New State Laws Attack Global Warming

By Published On: September 29, 2006

A bevy of bills to limit greenhouse gas emissions were signed, or expected to be autographed, by the governor. He has until September 30 to enact legislation. On a foggy September 27, Governor Arnold Schwarzenegger executed the state’s anti-global warming centerpiece, AB 32 by Assemblymember Fran Pavley (D-Agoura Hills) and speaker Fabian Núñez (D-Los Angeles). The governor is also scheduled to sign SB 1369 by Senate president pro tem Don Perata (D-Oakland). That bill aims to limit coal-fired, or polluting, power imports to the state. “We are entering a bold new era of environmentalism in California that will change the course of leadership,” Schwarzenegger said. The codified bill represents a transition to a “clean, more stable energy future,” Pavley added. The governor insisted that AB 32 would protect the environment and, contrary to claims by some in the business community, create an economic boom by harnessing “entrepreneurial spirit” to pump up the state’s clean-technology sector. The governor asserted that the measure’s market trading mechanisms – which are not mandatory – will pave the way for an additional 80 percent slash in CO2 from 1990 levels by 2050. The bill requires carbon dioxide gases to be cut by one-quarter from their 1990 levels by 2020 – estimated to be 174 million tons of carbon. “We simply must do everything within our power before it’s too late,” Schwarzenegger said. He said that India, China, Brazil, Mexico, and other countries “will all join us.” Curbing rising emissions from India and China is also seen as critical to thwarting global warming. As for the recalcitrant federal government, Schwarzenegger exclaimed, it is sure to follow. AB 32 gives the California Air Resources Board the authority to create a fee on carbon. Núñez, in an August 31 letter to the legal newspaper Daily Journal, insisted that the provision at issue gives the air board authority only to collect fees to administer the program, not to create a carbon tax. The bill’s language, however, states that the air board “may adopt by regulation, after a public workshop, a schedule of fees to be paid by the sources of greenhouse gas emissions.” If a carbon fee were created, the money generated would have to be appropriated by the Legislature. If the air board raised an estimated $2.5 billion, it remains to be seen how lawmakers would spend that money. Lenny Goldberg, a Sacramento lobbyist, questioned whether the money would be directed into the state’s general fund, spent to help low-income ratepayers, or invested in clean energy research and development. AB 32 also gives the air board authority to regulate greenhouse gas emissions from power plants, gas pipelines, oil refineries, and other large industrial sources. The 11-member board will create reporting requirements, set an emissions baseline against which to measure reductions, and set a cap on global warming gases. A cap-and-trade system, which could capitalize on a carbon fee, and other market mechanisms are part of the emissions reduction options (Circuit, Sept. 1, 2006). Perata’s SB 1369 seeks to cut CO2 emissions from in-state and out-of-state power plants by requiring all energy supplies to meet emissions levels on a par with those from a combined-cycle, natural gas-fired plant. A specific standard will be developed by the California Public Utilities Commission, in consultation with the California Energy Commission. Earlier in the week, outgoing CPUC member Geoffrey Brown indicated that his commission colleagues are not opposed to imports from coal-powered plants because, for them, reliability trumps environmental issues. Brown said his fellow commissioners are also open to the Frontier Line transmission line project. That multibillion-dollar line could bring in coal-fired and wind power from Wyoming. Earlier this week, the governor signed SB 107 by Senator Joe Simitian (D-Palo Alto), which requires that utilities achieve 20 percent renewables in their portfolios by 2010. Old law set the same standard for 2017. The new law allows renewable energy contracts, regardless of whether they will be on line in three years, to count toward the one-fifth green power goal. It also allows utilities to count renewable attributes of qualifying facility deals toward their renewables portfolio standard baseline. The bill was opposed by many renewables advocates because it allows investor-owned utilities to claim the green attribute of a QF contract during the duration of the agreement. Jan Smutny-Jones, Independent Energy Producers executive director, said utilities insisted at the time the original QF contracts were being hashed out that they wanted only the energy component – not energy and the capacity to produce it. Utilities reluctantly agreed to include paying for the QF’s capacity and no more. SB 107 also allows out-of-state renewable supplies to count toward the renewables portfolio standard. The non-California power provision faced opposition because the renewables law seeks to create in-state renewables projects. Schwarzenegger stated September 26 that the measure will help “continue our leadership on protecting the environment.” Also on September 26, AB 1925 by Sam Blakeslee (R-San Luis Obispo) was signed into law. It directs the California Energy Commission to focus on strategies for capturing and sequestering carbon.

Share this story

Not a member yet?

Subscribe Now