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Category — AB 32 (California)

California’s Wrong Debate (Models cannot mask LCFS’s failure in-the-making)

“We should not be using models to ‘validate’ policy and regulations. We should be using the models to better inform policy debates and avoid picking technological winners and (more frequently) losers.”

California’s Global Warming Solutions Act of 2006 (AB 32) put the state on a track rejected by the nation as a whole: a regulatory limit on carbon dioxide (CO2) emissions. This policy, which I have criticized as elitist climate policy postmodernism [1], is an all pain, no gain policy with high implementation costs.

The result of AB 32, California’s Low Carbon Fuel Standard (LCFS), has been debated for six-plus years, including the release of rival studies estimating regulatory impacts. Studies do not debate the climate-change impacts because the answer is … nil.

LCFS requires fuel producers to lower the average carbon content of their products 10 percent by 2020. It is a huge economic variable for the state’s (troubled) economy, and the size of California makes it a national economic issue as well. 

Dueling Studies

A year ago, an oil-industry-backed analysis by Boston Consulting Group estimated that California could lose between 28,000 and 51,000 jobs. The losses included many high-paying skilled manufacturing jobs, as well as indirect job losses due to multiplier effects.

Just last month, a counter study of LCFS was released by ICF that paints a much rosier picture than that of Boston Consulting. The face-value result might not be troubling, but the peculiar assumptions should be.  [Read more →]

July 2, 2013   2 Comments

California: Climate Policy Postmodernism (all-pain, no-gain for feel-good elitism)

“There is a vast difference between doing the right thing and doing the thing right. In this case, CARB is implementing AB32 in ways that ignore current realities and that likely make matters worse…. It is time for a major reset of the underlying law and its regulatory implementation.” – T. Tanton

The California Air Resources Board (CARB) is all-in, damn-the-torpedoes relating to AB 32, the state’s 2006 anti-global warming law, even while acknowledging that it will drive up the cost of energy. CARB chair Mary Nichols confirmed the start of a statewide cap-and-trade auction system November 14 under which industrial firms will buy and sell emission rights for pollutants–despite receiving unrebutted testimony from manufacturers and business owners about the very onerous, and even devastating, impact of moving forward with the auction.


When the California’s Global Warming Solutions Act was enacted in 2006, things were quite different. Electricity prices were being pushed down by the early expansion of natural gas plenty. Other states and nations were considering similar climate change programs, and, in fact, the Western Climate Initiative set up by Western Governors looked to increase trade in emission allowances. Unemployment in the State was at about 7 percent, and the foreclosure debacle hadn’t yet hit (which would drive many cities to the brink of bankruptcy).

The prospect of “leakage” was known, but not the extent. Too much faith was held in the Hobson’s choice of cap-and-trade as opposed to the more draconian option of command-and-control regulation. And finally, national cap-and-trade seemed to be coming.

My how things have changed—except for the commitment to economy destroying state policies. The most notable change is that, nationwide, greenhouse gas emissions have already dropped to 1992 levels, without interventionist policies. California’s carbon intensity has improved 21 percent since the turn of the century. Compare this to AB32′s goal of reaching 1990 statewide emissions by 2020. [Read more →]

October 4, 2012   7 Comments

Cap-and-Cry: California’s Global Warming Program (avoided warming of 0.005°C by 2050 under CARB regulations)

“… the total is 0.00476°C (0.0086°F) of global warming avoided by the California cap-and-trade program for reducing greenhouse gas emissions out to the year 2050. Such numbers strain the limits of detectability within our current observing systems, not to mention environmental significance.”

With the California Air Resource Board’s (CARB) recent announcement that they have finalized their greenhouse gas cap and trade regulations, California becomes the first state to have, according to the CARB’s chairperson Mary Nichols, “done something important” on the issue of climate change.

Ms. Nichols couldn’t be further from the truth. While CARB may have done “something important” for many things in California (not all of which may prove positive), climate change isn’t one of them.

