Economic Development

California Governor Seeks to Spread State's Green Practices

California is a leader on the environment, but it needs other states -- and nations -- on board to keep down economic costs.
March 4, 2013

By Anthony York

When Gov. Jerry Brown called on his fellow governors at a conference in Washington last week to embrace a California-style pursuit of cleaner air, he was doing more than reinforcing the state's image as an environmental trailblazer. He was trying to protect its economy.

Brown needs other states and the federal government to adopt key elements of California's environmental agenda, such as reaping more energy from renewable sources and capping greenhouse gas emissions, if those programs are to be successful here.

The state's aggressive pursuit of environmental goals has provided a new impetus for green jobs and federal subsidies. But the programs are costly to businesses, raising the price of their energy and forcing them to upgrade to cleaner manufacturing technologies.

If others don't go green, California could become an outlier, saddling businesses with costly new power while neighboring states continue to use traditional, cheaper energy, experts say. If the efforts under way in California spread to become the new normal, however, all will benefit from economies of scale.

If more states order power companies to limit their use of fossil fuels, for example, the incentive will grow nationwide for firms to develop cheaper alternatives, leaving California consumers less exposed to spikes in electricity rates.

Likewise, if greenhouse gas caps are widely implemented, the state's landmark climate change law is more likely to be successful. Cleansing the air is "clearly not something California can do on its own," said Severin Borenstein, director of the University of California Energy Institute.

The authors of California's emissions law said as much in its text: The ultimate goal is "encouraging other states, the federal government and other countries to act."

Brown has vowed to keep pushing to "decarbonize the economy." He wants to advance the state's mandate for renewable energy -- already the most ambitious in the nation -- further so California will receive as much as half its power from renewable sources within 20 years. In the courts, his administration is defending a state law, challenged by some oil and ethanol companies, that requires gasoline to contain 10% less carbon by the end of the decade.

In Washington, Brown pushed for others to join in. "We can't do it alone," he told state leaders gathered for the National Governors Assn. meeting. "We need other states.... We need China. We need India."

Many elements of California's environmental blueprint have already become a national model as other states and the federal government have adopted some version of them over the past several decades.

Using its leverage as the largest automobile market in the nation, California in 1975 required the use of catalytic converters to help reduce pollution from cars. Six years later, the federal government required them in all cars sold in the U.S.

A California law that passed more than 10 years ago limiting tailpipe emissions was the basis for a federal standard imposed by the Obama administration in 2010.

The state's global warming law, called AB 32 and passed in 2006, has been partly imitated elsewhere.

It was a model for federal legislation to curb greenhouse gas limits in 2010. President Obama failed to get the measure through Congress, but the Environmental Protection Agency created new rules to roll back emissions from coal-fired power plants.

The California law was grounded in the creation of a market that puts a price on greenhouse gas emissions. Owners of power plants and factories buy and sell permits to release the gases into the atmosphere.

The system, called "cap and trade," limits the volume of air pollutants that may be released in California each year but permits high polluters to buy the right to emit more.

Many business interests say cap-and-trade is too costly, though they may have fewer objections if that market grows large enough.

"The current system amounts to a tax to continue doing business in the state," said Shelly Sullivan, executive director of the AB 32 Implementation Group, a coalition of California businesses that has opposed many of the state's environmental regulations. "A broader system would create a larger market and, depending on how it's constructed, could address some of our concerns."

A limited number of cap-and-trade markets are in place in other parts of the country, although their scope is more modest than California's. Nine northeastern states, for example, have a carbon market aimed at reducing only power plant emissions.

Another landmark California environmental law requires power companies to generate more electricity from wind, solar and other "renewable" sources. Under a bill signed by Brown in 2011, California utilities must generate one-third of their power that way by 2020 -- the most ambitious such standard in the nation.

The California Public Utilities Commission estimates that reaching that goal could propel energy costs to nearly 11% above what they would be from gas-fired energy plants.

While 30 other states have also set requirements for power companies to utilize more renewable energy, their mandates are far more modest. Obama has been unsuccessful in his efforts to persuade Congress to pass a national mandate, and the prospects for Washington embracing more California-style energy policies is unclear.

In his State of the Union address last month, the president implored Congress to take action to cut the nation's pollution. Though he did not outline specific initiatives, he said he would take executive action to protect the environment if Congress declined to act.

"If Congress won't act soon to protect future generations, I will," Obama said.

Brown, meanwhile, is taking his green message overseas. In April, he is scheduled to visit China on a weeklong trade mission and will make climate change a centerpiece of his activities there, his aides say.

His itinerary includes a visit to Guangdong, the nation's most populous province, and he will seek ways for California to cooperate with leaders there to reduce harmful emissions.

Meanwhile, the state's Air Resources Board, which regulates air pollution in California, is working with officials in the Canadian provinces of Quebec and British Columbia on a joint effort to expand California's carbon-trading market.

Some of the lobbying efforts seem to be finding their mark. During the governors' conference, Arkansas Gov. Mike Beebe, a Democrat, said he shared Brown's concerns about the changing climate.

"It's not going to get any better," said Beebe, who has created a commission to set pollution-reduction targets in his state. "I'm with Jerry."

(c)2013 Los Angeles Times

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