By Thibault Worth

Craig Miller

California aims to cut the carbon content of fuels by 10%.

First it was go. Then it was stop. Now, it’s go again.

As of Monday, California’s groundbreaking Low Carbon Fuel Standard (LCFS) was back on track for implementation after the Ninth Circuit Court of Appeals issued a stay of an injunction against an earlier lower court ruling.

In a statement, the state’s Air Resources Board, which is responsible for the regulation, said the court’s decision would allow California to “continue implementation and resume enforcement of this important program to reduce greenhouse gas emissions.” [full statement PDF]

LCFS aims for a ten-percent reduction in the “carbon intensity” of gasoline and diesel fuels by 2020, by using a “life-cycle” approach. That means the standard looks beyond the carbon released during combustion, tallying up emissions from drilling (or harvesting in the case of biofuels), refining, and transporting of fuels.

The standard has fueled plenty of opposition from the oil industry, which argues that the Air Board has grossly overestimated how much biofuel can be brought to market to offset higher-carbon fossil fuels. The Western States Petroleum Association calls the LCFS a “disaster-in-the-making” that will raise the price of fuel for consumers.

Last December, Judge Lawrence D. O’Neill of the U.S. District Court for the Eastern District of California sided with Midwestern ethanol producers who argued that the standard would penalize their use of coal-fired electricity for refining activities, as well as their transport of fuels to California. O’Neill ruled that the LCFS violated the Commerce Clause of the United States and issued a preliminary injunction blocking the ARB from further action. The Air Board appealed the lower court’s decision in January.

Stanley Young, a spokesman for ARB, says that California isn’t telling out-of-state fuel producers how to run their businesses, only that they need to find a way to reduce the carbon intensity of their fuels if they want to do business here. He also argues that the standard will drive innovation and investment in California fuel industry.

The Ninth Circuit’s will continue to review ARB’s appeal of the lower courts decision while the stay is in effect.

Getty Images

Starting next year, industries will have to track their greenhouse gas emissions and some will have to pay for carbon pollution rights.

Mary Nichols, chairwoman of the California Air Resources Board (ARB) announced at a state senate hearing that the first carbon permit auction will be pushed back to November 14th.

The surprise announcement came at a hearing called to discuss what to do with proceeds from the sale of permits to emit greenhouse gases, the first of which is expected to flow into state coffers late this year.

Nichols’ announcement stole the headlines, though she said that the new auction date will not affect the overall timeline for implementation and that August will now be a “practice auction.”

“We’ll give everybody a free round in August where the auction won’t really count,” Nichol told me. “So that gives all the stakeholders, including of course, all the companies that are going to have to be purchasing allowances at the beginning an opportunity to see how the system will actually work.”

The rest of the hearing returned to the business of how the expected revenue from trading carbon “allowances” — which could exceed $1 billion in the first year — may be spent. It’s likely that the money will be considered a regulatory fee, which means that legally it can only be spent on programs that further the goals of AB 32 — namely greenhouse gas reduction.

“That makes sense, right, you don’t want the state collecting regulatory fees and then turning around and using them for unrelated revenue purposes,” explained Cara Horowitz, a law professor at UCLA who gave testimony at the hearing. The good news is that the state already runs several programs that fit these requirements, and the money could fund new programs as well.

I asked Nichols what she found most helpful from the hearing moving forward. She cited testimony given by Paul Hibbard, vice president of Analysis Group, who reviewed the economic impact on states participating in the Regional Greenhouse Gas Initiative (REGGI) after the first three years. REGGI is often cited as a test case for carbon trading in the U.S., though the Northeastern program applies only to electric power producers. California’s program will ultimately be much broader in scope.

Ten eastern states participate in REGGI and each can use its revenue for whatever policy purposes it likes. “Those who chose to target their use of the revenues towards energy efficiency were the ones who generated the most new jobs and new economic opportunities,” said Nichols. Is that a hint for where California could be headed? Possibly but it won’t be up to Nichols to make that call. Ultimately, it’s up to the legislature to decide during the budgeting process.

The California Air Resources Board has unanimously approved sweeping new rules designed to facilitate the transition from gasoline-powered to electric and hydrogen-powered cars. By 2025, automakers are now required to produce 1.4 million “zero-emission” vehicles for the California market, a number that would make clean cars 15 percent of  all new car and truck sales.

Josh Cassidy

A Nissan all-electric Leaf in San Francisco.

The rules also require automakers, by 2025, to halve greenhouse gas emissions emanating from vehicle tailpipes, compared to current levels. The federal Environmental Protection Agency is considering similar emissions rules, as well as a new fuel economy standard of 54.5 mpg by 2025.

