Among Tuesday's election returns, voters in two states issued a split decision on ballot measures to boost clean energy. California approved a plan to fund clean energy jobs, but voters in Michigan defeated a plan to put a stronger clean energy standard for the state’s utilities into the state constitution.
The State of Maryland released a new report earlier this year recommending a course of action to adapt to our changing climate. This report is the latest in a series that began in 2007 when Governor Martin O’Malley issued an executive order to establish the Maryland Commission on Climate Change. The commission was charged with addressing the causes of climate change and adapting to the most likely impacts. In 2008, the Maryland Climate Action Plan was released, addressing impacts, mitigation, and economic concerns.
Among the impacts highlighted in the Climate Action Plan was sea level rise, projected to be more than a foot by mid-century and as much as 3 feet by 2100. If the highest rates are realized, most tidal wetlands would be lost and about 200 square miles of land would be inundated. The bay would also suffer additional stresses as restoration goals become more difficult to achieve. Aquatic species composition will change and increased nutrient runoff into the bay will make water quality goals much harder to meet. Impacts are projected to occur inland as well with heat waves greatly increasing the risk of illness and death. The average year will have 24 days above 100°F by the end of the century. Ground level ozone, formed under prolonged, high temperatures will increase, resulting in more respiratory illnesses, especially among vulnerable populations.
The Action Plan addressed the adaptation needs of coastal regions but only highlighted the need to pursue the development of adaptive strategies for other affected sectors. In response, work began on a report specifically for adaptation in these other sectors. Earlier this year, the culmination of this effort was released as the Comprehensive Strategy for Reducing Maryland’s Vulnerability to Climate Change, Phase II: Building societal, economic and ecological resilience. The report provides the basis for guiding and prioritizing state-level activities with respect to both the climate science and adaptation policy within short to medium-term timeframes.
- Human Health: Conduct vulnerability assessments to gain a better understanding of risks and inform preventative responses by assessing potential health threats and the sufficiency of Maryland’s response capacity. The impacts to food safety and availability must also be evaluated.
- Agriculture: Increase crop diversity, protect against incoming pests and disease, and intensify water management through research, funding and incentives. Enhance existing Best Management Practices (BMPs) and land conservation targets including revising targets for agricultural land preservation. BMPs that are geared toward protecting water quality in the Chesapeake Bay are likely to be significantly shifted as changes in seasonality and precipitation occur.
- Forests and Terrestrial Ecosystems: Expand land protection and restoration and revise targeting priorities. This includes integrating climate data and models into existing resource assessments and spatial planning frameworks as well as developing adaptation guidance for local government planning. Management practices to reduce existing forest stressors should also be adjusted. High elevation forest species such as the red spruce or Eastern hemlock will likely disappear from Maryland as will the Baltimore Checkerspot butterfly and ecosystem management plans must reflect these future changes.
- Bay and Aquatic Ecosystems: Restore critical bay and aquatic habitats to enhance resilience. It is recommended that the state be proactive in the design and construction of habitat restoration projects due to their importance in enhancing the resilience of aquatic ecosystems. Dam removal projects on Octoraro Creek in Cecil County and Raven Rock Creek in Washington County have resulted in reduced stream temperatures and moderated stream flow, boosting connectivity between habitats and resilience of fish and other transient species.
- Water Resources: Ensure long-term safe and adequate water supply for humans and ecosystems. Reduce the impacts of flooding and stormwater by removing high-hazard water supplies and preventing inundation and overflow of on-site disposal systems. On-site disposal systems already lead to raw sewage leakage in Maryland are likely to worsen with increases in extreme precipitation. These failing septic systems must be improved or replaced.
- Population Growth and Infrastructure: Plan for precipitation-related weather extremes and increase resilience to rising temperatures by identifying investment needs to prepare for weather emergencies and improving stormwater management strategies. Urban tree canopy should also be increased to provide urban heat reduction, stormwater reduction, and air filtration.
Not every state has an adaptation plan, and Maryland is one of only two states (Virginia) in the Mid-Atlantic region to have completed one or made progress. However, both North Carolina and South Carolina have Climate Action Plans that call for an adaptation report and more states are moving towards producing adaptation plans. Maryland is at risk from a variety of ill-effects due to climate change and the identification and implementation of key adaptation measures will ensure the state minimizes the impacts and costs of climate change in the long run. Other states would do well to take heed, and move to minimize their costs as well.
