California will present its plan this morning to cut greenhouse gas emissions about 30 percent by 2020 in what amounts to a blueprint for transforming an entire economy.
The state is proposing a slate of changes including a cap-and-trade system for greenhouse gases, requiring renewable sources to power a third of the state’s grid and taxing gas guzzling cars. Their approach will become a model for the nation if climate change legislation of some sort passes through Congress and is signed by the next President in 2009 as is widely expected.
Most of the debate over the cost of climate change itself and combating climate change has been of the sophisticated back-of-the-napkin variety. California’s Air Resources Board, on the other hand, has had to undertake a detailed and near-term look at the state’s infrastructure to decide exactly how to get emissions cuts without economic cuts. It was required to do so by a groundbreaking law passed last year, AB 32 aka the "Global Warming Solutions Act of 2006," signed into law in September of that year.
For all these reasons, we’re going to live blog the webcast of plan’s presentation this morning. The topic should be addressed shortly after nine this morning at the Air Resources Board meeting. You can listen and watch live, too, via the agency’s audio and video feeds.The 35-page plan is now out as a PDF, too.
9:02: Meeting begins, called to order by the board’s Chair, Mary Nichols. Appointed by Governor Schwarzenegger, she also served in the EPA for the Clinton administration.
9:08: Discussing the health impacts of higher average temperatures. It looks like it’ll be a few minutes yet before the presentation of the plan.
9:13: While we’re waiting, it’s worth taking a look at what noted people are expecting from AB 32. John Doerr, the green VC, said before the bill passed that it would spark entrepreneurs to "go out and compete and innovate to bring enormous solutions to the market." That’s why the Wall Street Journal is saying that California’s plan will spark growth. The New York Times summarized the plan’s goals and timeline, "A final version of the plan, which makes a 28 percent cut in the 596 million tons of greenhouses gases the state would emit in 2020, is scheduled for adoption by California regulators by the end of the year."
9:20: Though the talk has not yet begun, the state’s presentation is now out (pdf). I’ll be taking a look at it and posting some highlights.
9:30: The first step in the process was creating an inventory of the state’s greenhouse gas emissions from various sectors. Last year, we turned that into a spreadsheet that you can play with.
9:35: Ken says from the comments, "I expect it will have zero impact on the environment and will drive business and jobs out of California." Well, sir, you’ve got until August 1, 2008 to comment on the draft plan. I note only that if national legislation comes into play, California will actually be better positioned than states that have been sitting on their hands. Both McCain and Obama have supported cap-and-trade systems, much like California’s draft system.
9:45: Now we’re getting into the meat of the meeting. Professor Michael Prather of UC-Irvine is talking about greenhouse gases beyond carbon dioxide, methane, and four other gases that were covered by the Kyoto Protocol. CO2 from the burning of fossil fuels dominates the atmosphere’s future, but there are other gases, notably black carbon aerosols. Interesting, carbon monoxide is an "important indirect greenhouse gas." CO emissions actually end up "pumping up" methane and ozone in the atmosphere.
10:00: Main takeaway from Prather’s presentation: atmospheric chemistry is really complicated. In California, Non-Kyoto gases are maybe 5-10 percent as important for global warming as the standard gases we look at. If you want to go deep on greenhouse gases that you don’t normally here about, check out Prather’s presentation (pdf).
10:08: One interesting question that the board is asking Prather is about the overall impact of diesel engines. They are about 20 percent better from a CO2 reduction perspective, but including particulate matter, diesel engines lose some of their impact. Prather said, "There seems to be no downside [to diesel]," but there might not be much upside either.
10:10: The presentation of California’s plan is about to begin! Mary Nichols intros the draft plan by saying, "This is by far the most significant step yet in California’s effort to fill the void in national climate policy." She calls it "sweeping and unprecedented in its scope."
The plan is documented after the jump.
10:15: Nichols says, "We believe that this scoping plan is going to be an important milestone, an important framework for other states that are interested in joining." She briefly touches on the economic impacts of the plan, too, saying, "setting California ahead of the curve on global warming will give our state a competitive advantage" in attracting green investment dollars and companies.
10:22: Edie Chang is presenting for the ARB’s staff. She’s running through the presentation that is available in PDF. "The heart of AB 32 is the requirement to reduce CA’s greenhouse gas emissions to 1990 levels by 2020," she says. "California’s climate change program is designed to help California to make the transition away from fossil fuels."
10:28: The scoping plan shows that California needs to cut 169 million metric tons of carbon dioxide equivalent from the 2020 business-as-usual scenario. That’s more than twice Massachusetts total CO2 emissions from 1990.
