Energy & Environment

Greenhouse Gumption

Whether you call it global warming or climate change, it's an issue that's being dealt with at the grassroots.
by | May 2006

When it comes to climate change initiatives, states and localities are up front and out there. Consider one 90-day period last year:

In late September, New Mexico became the first state to join the Chicago Climate Exchange, a market where businesses and governments pledge either to reduce their greenhouse-gas emissions or buy credits from other participants who have.

In early November, Seattle City Light announced that it had become the first major U.S. utility to reduce its net greenhouse-gas emissions to zero.

On December 20, seven Northeastern states that make up the Regional Greenhouse Gas Initiative--known as RGGI--announced a mandatory multistate agreement to reduce carbon dioxide emissions from power plants.

Just as this dizzying array of activity highlights interest in staving off global warming, it also reflects federal inaction. Since the Bush administration and the U.S. Congress refused to ratify the Kyoto Protocol--the international agreement to reduce greenhouse gases--many state and local officials have stepped up their efforts to fill the void. As a result, the climate-change issue is testing the ability of state and municipal governments to create political consensus, drive technological innovation and influence federal policy.

Most efforts at reducing global warming focus on limiting man-made emissions of carbon dioxide, a greenhouse gas produced by the burning of fossil fuels such as oil, natural gas and coal. The action options range from greater reliance on renewable energy to increased investment in mass transit to new regulations on industry. If there's a reasonable approach out there, some state or local government is probably thinking of trying it. "The states have been the leaders in climate change and will continue to be the leaders," says Joanne Morin, a New Hampshire environmental administrator involved in RGGI.

Three of the efforts stand out for their ambition and the attention they have garnered. The first, and perhaps most controversial, dates back to 2004. That's when California developed rules to place limits on carbon dioxide emissions from new cars and light trucks. These standards haven't been implemented yet and are currently being challenged in court. But they have proved to be politically viable in other places: Ten states have said they will meet the California standards if the state's rules go forward.

Then there's the call to arms from a group of mayors led by Seattle's Greg Nickels to participate in the Kyoto Protocol, with or without the blessing of a federal signature on the treaty. Under the Kyoto standards, the United States is supposed to reduce its greenhouse-gas production to 7 percent less than 1990 levels by 2012. Nickels reaffirmed that Seattle would be taking steps to meet the 7 percent goal and then began to persuade others to join him--an effort that has landed the support of more than 200 mayors. If these promises are met, 45 million Americans--15 percent of the U.S. population--will be living in places abiding by Kyoto.

Most recently, the regional greenhouse-gas group took a major step to reduce CO2 emissions from power plants. The states involved-- Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, Vermont and, as of April, Maryland--promised a 10 percent reduction in power plant emissions by 2019.

ON THE RAMPARTS

It's one thing to write a slogan or make a pledge. It's another to reach lofty goals, and that won't be easy--technologically or politically. Some business groups are especially concerned because many of the tools needed to reduce carbon dioxide emissions are not yet available. When it comes to meeting the California auto emission rules, "there are only a handful of models that would currently meet the standards," says Charles Territo, a spokesman for the Alliance of Automobile Manufacturers. Similarly, Franz Litz, a New York state environmental official who chairs a RGGI working group, admits that the technology to scrub CO2 from power plant emissions does not currently exist.

The officials promulgating these rules are banking on regulation to forge the technological innovations needed to meet the standards. Although that might sound confrontational, it tells only part of the story. While the battle over California's auto emission standards is a classic struggle between environmentalists and industry, both Nickels with his 200 mayors and the Northeast compact of eight states are working with the business community to develop a workable road map.

To generate a plan in Seattle to meet the Kyoto standards, Nickels appointed a "Green Ribbon Commission" that included a former Starbucks CEO, the chairman of REI Inc. and a local cement plant manager, as well as the founder of Earth Day. In March, the commission produced its recommendations, which called for investing in more mass transit, bike trails and energy-efficient buildings as well as--and more controversially--imposing congestion pricing on roads and passing a parking tax.

Although the local business community might have been expected to oppose at least some of these ideas, in reality it is teetering somewhere between cautious optimism and ambivalence. "We see this as a good step forward," says Charles Knutson, vice president for public affairs for the Greater Seattle Chamber of Commerce, adding, "We currently don't have a position." That statement may speak to a cultural difference between Seattle's business community and the U.S. Chamber of Commerce, which has actively opposed greenhouse-gas regulation, but it also suggests that compromise between environmentally oriented public officials and cost-conscious industry isn't impossible. While he expects the business sector to oppose some of his proposals, Nickels is recruiting major Seattle employers to voluntarily pursue measures to reduce emissions, much as he recruited mayors.