Dan Huber is Science & Policy Fellow
To see the economic costs of extreme weather you don’t have to look all the way to Russia where last summer’s heat wave caused extensive wildfires and crop losses roiled world markets for wheat. Nor do you have to look as far as Europe where in the summer of 2003, a 1-in-500 year heat wave caused at least 35,000 premature deaths. No, extreme weather events have recently occurred within the United States. In Cedar Rapids, Iowa, extensive flooding in the region in 2008 caused damage estimates of $8-10 billion. In Nashville, Tennessee, in May 2010, a 1-in-1000 year storm caused floods resulting in more than $3 billion in damage.
Whether you think these are just isolated incidents or are part of the emerging pattern of climate change, there is one thing we can all agree on. These events result in significant economic loss and to the extent we can build greater resilience into our economy to minimize losses from extreme weather, we will all be better off.
Kicking off the new year, we released an update of its Climate Change 101 series. Climate Change 101: Understanding and Responding to Global Climate Change is made up of brief reports on climate science and impacts; adaptation measures; technological and business solutions; and international, U.S Federal, State, and local action. Last released in January of 2009, the updated reports highlight the significance of the global negotiations, climate-related national security risks, local efforts to address climate change, the most recent predictions on global temperature changes, and more.
Opening Keynote by Eileen Claussen, President of the Pew Center on Global Climate Change
State-Federal Workshop on Climate and Energy Policy: Where Do We Go From Here?
Hosted by the Pew Center and the Georgetown Climate Center
February 24, 2011
I want to welcome all of you to our 2011 workshop on state and federal climate and energy policy. The Pew Center on Global Climate Change is delighted to be working with the Georgetown Climate Center – and two of our favorite alumni in Vicki Arroyo and Kate Zyla – to present what we hope will be a very engaging and informative program over the next two days.
You know we established the Pew Center in 1998 as a nonpartisan, independent organization to provide credible information and help spur innovative solutions to climate change. For those of us who have been working on this issue for so many years now – and I am certainly not the only one in the room about whom this is true – right now could be a very discouraging time indeed. President Obama did not even utter the words “climate change” in his State of the Union address in January. In contrast, in his 2010 address he was effusive in praising the U.S. House of Representatives for passing a comprehensive energy and climate bill.
We have traveled a difficult road on this issue over the past year … a road jammed by partisan fighting over health care and the legislation on financial reform … and a road torn up by the poor state of the U.S. economy. It’s been hard to move forward in these conditions. Then in November, congressional elections brought a whole new group of climate change deniers and doubters to the halls of Congress.
Any time you have someone winning election to the Senate thanks in part to an ad where he uses a rifle to shoot a hole through cap-and-trade legislation, well … I guess you could be forgiven for feeling a little bit down and out.
But I am not here to give you a woe-is-me address. Well – not an entirely woeful address. And the reason why I won’t do that, and the reason why none of us should accept the argument that it’s impossible at the moment to move anywhere on this issue, is because the stakes are simply too high.
Before I get into the meat of my remarks though I know the Academy Awards will be broadcast in a few days and I was looking at the list of films that are nominated this year, and I noticed that a lot of these films have something in common. A lot of them tell stories about people overcoming seemingly insurmountable odds to succeed. And I thought they actually hold lessons for those of us working on climate change and energy issues.
- For example, there is The King’s Speech … the story of King George the Sixth overcoming a debilitating stammer so he can unite his people to enter World War II. The moral for the climate fight: It takes hard work and determination to communicate in ways that mobilize people. And for those of you who have seen the movie, there is also this: when you’re feeling really down, unleashing a string of profanities can be excellent therapy.
- Another Oscar contender is the film The Fighter, about boxer Mickey Ward and his half brother, Dickie … and Mickey’s unlikely road to the world boxing title with Dickie’s help. The lesson: don’t ever count yourself out. And, if you’re a parent, please think twice before giving your children rhyming names.
- Of course, there is also True Grit … about a young girl’s venture into hostile Indian Territory to find the man who killed her father. The lesson for those of us pushing for climate action: stay the course, and follow your journey to its end. And, if by any chance you’re staffing up for this work, don’t overlook the gruff, hard-drinking, one-eyed man in the cowboy hat who dropped his resume off the other day. He might be able to help you out.
