‘Big Green’ Battle Centers on Cost of a Cleaner State : Environment: In many cases Proposition 128 simply sets guidelines. Price tag forecasts vary widely.

Environmentalists contend that Proposition 128, widely known as “Big Green,” will save Californians $87 billion in energy and health costs in 20 years and at the same time cleanse coastal waters and save redwoods.

Industry argues that the environmental initiative will cost Californians several billion dollars a year and produce huge increases in the price of gasoline, a surge in electricity rates and a rise in food prices.

These wildly different--and to voters, maddeningly befuddling--forecasts are central to the debate over the sweeping environmental proposition and two rival, industry-backed initiatives on the Nov. 6 ballot.

In large part, the disparate views of what Proposition 128 would do--and how much it would cost--stem from differing sets of assumptions about the future and human nature. The measure, in many cases, simply sets guidelines or goals and requires state officials to find ways to meet them.

Those who argue that the costs would be reasonable believe alternative technologies are available at competitive prices to replace pollutants. These supporters also assume that consumers would adjust their behavior and conserve energy without being throttled by large price hikes.

Opponents take none of this for granted. They contend that people do not change without strong incentives. Alternative technologies are inadequate, these critics say, and state officials will have to resort to costly measures to enact the law.

“As far as I can see it, economic growth probably will be slower than it would be otherwise,” said Frederick Cannon, chief economist for Bank of America. “But it’s unlikely, depending on how it’s implemented, that (Proposition 128) would cause some kind of downturn in the state economy by itself.”

Interviews with dozens of government officials, economists, energy experts, university professors and agricultural experts tend to portray a post-Proposition 128 situation in which there would be short-term losses: higher costs for some products and for manufacturing companies, the oil and gas industry and agriculture.

In the long term, many of these analysts say, the economy would be stronger because of improved energy efficiency. Air would be cleaner and public health might improve.

The measure, dubbed the “Hayden initiative” by opponents, is sponsored by Assemblyman Tom Hayden (D-Santa Monica), environmental groups and Atty. Gen. John K. Van de Kamp. Oil, chemical and manufacturing companies oppose it.

“The main long-run effect (on the economy) will be to change the composition of growth in favor of less-polluting industry and companies that produce things that combat pollution,” said Roger Noll, director of the public policy program at Stanford University. “I also think it’s going to cause the population growth of the state to be much lower than it would be otherwise.”

The initiative is designed to remove toxics from food, water and air and would create an elected office of environmental advocate to ensure protection.

Litigation could tie up parts of the measure if it is enacted. Industry, which dislikes several of the proposition’s provisions, is particularly troubled by a requirement that California reduce its carbon dioxide emissions by as much as 40%--probably closer to 32% if population projections are correct--by 2010.

Carbon dioxide, produced by the burning of fossil fuels, is the biggest contributor to global warming. Many scientists believe that it and other gases will cause major climatic disruptions in the decades ahead.

To help reach the targeted cut, the initiative would save redwoods and require builders to plant and maintain one tree for every 500 square feet of new construction. Trees absorb carbon dioxide, and if planted near buildings, could reduce heating and air-conditioning costs.

If passed, the initiative would trim the world’s carbon dioxide by less than 1%, according to opponents. Proposition 128’s backers hope other states and nations follow California’s example. Already, several countries have pledged major reductions in carbon dioxide emissions. Germany, for example, plans to cut its emissions by 25% by 2005.

“The carbon dioxide provisions strike me as being very challenging and very tough,” said Charles Imbrecht, chairman of the California Energy Commission, which would have to establish regulations to meet the target.

“But I certainly cannot say from an intellectually honest perspective (that) they are impossible.”

The goals could be obtained without hefty gas taxes, escalating electrical rates or nuclear power because alternative technology is available to reduce energy consumption, he said.

“The question is whether the public is ready to accept it,” said Imbrecht, a Gov. George Deukmejian appointee. “Not everybody wants to drive a Honda Civic.”

