, the issue of greenhouse gas reduction is about much more than just dollars and cents.
"Our coastline will be under water in 100 years; this is fact, not theory," Nichols said at a July Sacramento Press Club luncheon, adding that the changes currently going on in the atmosphere are "subtle, slow and complicated." Moving forward with AB 32 implementation, she contends, is a preemptive measure against disaster.
That implementation process involves a variety of methods, including direct regulations on many industries, monetary and non-monetary incentives for reducing greenhouse gas emissions, and a controversial "cap-and-trade" mechanism. CARB has also developed a Low Carbon Fuel Standard — issued in January of 2007 — which requires a 10 percent reduction in the carbon intensity of the Golden State's transportation fuels by 2020.
Other states have also developed their own plans to reduce greenhouse gas emissions, several of which mimic CALIFORNIA's efforts to decrease its carbon footprint.
According to the Center for Climate Strategies, a non-profit, non-partisan organization in Washington D.C. that helps governments develop comprehensive plans for dealing with climate change, at least 30 states have completed greenhouse gas reduction plans since 2006. Many others, including COLORADO, GEORGIA, and ILLINOIS, have plans under construction. More are likely to come on board, as State Net reports that lawmakers considered over 200 similar bills this year alone.
The whole process, however, is not without skeptics, particularly where it concerns the fiscal impact of putting such measures into action. With state budgets bleeding red ink everywhere, many observers contend these measures are simply too expensive.
The most controversial issue revolves around the proposed cap-and-trade programs, which limit the emissions a company may release while also permitting the most efficient companies or governments to sell their pollution "allowances" to others for a profit. Trying to meet those standards is expected to require many industries to make significant changes, including expensive equipment upgrades. Business groups say this could have a devastating impact on already-reeling state economies, particularly by driving much-needed jobs to cheaper and much less regulated labor markets overseas.
According to one recent study from the CALIFORNIA Chamber of Commerce, "The average annual loss in gross state output from small businesses alone would be $182.6 billion, approximately a 10 percent loss in total gross state output. This will translate into nearly 1.1 million lost jobs in CALIFORNIA." The report's authors say individuals will also feel the financial pinch, noting that "CALIFORNIA families will be facing increased annual costs of $3,857 and consumers will be forced to cut discretionary spending by 26.2 percent in order to cope with the increased costs generated" by AB 32 implementation.
But Glen Anderson, an alternative energy and fuel specialist with the National Conference of State Legislatures, disagrees, contending that many of the negative projections surrounding measures like AB 32 are based on bad information.
"There are huge assumptions being made about where energy comes from," Anderson says. "Obviously, burning coal is very cheap, but there are other efficient energy sources; they may be more expensive in the short term, but one would use less of it, decreasing the net amount spent."
Center for Climate Strategies President and CEO Tom Peterson also believes that the recession should not greatly affect the movement toward reducing greenhouse gas emissions. "I don't think we should say, 'Gosh, we've got a recession, let's think of this differently.' The stakeholders are very focused on low-cost, high-benefit plans and have seen the rollercoaster of economic times and changes among federal administrations."
While state governments are moving forward, Congress is attempting to implement its own clean energy measure, complete with a cap-and-trade component, authored by Reps. Henry Waxman (D-CALIFORNIA) and Edward Markey (D-MASSACHUSETTS). The measure — HR 2454, dubbed the American Clean Energy and Security Act of 2009, or "ACES" — enlists a variety of clean energy mandates designed to reduce nationwide greenhouse gases 17 percent by 2020, 42 percent by 2030 and 83 percent by 2050. It cleared the House in June but is so far languishing in the Senate.
Although the bill's fate is unclear, Peterson believes "it is only matter of time before congressional action takes place and the role of the states is to gear up." The success or demise of the bill may depend on resolving or reforming President Obama's health care proposal, which Peterson notes has occupied the bulk of lawmakers' time and energy in recent weeks, and will likely continue to do so. But even with the health care bill dominating the scene at the moment, Peterson notes that Senate Majority Leader Harry Reid (D-NEVADA) has indicated he is ready to make sure the cap-and-trade proposal is resolved by October.
Although most state leaders are loathe to see federal laws pre-empt what are usually much stronger state standards, CARB's Nichols says she is not overly concerned about the possibility of the Waxman-Markey bill taking precedence over AB 32. Nichols notes that while she does have "concerns about whether it's the most efficient, most cost effective way to do what they're trying to accomplish," the federal statute will simply push the states toward their initial goal.
"If the Senate includes the same provisions on cap-and-trade as contained in the Waxman-Markey House version, it's likely that there would be a moratorium on states enforcing their own programs for five years. States that already had a program would be able to turn in their allowances for federal allowances, so we would basically become part of the federal system," Nichols says.
States, however, are not waiting around for that to happen. Most are gearing up on their own, albeit with less money than usual, and supporters still think this is the best time to do it.
"State budgets are challenging," Peterson says. "However, building the capacity [for a greener environment] is important and essential."
— By Dina Morcos
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