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California eyes going ‘green’ despite slump

Although a new climate plan would boost utility bills, some predict it will stimulate the economy.

By Daniel B. WoodStaff writer of The Christian Science Monitor / October 16, 2008

The full moon sets behind a wind farm in the Mojave Desert in California.

REUTERS/Toby Melville/File


Los Angeles

California moved ahead this week with plans to slash greenhouse-gas emissions to 1990 levels by 2020 and foster a green economy, even as some business groups questioned the costs in difficult economic times.

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The California Air Resources Board (CARB) released Wednesday final details of its so-called “Scoping Plan,” that spells out ways to reduce its greenhouse-gas emissions to meet the requirements of the state’s landmark Global Warming Solutions Act of 2006.

The plan combines market-based regulatory approaches, voluntary measures, and fees. Key new measures include reducing leakage of harmful air conditioning and refrigeration gases, expanding commercial recycling programs, and establishing greenhouse-reduction targets for local governments.

“Our comprehensive approach steers California away from its dependence on fossil fuels and accelerates the state’s necessary transition toward a clean energy future,” said Mary Nichols, chairperson of the CARB, which is tasked with implementing the climate law.

But it’s not yet clear how the current economic crisis might affect the plan. Several businesses say that slashing emissions will be costly and harder to achieve during a potential recession.

The California Manufacturers and Technology Association – which represents 165 business organizations – says the Scoping Plan will cause electricity rates to increase by 11 percent, natural-gas rates to rise 8 percent, and gasoline prices to go up $11 billion per year under the plan.

A recent poll here by Fairbanks, Maslin, Maullin & Associates showed that 3 out of 4 voters support state energy policies even if they result in higher prices. The poll was conducted in June before the current financial crisis intensified.

However, Stanley Young, spokesperson for CARB, argues that electricity prices were going to rise anyway. “The price of electricity may rise but the bill that the householder gets could drop which is the benefit of energy efficiency,” he says.

It is possible that costs may rise in the short run and then level off or drop, says Dan Kammen, an energy expert with the University of California, Berkeley. “I suspect prices will rise initially then decline as diversity gets built into the system. Also, the reductions in external gas, oil, and imported electricity get replaced with renewables and [low cost]
energy efficiency,” he says.