Contending that the bulk of reductions must come from transportation, Imbrecht suggests strategies such as granting rebates to drivers of more efficient vehicles or assessing higher fees to those who drive gas guzzlers.

State vehicle design requirements also would have to be changed in a way that would produce more fuel-efficient cars without infringing on the federal government’s sole authority to set miles-per-gallon standards, he said. For example, state officials recently spurred future production of clean-fuel cars by approving the world’s toughest tailpipe emission standards.

James M. Lents, executive officer of the South Coast Air Quality Management District, largely agrees with Imbrecht. Meeting the initiative’s emissions goals “will not be easy, but it (won’t be) the kind of Armageddon you hear presented on some of the advertisements against it,” he said.

“I don’t know that we are talking about huge sacrifices. We are talking more about technology changes, more fuel-efficient cars, fuels that create less carbon dioxide . . . more efficient power plants, more efficient lighting at homes, more efficiency in factories,” Lents said.

Stanford University’s Noll, who said he intends to vote against the measure, argues that the targeted reductions would hit poor people hardest because low-income residents tend to drive older cars that consume more gasoline and have less choice about where they live.

An official of Southern California Edison Co. said that Proposition 128 does not allow the business community to reduce emissions in the least costly way. California is already more energy efficient than the rest of the country, and squeezing out the required reductions in carbon dioxide is possible but expensive, said Michael Hertel, manager of Edison’s environmental affairs.

“Why not allow California companies to go to Central America and plant 100,000 acres of trees at 100th of the cost?” Hertel said.

Even a sponsor of the initiative warns that costs required to meet the emissions target might seem overwhelming initially.

“In the first two years, you might say it’s devastating because the costs are front-loaded,” said Christopher Calwell, research associate with the Natural Resources Defense Council, a sponsor of the initiative. “I really discourage short-term thinking here.”

Light bulbs are often cited as an example of the kind of trade-off Proposition 128 would ask Californians to make.

An energy-efficient compact fluorescent light bulb costs as much as $15 to $25 to purchase, compared to the commonly used 75-cent incandescent, said Rick Heede, a research associate at Rocky Mountain Institute, which researches resource efficiency issues. But over the lifetime of the fluorescent, he said, consumers will save about $40 in electricity.

The impact on agriculture also could be severe in the short run if farmers do not prepare for a phase-out of many pesticides. The initiative would ban--in most cases within five to eight years--pesticides on food if they cause cancer or birth defects and set aside $20 million for research into alternatives.

Pesticide regulation, now in the hands of California’s Department of Food and Agriculture, would be shifted partially to the Department of Health Services. Environmentalists have complained that the agriculture department is more concerned with farmers than with public health.

“The short-term impacts are going to be pretty grave,” said Otto Doering, professor of agricultural economics at Purdue University. “As time goes on, lots of things happen to make adjustments. Farmers learn to do things differently, consumers may decide they don’t want as much of a certain product, and farmers may find new or different chemicals” or learn to farm without them.

Much of the outcome depends on how the measure is interpreted. Critics contend that one provision could ban about 65% of all pesticides. Supporters, conceding the language may be unclear, argue that the opponents are misinterpreting that provision.

If the provisions are interpreted according to the environmentalists’ intent and substitutes are available, the pesticide section could have “little impact,” Doering said. But he does not believe the changes will be painless.

“I think California is probably going to have to suffer some food price increases,” he predicted.

Lawrie Mott, a senior scientist with the Natural Resources Defense Council, insists that the phase-out provisions will give farmers plenty of time to find substitutes. Many already exist for the targeted chemicals used on several crops, she said.

Like other environmentalists, Mott points to previous predictions of crop losses and price increases that did not occur when other pesticides were banned by the federal government.

Voters who do not like the pesticide provisions of Proposition 128 could cancel them by voting for Proposition 135, a measure backed by farmers that would increase testing for pesticide residues on food but leave regulation in the hands of the Department of Food and Agriculture.

That measure, not surprisingly, is strongly opposed by environmental groups. If it gets one more vote than Proposition 128, current pesticide regulations would remain largely unaltered.

