I-80 near the Oakland interchange known as "the Maze." (Photo: Craig Miller)

In a strongly-worded letter [PDF] to the CEOs of seven major auto manufacturers, California Air Resources Board chair Mary Nichols defended California’s efforts to curb greenhouse gas emissions from cars and trucks and accused the trade group, the Alliance of Automobile Manufacturers, of misrepresenting California’s cooperation with federal agencies in letters to Congress.

At issue, wrote Nichols, are letters the Alliance sent to Congressmen Darryl Issa (R-Vista) and Fred Upton (R-MI) in January, calling “our commitment to a national program into question.”

“For the Alliance to suggest we are no longer committed to a cooperative effort is disingenuous at best, and incorrect,” wrote the Air Board chairman.

Nichols called on the executives to “distance” their companies “from future efforts by the Alliance to undermine the achievement of our mutual goals to set standards that will provide American consumers with cleaner and more efficient vehicles.”

The letter comes just as California and federal agencies announced a shared deadline for their collaboration to set national fuel economy and greenhouse gas standards for model year 2017-2025 cars and trucks.

Margot Roosevelt of the Los Angeles Times has more, including a response from an Alliance vice president who reportedly would not address the Nichols letter directly, but did express support for the shared fuel standards deadline.

Gov. Schwarzenegger making closing remarks at the Governors' Global Climate Summit (Photo: Gretchen Weber)

Governor Arnold Schwarzenegger’s third and final Governors’ Global Climate Summit wrapped up Tuesday with the launch of a new international coalition aimed at developing projects that cut carbon emissions around the globe. R20, or “Regions of Climate Action” is the culmination of Governor Schwarzenegger’s efforts to spur “subnational” action to address climate change.

“We can’t afford to wait for national and international movement,” he said in a press release announcing R20. “Action is needed now.”

Currently the coalition includes representatives from more than 60 state, city, and provincial governments from around the world including those in Japan, Nigeria, Rwanda, Canada, and Iceland, as well as the United States (The “20″ in R20 has no particular meaning, according to members of the Governor’s staff, except to echo the concept of the “G20″ nations).

Also announced at the summit Tuesday was a new partnership between California and the provinces of Acre, Brazil and Chiapas, Mexico.  The effort aims to cut carbon emissions by developing forest-protection projects in tropical regions. The ultimate vision for the project is that well-monitored forestry projects in Brazil and Mexico could provide carbon offsets under California’s evolving cap-and-trade program. According to the Environmental Defense Fund (EDF), more than 15% of global greenhouse gas emissions come from deforestation.

Funding for the projects would eventually come from California companies purchasing those offsets, said Mary Nichols, head of the California Air Resources Board, the agency tasked with implementing the state’s global warming legislation, AB 32.

“We have a ways to go,” said Nichols. “First we have to develop all the accounting protocols in order to make sure that these projects are enforceable and that they can be monitored and verified, and we’re not at that point yet.”

Nichols said that there is skepticism about international carbon offsets because some projects have not turned out to be credible. Therefore, she said, it’s important to work with trusted partners to develop the “rule of law,” to make these offsets acceptable in the California marketplace.

“That means that any project that’s done in Mexico or Brazil will have to be as good as a project that was done in California in order to be credited,” Nichols added.

“It’s a real precedent-setting, historic agreement,” said Steve Schwartzman, Tropical Forests Director for EDF.

I’ll be reporting from the next round of UN climate talks, set to begin in Cancun at the end of the month. Schwartzman said this new partnership will be an important signal for the international negotiators there.

“It certainly shows that it’s possible to make concrete, substantial progress in addressing global warming, even in the absence of national policy in the United States or an international agreement,” he said.

California’s chief air regulator was jubilant: “They didn’t know who they were messing with,” said Mary Nichols, when the first numbers came in from the polls.

Nichols, who chairs the state’s Air Resources Board, was reveling in the 20-point trouncing that voters gave the statewide ballot measure to freeze the state’s greenhouse gas law, known as AB 32. Governor Arnold Schwarzenegger seized the World Series moment and the locale, adjacent to the San Francisco Giants’ ballpark, to take a swing at the oil companies that financed Prop 23: “Less than 24 hrs later, we are beating Texas again,” proclaimed the Governor, who has made the state’s 2006 climate law a tent pole of his legacy.

