CALIF CLIMATE LAW THREATENED BY OIL

Calif. Climate Law Under Assault in Poor Economy
Juliet Williams, April 5, 2010 (AP via NY Times)

"…With the state mired in a crippling recession, the [2006 California] law [to cut greenhouse gas emissions] that once looked like a landmark achievement [and national model] is coming under assault. The regulatory effort Gov. Arnold Schwarzenegger set in motion is facing a political backlash and could come to an abrupt halt in the months ahead.

"A coalition of businesses, financed largely by three Texas oil companies, is funding a ballot petition that would delay the law until California's current unemployment rate is cut by more than half…Leading Republican gubernatorial candidate Meg Whitman has vowed she would suspend the law on her first day in office…Schwarzenegger, who has staked his legacy on environmental issues, has begun urging air regulators to take a go-slow approach. But he has vowed to fight the ballot initiative."

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"The possibility that a state that has set the national agenda on environmental change for decades might shelve its highly publicized climate regulations could have ramifications beyond California's borders. In Congress, lawmakers are struggling to craft a national climate bill that uses California's as a template, but are facing headwinds…

"At issue: Whether imposing costly regulations on businesses is a smart move as the nation struggles to emerge from recession…Under the measure, oil refineries, manufacturers, cement plants, utilities and other carbon polluters are to begin cutting their emissions in 2012…It is the first economy-wide cap on emissions in the nation, obligating California to reduce greenhouse gas emissions to 1990 levels by 2020, about 30 percent from the levels projected if there were no climate regulations."

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"Oil companies have long opposed California's climate law…The ballot petition is expected to qualify for the November ballot, with taxpayer groups, businesses and oil companies contributing nearly $1 million so far to get signature[s]…The bulk of that money has come from Texas-based oil companies. Valero Services Inc. of San Antonio, has given $500,000. Tesoro Companies of San Antonio and World Oil Corp. of Houston have given $100,000 a piece.

"Petition backers say California cannot afford to impose environmental regulations that would raise utility bills, fuel prices and cost jobs. Republican lawmakers say the law gives companies another reason to flee California…That may be an appealing message to voters who are frustrated with high unemployment, continuing home foreclosures and an ongoing state budget crisis that has forced deep cuts to social services, public schools and higher education…"

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"Both [Republican gubernatorial] candidates cite a much disputed study…which concludes the law could cost 1.1 million jobs…That study, which also is a key element of the initiative campaign, has been discredited by the state's nonpartisan legislative analyst…The California Air Resources Board, the entity charged with implementing the law, estimates climate regulations will promote investments in clean energy and will reduce California's overall fuel expenses $3.8 billion by 2020…

"The state's dismal economy -- hit by the nationwide foreclosure crisis and bank failures -- also has given Schwarzenegger pause…He has urged regulators to tread cautiously as they write the rules to oversee a carbon market in California for the companies that will be asked to cut their emissions…[Last month] the governor suggested the state initially give away carbon credits as a way to avoid high costs to regulated industries. That idea has been criticized by environmentalists…Schwarzenegger has ruled out any call to suspend the law, the centerpiece of his environmental legacy…"