So maybe there is something in the culture right now. Maybe we need these stories about people taking on big things, overcoming big challenges in their lives. And maybe those of us working on the climate change issue should take note. We may feel unlucky from time to time, but we cannot let it get in the way of our work to help shape solutions to the climate challenge facing this country and the world. The simple fact is that the evidence of climate change continues to pile up in front of us. We ignore it at our peril.
2010 tied 2005 as the warmest year on record. Nine of the 10 warmest years have happened since 2001. Last year, Russia faced the worst heat wave and droughts in its documented history. Unprecedented flooding in Pakistan left 2 million people homeless and millions more requiring emergency aid. There was also unprecedented seasonal flooding in Australia. And nearly all of the Northern Hemisphere was dealing with a massive heat wave last summer.
Each of these events, every one of them, is consistent with what scientists say we should expect in a warming world.
Even the record cold and snowfalls that much of the United States has been dealing with this winter can be seen as a glimpse of what we’re in for as atmospheric greenhouse gases increase and the climate becomes more unstable. It simply defies common sense to ignore the link between man-made climate change and these numerous extreme weather events. I am not saying climate change caused these particular storms and bitter cold, but this is exactly the kind of thing scientists say we should expect more of in the years to come. Add to that the declining sea ice in the Arctic, receding and disappearing glaciers, and the many other signs of irreversible change, and it’s hard not to feel that we are loading the dice. I have three young grandchildren, another is on the way. And it is hard not to wonder about the world they will grow up in.
What kind of world will it be? To what extent will their generation have to pay for the things we didn’t do today?
This is what’s at stake. And this is why we need to persist in our work on these issues. Over the next two days, we will be talking about many important topics, from transportation and land use to adaptation to what it will take to build a clean-energy economy here in the United States and around the world. We will also be talking about the varying yet complementary roles of the state and federal governments in addressing these issues.
I want to use my remarks here this morning to share what I believe is a realistic outlook of the challenges we face and draw your attention to a few small signs of hope. Because while the politics can look bleak, there are a few indications that action on this issue might still be possible in the months and years ahead.
The first positive sign I want to point out is the commitment of this White House to clean energy as a priority for the United States. In his State of the Union address, the President set a goal for the nation: to get 80 percent of our electricity from clean energy sources by 2035. He may not have used the words “climate change” in making this proposal, but the implication for the climate is clear.
The White House knows full well that public support for renewables and other alternative energy sources remains strong. A recent Gallup poll found that more than 80 percent of voters favor clean energy legislation … although voter support does drop, sometimes below 50 percent, when people are asked to consider the costs of shifting to cleaner sources of energy, however manageable those costs might be.
Adopting a clean energy standard would obviously be a big deal and a significant step forward. But is it politically possible? My guess is no – not right now. Not to say that there isn’t real interest in a CES – but realistically, the chances of such an initiative passing the Senate are very small – and probably zero for getting through the House. Still – it’s useful to set a goal – and start the conversation.
This takes me back to the lesson from The King’s Speech that I mentioned: It takes hard work and determination to communicate in ways that mobilize people. Even in the face of considerable opposition, those of us who believe in the need for action on this issue must continue our efforts to connect with the public. We must continue to make our case. And we must continue to connect our cause to other related causes for which there is considerable public support.
This is why we should all be pleased that the White House has placed clean energy issues front and center as it continues to develop its “Win the Future” innovation agenda for the nation. As the Obama administration very rightly points out, China leads the world right now in clean energy investment, and we have a lot of work to do just to keep up, let alone overtake China as the world’s clean energy leader.
And the White House’s commitment on these issues is not all talk; it’s not all about photo opps and messaging. One unmistakable sign that the Obama administration wants to see real action on climate and energy issues comes from the Environmental Protection Agency.
Remember the message from The Fighter? Don’t count yourself out. Well, EPA is making an effort to stay in the fight despite some very long odds, and some very tough opponents in the opposite corner of the ring.
Even as he talked about reducing “unnecessary” government regulations in his State of the Union address, the President made a point of saying that he – quote – “will not hesitate to create or enforce common-sense safeguards to protect the American people.” This was an obvious shot across the bow to those members of Congress who have stated their interest in depriving EPA of the ability to regulate carbon dioxide emissions.