While much was made of the millions that two Texas-based oil companies put into Prop 23, opponents, led by some pillars of Silicon Valley’s “clean-tech” and venture capital community,  eventually outspent the oil companies three-to-one. The “no” forces argued that the state’s environmental leadership was already yielding its own dividends in jobs and innovation. Voters apparently agreed.

Carl Pope put it succinctly: “It tells me that the future of California has arrived,” the Sierra Club chairman told me on election night. “Once you create a clean energy economy, people will not let it go.”

Prop 23 sought to suspend all regulations under AB 32 until the state unemployment rate dropped to 5.5% or lower, for four consecutive quarters. AB 32 is scheduled to be fully implemented, starting in two years.

US EPA Regional 9 Administrator Jared Blumenfeld, at Crissy Field in San Francisco on August 25th. (Photo: Gretchen Weber)

The ranks of officials publicly opposing Proposition 23 seem to be growing.  Earlier this month we reported that Energy Secretary Steven Chu said passing the measure would be a “terrible setback” for California’s clean energy leadership and that the state’s Air Resources Board Chairman Mary Nichols called Prop 23 a “very serious threat” to the core programs of AB 32 and related regulatory programs.

Today, at a meeting of the California Air Pollution Control Officers Association in San Francisco, federal EPA Administrator Jared Blumenfeld urged attendees to vote against the measure.

Doing so, he said, “is certainly what you should do.”

Blumenfeld said that the passage of Prop. 23 would send a “terrible and false” message to to the rest of the country by linking climate change mitigation legislation with a poor economy.

“The most damaging thing that could be done nationally would be to somehow co-join these two things, that climate change in California was shown to have a negative impact on the economy,” he said. “What we need to show, and many people have, is that taking action early on climate change is a good thing for the economy.”

Slated for the November ballot, Prop. 23 would suspend AB 32 until the state’s unemployment rate stays at or below 5.5 percent for four consecutive quarters.  Supporters of the measure have dubbed the measure the “California Jobs Initiative” and say that the implementation of AB 32 is hurting the state’s economy and will continue to do so.

Blumenfeld said that argument is a false one.

“There’s really no scientific, economic, or even really good anecdotal evidence to show that this measure would reduce employment opportunities. In fact the reverse is true,” he said.

Mary Nichols also weighed in on Prop. 23, albeit less overtly.  When asked to comment on AB 32 by the panel’s moderator Jack Broadbent of the Bay Area Air Quality Management District, Nichols responded that as an official of the  Schwarzenegger administration, she is barred from advocating on any ballot initiative.  However, she characterized the fight over Prop 23 is stark terms.

“It’s going to be a referendum about Texas oil companies trying to change California’s energy policy versus whether people believe that we have a future that involves clean tech and green technology,” she said.

For more on the Prop 23 fights, see Climate Watch’s recent posts on the subject.

“AB 32 was a good bill and continues to have California in a leadership role in developing clean energy and the efficient use of energy,” Chu told reporters at a dedication in Menlo Park. “From the middle 1970s California played that role and it would just be a terrible setback.”

Last week the trend was given full voice by Mary Nichols, who, as chair of the California Air Resources Board (CARB), is charged with getting AB 32 fully implemented in the next two years, called Prop 23 a “very serious threat,” not just to the core programs of AB 32, but to an array of regulatory programs that support the state’s attack on greenhouse gases.

“It would bring the part of it that I have anything to do with to a halt, certainly,” Nichols told me in an interview. “Although everybody’s ability to do things that reference climate–that reference GHG emissions–would be threatened as a result of this.”

“Absolutely not,” counters Michael Shaw, who directs legislative activities for the National Federation of Independent Business (NFIB) in California. “The measure only deals with AB 32 and does not deal with any of the other (environmental) laws; the Clean Air Act, the CEQA, or the California Water Quality Act. So all those laws will continue to remain in place and provide the protections to the environment that they’ve always done.”

Those specific laws, perhaps (the Clean Air Act, to be sure, as it’s a federal law). But what about the matrix of state regulation that was assembled outside of AB 32 to support greenhouse gas reductions, or measures put in place by executive order, such as the state’s edict to reach 33% renewable energy by 2020?

Steven Maviglio, a spokesman for the campaign against Prop 23, says the language of the ballot measure is wide open for interpretation.

“If the proponents wanted to limit the ballot measure just to regulations adopted ‘pursuant to’ AB 32, it would have been easy to say so, ” Maviglio wrote in a recent email. “But they did not do that, instead they chose to apply the ballot measure to all regulations that ‘implement’ AB 32.”