If the emissions targets under the CARB cap and trade program as it is scheduled to the year 2020 are met, the total amount of global temperature rise that would be avoided amounts to 0.00015°C (or for those who prefer English units, 0.00027°F). You read that right, one and a half ten-thousandths of a degree Celsius.

If CARB’s cap-and-trade program continues to be the primary mechanism by which to enforce the 80%-below-1990-emissions-by-2050 target legislated under California’s Global Warming Solutions Act of 2006 (aka, Assembly Bill 32, or AB 32), then assuming a business-as-usual (BAU) baseline, the amount of global warming avoided amounts to 0.00476°C (0.0086°F)—a bit less than five thousandths of a degree Celsius (just under one one-hundredths of a degree Fahrenhiet).

This all amounts to a lot of “nothing” for doing “something.” [Read more →]

November 3, 2011   15 Comments

Environmentalists vs. Cap-and-Trade: Washington Yesterday, California Today

“The fraudulence of … ‘goals’ for emission reductions, ‘offsets’ that render even iron-clad goals almost meaningless, an ineffectual ‘cap-and-trade’ mechanism must be exposed. We must rebel against such politics-as-usual.”

- James Hansen, “Never-Give-Up Fighting Spirit,” November 30, 2009

“The truth is, the climate course set by [the] Waxman-Markey [cap-and-trade bill] is a disaster course. It is an exceedingly inefficient way to get a small reduction of emissions. It is less than worthless….”

-James Hansen, “Strategies to Address Global Warming,” July 13, 2009.

The case for government intervention in the name of addressing man-made climate change concerns alleged market failure. But there is a second key factor in the debate over public policy activism: government failure.

The letter below, signed by 41 Left environmental groups , is a welcome example of policy activists assessing the ‘cure’ in terms of the ‘disease’. And it is a reminder that cap-and-trade on the federal level–long championed by Environmental Defense Fund (EDF) and such corporations as Enron (Ken Lay) and Duke Energy (James Rogers, a Lay protoge)–is dead from both sides of the political spectrum.

The California protest brings to mind the trenchant criticism of federal cap-and-trade by James Hansen. “Washington appears intent on choosing a [cap-and-trade] path defined by corporate greed,” Hansen wrote last year. “Unless the public gets engaged, the present Administration may jam down the public’s throat just such an approach, which, it can be shown, is not a solution at all.”

Hansen added in the same article:

“Cap-and-trade’s complexity provides a breeding ground for special interests…. [T]ry reading the Waxman-Markey 2,000-page bill to figure out who would get the money! Why do those special interests deserve it anyhow?”

- James Hansen, “The People vs. Cap-and-Tax,” paper delivered to the Chairperson of the Carbon Trading Summit, New York City, January 12, 2010. [Read more →]

August 3, 2011   9 Comments

Energy Policy in California: Turning Gold into Lead

Despite the state’s deep economic wounds, California’s Governor Jerry Brown last month signed SB 2X that increased the state’s already ambitious renewable portfolio standard (RPS) goal from 20% to 33% by 2020. Together with the state’s Global Warming Solutions Act of 2006 (AB 32), which requires caps on greenhouse gas emissions starting next year, the new law will push up the price of electricity and further delay the Golden State’s economic recovery by permanently driving away businesses and manufacturing jobs.

Worst-Run State: Kentucky, then ….

Last October, 24/7 Wall St., a financial news and opinion electronic newsletter, ranked the best- and worst-managed states in America. The best-run state was Wyoming, which received high marks in just about every category. Wyoming is also the least-populous state, perhaps hinting at one reason for its success.

The worst state on this list was Kentucky, barely edging out California for last-in-class honors. “While it does not quite rank as the worst state on our list, California stands out as being among the most poorly governed,” the publication wrote. “The most populous state in the union has been mired in debt and political unrest for nearly a decade. It bears the unique honor of being the only state considered economically unstable enough to have its debts, at a record $341 billion, rated at an A- by S&P.”