Let’s be clear here. The Supreme Court in 2007 decided that greenhouse gases meet the definition of pollutants under the Clean Air Act. The Court left it to EPA to decide if emissions of these gases presented a risk to public health and welfare. And EPA decided they did, based on overwhelming scientific evidence underlying the risks of climate change. It’s not just the Obama EPA that feels this way. We recently learned that the previous EPA Administrator under President George W. Bush came to exactly the same conclusion … and other senior Bush administration officials agreed.
In fact, EPA’s recent actions on this issue aren’t all that different than the step-by-step plan spelled out by the agency under President Bush, a plan that was described at the time by the Administration as “prudent and cautious yet forward thinking.” Today’s actions are largely the same, and yet they’ve come under attack by a vocal contingent in Congress.
What regulatory road is EPA headed down? The initial rules requiring mandatory reporting of emissions, substantially improved fuel economy for cars and vans, and best available control technology for large new and modified sources are a good start. Later this year, EPA is expected to propose additional stationary source controls, with a focus on the electric power and oil refinery sectors. And even in these cases, EPA’s actions are extraordinarily modest.
And so they may be pulling some punches, but the fact remains that EPA is staying in the fight. Of course, opponents of these and other reasonable EPA actions will continue to raise a ruckus, and there have already been loud cries in Congress to take away the agency’s regulatory authority and cut its funding. Indeed, the budget bill passed by the House of Representatives last week would repeal EPA’s authority to regulate greenhouse gases from stationary sources, although it leaves regulations of automobiles intact.
The House budget also proposes major cuts in climate-related programs at EPA and other agencies. EPA funding was reduced 30% overall, including the Global Change program, with even larger cuts to the greenhouse gas reporting program. NOAA’s Climate Service program was zeroed out as well. Among the many Energy Department programs with reduced funding, Energy Efficiency and Renewable Energy face a 40 percent cut. And for a high-profile hit, funding for the Assistant to the President for Energy and Climate Change, recently held by Carol Browner, was eliminated. Looking internationally, nearly all funding for U.S. commitments under the UNFCCC process was slated for elimination, including funding for the IPCC and the U.S. Special Envoy for Climate Change.
It’s not a pretty picture, and I cannot honestly tell you how it will be resolved. Certainly there will be cuts, certainly there will be policy riders to appropriations bills, and certainly there will be attempts to legislate away EPA authorities directly. But those seeking these changes will not have an easy ride, and I would guess that many of these attempts will fail.
So – sticking with the ‘fighter’ theme – on the budget front, we’re probably only in round 2 or 3 of a 12 round match.
More positive signs come from the world of business.
As all of you know, the White House right now is making a very deliberate effort to build business support for its policies. The President’s recent address to the U.S. Chamber of Commerce was just one part of this effort. It came, you will recall, shortly after he appointed Jeffrey Immelt of GE to head the President’s Council on Jobs and Competitiveness. GE and its CEO have been leaders in the American business community on the issue of building a clean-energy economy, so the Immelt appointment makes sense. And it’s a reminder to the American public that there is considerable support among U.S. business leaders for reasonable action to promote clean energy industries and jobs, reduce U.S. dependence on foreign oil – and, incidentally, reduce U.S. emissions of greenhouse gases, too.
There remains great interest in the business community in clear and certain U.S. energy policy. “Certainty.” You hear the word again and again today in conversations with business leaders. Dow CEO Andrew Liveris was on NPR last month and in simple, eloquent terms he stated that businesses need to know the regulatory rules of the road to have a better idea of what types of investments will pay off down the line. He clearly articulated the need for government to engage proactively with business to create public-private partnerships to spur innovation and create jobs in clean energy and other sectors.
So this idea that all of business is some scary villain standing in the way of action on these issues is inaccurate. In fact, the business world appears to be taking a lesson from the third film I mentioned, True Grit. Many of these companies started on their journey years ago to reduce emissions, increase efficiency, and pursue business opportunities in the clean energy sector. And they aren’t about to be dissuaded from staying on the trail. It may be tough sometimes, and the political winds may be blowing against them at the moment, but they are intent on pursuing this to the end.
