California Tightens Rules on Emissions
Supporters Hope Law Will Spur Federal Action

By Juliet Eilperin
Washington Post Staff Writer
Friday, September 1, 2006

California's legislature approved the broadest restrictions on carbon dioxide emissions in the nation yesterday, marking a new stage in the accelerating drive for a more aggressive national response to global warming.

The California bill requires a 25 percent cut in carbon dioxide pollution produced within the state's borders by 2020 in order to bring the total down to 1990 levels. In at least eight other states, political momentum is building to take similar steps to limit emissions of greenhouse gases linked to climate change, a trend that could increase the pressure for a national system despite the Bush administration's consistent opposition to mandatory caps.

The California legislation also provides a statewide market system designed to make it easier for heavily polluting industries to meet the new limits. They would be able to buy "credits" from companies that emit lower emissions than the caps allow, rather than having to invest in cleaner new technologies.

The measure cleared the California Senate on Wednesday night. The Assembly, on a 46 to 31 vote, sent it on yesterday to Republican Gov. Arnold Schwarzenegger, who pledged this week to sign it.

"It really does point out the country needs to solve this problem in a uniform way," said William K. Reilly, who headed the Environmental Protection Agency under President George H.W. Bush and now co-chairs the bipartisan National Commission on Energy Policy. "It will rebound in Washington."

California lawmakers, along with environmental advocates and some business leaders, said they pushed the measure both to address what they see as a threat to their state's economic and environmental welfare, and to influence national energy policy.

"I really believe the effort to curb global warming is a bottom-up effort in this country," Assembly Speaker Fabian Nuñez (D), who is a co-author of the bill, said in an interview Wednesday. "For us, this is not just about California. This is about making a push from the bottom up to get the Congress to take action."

Advocates would have to overcome major obstacles to bring about a national program, however. Both the House and the Senate have rejected mandatory limits on carbon dioxide. But if Democrats make gains in this fall's elections, it could bolster support on Capitol Hill for a universal cap-and-trade system.

Congress would have to hash out many more details than are spelled out in California's bill. State lawmakers left key implementation issues to be decided by the California Air Resources Board. The measure also includes an escape hatch allowing the governor to extend compliance deadlines for as much as one year "in the event of extraordinary circumstances, catastrophic events, or threat of significant economic harm."

Sen. Dianne Feinstein (D-Calif.), who has her own proposal to establish a national cap-and-trade system, said yesterday's vote "is a giant step forward toward a national cap. . . . It's only a question of time." But she said that, when it comes to details, the state bill "does not have a methodology or a process. It just caps it."

Because 40 states have coal-fired power plants that account for much of the country's carbon dioxide emissions, Feinstein added: "Forty times two, in terms of senators, makes a bill very difficult."

On that point, Sen. James M. Inhofe (R-Okla.), an implacable opponent of emissions caps, agreed, citing the Senate's record on the issue. "Cap-and-trade proposals are all cost and no reduction," Inhofe said in a statement.

Corporate opponents in California, moreover, have not given up their fight, saying the legislation could cripple their industries and raise electricity prices. Jack Stewart, president of the California Manufacturers and Technology Association, said industry is already taking steps to improve energy efficiency, and mandates will only increase the cost of doing business.

"The economic graveyards of California are littered with the jobs that are the unintended consequences of good intentions by legislators and governors," said Stewart, adding that manufacturers and utilities have not ruled out legal action to try to block the measure.

In Washington, utilities lobbyist Scott Segal sounded a similar note, saying the measure would raise electricity prices and hurt the most vulnerable consumers: "When power shortages occur and rates go up, the people who are hurt the most are the ones least able to afford it."

Bush's top environmental adviser, James L. Connaughton, said in a statement that the administration welcomes "effective state action to complement over 60 regulatory, incentive, and voluntary federal programs working to achieve the president's goal of reducing national greenhouse gas intensity by 18 percent by 2012," but that it remains concerned about "any program that moves jobs and increases emissions in other states or other countries -- an open question for California's proposed legislation."

Still, state and local politicians across the country are pressing ahead with rules aimed at cutting emissions. Two weeks ago, seven Northeastern states approved a mandatory limit on carbon dioxide pollution from power plants, with a goal of stabilizing emissions by 2009 and reducing them by 10 percent over 10 years. Maryland has plans to adopt similar standards.

In Utah this week, Republican Gov. Jon Huntsman Jr. established an advisory panel composed of environmental activists and utilities executives to review the science on climate change and propose ways the state can curb its effects.

James D. Marston, director of state global-warming initiatives for the advocacy group Environmental Defense, said states are taking the initiative because the administration and Congress have refused to act. "It's harder for us to turn the boat around now because we've had several years of making dirtier energy investments instead of cleaner energy investments," Marston said.

In California, Republicans and Democrats have a political incentive to take bolder action on climate change. With carbon dioxide pollution rivaling Australia's, the state is the 12th-largest emitter in the world. A July poll by the Public Policy Institute of California showed that nearly two-thirds of Californians, including a large majority of Republicans and independents, wanted state legislators to address the issue.

"Because of the support in the state for doing something on global warming, both Democrats and Republicans have been trying to get out front of each other," said Mark Baldassare, director of research at the policy institute.

Some California companies broke with industry leaders, concluding that mandatory greenhouse gas reductions are smart politics and will be good for business. Pacific Gas and Electric chief executive Peter A. Darbee, whose company serves 15 million customers and ranks as California's largest utility, issued a statement last night saying, "We're supporting this legislation because we are convinced that climate change is an urgent problem and action is needed now."

"This is a bill that is really rolling down the tracks," said PG&E's vice president for government relations, Nancy E. McFadden, shortly before the state Senate vote Wednesday. "We made the judgment that we're going to be constructive and make it a bill that would protect both the environment and the economy."