Schwarzenegger, Democrats reach landmark deal on global warming |

Schwarzenegger, Democrats reach landmark deal on global warming

Samantha Young

SACRAMENTO (AP) – California will become the first state to impose a cap on all greenhouse gas emissions, including those from industrial plants, under a landmark deal reached Wednesday by Gov. Arnold Schwarzenegger and legislative Democrats.

The agreement marks a clear break with the Bush administration and puts California on a path to reducing its emissions of carbon dioxide and other greenhouse gases by an estimated 25 percent by 2020.

It also gives Schwarzenegger a key environmental victory as he seeks re-election this fall.

“We can now move forward with developing a market-based system that makes California a world leader in the effort to reduce carbon emissions,” the governor said in a statement. “The success of our system will be an example for other states and nations to follow as the fight against climate change continues.”

The agreement came after weeks of difficult negotiations and was announced simultaneously by the governor’s office and Democratic leaders in the Senate and Assembly.

The bill, expected to be sent quickly to the Senate floor, requires the state’s major industries – such as utility plants, oil and gas refineries, and cement kilns – to reduce their emissions of the pollutants widely believed to contribute to global warming. One of the key mechanisms designed to drive the reductions is a market program that will allow businesses to buy, sell and trade emission credits with other companies.

Schwarzenegger had insisted that the California Air Resources Board, which will oversee the program, be required to implement the market-based strategy. The agreement reached Wednesday does not make the system mandatory, as the governor wanted, but it removed provisions that would have made it much harder to achieve it, according to administration officials involved in the negotiations.

The agreement states that the air board shall identify “market-based compliance mechanisms” that might be used as part of its plan to reach the cap.

The cap was praised by environmentalists as a step toward fighting global climate change but criticized by some business leaders. They say it will increase their costs and force them to scale back their California operations.

Republicans in the Legislature say climate change should be addressed at the national level, not on a state-by-state basis.

“Adopting costly and unattainable regulations will drive businesses and jobs out of California into other states and even into other countries with no commitment to improve air quality,” said Assembly Republican leader George Plescia, R-La Jolla.

Schwarzenegger and the Legislature’s Democratic leadership have embraced a state emissions cap on vehicles and industries as a way to make California a trendsetter in combatting global warming.

The nation’s most populous state is the world’s 12th largest emitter of greenhouse gases and could suffer dire consequences if global temperatures increase only a few degrees. Reports by state agencies indicate a 2- to 3-degree rise in temperature could melt the Sierra snowpack earlier each year, lead to flooding in the Central Valley and threaten the state’s long-term water supply for cities and farms.

Assembly Speaker Fabian Nunez, D-Los Angeles, called the emissions cap “a historic opportunity to show the world this can be done.”

Senate President Pro Tem Don Perata said the two sides overcame numerous obstacles – including election-year politics – to make the deal happen.

“This is not anecdotal legislation; this is rooted in fact,” Perata, D-Oakland, said during a news conference called by Democratic leaders to announce the agreement. “… The facts are if we do not do something to stop carbon emissions in this world, we will see a diminution in the quality of life.”

Schwarzenegger has tried to position himself as a leader on the issue. Last year, he issued an executive order calling for the state to reduce its greenhouse gas emissions to 2000 levels by 2010, 1990 levels by 2020 and to 80 percent below 1990 levels by 2050.

He organized a Climate Action Team that recommended a statewide cap and last month signed an accord with British Prime Minister Tony Blair in which California and Great Britain will work together to research cleaner-burning fuels and technologies.

California has led the country in reducing greenhouse gas emissions through its renewable energy policies and a 2004 law reducing tailpipe emissions from vehicles.

Ten other states are poised to enact California’s auto rule, while more than 20 states have required utilities to eventually generate some power from renewable sources such as solar, wind and geothermal.

The California bill also would eclipse an effort under way in seven Northeast states, which are seeking to cap emissions from power plants.

“We need to have all important sectors of the economy do their fair share,” said Jim Martson, a senior attorney with Environmental Defense, one of the main environmental groups involved in negotiations over the bill. “If you only do electricity or autos, you’re only getting at 70 percent of the problem.”

In the absence of federal action, much of the effort to combat climate change has been focused in the states.

More than 100 climate-related bills have been held up in Congress, including one by Sens. John McCain, R-Ariz., and Joe Lieberman, D-Conn., that call for a national cap on greenhouse gas emissions.

During the negotiations over the California cap, Schwarzenegger had sought to appease his supporters in the business community by arguing for safeguards for the industries that would be most affected.

Administration officials have spent weeks seeking assurances that any legislation would require a market program similar to schemes in the Northeast and the European Union. The idea would allow businesses to buy, sell or trade emission credits with other companies instead of making their own reductions if those cuts were considered too costly or technologically difficult.

Such a program could help industries that may not be able to meet their targets through energy efficiency practices or the use of alternative fuels. It might also allow a California company to buy credits for emission reductions made elsewhere in the world, according to administration officials involved in the negotiations.

Schwarzenegger also sought a so-called “safety valve” that would allow California to delay the emission-cap mandate if the state is hit with a natural disaster, terrorist attack or some other emergency.

The negotiated bill included a provision allowing the governor to push the cap deadline back by one year “in the event of extraordinary circumstances, catastrophic events or threat of significant economic harm…” The Legislature would have to be notified within 10 days if the governor took such action.

Nunez, the Assembly leader, said he hoped industry representatives would be “much more comfortable” with the bill once they had a chance to read it.

Silicon Valley entrepreneurs have touted a cap as an opportunity to get California ahead of the rest of the nation in designing new technology to achieve carbon savings.

In addition to the emissions cap, California lawmakers are poised to give final approval to related legislation. That bill would prohibit the state from entering long-term contracts with any out-of-state utility that fails to reduce its carbon dioxide emissions. The bill by Perata is awaiting an Assembly vote.

– Associated Press Writer Aaron C. Davis in Sacramento contributed to this report.

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