California Passes Nation’s Most Ambitious Climate Legislation, But Will It Succeed?

The California experience thus far with greenhouse gas reduction shows economic growth is possible with regulation, argues Ethan Elkind of the UC Berkeley School of Law

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DHARNA NOOR, TRNN: Welcome to the Real News Network. I’m Dharna Noor.

It’s been a long hot summer. Every state in the US experienced above average temperatures between June and August with California, Connecticut, and Rhode Island recording their warmest summer ever. In California it at least looks like they’re trying to do something about it. On Thursday, Governor Jerry Brown signed two far reaching climate bills into law. By the year 2030, the bill called SB32 requires greenhouse gas emissions to drop below the year 1990’s emission levels by 40%. And the bill AB197 is intended to create more oversight of regulator practice in order to curb local pollution. Here’s Governor Jerry Brown at the signing ceremony of the bills.

GOVERNOR JERRY BROWN: So what we’re doing here is far sighted as well as far reaching. It takes a lot of courage and a lot of vision. California’s doing something that no other state has done. You’re putting in the law real measures backed p by the real power of the state of California. This is big and I hope it sends a message across the country.

NOOR: With us to talk about this new legislation is Ethan Elkind. Ethan is the Director of the Climate Program at the UC Berkeley School of Law with a joint appointment at the UCLA School of Law. He’s also the author of the book Railtown: The Fight for the Los Angeles Metro Rail and the Future of the City. Thanks for joining us today Ethan.

ETHAN ELKIND: Thank you. Thank you for having me.

NOOR: Okay could you tell us Baltimoreans about the significance about this new California legislation starting with SB32. A drop to 40% below the levels we had in 1990 seems like a pretty huge drop and this is actually an extension of another bill right?

ELKIND: Yes, exactly. This is the most aggressive climate change goal in the country that California’s embarking on. It’s really sort of an experiment but as you mentioned it comes on the heels and is really an extension of AB32 which was passed in 2006 and requires California to get back to 1990 levels of greenhouse gas emissions by the year 2020. What this bill does SB32, is basically extend those targets now as you mentioned to 40% below 1990 levels by the year 2030. Also was dependent on the passage of another bill AB197. That gives the California legislature more oversight over the agency that’s responsible for achieving these goals through various regulations. It also requires the agency to prioritize emissions or reductions directly at the source as opposed to for example the cap and trade program that the state is currently using. Not that the cap and trade program couldn’t still be used in harmony with that but it really wants to prioritize direct emissions reductions from specific sources to achieve these goals.

NOOR: Could you talk more about AB197? Again this bill creates an overseeing legislative committee. How does that work exactly? Who are they overseeing and how does this effect legislatures and regulators?

ELKIND: So the California Air Resources Board is agency within the executive branch and its members are appointed by the governor and in this case you now have two members who are not going to be voting through AB197 which will be from the legislature. So this is basically the result of the legislature essentially feeling left out of the regulatory process that has happened to date and wanting to have greater oversight. And as well they have these restrictions now on the kinds of regulations that the Air Resources Board can propagate to achieve the 2030 goals.

NOOR: AB197 aims to combat local pollution and it’s no secret that some people are disproportionately impacted by pollution. How will this bill affect those folks? Folks who are experiencing the worst of pollution in California?

ELKIND: Well you know as I mentioned SB32 is a groundbreaking law on climate change in greenhouse gas reduction. But AB197 is really groundbreaking in a different way because for the first time now, we’re really trying to address this sort of environmental injustice that you’re referring to which is the idea that we have a lot of low income communities of color who disproportionately get the negative effects of pollution and also are the ones most at risk as climate change worsens in terms of droughts and fires and all the disruptions that comes with that.

So AB197 for the first time is really trying to ensure that our climate programs in California are not just about benefiting the wealthy in terms of rooftop solar incentives or driving expensive electric vehicles like a tesla. But is really trying to make sure that we actually provide more benefits that are more directly impacted and also to have more assurance that we’re actually going to see emissions reductions in these industrial sources in these low income areas because a lot of times when you have factories or other industrial entities that are emitting greenhouse gases, they’re also emitting other types of harmful air pollutants that are really poisoning a lot of these communities. So there’s an important environmental justice component that AB197 is addressing really in a groundbreaking way.

NOOR: And who lobbied against these bills being implemented and what was the response to nay sayers? For instance, there seems to be some pushback on the part of big business. Some are saying the implementation of these bills will adversely affect GDP and job creation. What’s your response to that critique?