Up to now, my remarks have been mostly Washington-centric, and I apologize. That’s what you get for coming to the nation’s capital to talk about climate change. But, of course, all of the action (or inaction) on this issue does not happen in Washington, and so let’s take a look at the picture at the state level. The news from the state capitals on this issue in recent months has been decidedly mixed. While regional climate initiatives continued to push forward in the past year, the November elections brought to the nation’s statehouses a group of new leaders who adopted strong stands against climate action in their campaigns. In the State of Montana, a bill was introduced that would overturn the laws of science and nature and simply declare that carbon dioxide does not cause global warming.
But this is another case where we should remember the story of Mickey The Fighter and not count ourselves out. Because there was an important bright spot in the elections. I am talking about the overwhelming defeat in California of Proposition 23. This measure, as you know, would have suspended a 2006 law intended to reduce the state’s greenhouse gas emissions. Shortly after the vote, the California Air Resources Board formally approved the state’s cap-and-trade program, which is designed to reduce California emissions to 1990 levels by 2020. While further legal challenges are pending, California is still in the fight. And there is strong public support for what the state wants to do.
Yes, Californiawill always provide a more hospitable climate for action on this issue. But the fact that the most highly populated U.S. state will soon be implementing a cap-and-trade system and other measures to reduce emission has to be a positive sign. It is a sign that the issue is not going to quietly disappear into the night. Much of the financial support for the “No on Prop 23” campaign came from the venture capital and tech industries in California. These companies understand the market opportunities that clean energy and energy efficiency provide, and despite the millions of out-of-state dollars poured into the Prop 23 campaign, they were willing to invest in making those opportunities real.
And, of course, California is not alone among the states in advancing serious measures that reduce emissions. Here at this workshop over the next two days, we will all learn more about what’s happening on this issue in states across the country.
For instance, Maryland has new energy laws to increase renewable energy production and create more incentives to purchase electric vehicles, which are especially well-suited to the state’s compact land use. And Maine has recently adopted laws to expand energy efficiency and boost clean electricity generation with the aim of preserving the Pine Tree State’s scenic landscape for its many vacationers.
As they have since the dialogue began way back in the 1990s, many U.S. states are taking the initiative, advancing solutions, and providing a learning laboratory for the rest of the country so we can see what works in practice. And that is definitely a positive sign.
The final very small positive sign I want to talk about is what’s happening outside the United States. The agreement reached by international negotiators in Cancún in December fills in many key missing elements of the 2009 Copenhagen Accord, including a stronger system of support for developing countries and a stronger transparency regime to better assess whether countries are keeping their promises. The Cancún Agreements also mark the first time that all of the world’s major economies have made explicit mitigation pledges under the U.N. Framework Convention on Climate Change.
Of course, the ultimate goal of the continuing international talks must be a comprehensive binding climate treaty. That’s the goal of the journey we started on this issue way back in 1992 at the Earth Summit in Rio. But in Cancún we saw countries agreeing on incremental steps that will deliver stronger action in the near term and keep the world on course toward someday (we hope) agreeing to binding commitments.
So to recap, I see four small but positive signs amid what I acknowledge is a very challenging environment. They are: 1) the White House’s continuing commitment to doing something on this issue in the face of very strong political headwinds, in part through common-sense steps at the EPA; 2) support for reasonable action on energy and climate issues among U.S. business leaders; 3) some progress on these issues in California and other states; and 4) continued progress in the international climate talks.
I don’t want to be a Pollyanna here. I understand as well as anyone else that all of these small positive signs I have mentioned are positive only when you compare them to all of the negative things that are happening out there today. We are like all of the leading characters in the movies I have mentioned. In a very difficult fight. On a journey in hostile territory with the odds sometimes appearing overwhelmingly stacked against us. Facing enormous challenges in communicating, getting our message across, getting more people on our side.
I cannot promise a Hollywood ending to this drama we’re in but I can say this: all is not lost. And getting to a place where we are confident about the prospects for action on this issue that we all care about so deeply is going to require each and every one of us to recommit ourselves to this fight. To recommit ourselves to staying the course in our journey. And to recommit ourselves to communicating in more compelling and more coherent ways about what’s at stake here, and about what we can and must do.
