California regulators Thursday proposed a cap-and-trade program to limit greenhouse-gas emissions and a goal to source one-third of the state's electricity from renewables.
The recommendations from a draft proposal from the California Air Resources Board staff are aimed at helping the state meet the California Global Warming Solutions Act of 2006, which requires it to cut emissions to 1990 levels by 2020.
According to the 89-page proposal, the measures would reduce greenhouse-gas emissions in the state by 30 percent from forecasted 2020 levels.
The recommendations also include a requirement that utilities produce a third of their electricity from renewable sources such as wind, solar and geothermal, and a measure that would allow the state to regulate tailpipe emissions. The emissions point has been under heated contention between the state and the U.S. Environmental Protection Agency, which in December denied California a waiver to regulate the emissions (see Looking for Answers From the EPA and EPA Rejects California Vehicle-Emission Standards).
Industry experts say the proposal, if implemented, would be a boon for green technology.
The proposal also is expected to kick off some fiery opposition from companies and consumers about who would end up paying for the program.
But the proposal is still years away from reality - if it ever gets all the approvals it needs.
After the public has its say and a final draft is prepared, California's emission plan will go to the Air Resources Board for consideration in November.
If it's adopted, all the measures would still have to be vetted and analyzed, again with public input, and individually approved in a process expected to last at least two years. If it's approved, the plan will take effect in 2012.
A vital piece of the plan is the cap-and trade program, which would limit the emissions that businesses and industries could produce, and also would set up a system to enable the trading of emission allowances.
California is the fifteenth largest emitter of greenhouse gases in the world, representing about two percent of all global emissions, according to the Air Resources Board. The proposed cap-and-trade program, which would cap emissions from electricity, transportation fuel, natural gas and large industrial sources, would be developed with the Western Climate Initiative, which was founded by a group of governors last year to develop regional solutions for climate change.
Companies and utilities subject to the cap would have two choices: "You can innovate and become a green leader or you can buy credits," said Daniel M. Kammen, director of the Renewable and Appropriate Energy Laboratory at the University of California at Berkeley.
Kammen, who was among the scientific experts asked to review the proposal, said the most significant cuts would come from electricity generation and transportation sectors.
The plan also proposes increasing California's renewable portfolio standard --which requires a certain percentage of the state's energy use to come from renewable sources -- from 20 percent by 2010 to 33 percent by 2020.
The California Energy Commission estimates that about 12 percent of the state's electricity comes from renewable energy.
Some industry analysts have said not all of California's utilities will reach the goal (see California to Get More Solar-Thermal). As a result, some may lobby to soften the Air Resources Board proposal.
Spokesman Keely Wachs said he couldn't comment on whether the Pacific Gas & Electric Co., for example, was going to take issue with the proposed renewable portfolio standard increase.
"We are currently reviewing the document. Looking at all the details," he said, adding that PG&E is on track to reach the 2010 goals.
As of late, the northern California utility has announced a slew of deals to buy power made from renewable energy (see PG&E to Get Power from Solar-Biofuel Hybrid Project, Ausra to Build 177-Megawatt Solar-Thermal Plant, IN BRIEF: FPL and PG&E Back Solar-Thermal, 212 Gets $250M, California to Get More Solar-Thermal and PG&E's Big Wind Deals).
Analysts also expect the tailpipe-emission proposal to have opponents.
"There is going to be pushback from businesses," said Spencer Quong, a clean-vehicle analyst for the Union of Concerned Scientists.
He expects automakers, energy providers and oil companies, among others, to take issue with the proposal because of concerns about the cost.
According to the California Air Resources Board, savings from improved efficiency and the development of petroleum alternatives would outweigh the costs of the proposal.
While the EPA has denied California a waiver to allow it to set stricter vehicle-emissions standards, Kammen said he believes the stance will change once President Bush leaves office, regardless of whether Sen. John McCain, R-Ariz., or Sen. Barack Obama, D-Ill., wins the White House.
"I expect that the new president will overturn the EPA's decision the first, second or third day in office," Kammen said.