ELKIND: Well first of all there are a lot of business in favor of this effort. So there’s a huge, obviously from the clean technology sector there’s a lot of support. But form other sectors as well, traditional electric utilities as an examples, a lot of Silicon Valley entities. But the real pushback came from the oil and gas industry. They’re the ones that have the most to lose from this whole climate effort that were to decarbonize the [inaud.]. Some of the claims are that this is going to cost us jobs. There are certainly concerns. And I think that some legitimate concerns that AB32 was adopted 2020, now SB32 to 2030 we’re seeing a lot of population growth that’s going to be happening in the meantime. So the order of magnitude of the effort has been bigger.

But as we’ve seen with the implementation of AB32 to achieve these 2020 goals, our carbon emissions in California have been going down for over a decade now while our economy is growing at one of the fastest rates in the nation. So this idea that we can’t decarbonize our economy without costing jobs has been disproven by the California experience so far. That’s not to say there aren’t questions going forward but California has a very thoughtful deliberative kind of process for all the regulations and all the statutory efforts that we have to try to achieve these goals. So policy makers are certainly well aware that we don’t want to create serious negative economic impacts. In fact, because they basically don’t want to risk a backlash to this program and so they’re going to be very deliberate.

But in fact what we’re seeing is a lot of economic upside for people. So for example, electric vehicles at this present trajectory are going to end up really reducing transportation cost for a lot of people. Same with solar PV as we’ve seen those cost come down. So a lot of these climate programs are boosting clean technology industries and they’re saving people money and California policy makers are very committed to ensuring that we continue on that trajectory.

NOOR: One of those programs that California is well known for is the cap and trade program but it looks like the cap and trade program is in a bit of trouble due to the lack of demand for carbon credits. Can you talk about what that means exactly and what the effect of that will be on these new emissions goals for California?

ELKIND: Sure. Well some of the reason why the cap and trade program has hit a bit of a stumbling block last few auctions, and I can explain that in a second, is because of this uncertainty around the future of the program. And actually the bills that passed, I don’t think do anything to address that uncertainty. So cap and trade basically involves putting a cap over our economy in terms of greenhouse gas emissions and then it creates these allowances for entities that are polluting to give them permission to pollute. Then as the cap goes down the number of allowances given out decreases.

The allowances in California, a certain percentage are auctioned off and there’s a lawsuit right now saying that that auction is essentially an illegal tax under the California constitutional law. So while that case is working its way through the system, it’s in the court of appeals right now, there’s a lot of uncertainty over the program right now and certainly going forward after 2020. Because authorization for the program expires after 2020. That doesn’t mean that the California air resources board which administers the program can’t continue the program after it but it creates some legal uncertainty and I think a lot of businesses are responding to that by not being so eager to buy allowances and that’s really hurt the auction proceeds.

In return California’s relying on the revenue from those auctions to fund a number of programs including most prominently the high speed rail but also some efforts related to funding local transit and weatherization programs and even low income housing near transit. Because that gets people off the roads and reduces pollution that way.

NOOR: In order for SB32 and AB197 to be successful, what else is needed either from California governors, from business, or just from folks who are citizens?

ELKIND: Well the biggest thing we need right now is deployment. We have all the technologies that we need to decarbonize our economy in terms of renewables, to switch from fossil fuel based to electricity generation, in terms of energy storage technologies which we use for electric vehicles and also to make sure that we can balance our grid from intermittent renewables like solar and wind. And we’re also doing a lot on energy efficiency. But we need to make sure we can bring down the cost of these technologies and deploy them as quickly as we can without really causing a lot of economic disruption.

So further investment in these technologies is going to be really important and I think the passage of these laws really creates conditions now for policy to help provide more financing for that to happen. And we also need more energy efficiency. We need to be much better about being efficient with the energy we do use. And that’s going to require some policy innovation but also technologies and finance that can go along with that to make sure that we can really improve the energy profile of our existing buildings and save people money in the process.

So I would say that that’s the biggest challenge. And then of course it would be very helpful if we had other states and federal government being a cooperative partner. The Obama administration has done a lot. The congress certainly creates uncertainty in terms of commitments to things like tax credits for some of these technologies going forward and now we see the federal clean power plant under attack too. So ultimately what California’s trying to do is inspire other action from states around the country and certainly nations around the world and we can use project partners as we go alone right now to a large extent but hopefully we’ll be bringing many others with us as we prove that this can be done in a effective away and actually create economic benefits in the process.

NOOR: Ethan Elkind joins us from California. Thanks so much for speaking with me today.

ELKIND: Thank you for having me. I appreciate it.

NOOR: And thank you for joining us on the Real News Network.

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