The “scoping plan” for AB 32–essentially the implementation strategy–draws on numerous other laws and regulations to achieve its emissions goals. Maviglio says the ballot measure “would effectively rip out the central nervous system of the state’s efforts on greenhouse gas reduction/clean energy/etc…which is the mandatory reporting and related programmatic components that are absolutely necessary to have any sort of comprehensive program.”

Last month, in an analysis of all measures set to appear on November’s statewide ballot, the non-partisan Legislative Analyst gave this assessment of the scope of Prop 23:

“This proposition would result in the suspension of a number of measures in the Scoping Plan for which regulations either have been adopted or are proposed for adoption. Specifically, this proposition would likely suspend:
- The proposed cap-and-trade regulation…
- The “low carbon fuel standard” regulation that requires providers of transportation fuel in California (such as refiners and importers) to change the mix of fuels to lower GHG emissions.
- The proposed ARB regulation that is intended to require privately and publicly owned utilities and others who sell electricity to obtain at least 33 percent of their supply from “renewable” sources, such as solar or wind power, by 2020. (The current requirement that 20 percent of the electricity obtained by privately owned utilities come from renewable sources by 2010 would not be suspended by this proposition.)
- The fee to recover state agency costs of administering AB 32.”

But the LAO report went on to say that:

“Many current activities related to addressing climate change and reducing GHG emissions would probably not be suspended by this proposition. That is because certain Scoping Plan regulations implement laws other than AB 32. The regulations that would likely move forward, for example, include:

- New vehicle emission standards for cars and smaller trucks.
- A program to encourage homeowners to install solar panels on their roofs.
- Land-use policies to promote less reliance on vehicle use.
- Building and appliance energy efficiency requirements.”

Shaw insists that “Proposition 23 simply deals with one issue at hand and that is the inappropriate timing of imposing new energy and other related taxes on Californians at a time when our economy can’t bear that.”

The full text of Prop 23 is available as a PDF download from the website of the California Secretary of State.

Air Board Chair Mary Nichols, flanked by Google Green Energy Czar Bill Weihl (left) and PG&E Sr. VP Tom Bottorff, at a panel sponsored by the Silicon Valley Leadership Group. (Photo: Craig Miller)

Mary Nichols, who chairs the state’s Air Resources Board, made the remark in a Silicon Valley panel discussion today. The ostensible topic of the event was renewable energy but it turned into a pep rally against Proposition 23, the statewide ballot measure designed to halt California’s comprehensive climate law, AB 32. Nichols was joined on the panel by executives from Google, PG&E and venture capitalist Vinod Khosla, all of whom voiced strong opposition to Prop 23.

When asked about the cap-and-trade provisions of AB 32, Nichols said: “We won’t launch this program without partners to trade with. It doesn’t make sense for an economy even as big as California, to try to do this all by ourselves.” The comment came days after congressional leaders threw in the towel for the summer, on a federal bill to address climate change and energy security. “To get the kind of leverage that you really need to make this program succeed, the US has got to step in,” said Nichols.

California is part of a nascent regional trading pact known as the Western Climate Initiative. But among the seven US states and four Canadian provinces signed on to the WCI, only California, New Mexico and Quebec are prepared to move forward with a working carbon trading market. Others still lack enabling legislation, and Arizona has overtly pulled out of the carbon trading plan, raising the question of how many “partners” California will have, even with WCI in the mix.

“I don’t expect to be faced with this dilemma,” Nichols told me after today’s event, “but if the worst were to happen and none of these states were able to move forward with their own programs, I think we would think long and hard about whether we would actually start enforcing the program, unless and until we were really confident that our  state had the ability to do it in a way that would not put us at a competitive disadvantage.”

Proponents of Prop 23 contend that full implementation of AB 32 will give other states and nations a competitive edge over California, resulting in “leakage” of jobs and businesses to regions with fewer regulations.

The panel, entitled “Electric Bills and Oil Spills: Will California Continue To Be a Clean Energy Leader?” was held on the Google corporate campus in Mountain View.

Though exact language has not been revealed, the compromise bill reportedly includes sections that would nullify state and regional programs to regulate carbon emissions. That does not sit well with Mary Nichols, California’s chief carbon regulator. “When it comes to energy policy and the environment, one size truly does not fit all,” Nichols told reporters in a Tuesday conference call. Nichols chairs the California Air Resources Board, which is the lead agency charged with implementing the state’s Global Warming Solutions Act, passed in 2006.

