Yesterday California Democratic legislative leaders and Governor Schwarzenegger reached a deal on legislation to reduce greenhouse gases in an effort to halt the advance of global warming. The legislation requires a 25% percent reduction in greenhouse gas emissions by 2020 and requires the California Air Resources Board (CARB), as the lead agency, to adopt regulations to curb emissions and to set up a cap-and-trade system to allow less polluting companies to sell emission credits to more polluting companies. As part of the deal the Governor would have the authority to delay the deadlines for up to a year in case of natural or economic disasters, a point Schwarzenegger insisted on.
All businesses must reduce emissions, beginning in 2012, to meet the 2020 deadline. CARB, which developed California's strict and groundbreaking low-emission vehicle/clean fuels regulations in the 1980s and early 1990s, enjoys strong support and has the staff expertise to develop a creative regulatory program to meet the law's goals. It will develop targets for each industry, and may impose fees to fund aspects of the program. Schwarzenegger also insisted on a cap-and-trade system. The bill does not explicitly require such a system but authorizes CARB to set one up.
The deal, which has been in the works for several months, marks the evolution of Schwarzenegger over the past several years from action-hero recall winner to cheerleader at the 2004 GOP convention to tough guy who called Democrats in the Legislature "girly men" and promised to kick the nurses' butt but got his own kicked in an ill-fated special election in 2005 to bipartisan dealmaker running for a second term. As part of his retreat from the hard-right, divisive policies of last year, Schwarzenegger began early in the year to take a more conciliatory and a "greener" stance.
The bill had the support of most of the environmental community, but split the business community, with some defending the past and others seeing the promise of a new boom. In particular the oil and gas industry opposed the deal.
Business interests, especially oil companies, were irate and said they felt abandoned by the Republican governor, who had pledged to work for a bill they could support. They accused Schwarzenegger and Democrats of cobbling together behind closed doors a haphazard bill that could create unintended economic chaos.
"We remain very concerned about the long-term impact of this legislation on jobs, the economy and our industry's ability to continue meeting increasing demand for gasoline and diesel fuels," said Tupper Hull, a spokesman for the Western States Petroleum Assn.
But several others forsee a new boom to rival the high-tech boom of the 1980s and 1990s
[S]ome venture capitalists and businesses, including Pacific Gas and Electric Co., support the bill and argue it will be a boon to the economy by creating an entirely new clean-tech sector that could rival the high-tech boom.
"Both the environment and the economy win," said Andrew Michael, vice president of sustainable energy for the Bay Area Council, a business group that includes the 275 largest employers in the Bay Area.
Michael argued that new companies developing environmentally clean technologies will create jobs in California, and companies could save money by becoming more energy efficient.
It would seem highly unlikely that many businesses would leave the lucrative California market, especially those, like the oil industry, with large refineries specially configured to meet local fuel requirements. More likely, other parts of the country will begin to follow California's lead. The prospect of a Republican Governor and Democratic Legislature joining with the best minds in the state to begin to attack global warming will stimulate similar efforts in other states, just as California's pioneering requirements for low-emission vehicles and cleaner fuels to combat smog precursors and improve fuel economy was joined by several eastern states.
As with California's stem cell research initiative this effort is also likely to be copied by states who do not want to see all the promising research and development gravitate to California, and who do not want to become a haven for polluting industries. Eastern states will follow California's lead, but the real fight may be in places like Texas which have both a strong energy industry and a competitive high-tech and intellectual base. At least we are beginning to see what life could be like after the demise of the Bush Regime and the overly partisan and divisive Congressional GOP.