California’s plan to cut emissions heavy on mandates

It’s unclear what the costs of implementing the plan will be. The ARB will release details later, but claims it will bring an added 1 percent gross domestic product by 2020. California soaked up $1 billion of clean technology investment in 2006, they note.

But others point out the impact of higher fuel prices and job losses in the regulated industries. “I’m skeptical about an end result of economic gains,” says Dr. Kolstad, adding that how the plan affects “average Californians in their pocketbook” will be “the barometer of acceptance of it.”

Some early criticism came from industry groups. “It’s the largest regulatory program I have ever been involved in in 15 years,” says Cathy Reheis-Boyd, chief operating officer for the Western States Petroleum Association. She emphasizes that her industry supports the reduction goals but says cap-and-trade is the cheapest way to get there.

She had other concerns, too. There’s no price ceiling to protect against unforeseen price spikes on the carbon exchange. And the fuel regulations leave refineries nonplussed over how to meet their carbon reductions before someone invents a better biofuel.

Others echoed a preference for less regulation. “If the plan says that only 20 percent of the reductions will be secured through a market, then you better [hope] the government is four times more likely to come up with reductions,” says Josh Margolis, joint CEO of CantorCO2e, a financial services company focused on energy and environment.

But Dan Kammen, an energy expert with the University of California working with the government, argues that many of the regulations build on well-organized programs, helping reduce the unknowns in this new system. “For us to count on cap-and-trade to do the bulk of the work, never having done this system here, would be a little risky,” says Dr. Kammen. He points out that cap-and-trade will affect some sectors more than others; regulations help spread burdens.

He suspects cap-and-trade will prove more effective at cutting emissions than the plan outlines. If so, some of the regulatory time lines could be relaxed, he says.

Over the summer, the ARB will take comments and make revisions before approving a plan in November. Then it will be implemented through government rule making – a process the ARB believes it has wide authority over.

“It’s a strong, independent board, and they are really the last say, except the law does allow the governor to delay any of the rules for a year,” says Bill Magavern, director of Sierra Club, California. He applauds the ARB’s proposal, calling it “balanced” and “comprehensive.”

Previous

1 | 2