State OKs Compromise Attack on Air Pollution : Smog: Plan submitted to U.S. calls for alternative fuels, electric cars. But auto, trucking industries gain concessions.

Barely meeting a key federal deadline, the state Air Resources Board on Tuesday unanimously adopted a sweeping plan that aims to clean up California’s smog with an array of hotly contested strategies that could cost consumers and industries billions of dollars a year.

After 25 hours of stormy testimony from business owners and environmentalists, the air board approved a compromise plan that pushes advanced technology in cars and trucks and includes concessions drafted to accommodate the oil, trucking and auto industries.

Provisions that will force widespread use of much cleaner alternative fuels and electric vehicles in California after the year 2004 were kept in the plan as a high priority. As a compromise, though, the board decided that it was too soon to determine how stringent a future standard might be necessary.

The new plan also relies heavily on a voluntary strategy drafted by Texaco and the trucking industry to use public money to buy and scrap thousands of older, polluting cars and diesel trucks beginning in 1996 in the four-county Los Angeles Basin, the state’s smoggiest region.

The cost of buying cars at $1,000 apiece would be about $75 million a year by 1999. No sources of funds have been determined, but the ARB says the effort might be financed through a $7 annual fee tacked onto vehicle registrations or a $100 fee on new cars.

California’s new blueprint for battling ozone outlines an ambitious 15-year agenda that is supposed to finally achieve the Los Angeles Basin’s elusive goal of healthful air in 2010, the year mandated by Congress.

Under federal law, California had until Tuesday to submit a strategy outlining in detail how it would comply with a national health standard for ozone in six regions of the state or face more onerous rules and sanctions from the federal government.

The 11-member air board was under direction from Gov. Pete Wilson to protect the state’s struggling economy but still meet federal clean air mandates as it wrestled with how to slash ozone--the pervasive, lung-damaging main ingredient of smog--by about 75%.

“We must understand what our actions mean to each and every sector of the economy,” said Jacqueline Schafer, chairwoman of the ARB. “We are in competition with other states to ensure that California’s quality of life is the best. That means that in attempting to ensure our environmental future we must be cognizant of the economic mortgage required.”

The board decided in a 7-0 vote to strike a compromise over new technology for cars because a proposal by the ARB staff last week prompted outrage from environmentalists and businesses that support alternative fuel technology. But in a concession to the trucking industry, the ARB made standards forcing alternative fuels in heavy-duty trucks a lower priority, setting no stringent long-term emissions goals.

The new plan gives high priority to the proposal to begin scrapping old cars in the Los Angeles Basin at a pace of 6,000 vehicles in 1996, increasing to 75,000 a year in 1999.

But local air quality officials fear that the scrap program is too unrealistic and unenforceable to satisfy federal mandates, especially for the Los Angeles region.

“We think it’s the wrong way to go,” said James Lents, executive officer of the South Coast Air Quality Management District, the agency that regulates air pollution in the Los Angeles Basin.

Environmentalists and businesses that back alternative-fuel vehicles criticized the ARB for giving in to influential industries. They said it is unfair to impose new fees on residents to pay for scrap programs when most of the burden should remain on industries that produce polluting vehicles and fuels.

“The CARB board wimped out on this whole thing,” said Henry W. Wedaa, Orange County’s representative on the Air Quality Management District Board and its chairman.

“Why should the public pay for this?” he said. “Why shouldn’t the industries creating the problem solve their problem? This is just another typical scheme to get out of cleaning up their emissions. The real story behind the story from my perspective is that nobody wants to use alternative fuels.”

Andrew Hirsch, a senior manager at Southern California Gas Co., said last week’s draft version made “a mockery of the people like us who have tried to advance this technology so far.” But Tuesday’s final plan “puts back some teeth for increased technology,” he said. “It’s a good solid compromise.”

Auto, trucking and oil executives, however, said the ARB was too optimistic in gauging the extent that alternative fuels and electricity could power cars and trucks in 2005. The price of alternative-fuel vehicles remains too high and too many technical shortcomings exist to guarantee widespread use, they said.

Industry executives contend that a program to scrap old vehicles would cost billions of dollars less and save jobs.

“This serves as a model for how employers and the air board can work together to find things that do not cause as much job loss but meet the same air quality goals,” said Allan Zaremberg, senior vice president of the California Chamber of Commerce.

