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California ready to cut greenhouse gases. Next, doing it.

After five years, California has put in place rules to cut greenhouse-gas emissions statewide back to 1990 levels. But lingering effects of the recession have pushed implementation back a year to 2013.

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Industry advocates, such as the AB 32 Implementation Group, counter that the price is still too high. "The costs that will be incurred by California's regulated industries are alarming," says executive director Shelly Sullivan. "Consumers and taxpayers will ultimately pick up the tab in higher costs for electricity, consumer products, government services, or even college tuition.

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"Cap and trade will work only if other states impose similar emission caps in their economies," she adds.

Legal experts have suggested that opponents could take cap and trade to court, arguing that it forces utilities in other states to live by California's rules when selling electricity in the state – a violation of the Constitution's commerce clause, they say.

2. Mandating lower-carbon gasoline

The commerce clause, which vests power to govern interstate commerce in the federal government, has already caused problems for AB 32. California's low-carbon fuel standard, the world's first, was enacted the year after AB 32. It aims to reduce the carbon content of gasoline. But it was ruled unconstitutional by a federal district judge on Dec. 29. US District Court Judge Lawrence O'Neill said LCFS discriminates against out-of-state producers.

The case has had a ripple effect. Of 18 states that were poised to follow suit, several – including Pennsylvania, New Jersey, Maine, New Hampshire, Washington, and Oregon – have now either backed off or are reconsidering.

Like cap and trade, LCFS is at the center of the debate over whether AB 32 is merely symbolic. Oil companies see themselves as trying to keep California from being on the costly forefront of policies whose carbon savings will be easily erased by polluters like India and China.

Charles Drevna, president of the American Fuel and Petrochemical Manufacturers, says a nationwide low-carbon fuel standard would worsen air quality because it would prevent American refineries from importing petroleum obtained from oil sands in western Canada. That means the US would have to import more oil in tankers from the Middle East and elsewhere. At the same time, Canadian oil would be shipped in tankers across the Pacific to China and other Asian locations, thereby enlarging the carbon footprint for the oil imported and exported.

Supporters say AB 32 is crucial for its role in addressing global warming. "This was the first big step taken to really deal with it," says Nabil Nasr, director of the Center for Integrated Manufacturing Studies at the Rochester Institute of Technology in New York.

3. Increasing fuel efficiency

Other aspects of AB 32 have met with more success. On Jan. 27, the California Air Resources Board (CARB) mandated that 15 percent of all new cars sold in the state by 2025 should run with zero or near-zero emissions. The result would be some 1.4 million electric, plug-in hybrid, and hydrogen cars on California roads within 13 years. Today, there are 10,000 such vehicles in the state.

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