Companies Resist Bid to Limit Emissions

An ambitious effort to combat global warming in California comes before a state Senate committee today as the state’s most powerful business groups step up their efforts to kill it.

At issue is a bill by Assembly Speaker Fabian Nunez (D-Los Angeles) that would require industries to report how much greenhouse gas -- currently an unregulated source of pollution -- they produce and accept caps on emissions beginning in 2012.

To Nunez and supporters, the bill is a boost for the state’s environment and would make California a leader in grappling with global warming.

“This is a real threat to the sustainability of the planet,” he said. “Unless you mandate the reduction of emissions, people are not going to do it.”

But most business lobbies say putting caps on greenhouse gases would drive jobs to other states and countries by forcing industries to pay more for power and limiting their production.

“There’s no way to get to the targets except by stopping the use of energy,” said Dorothy Rothrock, vice president of the California Manufacturers and Technology Assn.

Last week, a coalition of the manufacturers association, the California Chamber of Commerce and more than 20 other trade organizations launched a statewide radio advertising campaign to persuade legislators to vote against Nunez’s proposal.

It is expected to be the most controversial legislation of the year affecting business, and its prospects for passage are far from certain.

Opponents are expecting a major fight. Killing the bill “is at the top of the list of issues that we are most concerned about,” Rothrock said.

But she concedes that the manufacturers and their allies, including oil refineries, carmakers and farmers, won’t have an easy time getting lawmakers to reject an environmental initiative that already has been tentatively embraced by Republican Gov. Arnold Schwarzenegger.

Last year, Schwarzenegger signed an executive order setting targets for cutting carbon dioxide emissions, which increase temperatures in the Earth’s atmosphere, to 1990 levels over the next 15 years.

“I say the debate is over,” Schwarzenegger said at an environmental conference last year. “We know the science. We see the threat. And we know the time for action is now.”

On Thursday, a panel of the National Academy of Sciences backed the governor’s assertion. The National Research Council released a report confirming that average temperatures have been rising for the last century, mainly due to human activities.

Environmentalists say the bill to be heard by the state Senate Environmental Quality Committee this afternoon would put teeth in the governor’s pledge to slash greenhouse emissions.

Proponents also note that hitting the governor’s pollution reduction targets would create as many as 20,000 jobs and add $59 billion to the state’s gross product by 2020, according to a January study by UC Berkeley.

Schwarzenegger, who claims a position of national leadership in the battle against global warming, has endorsed the idea of hard caps on greenhouse gases and said he “might be able to live with” putting them in place by 2012.

However, the governor has not said he would sign the bill by Nunez and Assemblywoman Fran Pavley (D-Agoura Hills) if it lands on his desk before the Legislature adjourns in August. If it passes the entire Senate, the bill will move to the Assembly.

Schwarzenegger is apparently eager for compromise. He is committed to working closely with the Legislature to make sure he gets a bill he can sign, spokesman Adam Mendelsohn said.

In its current form, the legislation directs the California Air Resources Board to set enforceable limits on emissions from electric power plants, refineries and other stationary polluters by 2010. The rules would become effective in January 2012 and progressively lower pollution from greenhouse gases over the next eight years.

Environmentalists argue that lowering greenhouse gas emissions is feasible. They accuse business of raising the same sort of pessimistic alarms they sounded to oppose pioneering pollution control laws passed by California since the 1960s.

Sierra Club lobbyist Bill Magavern says environmentalists are trying to make sure that the governor doesn’t succumb to pressure to oppose AB 32 from business groups, which have contributed millions to his campaign accounts.

But opponents fear the caps could bring devastating results when fully in place in 2020. They also would send a signal to business not to invest in California, said economist Margo Thorning, who recently analyzed the issue for the American Council for Capital Formation, a business-backed Washington think tank.

“My guess is that energy use would have to come down somewhere close to 40%,” she said. “It really would practically shut the state down.”