California Tackles Global Warming - At a Cost, Some Say
by Sean Chamberlin - Friday, 29 September 2006, 10:35 AM
  California Tackles Global Warming - At a Cost, Some Say
By Meghan Mulhern and Susan Jones Correspondents
September 29, 2006

( - California's new "global warming" law is "a typical product of "Lala land" says one free-market analyst. But environmentalists and Gov. Arnold Schwarzenegger said the new law will kick off a "bold new era of environmental protection."

The California Global Warming Solutions Act of 2006, signed into law on Thursday, directs the State Air Resources Board to cap greenhouse gas emissions from California's power plants, oil refineries and other industrial polluters. Those emissions must be reduced 25 percent by the year 2020.

The text of the new law says that global warming "poses a serious threat to the economic well-being, public health, natural resources, and the environment of California."

It says global warming may produce air quality and water supply problems; a rise in sea levels that flood thousands of coastal businesses and residences; damage to marine ecosystems and the natural environment; and an increase in the incidences of infectious diseases, asthma, and other human health-related problems.

The bill also says global warming will have detrimental effects on some of California's largest industries, including agriculture, wine, tourism, skiing, recreational and commercial fishing, and forestry.

California Gov. Arnold Schwarzenegger signed the "landmark" legislation in two separate ceremonies on Thursday.

"This is something we owe our children and our grandchildren. We simply must do everything we can in our power to slow down global warming before it is too late," Schwarzenegger said at the first bill-signing ceremony in San Francisco. (The second signing ceremony took place in Malibu.)

Press reports noted that Republicans, Democrats, scientists and some industry leaders backed the bill. Even British Prime Minister Tony Blair congratulated California in a satellite video message: "You are showing brilliant leadership that will inspire and excite a lot of people worldwide," Blair said.

But critics, including business groups, fear the bill (AB 32) will have adverse economic consequences.

"This bill will trigger significant increases in consumer and business costs for electricity and fuel, and higher prices for manufactured goods. And it will do next to nothing to affect emissions on a global scale so long as countries such as India and China continue their sky-rocketing emissions growth," said the Sustainable Environment and Economy for California coalition (SEE).

"The more businesses [that] leave California because of AB 32, the less impact it will have on reducing global warming," the California Chamber of Commerce said.

"AB 32 poses a tremendous risk to our economy, as businesses may leave California due to our increased energy costs and take their jobs to other states and countries that don't have carbon caps," said Allan Zaremberg, president and CEO of the California Chamber of Commerce and member of SEE.

Nevertheless, the California Chamber said now that the bill has been signed into law, it's time for everyone to work together to "reduce and mitigate the potential harm to California's job climate."

The Chamber recommended that California leaders provide tax credits to encourage more efficient generators and manufacturing processes, as well as greater protections for intellectual property rights. "The state could also provide financial incentives for consumers and businesses to purchase more fuel-efficient vehicles, including those fueled by clean diesel," the Chamber added.

'Important law'

Environmental groups strongly support the new global warming law. "In fact we think that it's the most important environmental law enacted in California in recent years and the most important law to curb global warming ever adopted in the United States," said the Sierra Club's Bill Magavern.

Magavern said other states may now be inspired to follow California's example -- eventually forcing the U.S. government to "take action."

The bill itself notes that "action taken by California to reduce emissions of greenhouse gases will have far-reaching effects by encouraging other states, the federal government, and other countries to act." (Environmentalists have criticized President Bush for refusing to sign the Kyoto global warming treaty.)

According to the Union of Concerned Scientists, California is the world's twelfth largest source of carbon dioxide, which is considered the main culprit in heat-trapping pollution.

"The state has a responsibility to reduce its share of emissions, and by doing so can lead the United States -- and the world -- in developing the innovative policies and technologies needed to avoid the most dangerous consequences of global warming," Union of Concerned Scientists says on its website.

The Natural Resources Defense Council and Environmental Defense, two groups that sponsored AB 32, said the new law "marks a turning point in international efforts to solve the world's most pressing environmental problem."

Environmentalists note that AB 32 is the first statewide effort to limit greenhouse gas emissions. It "goes further than any other U.S. effort and will serve as a national precedent," the NRDC said in a news release.

Economic collapse works, too

Marlo Lewis, a senior fellow at the Competitive Enterprise Institute, noted that U.S. greenhouse gas emissions are currently about 21 percent above 1990 levels.

"As population grows and the economy grows, you use more energy and you have more emissions," he explained. Reducing greenhouse gas emissions levels could also crimp the economy, he warned.

"If you look across the entire world, the only countries that were able to sustain significant greenhouse gas reductions, particularly carbon dioxide reductions, over a period of a decade or two were the former Soviet Union, and Eastern Europe," Lewis said. "They significantly reduced emissions because their economies collapsed."

Lewis noted that emissions also dropped in Germany when it unified - and all the old East German factories and power plants were shut down. "That was a one-time reduction, not a continuous reduction -- a fall like you get with an economic collapse," he said.

While some business interests will be harmed by California's new global warming law - coal and oil, for example - other interests will benefit. "If you're big in agribusiness and you want regulations that force automobiles to use more ethanol and less petroleum-based fuel, then your interests will be to support the global warming bandwagon," Lewis said.

Lewis noted that while some Americans engaged in the global warming debate are truly concerned about the environment, others are more interested in governmental aspects:

"Think of all the power this gives to regulators, because carbon dioxide is the most ubiquitous byproduct of industrial civilization, so if you're going to control carbon dioxide emissions, then you basically have to control everything; which, is great if you're in the business of controlling other people."

Supporters of the new law say they expect California to lead the way in developing new "clean and efficient" technologies - something that will create new jobs and benefit California's economy, they say.

Let's hope so, said the California Chamber of Commerce: "We want to make sure that the businesses which spring up to meet the demand for new energy technologies do more than just sell them to California; we want those businesses to locate here, employ Californians and provide revenues for the state."