Tag Archives: Global Warming Solutions Act of 2006

AB32 Implementation Stopped by Environment Justice Suit

San Francisco Superior Court judge Ernest Goldsmith smacked down plans by the California Air Resources Board to implement its AB32, Global warming Solutions Act, “scoping plan” because he said CARB failed to follow the provisions of the California Environmental Quality Act (CEQA) because its environmental review failed to adequately consider alternatives to its proposed cap and trade approach.

In essence, the judge said CARB had already made up its mind and its actions to implement the scoping plan “seeks to create a fait accompli by premature establishment of a cap-and-trade program before alternatives can be exposed to public comment and properly evaluated by the ARB itself.”  Judge Goldsmith found that CARB’s “analysis provides no evidence to support its chosen approach,” and its action “undermines CEQA’s goal of informed decision-making.”

OUCH!

Adding insult to injury for CARB the lawsuit pending before Judge Goldsmith was filed by the Center on Race, Poverty and the Environment, a San Francisco environmental justice group that seeks more specific remedies from the court such as ordering reductions in specific harmful emissions in specific neighborhoods.

CARB has until Tuesday to respond to the preliminary ruling, but if it is ordered by the Court the effect could be considerable delay in implementing AB32.

The delay could be just a temporary hiccup in the implementation of AB32, according to environmental blog Legal Planet since the since CARB won on the merits on all the plaintiffs specific claims challenging the scoping plan.  The Judge’s decision is narrowly cast to apply to the CEQA environmental review process.  CARB would certainly appeal any injunction issued but it probably will have to fix the procedural problems before it moves forward with implementation.

Green Biz Crowd says AB32 will send California over the Cliff

The California Air Resources Board (CARB) adopted its first round of rules to implement AB32 this month.  While the rules do not kick in until 2012 and most of the “allowances” required to emit greenhouse gases will be given away until 2015 it still is cause for celebration or alarm in the Golden State and elsewhere.

RenewableBiz is part of the green press crowd that closely follows the renewable energy market.  It is doing a quick poll of its readers running from December 19th to January 1st recently asking:

Which statement most closely resembles your view of California’s adoption of a cap-and-trade system for CO2 emissions?
A boom in the clean energy economy has been started
24% (9 votes as of 12/13/2010)
California’s economy will be driven off a cliff
43% (16 votes as of 12/23/2010)
The state will muddle along like much of the rest of the country
32% (12 votes as of 12/23/2010)
I know there are few votes and this is not statistically valid survey methods—but this is a ‘green as they come’ trade rag and when these folks think AB32 will drive California off the cliff—-it makes you wonder!   So I’ll check back on this quick poll New Year’s Day and see if I should just keep drinking.

California RPS Dreamin’

As expected California’s three major investor owned utilities will not meet the 20% RPS goal by the end of 2010 as required by law. We have known this outcome for more than a year, but pressure has been applied on all sides to get as close to the goal as possible.  The failure to meet the goal is not causing major heartburn because procurement is continuing and the CPUC and CEC have been approving new projects at a frantic pace over the last six months to ‘show progress.

At the end of the third quarter reporting period the RPS performance was about 15% of retail electricity sales allocated as follows:

Despite the inability to meet the 20% target California pressed on nonetheless setting an even higher 33% PRS goal by 2025 by executive order.  By increasing the goal to 33% and pushing it beyond the term of office of the current politicians responsible for failing to meet the 20% target—this is considered ‘good news’ in Sacramento.

There is an additional 352MW of renewable projects that are working feverishly to come on line by year end 2010 to meet the federal financing requirements.  But Congress granted an extension to the end of 2011 for compliance.  To date, the sum of all renewable energy capacity installed that counts toward achieving the California RPS goals is 1, 049 MW or about the size of one typical nuclear power plant or—bite your tongue—typical Midwest coal plant.  Remember we don’t allow either new nuclear or coal plants to be built in California—that’s one of the reasons our electricity rates are so high.

But we still feel good about trying to meet our RPS goals and save the planet even if we fail. And the voters seem to think that’s OK since they rejected Proposition 23 to suspend the Global Warming Solutions Act on the November ballot effectively telling Sacramento to keep doing what you are doing.

Now Jerry Brown is on the hook to finish what he started the first time he was Governor.  The 33% RPS goal is set by executive order not legislation and the state can hardly afford any more subsidies of anything.

The sum of our fears is the perfect storm of higher state taxes, higher electricity rates and continued high unemployment.

Forget it, I’m not giving up my old beer refrigerator in the garage to save energy!