Think about transportation. With gas prices rising and oil now exceeding $100 a barrel, it’s hard to argue against realistic solutions that can lessen our oil dependence while reducing greenhouse emissions. The Pew Center just last month released a report that showed it’s possible to get to a cleaner, more secure transportation system that could deliver up to a 65-percent reduction in emissions from the sector between now and 2050.
Solutions are out there. We can meet the challenge of building clean energy industries and creating clean energy jobs. We can reduce U.S. and global emissions of greenhouse gases. But we are going to need true grit to get this done.
Thank you very much, and I hope you enjoy the conference.
Last Thursday, the California Air Resources Board (CARB) published details on the proposed greenhouse gas trading program to be implemented under state law AB 32. AB 32, as our blog readers know, is under threat from Proposition 23 – which would forestall (perhaps indefinitely) meaningful action to reduce greenhouse gases in California. The analyses done by CARB in association with the development of the proposed program bolster the case for rejecting Prop 23.
These CARB analyses show that the trading program under AB 32 will “shift investment and growth within the overall economy toward those sectors driven by the production of cleaner and more-efficient technologies.” The importance of this targeted growth should not be understated – by moving toward energy technologies that are both home-grown and energy efficient, we reduce our economic exposure to the price volatility of global energy markets. Since the world is using more and more of what are ultimately finite quantities of fossil energy, protecting ourselves by transitioning the economy toward energy systems that are not subject to global supply and demand imbalances is important to protecting our future economic growth.
While transitioning to new and different systems for energy production and use will necessarily result in some temporary economic dislocation, the market mechanisms included in CARB’s regulatory program minimize these impacts. Taken directly from the CARB economic analysis appendix: “Overall, staff finds no significant adverse impacts on California business or consumers as a whole as a result of the proposed regulation.”
With climate change legislation stalled on Capitol Hill in Washington, D.C., for the foreseeable future, maintaining the critical environmental legislation of AB 32 is extremely important for advancing the nation’s climate policy. Even absent action by other states, California is the world’s 8th largest economy and a significant contributor to global greenhouse gas emissions. Action taken through policy in California is a huge step forward in addressing the global climate crisis.
Much of the rest of the world is waiting for the United States to take a leadership role on the issue of global climate change. With political gridlock in D.C., the best chance for the nation to make significant progress on this issue starts in California. AB 32 is the start of California’s transition to a 21st century economy of clean, green, homegrown energy – and represents an opportunity for the state, and the nation, to retake a leadership position in what will be some of the most important industries of the coming decades.
Russell Meyer is the Senior Fellow for Economics and Policy
This post also appeared today in National Journal's Energy & Environment Experts blog.
As others have pointed out in the discussion of California’s Proposition 23, which would suspend the landmark climate law (AB32), passage would have wide-ranging implications for both the state itself and the national debate on comprehensive climate and energy policy in the U.S. These concerns for both California- and national-level climate action are valid – by creating a policy environment of extreme uncertainty, Prop 23 threatens to freeze the currently expanding investment in clean technology in the state. It is also arguably the new “battleground” on comprehensive climate legislation in the U.S., given the current state of affairs in the U.S. Congress.
But there’s an intermediate level of climate action that also is at stake with passage of Prop 23. Success for the fledgling cap-and-trade portion of the Western Climate Initiative (WCI) hinges on California continuing to be a leader in the development and implementation of the program. WCI states account for nearly 15% of U.S. greenhouse gas emissions and WCI would be the first emissions-trading scheme in the U.S. to cap emissions from economy-wide sources. While it may take some time for all WCI states to adopt cap-and-trade, all environmental programs have to start somewhere. And California’s leadership – not to mention the large quantity of emissions the state will add to the new market – is critical to the most comprehensive (in terms of emissions coverage), ambitious climate action initiative in the U.S. Perhaps this is something the backers of Prop 23 are acutely aware of?
