California and Global Warming
In an a new attempt to show that he really isn’t a Republican, Gov. Arnold Schwarzenegger endorses a bill that will “combat global warming”,
Republican Gov. Arnold Schwarzenegger and Democratic leaders endorsed landmark legislation Wednesday that could serve as a national model for combating global warming and, according to Silicon Valley business leaders, spur a wave of cleaner-burning energy technologies.
“This is groundbreaking legislation,” said Rafael Aguilera, a climate change expert for Oakland-based Environmental Defense. “It sends a clear message to Washington and the rest of the world that California is serious about a low-carbon future.”
And along with it even higher energy prices than the state already has (some of the most expensive in the nation). Some were clearly aware of this,
The bill, AB 32, mandates that California reduce greenhouse gas emissions by 25 percent — to 1990 levels — by the year 2020. Major carbon-emitting industries will be forced to report their emissions to the state Air Resources Board, which will craft regulations to reach those goals. Those regulations would take effect in 2012.
Opinion within the business community was divided. Some business groups argued the measure could dramatically increase energy costs for companies, hurting the state’s business climate and potentially causing some companies to leave California.
Potentially? There is no potentially about it when it comes to larger business such as refining large scale manufacturing.
But business interests in Silicon Valley, including prominent venture capitalist John Doerr and alternative energy company executives, lobbied heavily for the bill. They said it would spur investments in energy technologies such as solar, wind, coal gasification and fuel cells, which can produce energy with low or no emissions of greenhouse gases and other pollutants.
Ahhh rent seeking in action. And misleading as well. Putting in a bunch of solar panels might reduce green house gases (GHGs), but it might very well increase other types of pollution. For example, a large solar array out in the desert could adversely impact the environment.
PG&E, the major California utility, also issued a statement Wednesday backing the legislation.
Sure why not. After all, they will likely be one of the main entities to implement much of the legislation via their power purchases. And who cares if their costs go up, they’ll just go to the State Public Utilities Commission (PUC), point to the law, point to their costs, argue reasonableness–which they’ll likely win–and then pass on the costs to their customers.
One of the main sticking points in negotiations over the legislation was the role of a so-called “cap-and-trade” program, which would create a marketplace for trading carbon emissions. It would work like this: If a company reduced its carbon emissions to levels below the mandated cap, it could sell its remaining “credits” to another business that was unable to reach the cap.
Gov. Arnold Schwarzenegger insisted that such a system be a mandatory part of the state’s regulations. Democrats, concerned that a “cap-and-trade” system could cause disproportionately more pollution in low-income communities, pushed for such a system to be optional. Schwarzenegger ultimately relented on that and other negotiating points, although both sides said a cap-and-trade system will likely be adopted.
What a load of baloney. We are talking GHGs here for the most part and these things do not respect community boundaries. I know for a fact that very, very well to do neighborhoods have really poor air quality while less well-to-do neighborhoods have very good air quality. For example, if you are in a less well-to-do neighborhood and are somewhat close to the beach and not up against the mountains around L.A. you wont have same crappy air that one would find in San Marino–a very well-to-do neighborhood.
A cap-and-trade program actually makes sense because in has an added incentive to reduce GHG emissions over-and-above reducing the costs of doing business.
One thing that was not addressed in the article, and I’d be cursious to see if it is in the legislation, is what to do with low income consumers of things like electricity. After the 2000/2001 electricity crisis the PUC protected such customers from the rate hikes. Not only that, but periodically the criterion for becoming one of these low income customers has been periodically increased. The result is that a very large segment of the residential consumers of electricity are protected from the high rates. These people have less incentive to consume than those not on the “low income” rates. If a similar policy is put in place with regards to the GHGs then this bill will likely fail in curbing GHGs and increase electricity prices futher for businesses and non-“low income” residential customers.
Personally, I expect this to be one big gigantor fiasco. That is what we had with deregulation, and why should we expect the politicians to have learned anything from that? In fact, we should expect the politicians to have learned nothing. California has term limits and many of the politicians that were in office that brought us the 2000/2001 crisis are now out of office for that reason. Those now in office have to come up to speed on the issues and it is a very steep learning curve. California…the land of fruits and nuts.