Climate policy advances in the states, but slowly


Vestas Wind Systems wind turbines operate in Rio Vista, Calif. California is pressing ahead with a plan to make between 350 and 400 companies start reducing their greenhouse-gas emissions or start paying the difference. (Ken James/BLOOMBERG)
November 5, 2012

While Tuesday’s election may not break the national logjam over how to address climate change, a few states will take decisive action on energy policy in the coming week.

On Nov. 14, California will hold the nation’s largest-ever auction of carbon pollution allowances, requiring many of the state’s biggest utilities and manufacturers to either cut their greenhouse-gas output or buy permits to compensate for it. Michigan residents vote Tuesday on whether the state will require that 25 percent of its electricity be produced from renewable energy by 2025. And Washington state voters will choose as governor either Jay Inslee, a Democratic former congressman and outspoken proponent of carbon limits, or his Republican opponent, Rob McKenna, a two-term attorney general.

Four years ago, some policymakers and environmentalists predicted that the United States would lock in major cuts in greenhouse-gas emissions from multi-state initiatives in the West, Midwest and Northeast. That hasn’t exactly happened: The recession and the election of some Republican governors have curbed some of the most ambitious efforts to address climate change.

But the push to expand renewable energy, which would reduce greenhouse-gas emissions by producing electricity without burning fossil fuels, does continue on the state level. And California is pressing ahead — without the six states that initially planned to join it — with a trading system that will allow the state’s major carbon emitters to buy and sell pollution allowances.

“Clearly, the states remain the laboratories where we’re seeing significant progress,” said Gene Karpinski, president of the League of Conservation Voters.

But the pace of experimentation has slowed, and it has shifted decisively toward renewable-
energy quotas rather than mandatory limits on greenhouse-gas emissions, which are linked to global warming.

Judi Greenwald, who tracks state actions on climate and energy as vice president for technology and innovation at the advocacy group C2ES, said the past four years have witnessed a shift in state policy.

“We still see all the states doing things on clean energy,” Greenwald said. “But definitely fewer states are calling what they do ‘climate.’ ”

Thirty-one states and the District have renewable portfolio standards, meaning they have established targets for how much of their electricity supply should come from renewable sources by a specific year. But moving those targets can be difficult.

Michigan’s standard calls for renewable energy to produce 10 percent of its electricity supply by 2015, but the push to boost this to 25 percent a decade later sparked an intense flight in the state, culminating in Tuesday’s vote.

Several groups — including the utility DTE, the Detroit Regional Chamber of Commerce and the Michigan Farm Bureau — have formed the Clean Affordable Renewable Energy for Michigan Coalition to oppose the more ambitious standard, devoting more than $21 millionto the campaign.

Alejandro Bodipo-Memba, a spokesman for DTE, said Michigan is well on its way to reaching its current renewable target. But, given that renewable energy already accounts for 7 percent of the state’s electricity, achieving 25 percent in 13 years “is going to be a significant burden on our customers” and could cost utilities up to $12 billion.

A range of environmental groups, many of which come from out of state, have spent more than $10 million, arguing that the new goal would spur the development of 94,000 clean-energy jobs in Michigan. Former president Bill Clinton endorsed the initiative last week.

Meanwhile, California is pressing ahead with its plan to make between 350 and 400 companies start reducing their greenhouse-gas emissions or paying the difference. The auction covers the state’s utility and industrial sectors, which account for about 85 percent of California’s greenhouse-gas emissions, and the program will reduce emissions 15 percent by 2020.

The only other emissions trading system, the Regional Greenhouse Gas Initiative, is trading carbon among Northeast and mid-Atlantic utilities.

Derek Walker, strategic climate initiatives director for the advocacy group Environmental Defense Fund, said state officials “take it seriously that this is a make-or-break moment. Doing this well is a way to show you can have a strong environmental policy that doesn’t hurt the economy, and not doing it well is a huge setback for environmental policy globally.”

But many in California’s business community have questioned why the state is auctioning off 10 percent of the allowances, rather than giving them all away for free. Catherine Reheis-Boyd, president of the Western States Petroleum Association, said the auction “puts California at a competitive disadvantage” because the six states initially slated to join it in a Western compact — Arizona, Montana, New Mexico, Oregon, Utah and Washington — have dropped out.

Inslee, the former congressman locked in a tight race for governor, has pledged to restart efforts to connect Washington’s climate program with those of other states.

Robert Stavins, who directs Harvard University’s environmental economics program, said it is “likely to be effective” but is “going to be controlling emissions at a higher cost to the economy” by requiring all of the auction revenue to be spent on reducing emissions. He added that there are “legitimate concerns” about whether California’s imported electricity, which makes up half of its carbon emissions, may end up selling fossil-fuel energy to other states while directing its renewable sources toward California utilities.

In a statement, California Air Resources Board Chairman Mary D. Nichols said the program has already produced economic benefits because “as a first mover California is already receiving the lion’s share of the country’s clean tech investment.”

Gary Gero, president of the Climate Action Reserve, whose group provides offset credits for firms seeking to compensate for their carbon emissions, is brokering agreements to preserve forests, destroy ozone-depleting substances and capture methane emissions from dairy and swine farms. But he noted, “The goal is to have a program no one notices. If the public isn’t aware there’s a cap-and-trade program, and nobody notices, that’s a good thing.”

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