State regulators hope the new rules will lead to the widespread adoption of zero-emission vehicles, which they say is critical for meeting California’s goal of cutting greenhouse gas emissions 80% by 2050. That goal was established by executive order by Gov. Arnold Schwarzenneger, and goes beyond the cuts mandated by California’s landmark  global warming law, AB 32.

According to the board’s calculations, zero-emission vehicles will have to make up nearly 100% of new car sales in 2040 and beyond to meet that goal. “Without [the transition from gasoline to clean cars], which may appear to be radical to people, you cannot lower CO2 emissions enough to stop the global climate change that’s occurring,” says Tom Cackette of the Air Resources Board.

The Air Resources Board estimates that the new rules will raise the average sticker price on 2025 model year cars by $1900. However, the board says, the savings in fuel costs over the life of the car will be three times that.

The new rules announced today include the following:

• Greenhouse gas emissions cuts
  The rules cut greenhouse gas emissions from tailpipes 47% by 2025 compared to today’s new cars.
• Cuts in smog-forming emissions
  Today’s cars are 99% cleaner than cars were in the 1960s. But the new rules reduce smog-forming emissions from tailpipes a further 75% by 2025.
• Zero-emission vehicle mandate
  Beginning in 2018, automakers must sell increasing numbers of electric cars, hydrogen fuel-cell cars or other cars emitting little to no pollution. By 2025, zero-emission vehicles must make up 15% of new car sales. In the early years of the program, car companies can get credit for plug-in hybrid car sales or for going above and beyond requirements of the greenhouse gas rule.
• Hydrogen Fuel Stations
  The rules would require gas stations to install hydrogen fueling pumps based on the number of hydrogen fuel-cell cars in the state. The oil companies are negotiating with ARB on a Memorandum of Agreement that would allow them to avoid regulation if they build hydrogen stations with government or private funding.

As for the response from the car industry, at a public meeting this week automakers asked for maximum flexibility in meeting the new sales mandate. They say success will ultimately depend on consumer adoption of the new technology, which includes cars like the all-electric Nissan Leaf and the Chevy Volt plug-in hybrid. Of the 10,000 Leafs sold in the US, almost 4,500 of them were sold in California.

“It’s a long, long bridge between here and 2025 to grow 15 percent of the market on a car that’s not price competitive, on a car that’s not performance competitive, on a car that will inevitably have infrastructure issues,” says Bill Reinert with Toyota’s Advanced Technology Group.

The board didn’t address electric charging infrastructure in these rules, but has committed to looking at the issue in 2014. Currently, there are about 1,200 public charging stations in California and funding exists for  several thousand more. Since electric vehicle owners charge their cars predominantly at home, regulators say they aren’t sure how many public charging stations will be needed.

The Air Resources Board says it’s committed to continuing financial incentives for advanced vehicles, though the program has proven so popular that they have been reduced. Today, consumers can get a $2500 rebate for purchasing a zero-emission vehicle and $1500 for a plug-in hybrid, down from $5000 originally. “We can’t give an assurance that [the funding] will last through the year, so we’re looking at other alternatives,” says Tom Cackette of ARB. (For more on what it’s like to buy and drive an electric car, check out QUEST’s blog series Life with the Leaf).

More from CARB:

• California’s Advanced clean cars program
• Fact sheet

Craig Miller

California's cap and trade program will kick into gear when the state holds its first emissions allowance auction, in August.

There might be more money in the first year of California’s cap-and-trade program than expected. Governor Brown’s 2012-2013 budget includes $1 billion in revenue from the state’s cap-and-trade program, ramping up this year as part of California’s 2006 climate legislation, known as AB 32.

That might seem surprising since 90% of initial permits to emit greenhouse gases will be given away to industry. But number-crunchers at the Legislative Analyst’s Office (LAO) say that selling just ten percent of allowances at auction could generate that much cash. The price for an emission allowance has not been set, but projections range from $10-$40 per credit, which means that the state might garner even more than $1 billion in the bargain.

While more money couldn’t hurt a cash-strapped state like California, there are still some concerns about how this new revenue will be spent. Tiffany Roberts, Senior Fiscal and Policy Analyst for Energy and Climate Change at the LAO, explained to me that there are legal restrictions on how revenues from cap and trade can be used. “These revenues can’t go to fund general tax purposes,” Roberts said. “They have to be used either to mitigate greenhouse gas emissions or to mitigate the adverse effects of greenhouse gas emissions.”

