Mayor Backs AQMD Smog-Trading Plan

Los Angeles Mayor Richard Riordan and Councilman Marvin Braude joined the Los Angeles Area Chamber of Commerce and many of the Southland’s largest industries on Tuesday in supporting the region’s innovative but controversial smog-trading proposal.

The South Coast Air Quality Management District’s free-market pollution plan, called RECLAIM, has turned into a divisive issue for business leaders in Los Angeles, Orange, Riverside and San Bernardino counties.

The Southland’s largest polluting industries believe the program is an economically sound and flexible way to clean the region’s air, but many groups say it could be more burdensome for smaller businesses than the traditional approach of controlling smog.

Declaring his support for the first time, Riordan called the smog-exchange plan “a brilliant idea whose time has come,” and he urged the AQMD board to adopt it. Braude, who sits on the board, said RECLAIM is “a revolutionary, business-friendly way of achieving something we all want--cleaning the air we breathe.”

The Los Angeles chamber’s executive committee, which represents 2,100 businesses in five counties, also gave its “qualified support” after a lively morning debate. Endorsement also came Tuesday from the Small Business Coalition.

“There are still some areas that need review and modification,” said chamber President Ray Remy, “but the basic thrust is that the program is supportable.”

Among other key business groups and companies that remain opposed, however, are the Orange County Chamber of Commerce, the Greater Riverside Chamber of Commerce, the Gas Co., Anheuser-Busch Corp. and the Economic Development Corp. of Los Angeles County.

The debate is heating up as the air-quality board prepares to convene a two-day hearing on Sept. 9 to debate RECLAIM, a proposal the AQMD developed after three years of negotiations with business leaders and environmentalists.

The divisiveness in the business community is ironic because the main goal of RECLAIM is to ease the economic burden of smog control.

Traditionally, the air quality agency has tried to curb smog through a series of complex rules that target each industry’s polluting equipment.

Under the new plan, the AQMD would set a limit of two major air pollutants that each business can release. The companies could choose how to comply, and if they cut emissions beyond that limit, they could sell smog credits to others. The goal is to create a large market for the credits, giving firms an economic incentive to tackle their pollution.

The AQMD has a lot at stake because it has suspended new air pollution rules to plan for RECLAIM and is facing increasing pressure to meet federal clean-air laws. AQMD officials say an initial 460 businesses would save $93 million a year while cutting the same amount of pollution as under traditional smog rules.

But some business leaders who once supported the concept as less costly and onerous now believe the AQMD’s implementation would be so complex and flawed that it would have the opposite effect.

A main reason for the dispute in the business community is that most of the benefit would go to the oil and power companies and other large polluting industries.

“We supported RECLAIM initially, but as it’s gone through the process, it now appears that we no longer can support it,” said Bruce Brown, a vice president of the 1,200-member Orange County Chamber of Commerce. “The smaller companies will have no opportunity to buy and sell the pollution credits--they are being phased out because they cannot afford it.”

Changes wanted by the Los Angeles Area Chamber of Commerce include simplified pollution monitoring for smaller firms and assurance that new businesses will not be chased off. Two members of the chamber’s 14-member executive committee--which is dominated by major industries--dissented.

“It is still a very fluid situation. You will continue to see some business-oriented groups in opposition,” Remy said. “And quite frankly, if the program doesn’t address some of our concerns, we will have to redress the issue.”

Many environmental groups, meanwhile, fear RECLAIM will amount to a lot of paper shuffling with no benefit to air quality.

“All Riordan knows is what his big-business cronies have told him, and even that must be a highly biased report if he’s supporting a program that so much of industry opposes,” said Jim Jenal of Citizens for a Better Environment, one of the most vocal critics.

The strongest support comes from a coalition of 20 companies that includes the region’s biggest sources of industrial air pollution. Included are six oil refiners, plus Southern California Edison, Hughes Aircraft Co., TRW, Lockheed, Northrop, Rockwell and Toyota.

“A lot of people are now coming out and seeing that the program will be good for business, as well as the environment,” said Robert Wyman, an attorney representing the coalition.