Air board member Jack Lagarias, who suggested the compromise Tuesday, said the plan “will send a message to (vehicle and fuel) manufacturers that advanced technology is still an answer to California’s air quality problems.” He said it was important to leave open to debate in the year 2000 how stringent a standard is necessary and reasonable by then.

For 25 years, the ARB staff and board have been unwavering in setting tough state mandates that force cleaner fuels and vehicles. But they have been under increasing pressure from Gov. Wilson’s office in recent months to incorporate less costly alternatives recommended by the oil and trucking industries.

Although eclipsed during much of the debate by the controversy over the vehicle scrapping programs, the new plan contains hundreds of important and aggressive measures regulating pesticides, consumer products ranging from aerosol paint to nail polish, and businesses from aerospace to auto mechanic shops. It also requires California heavy-duty truck operators to cut diesel exhaust in half by 2002.

The plan is a compilation of measures to be imposed by the ARB and six regional districts, including the AQMD, as well as some national standards for railroads, airlines and other interstate sources under consideration by the U.S. Environmental Protection Agency.

The state’s goal is to create an anti-smog program strong enough to replace proposals developed by the EPA that have been criticized by virtually every business and government agency as onerous and economically disruptive.

“California’s economy has a loaded gun to its head,” Wilson’s chief economist, Phil Romero, said at the hearing.

Romero said the state plan would be 30% to 80% less expensive than the federal version. An economic consultant hired by the ARB at Wilson’s request estimated that the state plan would cost $6 billion a year compared to $8 billion a year under the federal plan.

The ARB’s plan, however, may not be specific enough to win the approval of the EPA, which has veto power. David Howekamp, chief of the EPA’s western regional air division, said it lacks such necessary details as a strategy for funding the scrapping programs.

“They would have to address those issues,” Howekamp said. “They have to have enforceable measures for this to be an approvable plan.”

The EPA has six months to determine if the plan is complete and a year after that to approve or reject it.

Schafer challenged the EPA to act quickly in accepting California’s plan as a replacement of the federal version and also to adopt some national pollution standards for sources such as railroads and airlines.

“Submitting the (plan) today sent the message that California is willing to accept its responsibility no matter how difficult it may be,” Schafer said. “California simply wants the federal government and EPA to accept the same responsibility.”

Los Angeles Mayor Richard Riordan, a vocal opponent of the federal plan, praised the ARB Tuesday for “including many constructive proposals to achieve clean air and preserve jobs.”

The scrapping program is designed only for Los Angeles, Orange, Riverside and San Bernardino counties, but could be expanded later.

The air board acknowledged that there is no easy source of funding for buying old cars and new fees are likely to become an explosive issue for Californians. Legislative approval is necessary before the program can begin, and the California Chamber of Commerce and oil industry officials have pledged to the ARB that they will persuade state legislators to pass a funding bill next year.

In addition to cars, the plan prescribes the scrapping of 1,600 old, high polluting diesel trucks per year in the basin beginning in 1999. Fewer would be scrapped from 1996 to 1998. The ARB suggests low-income loans or government subsidies to pay the truckers to replace their old vehicles.

Dennis Zane, who directs the Coalition for Clean Air, said trying to buy such large volumes of vehicles is a “bogus, ephemeral notion . . . utterly, utterly absurd. Scrapping does have its place, but we should not see it as a substitute for new technologies.”

AQMD officials say they also worry that the attempt to retire so many old vehicles will fail, leaving the Southland unable to meet health standards. “We think they are being overly optimistic,” Lents said.

Lents said he doubts that $1,000 will be enough to persuade motorists to sell their vehicles, which in most cases would be over eight years old. In an experimental program, Chevron and other oil companies have bought and scrapped 5,000 cars since the summer of 1993, but have started to run out of willing sellers and have already upped offers to $1,500, he said.

Ford Motor Co. Executive Engineer Mike Schwarz acknowledged that the public, not the car and oil industries, would pay for the scrapping program. But he said that even if auto makers are forced to produce new technologies, they still would pass the cost to consumers.

“The question is how, not whether, California citizens should pay for the measures in this plan,” Schwarz said.

Even with the concessions, some business leaders say the burden on California companies remains far too high. The plan “will have a dramatic and adverse effect on California’s economy,” said United Parcel Service executive Ken Churchill.