AB 32

Los Angeles utility starts to squawk as it stares down a $700 million carbon bill

Regulators have won praise for speed and thoughtfulness with which they have laid the groundwork for implementation of A.B. 32, the landmark bill that aims to bring California's greenhouse gas emissions down to 1990 levels by 2020. But even within a single state, climate change legislation creates winners and losers, and regional tensions are starting to show.

California's climate plan consists of a slew of new efficiency standards, regulations, and reduction measures -- as well as a cap-and-trade system to place a lid on total emissions. It's the cap-and-trade system that is part of the present pushback.

At issue in particular are the long-term contracts that the Los Angeles Department of Water and Power (DWP) has entered into for coal-based electricity. Although coal has kept L.A.'s electricity some of the cheapest in the state, the utility will have to pay enormous sums for carbon allowances under the new law.

It's always instructive to unpack some of the distortions that surround the politics of climate change legislation. Officials from L.A. seem to be trying out three different angles in their resistance to the bill. The first is that the steep cost of the allowances will divert money away from energy efficiency and renewable energy programs.

EDF prez says we can’t afford to wait for the ideal first step

Fred Krupp

The following is a response to this post.

-----

Ken Ward tracks the evolution of EDF's position on climate legislation in search of evidence that we've relented on tough global warming pollution limits since making climate change a top priority more than ten years ago. He sees our support of the Climate Security Act as a retreat from bold action, as surrender to what's merely possible in Congress. Far from it.

What shapes our advocacy and our support for that bill is not, as Ken suggests, the limits of politics-as-usual in Washington. It's shaped by the urgent need to begin reducing global warming pollution -- and the fact that as a nation we have failed to take action despite two decades of evidence that we are in deep trouble.

On the art of setting (and hitting) emission targets

Gore's call for 100 percent renewable electricity generation within 10 years may seem, at first blush, to be so far out in left field as to lack any seriousness -- but it has some commonality with established regulatory policy. For example, California's global warming law (AB 32) is rooted in Governor Schwarzenegger's Executive Order S-03-05, issued on June 1, 2005, ordering that "the following greenhouse gas emission reduction targets are hereby established for California: by 2010, reduce GHG emissions to 2000 levels; by 2020, reduce GHG emissions to 1990 levels; by 2050, reduce GHG emissions to 80 percent below 1990 levels."

What is notable about both Gore's and the governor's targets is that all the numbers happen to end in zero. Gore did not call for a reduction of, say, 95 percent in 13 years; his targets are evidently ballpark numbers more-or-less picked out of a hat. "One hundred percent" can basically be interpreted to mean "a whole lot" and "10 years" translates to "ASAP."

How to reduce California auto emissions faster than Pavley

Last update: 7/22/2008

In my last post I touted the benefits of a fully refunded emissions tax. Let's take a look at how it could work in California.

When it comes to a refunded tax, more money for industry doesn't mean less money for consumers. Case in point: Today's gasoline prices in California are averaging $4.58/gal, which equates¹ to $536/MT-CO2e. That's how much California drivers are currently paying to emit CO2 -- and how much they could save from fuel economy improvements.

The same approach used by the Swedish program could be applied to motivate efficiency improvements in vehicles, consumer appliances, etc., by employing feebates, which can be implemented as a kind of refunded emission tax. The tax would be applied to projected lifecycle emissions (direct or upstream) and would be refunded in proportion to some measure of economic utility (e.g. refrigeration capacity, illumination output, etc.). The tax and refund together would incentivize lower emissions per unit of economic utility. Feebates could be used as an alternative to traditional performance standards, or could be used to effectively impose a price floor on a tradable standard.

Will California’s climate change regulations mandate maximum emission reductions?

[This post is follow-up to a David Roberts post from Jan. '08: "What does California's climate bill mandate?"]

Sometime later this month, the California Air Resources Board (CARB) will release its draft "Scoping Plan" on implementation of the state's Global Warming Solutions Act of 2006 (AB 32), which requires that statewide GHG emissions be reduced to or below 1990-level emissions by 2020.

