Rescind Global Warming Order, Says Perata

A partisan spat escalated this week when Senate president pro tem Don Perata asked Governor Arnold Schwarzenegger to rescind an executive order issued last week. The order specifies how to carry out California's new global warming law, placing California Environmental Protection Agency secretary Linda Adams in charge of the effort, and presses for a market-based approach to carrying out the new law. Schwarzenegger's order "undermines the bipartisan spirit and cooperation in which the law was passed," wrote Perata in an October 23 letter. "The law states that the [California] Air Resources Board is the lead agency charged with monitoring and regulating greenhouse gas emissions under the Act. It further specifies that regulatory measures to reduce emissions must be adopted, while market-based compliance mechanisms are left to the discretion of the ARB, and may be adopted only after extensive evaluation and determinations by the board through a public process," the Senate leader continued. A spokesperson for the governor called the executive order "vital" to carrying out the new law. "The governor believes that a market system is the most efficient way to reduce California's carbon dioxide emissions," said Darrel Ng, Schwarzenegger spokesperson. He added that the governor would "continue working with legislative leaders and the Legislature" to achieve the state's greenhouse gas reduction goals. Another source within the administration - who would speak only anonymously - said the order is completely consistent with long-standing policy. CARB, the source noted, falls under the CalEPA secretary, who also has long been in charge of coordinating state efforts to reduce greenhouse gas emissions under both existing law and administration policy (Circuit, Oct. 20, 2006). Within the administration, it was widely assumed when the law, AB 32, was negotiated that a market-based carbon emissions trading program would be put in place to help meet California's ambitious goals on climate change. "Reducing emissions will take all the tools," the source said. "Creating an advisory committee on market-based policies will enable the state to learn from those already ahead of the state on carbon trading." The first test of bipartisanship on global warming is likely to come with the decision on how to fund the program. Early next year, the governor plans to present a budget that CARB has said would not impose any fees on businesses covered by the new law to help fund its implementation, but instead will seek to rely on existing revenue sources. Whether to incorporate land-use controls also may become an issue when the Legislature convenes. Air board member Mark DeSaulnier has called for a state role in restricting land use to reduce greenhouse gas emissions, aiming at big homes in hot areas that need a lot of air conditioning and sprawling land use that increases car usage. DeSaulnier, a Contra Costa County supervisor, is in a race for a state Assembly seat in November. He said he may introduce legislation to give the state more authority over land use - now controlled largely by local government. As a supervisor, he has worked to enforce an urban growth limit in Contra Costa County. The governor's October 16 executive order, which drew immediate partisan fire, placed Adams in charge of coordinating implementation of the new global warming law and called for CARB to collaborate with her. It further ordered Adams to appoint a market advisory committee to advise the air board on creating a market-based compliance program. Three days later, Adams told CARB that she wants it to devise an emissions trading program that will allow California carbon credits to be bought and sold in emerging markets - for instance, in the Northeast. To help the agency do that, she said, she would appoint a representative of Credit Suisse to the market advisory panel. The company is involved in trading carbon emissions credits in New York. Credit Suisse is highly interested in California's new global warming program, a company spokesperson told Circuit. Credit Suisse sees carbon trading as a growing area, the spokesperson explained. In a white paper, the company said it is the only major financial firm with a carbon trading desk in the U.S. and sees carbon trading as a "key strategic initiative" of its commodities group. The governor's order calls for trading with the Regional Greenhouse Gas Initiative market in the Northeast, the existing European Union carbon market, and other potential markets worldwide. Schwarzenegger, for instance, has raised the prospect of a unified approach to global warming among Western states, and his office has noted that the Chicago Climate Exchange operates a voluntary trading system. - William J. Kelly

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Rescind Global Warming Order, Says Perata

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