The Regional Greenhouse Gas Initiative is also seeking a business- friendly track, notably with a trading system where power plants can sell emissions allowances to those that fail to meet the standards. This type of cap-and-trade program is generally regarded as a way to keep down costs. It is especially appropriate for carbon dioxide because transferring pollution from one place to another is not harmful--all that matters is the total amount of pollution generated. "In some ways, carbon is the perfect pollutant to control with cap and trade because you're not worried about short-term local concentrations," Litz says.

This concept has also led RGGI to include "offsets." With offsets, emitters are allowed to spend money on curtailing greenhouse gases elsewhere, in place of meeting their emissions targets. For example, under the initiative's tentative rules, power plants will be able to meet the standards by doing such things as planting trees rather than simply producing cleaner emissions. When the pollution allowances reach certain price thresholds, emitters are allowed to rely more heavily on offsets--a measure intended to control costs.

The danger in making concessions to business is that they may come at the cost of support from environmentalists. For example, both Dan Lashof of the Natural Resources Defense Council and Daniel Sosland, executive director of Environment Northeast, support RGGI. Yet they view offsets with some skepticism, worrying that, if broadly utilized or poorly designed, they could fail to produce meaningful emissions reductions. This balancing act underscores the guinea-pig role state and local governments play, both in terms of overcoming technical obstacles and forging political coalitions. Surprisingly, that's not something that worries Litz, who says his group of eight states is concerned only with establishing a model for others to follow.

POLITICAL INFLUENCE

Nickels' mayoral partnership and the RGGI group aren't the only state or local climate-change compacts. There is also, among others, the West Coast Governors' Global Warming Initiative and the Southwest Climate Change Initiative. Nickels links this impulse to collaborate to the global scope of climate change. "None of us as individuals or even individual communities feel we have the power to change it," he says. "If I were simply to say Seattle is going to do what it can in a vacuum, it would be a very frustrating exercise."

There are also frustrations inherent in working with one's peers. Although Nickels found mayors eager to join him, the tough part may come as city leaders have to take concrete steps to reduce emissions. RGGI went through this process last year: Massachusetts and Rhode Island, two states that had been part of the initiative's discussions, refused to join, citing fears of increased energy costs.

Not everyone sees the compacts and their regulations as an appropriate solution. Marlo Lewis Jr., a senior fellow at the Competitive Enterprise Institute, argues that regulations on CO2 emissions could cost hundreds of billions of dollars without significantly affecting global warming. He also says that the current state and local efforts are intended to create a web of regulatory requirements aimed at compelling business leaders to do something they wouldn't otherwise do: Ask Congress to adopt national regulations for CO2 emissions. The state and local groups, he says, "want to confront Congress, but especially the Bush administration, with a patchwork quilt that will drive the business community up the wall. They see this as a political campaign."

Those pursuing climate change efforts make no secret of their desire to influence federal policy. That's because there are substantial limitations on what states or localities can achieve on their own. Nickels has no legal authority to punish mayors who do not keep their word to him. Proponents of RGGI face a number of obstacles to getting their trading system operational, but, even if they do, they have no power to compel other states to join. And, besides facing challenges in court, California must get permission from the U.S. Environmental Protection Agency before it can enforce its auto emissions regulations. Furthermore, environmentalists fear that state and local rules will fail to chip away at emissions nationally or globally because polluters will simply shift their activities to unregulated locales.

As a result, state and local governments may make their most significant impact on greenhouse-gas emissions by driving federal action, either in the coercive way that Lewis describes or in the way supporters of the initiatives say they plan: by proving that the programs can work. In particular, they say that if their efforts demonstrate that progress can be made against global warming without adverse economic impacts, then they will have neutralized the strongest argument against federal action. "There's a lot of hope that state activity will end up driving federal action," says Sosland. "There's a lot of governors of both parties who believe that is inevitable."

Inevitable or not, it remains a goal. "All of the states involved in RGGI would love to see a national model," says Litz. "We would love to see an international program. You have to start somewhere."

Josh Goodman
Josh Goodman  |  Former Staff Writer
mailbox@governing.com  | 

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