State's model climate policies should maintain momentum

Maria Gallucci / InsideClimate News /

For decades, California has been the engine of growth behind America’s sputtering clean-energy economy — adopting groundbreaking clean air and climate policies as federal efforts lagged behind.

The hope was that California’s initiatives would become the template for a national law to slow global warming.

That hasn’t happened yet — and it isn’t likely to over the next four years. In his second term, President Barack Obama faces the same divided Congress that rejected carbon-reduction targets and a price on carbon dioxide emissions, two cornerstones of California climate policy.

But an Obama White House provides California a key federal partner that wants to regulate global warming emissions from power plants and cars, and won’t interfere. Steady support from the top might encourage other states to copy or join California’s pioneering initiatives, according to policy experts and advocates, which only helps the Golden State.

“I can imagine a set of states deciding to take on something like California’s program several years into an Obama administration, having warmed up to the idea of greenhouse gas regulation and having seen it work in practice,” said Cara Horowitz, executive director of UCLA Law School’s Emmett Center on Climate Change and the Environment.

California’s clean economy is driven by at least four sweeping policies: an economywide cap-and-trade program that puts a price on carbon pollution; a low-carbon fuel standard that limits the sale of carbon-intensive fuels; a 33 percent renewable electricity standard; and rigorous clean-car mandates for automakers.

Here’s a rundown of some of the policies, and a look at how the second Obama administration could help them along.

• Cap and trade: Removing the stigma

After six years in the making, California is set to launch the first auction of its cap-and-trade program on Nov. 14.

The program is the hallmark of California’s global warming law, AB 32, which requires the state to cut greenhouse gas emissions by 30 percent by 2020 and 80 percent by 2050.

Regulators will set a ceiling on CO2 emissions from utilities, oil extractors and fossil fuel-burning factories and require them to pay for their pollution by buying carbon allowances in quarterly auctions.

In year one alone, the program is expected to generate between $660 million and $3 billion in auction proceeds. By 2020, cap and trade could send $8 billion into state coffers annually.

California’s program is the nation’s second cap-and-trade system and the first to target carbon polluters across the economy. The Regional Greenhouse Gas Initiative limits emissions from power plants in nine participating Eastern states. In both cases, the states established the program without federal involvement and approval.

Obama supported federal cap-and-trade legislation in his first term, and rumors are swirling that he might push for a national carbon tax to help cut the deficit. Far more certain is that his Environmental Protection Agency will finalize greenhouse gas limits for existing power plants and oil refineries.

Any action from Obama on greenhouse gases could help chip away at the stigma of regulating carbon, said Horowitz of UCLA’s climate change center.

• Low-carbon fuel standard: Will Obama weigh in?

Another critical piece of California’s global warming law is a rule to slash carbon emissions in transportation fuels. The Obama administration isn’t directly involved with the measure, but the standards are stuck in legal limbo and the White House could opt to weigh in.

The low-carbon fuel standard — the first of its kind in the world — went into effect in the spring. Under the rule, oil importers, refiners and fuel blenders must cut the “carbon intensity” of their fuel mix by one-quarter of a percent this year and by 10 percent by 2020. The rule would discourage the use of oil sands crude and other high-carbon fuels and encourage greater adoption of electric cars and other clean vehicles.

Transportation accounts for 40 percent of California’s global warming emissions and about a third of U.S. emissions.

In December, a federal judge ruled that the policy was unconstitutional because it regulates economic activity outside California’s borders, siding with oil companies, Midwestern ethanol producers and other opponents. Advocates appealed the decision.

The rule’s fate now rests with a three-judge panel in the 9th U.S. Circuit Court of Appeals, which is expected to issue its final decision in 2013. The Obama administration could, in theory, attempt to sway the 9th Circuit judges by filing a friend-of-the-court brief expressing support for the program.

• Zero-emissions vehicle mandate: A sigh of relief

For California’s new mandate for ultra-clean cars, Obama’s victory removes any doubt the program will move forward.

The rule, approved in January, requires 15 percent of all cars sold in California to be zero-emissions vehicles (ZEV). Compliance begins with model year 2018; full compliance is expected by 2025. State regulators unanimously passed the mandate after four years of bargaining with the auto industry and environmental groups.

The mandate could result in more than 1 million all-electric, plug-in hybrid electric and hydrogen vehicles on California’s roads in the next decade, about 20 times the amount of such cars on U.S. roads today. It’s the latest move in California’s half-century-long effort to cut air pollution and carbon emissions from cars and trucks.