The state has already invested three years and more than $100 million dollars (approximately $40 million per year, according to a policy brief issued last week by the state’s non-partisan Legislative Analyst’s Office), laying the groundwork for sweeping new regulations, including a carbon trading scheme with several other Western states. The regional cap-and-trade program known as the Western Climate Initiative could also be jeopardized by the current Senate bill, though from most appearances, the program is already languishing.

Businesses also have much at stake. Jan Smutny-Jones heads the Independent Energy Producers Association, whose members generate almost half the electric power produced in California. “My members are making literally billion-dollar decisions about infrastructure that’s going to be around in California generating electricity or transporting electricity to customers for the next 40-50 years, and they kind of need to know sooner rather than later, in terms of what the actual rules of the road are gonna be,” Smutny-Jones told me in his Sacramento office on Monday. “Having the rules change is disruptive,” he said.

California Senator Barbara Boxer, who co-sponsored the first Senate version of the bill last fall, says she does “not support federal preemption” but also wants to avoid overlap between the state and federal systems. “It depends on how the bill is written,” Boxer told reporters at the recent state Democratic Convention. “I’ve had environmentalists say ‘Well if we do a trading system on the credits, we want one system, we don’t want two systems,’ so there’s some areas where it may make sense.”

Nichols offered little latitude in her remarks on Tuesday.  “We need to put down a marker here and remind the senators that they will not have an effective climate program without the states,” she said. “We don’t want there to be any room for doubt about whether states are permitted to do things that advance their economic and energy agendas.” Nichols cited large amounts of “green” venture capital flowing into California as fruit already borne by the state’s actions toward reducing carbon emissions.

The Senate bill is expected to be rolled out on Monday. Optimists are hoping that a finished bill could reach the Senate floor by June or July, according to a report from Reuters news service.

The report, released Wednesday, predicts modest growth in the state economy over the next 10 years, including growth of 2.4% in both personal income and gross state product with or without the law.

During a Wednesday conference call,  CARB chairman Mary Nichols told reporters that sectors where California is strong, such as renewable energy and informational technology, will benefit from AB 32.

“California is uniquely positioned to benefit because this is the direction in which our economy is going anyway,” she said.

Nichols added that industries heavily dependent on petroleum will also benefit, but that they will have to go through a transition.

“We will see economic benefits overall by 2020,” said Nichols, “but it will be easier for some than for others.”

The report was reviewed by the 16-member Economic and Allocation Advisory Committee (EAAC), an independent panel of policy, business and economic experts appointed by Nichols and California Environmental Protection Agency Secretary Linda Adams.

The report finds that AB 32 provides, “neither a huge boost nor a major negative impact on California,” said Larry Goulder, chair of the EAAC and of Stanford’s Economics Department on a call Wednesday with reporters.  “These findings are not that different from other studies that have been done.”

The Air Board’s original analysis was questioned earlier this month in a report from the non-partisan Legislative Analyst’s Office, which projected a mixed bag of pluses and minuses, with a short-term negative impact on jobs.

CARB’s first economic projections were criticized by others, including UCLA economics professor Matthew Kahn.   Kahn said he is much happier with this new report because of adjustments made to the baseline scenario and because of the independent review made by EAAC panel, which he called a “dream team” of economists.  However, the report still falls short, Kahn says, because its macroeconomic approach doesn’t identify how specific industries and businesses will fare under AB32.

“The report released today is about averages. And where I think we need more research is in how individual firms will be affected,” said Kahn. “When I was in graduate school, I had a professor who used to say ‘if your feet are in the fridge and your head is in the oven, on average, you’re ok’ and I always thought that was a funny joke, but I think it’s apropos about California today.”

Also on Wednesday, Kahn published an opinion piece in the LA Times with co-author James L. Sweeney, director of Stanford’s Precourt Energy Efficiency Center, arguing that a study frequently cited by opponents of AB 32 is seriously flawed.  The study, known as the Varshney/Tootelian analysis, estimates that the law will cost small businesses $50,000 a year and each household $3,857 a year once the new rules kick in.

Opponents of AB 32 are advocating for a ballot initiative that would suspend the law’s regulations until the state economy improves and the state unemployment rate drops to 5.5%. It’s currently pegged at 12.5%, officially.

Today and tomorrow are packed with technical lectures on topics ranging from “Decadal Changes in the El Nino Pattern and Impact on the Hydroclimate…” to “Climate and Wine Grape Phenology in Napa Valley.” But yesterday it was up to the policy honchos to set the scene.

