Hostile Climate Greets Governor’s Plan to Save Earth

SACRAMENTO -- Gov. Arnold Schwarzenegger is running for reelection as a self-styled bold leader, who can boost the business climate at the same time he protects the planet from global warming.

But Schwarzenegger’s latest plan to curb greenhouse gas emissions beginning in 2012 is being greeted with skepticism by many environmentalists and downright opposition from major business lobbyists.

And if a compromise is to emerge, it must come in the next three weeks. The Legislature finishes for the year Aug. 31.

“It’s really important to the governor and the Legislature that something gets passed in this area of global warming,” said Mark Baldassare, a senior fellow at the Public Policy Institute of California.

“The public is saying it’s increasingly worried about the effects of global warming on the quality of life and the economy.”

The bill designed to carry out the governor’s Climate Action Initiative is heading toward final action in the Legislature. But many of its details remain hotly contested.

Still being debated -- in committee rooms and behind closed doors -- are issues of which businesses would be regulated, what agency would be charged with enforcement and what restrictions would be imposed on the state’s big air polluters.

“We think this is clearly the most important environmental bill of the year and maybe the most important bill of the year,” said Linda Adams, secretary of the California Environmental Protection Agency, who would play a key role in making any new law work.

Schwarzenegger and British Prime Minister Tony Blair had signed an agreement July 31 to work together to curb greenhouse gas emissions.

“California will not wait for our federal government to take strong action on global warming,” the governor said.

As Sacramento negotiations ensue this week, environmentalists expressed concern that the governor’s plan lacked the teeth needed to enforce strict limits on the amount of carbon dioxide pollution from power plants, refineries and cement kilns.

Business groups fear that imposing mandatory caps on emissions would burden California companies by driving already steep electricity prices higher.

“We can’t really tolerate anything that raises energy costs,” said Dorothy Rothrock, vice president of the California Manufacturers & Technology Assn.

Even a normally staunch Schwarzenegger ally, the California Chamber of Commerce, denounces the governor’s global warming legislation as “a job killer,” an epithet the group usually pins on bills carried by liberal Democratic lawmakers.

Finding a way to please both camps is perhaps the biggest challenge facing the governor as the Legislature begins its last three weeks of session before the November general election. Schwarzenegger doesn’t want to alienate the deep-pocketed business groups that contribute to his campaign.

But neither can he afford to ignore the 80% of California residents who say they’re worried about global warming, according to a July poll by the Public Policy Institute of California.

“It’s a difficult task,” said Frank Wolack, a Stanford University energy expert. “Everybody has a different objective.”

Neither side showed much sign of changing its stance at a Senate Appropriations Committee hearing Aug. 7 on the principal global warming bill, sponsored by Assembly Speaker Fabian Nunez (D-Los Angeles). The measure was kept in committee, pending a detailed review of its potential costs to taxpayers. Nunez’s bill, which is expected to make it to the governor’s desk in some form, had passed the Assembly on a partisan 50-27 tally.

Though they differ on remedies, businesses, environmentalists and the governor agree on a basic premise that something should be done to reduce human activities that heat the atmosphere. The overwhelming preponderance of scientific research indicates that human activities are increasing emissions of greenhouse gases and contributing to climate change.

Schwarzenegger compares global warming doubters to people who once believed the world was flat. He calls business critics doomsayers. “You can build a great economy and you can take care of the environment at the same time,” he insists.

Stark disagreements, however, arise over what Californians specifically can do to attack a problem that doesn’t confine itself to state or national boundaries. Environmentalists contend that at minimum California should become a model for other states and countries by taking strong measures to deal with global warming. Symbolic acts are fine, counters business, but not if it means chasing jobs to neighboring states that don’t limit greenhouse gas emissions.

Until now, business says it opposes any government limits on greenhouse gas emissions, even if the caps are tied to a market-based system that allows industries to buy and sell permits that would allow them to release carbon dioxide and other greenhouse gases. With that in mind, Nunez said he was talking to two electric utilities, at least one oil company and the cement industry to convince them they could live with the emissions caps.

The governor is sympathetic to business concerns. His version of AB 32 contains a so-called safety valve that would allow deadlines for capping greenhouse gas emissions to be extended if an administration-dominated Climate Action Board decided that limits would harm the economy. The governor’s proposal also would create a new bureaucracy, consisting of the heads of a number of state agencies, to oversee the process for mandatory reporting and capping of greenhouse gas emissions.

“We have no intention to put people out of business or do economic harm,” Cal-EPA’s Adams said.

Nunez and his environmentalist supporters, though they welcome the governor’s support, are wary of the administration’s push for the safety valve and the oversight board. “To have a cap that is meaningful, there needs to be enforcement,” said Devra Wang, director of California energy programs at the Natural Resources Defense Council.

The governor’s version of AB 32 is largely silent on how the global warming caps would be enforced. Environmentalists say they would prefer leaving enforcement to the independent California Air Resources Board. The board has decades of experience in fighting localized toxic pollutants such as sulfur dioxide and nitrogen oxide. Schwarzenegger’s Democratic challenger, state Treasurer Phil Angelides, says he supports Nunez’s bill as it stands and accuses the governor of trying “to gut” crucial enforcement mechanisms.

For their part, business groups contend that both the Nunez and Schwarzenegger versions of the global warming bill do not clearly spell out the government’s power to cap greenhouse gas emissions.

Schwarzenegger won’t have an easy time selling business on the need for a California-only law on global warming, said Severin Borenstein, director of the University of California Energy Institute in Berkeley.

“There are costs for reducing greenhouse gases, but if California can get on board, it might be able to demonstrate that those costs are not tremendously high,” he said. “And the rest of the United States might follow along.”