State air regulators to decide on future of California's greenhouse gas law

In Sacramento today, state air regulators will meet to approve a blueprint for California's landmark Global Warming Solutions Act. KPCC's Molly Peterson says that two years into the law's planning, the debate focuses on its economic effects.

Molly Peterson: Air Resources Board chairman Mary Nichols has posted a video on the agency's Web site arguing how important the board's vote will be to all Californians.

Mary Nichols: We're feeling the effects of global warming in sea level rise that's nibbling away at our coastline, we're seeing it in the increase in devastating wildfires – and we know that we can take action and we can be leaders in a way that will help our state and help our economy at the same time.

Peterson: The Global Warming Solutions Act requires California to cut greenhouse gases within 12 years back to the emission levels of 18 years ago. Since it became law, policymakers have written a "scoping plan" – a road map for how to do it. Nichols and Governor Arnold Schwarzenegger say it's important to keep limiting greenhouse gases, even in the economic slump.

Governor Arnold Schwarzenegger: We have no intention of backing away from our historic commitment to the fight against global warming because the economy has slowed down.

Peterson: The state's budget problems were one reason Schwarzenegger skipped a United Nations climate conference in Poland this month. But a video message he sent instead emphasized California's faith in the value of environmental laws.

Schwarzenegger: Study after study has shown that our approach will save consumers money, create hundreds of thousands of new jobs and create billions in new payroll.

Peterson: His upbeat tone echoes that of the air board's own analysts. In October, they said a mix of green policies – regulating car emissions, creating a market to trade and limit carbon, and investing in alternative energy – will boost the economy within a dozen years. Others have doubts.

Roger Niello: What happens to the state when the economy really goes in the tank?

Peterson: Republican Assemblyman Roger Niello asked the state's nonpartisan legislative analyst to examine the policies' costs. The analyst concluded that the air board based its view on some sketchy assumptions, and asked for more explanation. Niello says the way the air board responded to the analyst reminds him of an impatient parent.

Niello: You had parents, and you would ask your parents if you could do something, and they would say no, and you would say why, and they would say because I said so, and you would say why, and they would say because I said so.

Peterson: Six skeptical peer reviews of the plan's fiscal effects followed and fueled the debate. Reviewers, including UCLA economist Matthew Kahn, say the air board is overstating the benefits of Assembly Bill 32 over a dozen years, and lowballing its costs.

Matt Kahn: On some level the AB 32 document we were asked to read was a best-case scenario. And at least when I think about the future, I want the state to be ready for worst-case scenarios.

Peterson: Kahn says he saw little consideration of uncertainty and risk in alternative energy supplies. He offers the example of hot summer days. There's high demand for electricity and little wind to generate extra energy.

Kahn: Prices will have to soar on those days. And yet nowhere was there a discussion of the possibility prices could soar on those days.

Peterson: The latest fiscal studies also point up unresolved tensions over the major aspects of the plan. Angela Johnson Meszaros co-chairs a committee that advises the air board on policy impacts in low-income communities. She says the state's view doesn't fully account for economic risks to poor people.

Angela Johnson Meszaros: Not only are our communities going to be least able to protect themselves from changes to the climate, but also our communities disproportionately host the fossil fuel infrastructure. And it causes very serious negative health impacts in our communities.

Peterson: That's why she says she's long opposed a key part of the state's global warming strategy, a cap-and-trade system for greenhouse gases. Meszaros worries that system won't work, and that will leave the air in polluted neighborhoods dirty.

Meszaros: You read the scoping plan, you would have no evidence at all that anybody anywhere has ever questioned the ability of a trading program to get all kinds of reductions they're claiming it's going to get.

Peterson: State agencies are gearing up for next year's work following the scoping plan. But UCLA economist Matthew Kahn says it's worth Californians' time to understand the financial risks up front.

Kahn: If something is portrayed as a free lunch, then the typical voter won't think this through much. But if the truth is that it's slightly costly, this forces us to focus and to design the policy efficiently and effectively.

Peterson: Kahn says a better accounting now could prevent a political backlash later.