While we’re on the topic of threats to this singularly unique climate law, let’s not forget Prop 23’s much less well-known cousin, Prop 26. This initiative seeks to tighten how the state constitution defines taxes and regulatory fees, and require a two-thirds supermajority vote in the state Legislature to enact new taxes and many fees. Perhaps seemingly harmless, lawyers from UCLA this week argued that Prop 26 is a threat to the state's ability to assess fees on polluters for the external costs they impose on the public and will affect a number of existing laws, including the state’s landmark climate law (as well as a green chemistry initiative, two laws blocking chemical products in landfills, and rules on lead). It’s ironic that Prop 23 could be defeated, while Prop 26, backed with multimillion-dollar contributions from the California Chamber of Commerce, Chevron Corporation, and Philip Morris USA Inc., might slide through and have the same effect on AB32, albeit via different means. Passage of either proposition would be a setback to California’s ability (and thus, the WCI’s ability) to move forward on climate.
Eileen Claussen is President
I will be the first to admit that I don’t really understand the California election process. Governors are recalled and propositions seem to proliferate at every election cycle. What I do understand is that these propositions can have dramatic consequences—after all, elections do matter. Most folks who are reading our blog have likely heard of Prop 23, which would effectively stop the implementation of California’s landmark climate change law, AB32. Environmental groups, clean energy entrepreneurs and big names such as Bill Gates and James Cameron have poured large amounts of attention and $25 million into the “No on 23” campaign, even as refiners Valero and Tesoro—and the now infamous Koch Brothers—fund the Yes campaign. Luckily the opponents have been getting the upper hand recently, with polls saying just over 50% of likely voters plan to vote against the prop—including both gubernatorial candidates.
On September 23, the California Air Resources Board (CARB) announced the adoption of ambitious, though aspirational, greenhouse gas (GHG) emission reduction targets associated with the total miles traveled by California drivers. This is the latest step in the process of implementing Senate Bill 375, signed by Governor Schwarzenegger in 2008. The significant increase in stringency of the CARB target levels over recommendations made by Metropolitan Planning Organizations (MPOs) last May was surprising and although praised by some, has received significant criticism.
The law provides incentives, not mandates, for MPOs to use regional transportation strategies that encourage smart growth. Incentives for MPOs, which meet the GHG targets, can include easier access to federal funding and exemption from certain environmental review requirements. Although called ‘precedent setting’ by the media, it establishes growth policies considered similar to others that have already been implemented in California, and this law would not have a strong impact without stringent GHG reduction targets. SB 375 required CARB to set the targets, giving it the power to determine how seriously MPOs would have to invest in new development plans if they wish to take advantage of the incentives. Using 2005 as a baseline, the GHG emissions per capita reduction targets set by CARB for 2020 and 2035 were, respectively:
|Region||2020 Target||2035 Target|
|San Diego Area||7%||13%|
|Bay Area Region||7%||15%|
|San Joaquin Valley (to be revisited in 2012)||5%||10%|
|Targets for the remaining six MPOs making up 5 percent of the population match or improve upon their current plans for 2020 and 2035|
The targets CARB defined were more ambitious than what the largest MPOs recommended in May. For example, recommendations for the Bay Area were 5 percent per capita for 2020 and 5 percent for 2035 (the same to account for projected population growth, which would make higher targets more difficult to achieve in 2035). Critics complained that these targets were “hijacked” by environmentalists, as CARB did not provide an explanation for the increase.
While more stringent targets are a victory for champions of climate change policy, some Californians have claimed CARB’s numbers as irresponsible because MPOs cannot afford to implement the plans needed to meet the targets. Given the state’s budget deficit and lingering impacts from the global economic recession in 2008 and 2009, budget crises for transit agencies have resulted in decreased service and increased fares. To combat expected costs, CARB has promised to help seek out more state and federal funding, although CARB member and San Diego County Supervisor Ron Roberts is pessimistic about their chances. Business groups angrily predict that such funding will have to come from increased transportation taxes such as vehicle miles traveled fees, parking fees, and congestion pricing. Critics (Example 1, Example 2) also cite the prediction by the Metropolitan Transportation Commission (MTC) of San Francisco that gas would reach a cost of $9.07 per gallon if there were a carbon or ‘vehicle miles traveled’ (VMT) tax.