There was little in that preamble that hasn’t been heard before. When asked about recently expressed doubts that the state’s utilities can attain a one-third proportion of renewable energy within the next decade, air board chief Mary Nichols said “Not only can we do it, we have to do it.” Nichols, probably the state’s highest-profile point-person on climate policy,  said the the state’s broader, longer-range goal for cutting greenhouse gas emissions simply can’t be achieved without it.

Just as if they’d heard her, legislators tonight passed SB 14 out of committee. The bill requires utilities to meet the 33% renewable portfolio standard (RPS) by 2020 (in other words, to derive a third of their power from low-carbon sources). Green energy activists lamented language in the current version that allows utilities to slip that deadline, if there are delays in bringing new renewable energy sources online.

There was a clear signal from yesterday’s symposium speakers that, as we’ve previously discussed in this space, adaptation is taking center stage on the policy front. California has set targets for “mitigation” of global warming and put some of the wheels in motion. Now attention has turned to preparing for inevitable climate change effects, already in the pipeline.

The CEC’s newest Commissioner, Julia Levin, warned against the onset of “NIMBY” syndrome as measures are implemented across the state, such as the build-out of solar and wind “farms.”

And Stanford scientist Chris Field, who heads the IPCC’s Working Group II, noted that while growing interest in the “other” greenhouse gases (methane, nitrous oxides, etc.) is justified, the focus should remain on controlling carbon dioxide.  “As long as the world maintains an aggressive focus on economic growth,” said Field, “It’s the economic growth that’s the driver of future emissions and that’s why strategies to find ways to grow the economy without increasing carbon emissions are so important.” While some of the other gases are more potent greenhouse gases, Field says they’ll see little or no growth in volume in coming years.

Field previewed some of what he sees as the focal points of the next major IPCC climate report, known as AR5. Field predicted that we’ll see a shift in focus from making the case that global warming is real and human-induced, to providing more and better information that “stakeholders” can act upon. Field cited a recent study projecting that corn yields in Africa could fall 30% by 2040, due to climate forces.

California's 2009 Climate Champions in Sacramento (April 27, 2009) Photo by Amanda Dyer

Don’t let anyone convince you that today’s teenagers  are all too busy watching Gossip Girl to notice what’s going on the world.   At least some of them are all too aware that they’ll be inheriting whatever their elders leave them in the way of climate policy–a promising start or a global Gordian knot.

So, in Sacramento on Monday, California Air Resources Board chair Mary Nichols witnessed some thoughtful, engaged, youth-in-action as she fielded sophisticated questions from the newly-inaugurated 2009 California Climate Champions.

Over lunch, these ten high school students asked Nichols about the  future of electric cars in the state, how to help low-income Californians reduce emissions, the availability of renewable energy sources, and how CARB is dealing with political resistance to California’s Global Warming Solutions Act,  AB 32.

Mark Bessen, a 2009 Climate Champion from Palos Verdes High School in Rolling Hills Estates, asked Nichols how society can translate science into political action.

“That is the secret of life,” she replied.

Now in it’s second year, the California Climate Champions program selects high school students from across the state to serve as educators about global warming and to “champion” projects that address climate change issues in their own communities.

This year’s students are planning a diverse set of projects that include alternative fuels, solar power, water conservation, and large-scale composting.  For example, Nicholas Dahlquist  from Rim of the World High School in Lake Arrowhead plans to use chemistry to explore the potential for powering school buses with waste vegetable oil.

“The idea is to take used vegetable oil from deep frying and convert it into a fuel you can use in any diesel engine,” said Dalquist. “The process is relatively straightforward.” Currently, using vegetable oil as a diesel fuel requires some engine modification.

The challenge, he says, is getting people to actually use the fuels, so raising awareness about alternative fuels and working with local transportation authorities to explore possibilities are both aspects of his project plan.

“Biodiesel from waste oil, unlike biodiesel in general, does not require food crops in order to create it.  It’s basically a renewable resource that would otherwise be waste,” he said.

Other champions include Soraya Okuda, a student at Lowell High School in San Francisco, who is working to establish a composting system at San Francisco State University and at the nearby Stonestown Galleria. Another, Jason Bade, from Aragon High School in Foster City,  plans to lobby cities to develop programs that help homeowners purchase and install rooftop solar panels.

Read about the rest of the 2009 Climate Champions and check in on the progress of last year’s Champions and their projects at www.climatechamps.org.