AB32 wins Stay of Execution

Proposition 23 got a stay of execution with 60% of Californians favoring the Global Warming Solutions Act. California voters see themselves as responsible environmental advocates and thus are emotionally and–some say—spiritually tied to anything green.

There is much to admire in this willingness to lead rather than follow.  California’s leadership in energy efficiency, as one example, has succeeded beyond all expectations in reducing the energy intensity of the state to 50% of the national average.

But Politico reports that in the rest of the country 30 House members who voted for Waxman-Markey were defeated Tuesday.  With even a growing number of Democrats lining up against Cap and trade legislation and Senator-elect from West Virginia won a tight race by running a commercial using his gun to shoot a hole through Waxman-Markey nailed to a Mountaineer tree.

I don’t think California is going to get much help with AB32 from Congress. And to make matters worse, several states are lined up to sue California over AB32 because, they allege, just like ObamaCare, AB32 violates the interstate commerce clause of the US Constitution by imposing California terms and conditions on out of state power producers and manufacturers.

And California voters also approved Proposition 26 which reclassifies administrative impact fees like those the California Air Resources Board expects to use to enforce AB32 as “taxes” and thus subjects them to the same 2/3 vote or voter referendum as increases in income or sales taxes.

Jerry Brown said it best in his remarks after the election summarizing the voters message.  He said California voters believe in creating a clean energy economy but they also said loud and clear that the state should take it hand out of our pocket.

It won’t be easy being green even though Proposition 23 was defeated.

California’s Achilles Heel: The High Cost to Do Business

The High Cost of Doing Business also Kills Green Jobs

Did you read the op-ed by TJ Rogers in the WSJ today?  He describes the real choice we have here in California and elsewhere between growth and the environment.  It’s not a throw the baby out so we can keep the bath water lesson.  That is improving environmental quality does not have to destroy jobs.  But that is often the unintended consequence of the cumulative impact of rules and regulations that seem reasonable at the moment but haunt us over time.

California is an example of both extremes at work.  Some of the early environmental policy decisions made in California involved establishing energy efficiency standards on a wide range of products sold in the state.  Yes manufacturers opposed such unilateral actions, but California lived into it best traditions as laboratory and trendsetter in focusing on reducing wasteful energy use.  Today the energy intensity in California of about 50% of the national average and the size of the California consumer market meant that manufacturers could do well by doing good by adopting the California efficiency standards for the products sold across the United States.

Similarly, setting renewable energy portfolio standards requiring utilities to get 20% of energy consumed from clean, renewable sources indeed jump started the market for wind and solar energy and a range of other technologies and California utilities are closing in on the 20% targets.

But TJ Rogers talks about his company’s acquisition of money losing Sun Power and how the decision needed to save the company from bankruptcy and return it to profitability meant moving the solar panel production from increasingly high cost California to lower cost Malaysia while growing its sales and customer service functions in the California market.  Eventually, he said 4000 jobs went to Malaysia while 800 new jobs were created in California.

Over time the cost of doing business in California is having impacts that even threaten our environmental goals.  While we still generate ideas and our venture capital in Silicon Valley builds new companies and new products they can’t afford to build them here and thus our high cost status deprives us of the job creating benefits of that cleantech investment as R&D turns into manufacturing.

Proposition 23 on next week’s ballot would suspend AB32 the California Global Warming Solutions Act until unemployment in the state is below 5.5% for four consecutive quarters.  As I write this the polls suggest that California voters are likely to vote the proposition down.  Doing so will not improve the odds that California will achieve its greenhouse gas emission reduction targets but it may cost the state as many as 1.1 million jobs as business shifts its manufacturing and other operations out of state.  Even if California held its GHG emissions steady at it 0.36 gigaton 1990 levels (the target for 202 under AB32) TJ Rogers described the impact as reducing the total US GHG emissions of 5.98 gigatons in 2007 to 5.94 gigatons. NONE of those emissions would actually go away they are just exported to other markets along with California jobs.

And that’s the lesson, when California policy makers stick to environmental strategies that encourage real changes in energy intensity and use that is lasting we can have a profoundly positive environmental impact within the state and well beyond our borders.  But when those policies are a zero-sum game that induces business to go elsewhere California forfeits both its environmental leadership and its economic growth and standard of living.

So pay attention to how California voters decide three propositions on the ballot:  Prop 23 on suspends the Global Warming carbon tax, Proposition 24 adds $1.3 billion in new taxes on business by eliminating investment tax credits on new plant and equipment for business growth and Proposition 25 reduces the legislative votes required to pass a budget from 2/3 to a simple majority.

The Tax Foundation called California the second worst business tax climate of the 50 states after New York but it will displace New York as the worst depending upon how voters act.

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