California Global Warming Solutions Act passes

California has committed to bringing its greenhouse gas emissions down to 1990 levels by the year 2020, a 25% cut from today’s levels.

California is the world’s sixth largest economy and creates 2% of greenhouse gas emissions. More importantly, California frequently acts as a bellwhether for the rest of the United States on environmental issues.

The bill was the subject of some dramatic last-minute negotiations focusing on the use of market-based mechanisms to reduce emissions:

One of the main sticking points in negotiations over the legislation was the role of a so-called “cap and trade” program: If a company reduced its carbon emissions to levels below the mandated cap, it could sell its remaining “credits” to another business that was unable to reach the cap.

Gov. Arnold Schwarzenegger insisted that such a system be mandatory. Democrats urged that it be optional, concerned it could cause disproportionately more pollution in low-income communities. Schwarzenegger ultimately relented on that and other negotiating points, although both sides said a cap-and-trade system will likely be adopted.

We would have preferred to see Schwarzenegger prevail on this point, but are optimistic that the final outcome will still be a huge step forward. Pollution in low-income communities is of course a serious issue, but it is also the case that the poor will disproportionately suffer the effects of climate change.

Critics of the bill claim that California businesses will be placed at a competitive disadvantage by the new legislation, but in fact the economic consequences of inaction would be far more severe. The bill itself notes the potentially adverse effects of global warming on California’s largest industries, such as wine, tourism, and agriculture; the risk to coastal populations and businesses; the threat to its water supply; and the ongoing strain on its electricity system.

And proponents of the legislation rightly see a huge amount of economic opportunity in being on the forefront of this issue. Our friends at Ford Motor Company have frequently told us about the enormous amount of institutional learning and capability that has resulted from their own voluntary participation in a cap-and-trade system. Once again, California will be at the head of the curve.

Author Bio


Comments Disabled

  1. E Farber - August 31, 2006

    Is a key provided for the map?
    [Ed. — Sorry the original image was confusing, and didn’t go all that well with the post. It has been updated.]

  2. Pegasus - September 4, 2006

    While we wait for the IPCC report one thing is clear. That no matter the content there will not be enough definitive proof to convince either side in this debate. And while “the business as usual scenario” is certainly a dangerous one worse yet is the lack of consensus and apathy. Perhaps we should all focus less on climate change and more on changing perceptions.

  3. Walt - September 6, 2006

    Hey Adam, interesting column on the Seattle Expedia visit, my friends in Seattle say it’s such a nice city, they don’t want anyone else to move there……Nice STI by the way.
    Anyways on the issue with Arnold Schwarzenegger signing the cap on greenhouse gases, do you know if he got rid of his Hummer? I asked ABC news but they were too busy to reply I guess. So I found this web site;

  4. Tom - September 6, 2006

    Hey Walt:

    Tom here. I was the one visiting Expedia.

    As far as we know, Arnold still has these beasts. Hopefully he doesn’t drive them very much.


  5. Walt - September 7, 2006

    Sorry I said Adam, I meant Tom.