AB 32 also requires that the regulations "achieve the maximum technologically feasible and cost-effective greenhouse gas emission reductions." Furthermore, the regulations must be designed "in a manner that is equitable, seeks to minimize costs and maximize the total benefits to California, and encourages early action to reduce greenhouse gas emissions".

The law authorizes a variety of regulatory measures, but CARB's Scoping Plan effort has focused primarily on cap-and-trade, following the precedent set by the U.S. Acid Rain program. Cap-and-trade can be effective at achieving a specific emission target at minimum cost -- but how does the requirement for maximum emission reductions fit in with this approach?

We can’t wait for new nukes, so what do we do now?

Suppose the leaders of this country were wise enough to put a moratorium on traditional coal (the most urgent climate policy needed, as discussed here)? How will we meet our steadily growing demand for carbon-free power over the next decade? And to get on the 450 ppm path, we don't just need to stop U.S. emissions from rising -- we should return to 1990 levels (or lower) by 2020.

Nuclear

Nuclear is an obvious possibility, beloved of conservative Francophiles like McCain and Gingrich, but energy realists understand that it is very unlikely new nuclear plants could deliver many kilowatt-hours of electricity by 2018, let alone affordable kwh. Indeed, back in August, Tulsa World reported:

American Electric Power Co. isn't planning to build any new nuclear power plants because delays will push operational starts to 2020, CEO Michael Morris said Tuesday ...

Builders would also have to queue for certain parts and face "realistic" costs of about $4,000 a kilowatt, he said ...

"I'm not convinced we'll see a new nuclear station before probably the 2020 timeline," Morris said.

And that in spite of the amazing subsidies and huge loan guarantees for nuclear power in the 2005 energy bill (see here).

Reflective paint and glaze can reduce the need for A/C in your car

The following post is by Earl Killian, guest blogger at Climate Progress.

-----

California's AB 32 cap on greenhouse gas emissions has its regulatory agencies working to find a set of measures that will amount to savings enough to cut 2020 emissions by about 30 percent. Since 12 years is too short to change California's vehicle fleet or its power plants, myriad measures are being considered, each rather small but hoped to make a difference cumulatively.

One such effort is to find paints and coatings to reduce how hot cars get when parked, so the driver is less likely to turn on the air conditioner:

The green-collar jobs movement tests its voice in Memphis

Pat Walters is a freelance journalist based in Memphis. He’s captivated by stories about ecology, landscape, and culture. His work has appeared in publications including The St. Petersburg Times and The New York Times Magazine. And he’s very happy his job is green. Friday, 11 Apr 2008 MEMPHIS, Tenn. To read more Grist coverage of […]

The solution: Output-based standards

This is the fifth and final post in a series on the details required to get carbon policy right. See also parts one, two, three, and four.

So far, I've done a lot of complaining -- which, in and of itself, is just, well ... whiny. Here, then, is a solution.

First, a very brief review:

1. A test of good carbon policy is whether it encourages the private sector to invest capital in projects that will reduce GHG emissions.
2. "Additionality" confuses carbon policy, by preferentially shifting investment toward less economic GHG-reduction technologies.
3. Carbon taxes provide sticks without carrots, and thereby provide no direct incentive to those who might otherwise use carbon pricing to invest in projects that lower GHG emissions.
4. Long-term carbon pricing is necessary to encourage private sector investment. Spots alone will not.
5. Although not covered in this series, it bears repeating that auctions trump allocation.

Unfortunately, virtually all of the GHG-reduction strategies currently in existence (e.g., Kyoto, RGGI) or being contemplated (e.g., Lieberman-Warner, California AB 32) fail one or more of the prior tests. Moreover, all those actual/proposed bills are really complicated, with many moving parts that are rife for gaming -- or, more charitably, significant legislative error. Here, then, is a better approach: output-based GHG regulation.