CARB could address these concerns by clarifying the rationale for its decision and exposing half-truths propagated by some of its critics. For example, whether or not targets are too ambitious, SB 375 requires CARB to review them regularly and consider revisions based on economic and demographic conditions, as well as actual results achieved. The critics’ references to the MTC’s $9.07 per gallon gas are disingenuous warnings. The MTC’s gas price forecast is actually for 2035, not the immediate future, and the MTC considers a carbon or VMT tax as just one of multiple policy options. Only when this tax is added to the MTC’s unlikely forecast of gas prices (a linear extrapolation based on gas prices in 2008, the highest price ever, hitting $7.47 per gallon by 2035) does the cost of one gallon reach $9.07 in 2035. This forecast is significantly different from that of the U.S. Energy Information Administration, which, as of 2010, expects a national average of $3.91 per gallon gas in 2035. In addition, sustainable development experts Calthorpe Associates’ ‘Vision California’ study highlights attainable smart growth savings for Californians that would provide a significant boost to the economy. It quantifies savings, potentially achievable through SB 375, at $6,400 per year per household by 2050, among other significant opportunities.
While it is natural to be wary of the ambitious goals, California has previously defied naysayers and achieved ambitious policy goals at lower costs than initially predicted, as happened with Title 24 building energy efficiency standards in 1978. Furthermore, it is worth noting that SB 375 will remain intact no matter the fate of Proposition 23, which seeks to suspend the Global Warming Solutions Act, Assembly Bill 32, in the upcoming elections. By providing incentive-based aggressive targets, MPOs now have greater reason to invest significantly in future transportation and land use plans. With such an investment, Californians can look forward to a more comfortable life with shorter commutes, reduced air pollution, and long-term economic growth.
Sam Wurzelmann is the Innovative Solutions intern
Despite the uncertain future of comprehensive federal climate legislation, states continue to move forward with energy policies that reduce greenhouse gas emissions and save consumers money on their electricity bills. One policy in particular is quickly gaining traction in the states: Property Assessed Clean Energy, or PACE, programs. Twenty-three states plus Washington, DC, have PACE legislation, and 13 others have proposals on the table including Kentucky, South Carolina, Nebraska, and Pennsylvania.
PACE is an innovative funding mechanism that addresses many of the financial barriers to energy efficiency and renewable energy retrofits on residential, commercial, and industrial properties. In general through PACE states delegate authority to local governments to designate an improvement district and issue bonds, which provide low-interest, long-term loans to property owners for energy saving measures. The loans are paid back through an addition on the property tax bill and often over a 20-year period. If the property is sold, the debt transfers to the new owner. PACE programs usually create a lien on properties that is “senior” to (i.e., takes precedence over) other obligations on the property.
Because PACE is run by local governments, there are different styles of implementation for the various program elements including: program administration, underwriting criteria, source of funds, eligible measures, and quality control. For example, San Francisco uses a third party for administrative functions and issues “mini-bonds” to be purchased by a pre-determined investor, while Babylon County, in New York, uses in-house staff to administrate and has repurposed an existing solid waste fund for financing.
The White House strongly supports initiatives that make it easier for homeowners to get loans for energy efficiency and renewable energy improvements, and PACE programs have benefited from $150 million in stimulus funding. In an effort to standardize best practices and ensure that PACE is good policy for all stakeholders, the White House released a Policy Framework for PACE Financing Programs in October 2009. The measures initially accelerated the adoption of PACE and served as a guide for the second generation of PACE programs.
However, both existing and developing programs have been slowed or halted entirely due to opposition from Freddie Mac and Fannie Mae. In May, both agencies sent letters to mortgage lenders reminding them that an energy-related lien may not be senior to a federally backed mortgage. The letters place a burden on the lender to determine if they originate mortgages in any state or locality that permits a first lien priority on energy loans. Proponents of PACE and its senior lien provision say it is a necessary requirement for local governments to raise funds.
Following Freddie and Fannie, on July 14 the Federal Housing and Financing Agency (FHFA) released a statement of their opposition to PACE. As a result, the California attorney general’s office has sued the FHFA, Fannie Mae, and Freddie Mac for their actions and unwillingness to guarantee properties with PACE assessments. The July 14 lawsuit asks the court to declare that PACE does not violate the standards of Fannie and Freddie and also requests an injunction to prevent the agencies from taking action against home owners with PACE loans. Congress is also working on legislation that would require Freddie and Fannie to use underwriting standards that would facilitate the use of PACE programs. With a scarcity of financing options that overcome the high upfront cost of retrofits, this is an issue worth watching closely.
Olivia Nix is the Innovative Solutions intern