This year, without the $3.5 billion in federal stimulus funds to cover their losses, California legislators may finally be forced to pragmatically deal with a $19 billion budget deficit, which comes on top of a 2010–2011 carryover deficit of $6.1 billion.

Other Bad Ratings

A low opinion of California’s business climate is not limited to 24/7 Wall St. In its 2010 annual survey of the best and worst states for business, The Chief Executive magazine gave its “booby prize” for worst state to California for the second year in a row. The global consulting firm Bain & Co. found that “California is far worse [for business] than any other state by a very significant margin.” Development Counselors International (specialists in business relocations) surveyed corporate executives in March 2011 and found that 72% responded that California has the “worst business climate” in the entire U.S. [Read more →]

June 23, 2011   3 Comments

California’s Cap-and-Trade Illegality: CARB Rethink Necessary

Background:Earlier this year, I wrote about a new, tentative California Superior Court decision that threw a monkey wrench into California Air Resources Board’s climate regulatory scheme.

 a California superior court once again ruled against the California Air Resources Board (CARB) for failing to comply with environmental law pursuant to AB 32, California’s global warming law. The tentative decision directs CARB to rewrite its California Environmental Quality Act (CEQA) documentation, and to cease implementation of the AB 32 Scoping Plan until the violation is corrected.

The decision is based on violations of process only and does not address any scientific or economic substance of either the CEQA documentation or of the scoping plan. Reactions have been mixed from “no big deal” to “hallelujah.”

The judge’s decision states that CARB violated state environmental law with its 2008 plan to reduce greenhouse gases and its more recent cap-and-trade regulatory schema.

If the judge’s decision is made final without substantive change, the state would be ordered to stop the implementation of AB 32 until the CEQA process is fully complied with.

Update: Court Ruling Final

In March, the tentative decision was made final, except for orders and relief. Judge Ernest Goldsmith ruled that CARB had failed to conduct such an [alternatives] review but left open the question of whether the agency could conduct rulemaking, environmental studies or do any other work while the legal issues were being resolved. The state said at the time that it would appeal.

Well, the decision is now final and complete. California [CARB] must immediately halt work on its cap-and-trade program until it completes a review of alternative approaches to reducing climate change, the court ruled on May 20.

Cap-and-Trade was set to begin operating in January 2012, but the Court’s order could cause delays. Many participants hold the view that ARB dodged a potentially fatal bullet in its implementation of cap and trade. The Court could have ruled that a trading scheme was an unacceptable method of reducing emissions. The Court could also have stayed the entire suite of regulations that the state is pursuing, 69 in all, including a low-carbon fuel standard, local development and smart growth guidelines, and emissions reductions from ships and trucks. [Read more →]

May 31, 2011   3 Comments

California Climate Rethink? CARB’s AB 32 Implementation Plan Under Fire

A California superior court recently issued a tentative decision against the California Air Resources Board (CARB) for failing to comply with environmental law pursuant to the implementation of AB 32, California’s global warming law.

The tentative decision directs CARB to rewrite its documentation pursuant to the California Environmental Quality Act (CEQA), and to cease implementation of the AB 32 Scoping Plan until the violation is corrected. The decision is based on violations of process, not the scientific or economic substance of either the CEQA documentation or the scoping plan as critics of climate alarmism would have liked.

Reactions to the tentative finding have ranged from “no big deal” to “hallelujah.” But it is a big deal; CARB’s implementation of AB 32 hangs in the balance, at least for the time being.

Will CARB convince the trial judge to change his decision–or flaunt the order even if unchanged? Rest assured if the decision becomes final, CARB will appeal.

Will CARB admit, maybe, that mistakes were made and work to improve their own process and analyses, rather than just push the blame elsewhere?

Comments from both parties were just submitted. We will see what transpires, but it is wishing too much for a mea culpa from CARB. [Read more →]

February 22, 2011   3 Comments