Like Lisa said, yesterday’s schmoozing between Schwarzenegger and Blair was touching but symbolic. The real meat of environmental legislation right now is pending in Sacramento, where Fran Pavley and Fabian Nunez have introduced the Global Warming Solutions Act (AB 32) [PDF]. According to the the Environmental Defense fund:

AB 32 is the first statewide effort to cap greenhouse gas emissions across all sectors of California’s economy. It would set a firm cap that would ensure that California’s greenhouse gas emissions are reduced by 25% by the year 2020, putting teeth in Governor Schwarzenegger’s goal to reduce California’s emissions.

According to a summary Q&A (PDF) about the bill, a market based cap-and-trade system is one several “flexible compliance mechanisms” that could be considered by California Air Resource Board (CARB). A specific regimen for carbon trading is not actually included in the bill, a fact which even the LA Times seems to have tweaked.

Rod Beckstrom, CEO of Carbon Investments in Palo Alto, and Ray Lane, of Kleiner Perkins, had an interesting if optimistic take on AB 32:

As the nation’s leading environmental innovation state, California needs to approve AB 32, which would cap emissions across key sectors of the economy. If state regulators add flexibility for emitters in implementing a cap, a market can emerge.

As this domino falls, it will put pressure on the federal government to act. The United States needs to approve the bipartisan McCain-Lieberman Climate Stewardship Act or some other legislation that achieves the goals of capping emissions and putting markets to work.

This will push the third domino — China — to fall. Largely because of Dudek’s work, China has gone the way of cap and trade, coupling emissions trading with its sulfur dioxide cap as its national acid rain control policy. Environmental innovation in California will spur China in the same direction.

Beckstrom and Lane cite McCain-Lieberman, but I still like the Waxman-sponsored bill, the Clean Climate Act. Maybe it’s just because he’s my senator, but Waxman’s bill appears to be the most progressive. (Of course, I’m no policy analyst, so I welcome any feedback.) And Waxman himself is way cool.

In addition to the Pavley-Nunez bill, SB 1250 (PDF) (Perata) provides revenue from utility bills to fund renewable energy R&D and SB 1368 (PDF) (also Perata — good man!) sets greenhouse gas performance standards for electricity sources that serve the state.

Finally, the California Ballot Initiative (PDF) — aka Prop 87 — will be voted on by all Golden Staters in November. It raises $4 billion to promote biofuels, efficient vehicles, and renewables R&D using funds from “an extraction fee on oil from California lands.”

No more kissypoo. This is making out.