The Governor’s budget indicates that he’s looking to spend in four broad categories:

• Clean and Efficient Energy
• Low-Carbon Transportation
• Natural Resource Protection
• Sustainable Infrastructure and Development

If the Brown administration can make the case that all the new and existing programs they want to fund fall within the purview of the law, they could be in the clear. If not, the money tussle could end up in court.

Roberts expressed concern over the lack of a timely, detailed plan laying out how the revenues would be spent. “It’s very important that such a plan be submitted to the legislature during the budget process with adequate time for the legislature and the public to scrutinize it,” said Roberts. But the budget says that no detailed expenditure plan will be released until after the California Air Resources Board (CARB) holds its first auction of credits in mid-August. At that point ARB will know how much money it brought in and can plan how to spend it. But August is well past the deadline to sign a budget, which means that the “uncategorized” revenues from cap-and-trade will be part of that budget without any legislative, or public, review of where they will go.

It’s a question that best be settled. Even if a billion dollars seems like small potatoes, economists have projected that once fully implemented several years from now, carbon trading could represent a $15 billion annual haul for the state.

The National Academy of Sciences/Flickr

Mary Nichols chairs the California Air Resources Board.

ARB’s response to inquiry wasn’t what Orange County Republican had in mind

Orange County Republican Darrell Issa says he remains “deeply troubled” by what he calls a “lack of candor” & “internal inconsistencies” in the California Air Resource Board’s (ARB) response to his November 9th letter probing negotiations toward a new national fuel economy standard. (You can read my original post on Rep. Issa’s and Nichols first round of correspondence here.)

Issa now charges that the initial response from ARB Chair Mary Nichols “appear[s] to be a deliberate attempt to mislead Congress and obstruct an official investigation.”

Reached today for comment, ARB spokesperson Stanley Young expressed some apparent exasperation in an email, saying, “We will respond to the letter and look forward to once again explaining how California’s efforts are designed to save consumers money, increase the nation’s energy security and help fight climate change.”

Issa heads the Committee on Oversight and Government Reform, and the volley of letters between it and ARB are part of his investigation into the process that led to the recently announced fuel economy and emission standards for light and heavy-duty vehicles. Issa contends that California overstepped its authority by setting fuel economy standards, a task left to the federal government. The ARB maintains it set only emission standards, with authority backed by federal waivers and several court decisions.

In parsing Nichols’ responses, Issa appears to charge that ARB asked auto manufacturers to adhere to two standards: corporate average fuel economy (CAFE) standards set by the National Highway Transportation Safety Administration (part of the federal Department of Transportation), and the Environmental Protection Agency’s greenhouse gas emission regulations. Nichols’ stated in her November response that California “agreed to accept [automakers'] compliance” with EPA’s emission standards, as a way to “harmonize” the two.

Issa next questions ARB’s relationship with the NHTSA. Nichols told the Committee that it could not furnish any documents or communications “because [C]ARB was not involved in negotiating an agreement.” Issa counters by pointing out that ARB, according to its own records, “met with NHTSA on at least 116 separate occasions.” He calls the Air Board’s assertion that it did not “negotiate with NHTSA…demonstrably false.” Nichols characterized the relationship as a “collaboration.”

As for the Board’s assertion that its actions have been supported by the courts, Issa counters that Nichols has been cherry-picking her case law, writing that the “agency prefers to cling to the trial-level decisions of two Democrat-appointed district court judges.” He concludes his 11-page letter by once again asserting that the real effect of the ARB’s actions is to “de facto” set fuel economy regulations. “[C]ARB cannot escape this conclusion by calling its…regulations by another name.”

Issa has asked for a response by January 9.

Using IPCC climate projections, the study models how climate change will impact California up and down the coast, including coastal cities like San Francisco and inland cities such as Riverside and Fresno.

Lead author Scott Sheridan, a geographer at Kent State University, says that the projected increase in heat-related deaths among those 65 and over are due in part to physiological reasons, but also to growing population size of this age group. By the end of the century, he says, the state’s population of people in this age bracket will increase from 4 million to 15.7 million. Sheridan says California communities that are already used to dealing with hotter temperatures, like the inland city of Fresno, may be better prepared to deal with the heat than relatively cooler coastal cities.

“On a hot 90-degree day in Riverside, everyone has the AC running. In San Francisco, not everyone has that luxury.” says Sheridan.

Sheridan says that heat-related deaths are projected to go up more in coastal cities like San Diego than in inland cities because people on the coast may be less acclimatized to extreme heat and the cities themselves may lack the preparation to deal with the public health consequences of lengthy, intense heat waves.