In addition to pesticides, Big Green would curtail the use of chemicals that deplete the protective ozone layer. Beginning Jan. 1, 1997, businesses would be prohibited from producing, using or selling these substances. Extensions could be granted if alternatives were unavailable.

New cars would be required by Jan. 1, 1995, to use non-ozone depleting coolants in air conditioners, but there would be no restrictions on the use of air conditioners in cars, homes or offices.

Recognizing the threat of ozone depletion, 90 nations have agreed to curb their use of the destructive chemicals. Proposition 128 would require California companies to discontinue using these substances years sooner than industry elsewhere in the nation.

Environmentalists say the deadlines would leave companies time to find alternatives and place California in the forefront of technological change. Opponents argue that the earlier phase-out for California could cost the aerospace industry as much as $500 million because it relies heavily on the use of an ozone-depleting chemical as a solvent.

“If you drive technology too fast, it breaks,” says Steven Moss, an analyst for San Francisco-based Spectrum Economics, which has been hired by the opponents to forecast the consequences of the measure. “You get technology that is not quite ready for prime time.”

In an effort to protect California’s coast, Proposition 128 also seeks to restrict offshore oil drilling, tax oil companies to pay for oil spill cleanups and force industry to reduce pollution of coastal waters. In each case, the initiative does not go substantially beyond current state or federal law.

Even though new offshore drilling is banned in California, legislative analyst Elizabeth G. Hill estimates that a provision in the measure making the drilling prohibition harder to repeal could cost the state as much as $2 billion in deferred oil revenues.

Proposition 128 also would tax oil companies $500 million to pay for future spill cleanups. California legislators recently approved a similar cleanup program that would tax the industry $100 million.

All companies that discharge into coastal waters would have to determine what toxic materials they are releasing and search for safe alternatives.

“It will ban every toxic chemical contaminant in our coastal waters that could be replaced by a cost-effective substitute chemical,” said Greg Karras of Citizens for a Better Environment. “It’s clear that an alternate economy will replace the toxic economy.”

The initiative also would force some coastal cities to speed up their timetable for providing secondary treatment of sewage before dumping it into the ocean.

Moss, opposing the measure, argues that a provision to reduce contaminated storm water runoffs into coastal waters could cost local governments hundreds of millions of dollars without substantially improving the marine environment.

He also contends that water supplies for human consumption could be reduced under a provision that he says requires more water for marine life. The authors say he is misinterpreting the measure.

There is less dispute over Proposition 128’s provisions on redwoods. The measure would ban their clear-cutting and provide $300 million in bonds to buy some of the state’s oldest redwoods and finance urban tree planting.

A second initiative supported by environmentalists would go further. Proposition 130 would ban clear-cutting of all trees--not just redwoods--and reduce the amount of timber that could be harvested. It also would provide $742 million in bonds for the purchase of forest land and the retraining of loggers.

The timber industry is offering its alternative to forest management. Proposition 138 would ban clear-cutting in name, but contains loopholes that would allow loggers to take most, if not all, trees from a given site. That proposal offers a $300-million bond measure to pay for more tree planting in urban and rural areas and for assistance to small landowners to improve timber production.

Aside from any cost to consumers and industry, legislative analyst Hill says the price tag of Proposition 128 includes $90 million a year for state and local governments and onetime costs of $300 million in bonds, $750,000 to set up the office of the environmental advocate, and $40 million for research to find substitutes for banned pesticides and ozone-depleting chemicals and to reduce greenhouse gases.

With the opposition focusing its campaign on financial costs, environmental groups are trying to move the spotlight to the environment itself, arguing that the cost of not doing anything will be far greater: a dearth of redwoods, climatic disruptions for future generations, fouled water and polluted air.

Environmental groups and industry and government officials nationwide are watching the outcome of Proposition 128, which could have ramifications for regulations designed to attack environmental ills.

William K. Reilly, U.S. Environmental Protection Agency administrator, said California’s experience with the initiative, if it passes, will be “extraordinarily instructive.”

“Big Green will have profound implications outside California.”