Correction: The story incorrectly said the new renewable energy mandate (33 percent by 2020) will apply only to investor-owned utilities. It will apply to all utilities in California.
California will embark on a grand experiment to enforce a myriad of regulations aimed at reducing greenhouse gas emissions by 30 percent by 2020.
After 18 months of public hearings, the California Air Resources Board approved on Thursday a master plan for AB 32, otherwise known as the Global Warming Solutions Act of 2006.
The law represents an ambitious effort by the state of California to enact some of the most stringent policies in the country to reduce emissions. Proponents say it will spur greentech investments and developments while promoting a cleaner environment.
Critics say the law will incur tremendous costs to businesses and residents. Businesses that must spend money to cut emissions will pass on the expenses to consumers. The state will have to raise money for public transit and other incentives in the plan.
The centerpiece of the plan is a program to set emissions limits for a variety of industries and force polluters to pay if they emit more than allowed. Other initiatives include promotingsolarenergy use, building high-speed rail, mandating recycling by businesses, setting energy efficiency standards for buildings and requiring ships that dock at California ports to cut emissions.
All of the utilities in California also will have to get 33 percent of its electricity comes from renewable sources such a solar, wind and geothermal plants. The investor-owned utilities already have to have a 20 percent mix by 2010, a requirement that has proved tough to meet.
The air resources board has yet to attach an overall cost to carrying out these mandates. The master plan only outlines goals to reduce emissions to the 1990 levels by 2020 and measures to achieve them. The board has until 2012 to write the rules to carry out those measures.
But the board has estimated that the cost of implementing AB 32 could amount to $25 billion in 2020. In return, the state could see energy savings of $40 billion, said Stanley Young, a spokesman for the board.
The board also believes AB 32 could average household could save $500 in 2020 (in 2007 dollar). Savings will come from driving more fuel-efficient cars, using energy-efficient appliances and other measures.
California is developing the cap-and-trade program, which will cover 85 percent of the state's emissions, as part of a consortium of seven states and four Canadian provinces. The Western Climate Initiative released a program outline in September.
A group of northeastern states already deployed a cap-and-trade program earlier this year (see RGGI Generates $38.58M in Carbon Permits Sale). President-elect Barack Obama says he wants a national cap-and-trade program.
Although environmentalists generally applaud California's efforts to reduce emissions and get tough on polluters, they might find new battles emerging as developers rush to profit from all these "green" initiatives.
For example, Gov. Arnold Schwarzenegger criticized the state's environmental regulations for holding up certain solar and other renewable energy projects last month.
The governor railed against some endangered squirrels during a press conference in which he promised to streamline the permitting process to make it easier for developers renewable energy projects and transmission lines (see Schwarzeneger: Permitting Process Too Complicated).