Projected heat-related deaths based on various climate change scenarios in San Diego. The red line indicates a high fossil fuel intensive scenario. Chart: CARB/EPA

“People that are acclimatized to warmer temperatures have a greater threshold for heat.” says Sheridan.

CARB spokesperson Dimitri Stanich says the study could lead to more local health policies in cities that are more vulnerable.

“Previously studies have focused on a macro approach to heat impacts but couldn’t specify impacts on California cities.” says Stanich.

Sheridan says one potential model for California cities is Philadelphia.  The health department there helped residents get fans, and it developed a buddy system to for neighbors to keep in touch during hot days. Philadelphia also has 60 cooling stations running during the summer, which can be found using this interactive map developed by the city’s Office of Emergency Management.

To see how temperatures are expected change in your region of California, check out the interactive Cal-Adapt tool from the California Energy Commission.

In response to a court ruling (which it’s still appealing), the California Air Resources Board today issued a new analysis of its proposed carbon trading program, weighed against several alternative means of reducing greenhouse gas emissions.

The fresh look includes the original five options, including cap & trade and the option of doing nothing at all. It does not add any new options but rather seeks to flesh out the other three. The non-trading options include regulating emissions at the source, implementing a straight-up tax on carbon emissions, and a mixed bag of actions. The reworked analysis expands discussion of those three alternatives from a few pages to more than 60. It will be up to the courts to decide whether the extra paper carries enough substance with it to comply with the California Environmental Quality Act.

Regulators were sent back to the drawing board by a Superior Court ruling in May that favored plaintiffs in a lawsuit filed by environmental justice advocates. The groups charged that the state sidestepped its own environmental laws in its original implementation plan for AB 32, stacking the deck toward a cap & trade program, and giving short shrift to other approaches. The judge agreed. The Air Board appealed but went back to work on alternatives, anyway.

The release of today’s “functional equivalent” document starts the clock on a 45-day period for public comment. The Air Board is scheduled to consider those comments at its meeting on August 24.

I had the chance to sit down for a few minutes with California’s top air regulator today. Mary Nichols, who chairs the state’s Air Resources Board joined us by satellite from Sacramento. The seven-minute interview will air on KQED’s This Week in Northern California, Friday evening.

Nichols after a day-long public hearing in December of last year. (Photo: Craig Miller)

On Wednesday, blogger Jon Brooks posted a call for questions on “News Fix,” the KQED News blog. It was a worthwhile experiment but the results speak to the extent to which Nichols has become a lightning rod for opponents of environmental regulation in general and cap & trade in particular — and to some degree the state of public policy discourse in America today. The comments, some emailed and some posted on the comments thread at News Fix were largely a stream of invective directed at Nichols and the Air Board. Some questions were a bit technical for a seven-minute TV interview. Others were valid but off-topic. As the latest installment in our series of “Climate Watch Conversations,” I tried to keep to the climate-related business of the Board (with one exception: I felt I needed to have her address events unfolding in Japan and concerns here about radioactive drift).

Nonetheless I was able to cull a few for this brief interview. Several questions make it clear that some remain convinced that implementation of AB 32 will be a drag on California’s economic recovery:

Corey:

“Don’t you think that now is a time to worry about jobs and the well-being of people? Do you understand how many jobs this bill will kill? Do you understand that the amount of “green” jobs created will still not cover the jobs lost?”

You can hear all of her answers in the video segment posted on the This Week site and below.

As Nichols is often perceived as a person vested with considerable power, Steve, Chris, and Jeremy Schellhardt wanted to know why Nichols’ post is appointed, rather than elected. This question didn’t make it into the seven-minute broadcast window but Nichols answered, with no apparent irony, that she had never been asked that before. She said she thinks the power of the position is overestimated. When I asked if she’d rather be elected, she said “No! I don’t want to have to go out and raise money to keep my job.” Personally, I liked the question offered by Taggart:

“I’d like to know how many times Ms. Nichols has taken “alternative transit” to work in the past year. Bet I could guess.”

Answer: She walks to work (in Sacramento, though she confesses to driving when she works in Los Angeles). I wonder if that was Taggart’s guess.

In retrospect, I would say this was a worthwhile experiment but I don’t think I’d repeat it for an interview of such short duration. I could’ve bypassed your comments and pursued my own line of questioning, as journalists typically do. Or I could have ignored the extraordinary crisis unfolding in Japan and its potential implications here. Neither seemed like a good choice. The brutal time constraints of television meant that readers and I were both shortchanged in terms of questions we’d like to have answered. We’ll learn from this and pursue a longer format for the next one.