10:32: Chang is walking through the cap-and-trade system as well as sectoral programs that would help reduce emissions. They are summarized in this table. More detail on these measures will be available next week.
10:35: California’s cap-and-trade program will be linked to other states in the Western Climate Initiative. The cap-and-trade program will begin with big industry and electricity generation in 2012. Transportation fuel would also eventually come under the cap-and-trade. On the key issue of whether companies will have to pay for CO2 allowances or be given them by the government, Chang punts, saying that they would probably give away most of them in the beginning but move to auctions over time.
10:40: In transportation, the key is the so-called Pavley standards for greenhouse gas emissions for cars. California is currently prevented from implementing them by the Federal government. In the energy sector, the main plank in the program is requiring that 33 percent of California’s power grid be driven by renewable sources like wind and solar power.
10:43: Industrial sources, like those making chemicals or cement, are covered by the cap-and-trade system. They will also be subject to audits to look for cost-effective ways of reducing greenhouse gases that also reduce toxic pollutants. This seems like a good but sort of obvious idea.
10:44: The ARB is also proposing a landfill methane use plan and is looking at forests as CO2 sinks. They also want a "public goods" charge on water. In agriculture, they want manure digesters to capture methane emissions from dairies and might make them mandatory.
10:45: They are also considering efficiency improvements and standards for refineries and cement makers. The latter, we add, are shockingly big CO2 emitters.
10:49: The state is also still considering leveling a carbon fee (aka "tax") that would be applied "upstream." That means anyone bringing a fossil fuel into the state would get hit with a tax. The key difference from a cap-and-trade is that it’s completely reliant on market-mechanisms, with no cap ensuring that greenhouse gases actually don’t grow. Still, Wired thinks a carbon tax is a cleaner, simpler solution.
10:52: This is important: The Air Resources Board believes that the savings from their plan will outweigh the overall cost to the California economy. That stands in direct contrast to what many are claiming. The Pavley car standards, Chang says, save car buyers $30 per month, offsetting the "moderate" increase in energy prices that will result from implementing AB32.
10:56: The ARB is also figuring that implementing AB 32 will save $1.5 to $2.4 billion in public health costs, largely due to cutting down respiratory problems. (The webcast continues to struggle, fyi.)
11:03: Mary Nichols is glossing that interdepartmental cooperation is necessary. The Q&A session is about to begin.
11:07: ARB member, Barbara Riordan, says that she’s worried about cooperation from local and regional governments. She makes a good point: the local people signing on to the plan now will be out of local government by the time it’s implemented in five years.
11:17: There’s some inside baseball talk between the committee and the staff.
11:27: Audience questions begin. There are 20 speakers signed up. Early comments are very positive. It’s mostly people representing environmental groups. Bob Epstein of Environmental Entrepreneurs, for example, said, "One of [the report’s] strengths is that it reflects so many people’s opinions."
11:35: Chris Busch of the Union of Concerned Scientists hit immediately on the one element of the plan likely to rankle most liberals: the giveaway of carbon credits in the cap-and-trade system. Bush pushed for more of the credits to be auctioned instead of given away to power companies. Auctions generate money for the government that could be put to green tech research or refunded to consumers, but power companies see them as a punitive measure. Bush said, "We think that auctioning is a key element of a plan" that maximizes the public interest. Look for a lot more back-and-forth over this issue as people on the left push for 75 percent of permits to be auctioned while the industry pushes for 25 percent.
11:45: The Environmental Defense Fund and National Resources Defense Council have given kudos to the plan. The NRDC wants more emphasis on the health benefits of reducing emissions.
11:50: Finally, someone from a group that’ll be impacted by the legislation! Bruce McLaughlin, representing the California Municipal Utility Association, engages on auctioning CO2 permits. "Auction revenues, which are a very scary thing for us… should be left 100 percent in the hands of those utilities." Even as he said it, McLaughlin looked as if he knew that 100 percent permitting giveaways was just an industry pipe dream.
12:06: There could be one more major battleground over the implementation of AB 32 and that’s land use. The plan, by-and-large, doesn’t specify changes in urban development that could lead to more compact living or increased use of mass transit. Stewart Cohen with the Transportation and Land Use Coalition pointed this out in a spirited oration. He called for measures to reduce vehicle miles traveled beyond the 1.5 percent built into the plan. That’s an amazing number actually: to get a roughly 30 percent reduction in greenhouse gases, the state isn’t targeting anything close to a comparable decrease in people driving around, even though transportation is the number one contributor of greenhouse gases in California. We ote that making it easier for people to drive less when gas prices are over $4 would probably be a popular initiative.
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