Democratic lawmakers and Gov. Arnold Schwarzenegger on Wednesday struck a groundbreaking environmental deal to reduce the state’s greenhouse gas emissions by 25 percent over the next two decades.
Assembly Speaker Fabian Núñez, D-Los Angeles, hailed the long-bargained agreement as the first in the nation to impose limits on all greenhouse gases — a move environmentalists hope will influence the federal government and other states.
"We feel that California has always been a leader in protecting the environment. We’ve done so in the area of recycling and clean air and tailpipe emissions standards," Núñez said during a news conference inside the Capitol, flanked by representatives from Environmental Defense and the Natural Resources Defense Council.
"And we have now moved it to the next level," Núñez said.
The Senate approved Assembly Bill 32 with a 23-14 vote late Wednesday. The bill now goes to the Assembly for a vote.
Schwarzenegger, who has sought to boost his environmental credentials in his bid for re-election, has pledged to sign the measure.
"We can now move forward with developing a market-based system that makes California a world leader in the effort to reduce carbon emissions," he said in a statement. "The success of our system will be an example for other states and nations to follow as the fight against climate change continues. AB 32 strengthens our economy, cleans our environment and, once again, establishes California as the leader in environmental protection."
The agreement was unveiled less than 36 hours before the Legislature’s scheduled adjournment at midnight tonight. Lawmakers are expected to ratify the deal before leaving the Capitol for the year.
But the governor’s fellow Republicans in the Legislature said the bill was the wrong approach.
"Adopting costly and unattainable regulations will drive businesses and jobs out of California into other states — and even into other countries with no commitment to improve air quality," said Assembly Republican leader George Plescia of La Jolla.
Plescia said climate change should be addressed at the national level, not with a state-by-state approach.
Under the bill, California would take the national lead in limiting greenhouse gases by reducing emissions to 1990 levels by the year 2020.
Starting in 2012, the state would enforce a statewide cap on industries’ emissions. Major industries believed to be the biggest contributors include utility plants, oil and gas refineries, and cement manufacturers.
The bill directs the California Air Resources Board to develop regulations, as well as establish by Jan. 1, 2008, a mandatory reporting system to track emissions.
"California is acting while Washington drags its feet," said Jim Marston, senior attorney with Environmental Defense. "This bill sets the stage for Governor Schwarzenegger to make history and get America’s global warming policy on track with the rest of the world."
According to the Union of Concerned Scientists, California is the world’s 12th-largest source of carbon emissions, including carbon dioxide — the chief heat-trapping gas that many scientists blame for global warming.
Advocates argue that by restricting greenhouse gas emissions, the state would motivate more businesses to develop and use more green technology — creating more jobs and wealth for the state’s economy. Two economic analyses suggested the state could generate 83,000 jobs and $4 billion in income by 2020.
Advocates estimate the state will eliminate 174 million metric tons of greenhouse gases.
Last month, Schwarzenegger signed a unique accord with British Prime Minister Tony Blair to work on alternative fuels and technologies.
Senate President Pro Tem Don Perata, D-Oakland, said people are custodians of the planet and need to act responsibly.
Reports by state agencies indicate that a 2- to 3-degree temperature rise could be enough to cause the Sierra Nevada snowpack to melt earlier each year, leading to flooding in the Central Valley.
"This is not anecdotal legislation; this is rooted in fact," Perata said. "The facts are if we do not do something to stop carbon emissions in this world, we are going to see a diminution of both the quality of life, and eventually all life."
But reaching the deal during the last week of the legislative session involved a tremendous amount of negotiating between the Governor’s Office and the two houses.
On several occasions, Núñez said, he was "ready to throw in the towel."
Administration officials said the governor teetered back and forth, and didn’t commit to signing the bill until Wednesday.
He had been most concerned that the bill would drive up the cost of doing business in the state.
At issue was the governor’s request for mandatory market trading on carbon emissions, which would help businesses meet their quotas at the lowest cost. Such a mechanism would allow businesses to buy, sell and trade credits with other companies.
Some environmental groups opposed such trading, fearing it would enable businesses to sidestep emission requirements. The bill requires trading, but directs the Air Resources Board to set up a road map for trading.
Administration officials also sought broad oversight, arguing that the Air Resources Board lacked the expertise to regulate so many industries. Lawmakers prevailed, and the board retained oversight under the bill.
Administration officials acknowledged that the board, which is composed of 11 members appointed by the governor, will be asked to undertake a monumental task. However, officials say the board will receive additional staff.
At one point, amendments to the bill had called for a council made up of five members appointed by the governor and four appointed by the Legislature.
Schwarzenegger had expressed concern that the bill lacked an escape clause that would allow the government to lift caps in emergencies. Administration officials cited the state’s energy crisis as a prime example of why the state needs to have the power to intervene.
Under the agreement, the governor has the authority to lift the cap for one year under extreme circumstances.
ASSEMBLY BILL 32
• Combats global warming by reducing the state’s greenhouse gas emissions to 1990 levels by 2020.
• Requires major industries – such as utilities, oil refineries and cement kilns – to meet quotas through a mix of new technologies and credit trading.
• Directs the California Air Resources Board to come up with regulations and track emissions reporting.
• Grants the governor authority to lift caps on emissions for one year under extraordinary circumstances.