Beacon of Hope for States?

Lisa Ruesch

While the Bush Administration and Congress have done little to address climate change, last summer California Governor Gray Davis signed two landmark environmental bills-one imposing strict new limits on greenhouse gases from auto emissions, the other requiring that a minimum of 20% of California's energy come from renewable sources, the highest such minimum percentage in the nation.  The bills further solidify California's role as the nation's environmental trendsetter and trailblazer.  These bills, moreover, are building momentum for similar action in other states.  While DC sleeps, the states are taking charge and setting national policy.

The California Climate Bill authorizes the California Air Resources Board (CARB) to develop a plan to achieve a "maximum feasible reduction" of greenhouse gases from cars, light trucks and sport-utility vehicles which will become effective in 2006.  Car makers have until 2009 to comply with the new standards.  CARB will evaluate a panoply of options including engines that shut down some cylinders in open-road driving, tighter seals on air conditioning systems, as well as a host of technologies currently used in Europe, many of which increase fuel efficiency, performance, or both.  Tailpipes will not be the only means of decreasing greenhouse gases under the bill: Auto makers will be able to use reductions in pollution from non-vehicle sources such as manufacturing plants in other states to meet the California standards.  Means that the bill does exclude include tax increases and lowering speed limits. 

In passing the "California Climate Bill," California, the state which was first to require catalytic converters, unleaded gasoline, and smog checks, has done what Congress failed to do: demand that automakers reduce carbon dioxide emissions from cars and light trucks.  In March, a bipartisan team of senators led by John Kerry (D-Mass) and John McCain (R-Ariz) failed to pass an amendment that would increase fuel-efficiency standards, in an effort to reduce greenhouse gases produced by cars and trucks and decrease dependence on foreign oil.  The amendment was defeated by a vote of 62 to 38. 

The debate over the amendment revealed the perceived battle lines in greenhouse gas regulation.  Opponents of the amendment, many of whom receive heavy support from the auto industry, made inflammatory claims which were buttressed by an expensive advertising campaign funded by car makers and the United Auto Workers.  Christopher Bond (R-Missouri) suggested that higher mileage requirements would make golf carts the dominant means of transportation.  Other opponents' arguments were, strangely, tinged with gender and class politics.  Barbara Mikulski (D-Maryland) argued that "American women love S.U.V.'s" and that carpooling soccer moms "need large capacity" vehicles, while Zell Miller (D-Georgia) claimed that he was protecting the interests of "hard-working people with calloused hands" and opined that "as the pickup goes, so goes the heart and muscle of our country."

In the wake of this defeat and lack of leadership on climate change from Congress and President Bush, environmentalists and politicians looked to California to take action.  Indeed President Bill Clinton, Senators McCain, Kerry and Joseph Leiberman (D-Conn), and activist and actor Paul Newman, all lobbied California lawmakers to pass the California Climate Bill.  Senators Kerry and McCain pointedly expressed their hopes to Governor Gray Davis in a June 20 letter: "Be assured, California has an opportunity to do what we in Washington failed to achieve."

Policy makers looked to California because of the state's unique position within the framework of national air pollution regulation.  California, unlike any other state, can set its own auto emissions standards under the Clean Air Act, provided that its standard is at least as stringent as the federal standard and it receives approval, in the form of a waiver, from the EPA.  Waiver applications are almost always approved since the EPA presumes that the waiver requirements are met absent "clear and compelling evidence" to the contrary.  The California exemption provision was added to the Clean Air Act because of the state's unique air pollution problems and pioneering efforts to combat pollution. 

California alone, however, does not benefit from its exemption: Although other states cannot set their own standards, they can "piggyback" on California's.  States that "piggyback," however, must adopt identical standards; they cannot modify California's standards and create a third standard.  The California standard, moreover, must be adopted at least two years prior to the car model year to which it applies.  Other states can adopt California standards immediately after California passes them, and prior to the EPA granting a waiver to California, but states cannot enforce the plan before the actual waiver is obtained. 

Thus, because of the piggyback provision, states can adopt either federal or Californian auto emissions standards.  Many states have followed California's standards in the past requiring, for example, catalytic converters and unleaded gas.  More recently, many northeastern states passed bills identical to California's zero-emissions vehicle requirement. 

Adoption of California standards by other states is environmentally beneficial not only because it means stricter car emission standards in a larger portion of the nation, but also because it increases the market for "California cars."  Whenever California has demanded cleaner cars, automakers have argued that it is impracticable to build cars tailored to California, which represents 10% of the national car market.  But, when states such as New York and Massachusetts adopt California standards, the percentage of the car market requiring California cars more than doubles, approaching 25%.  Thus, "piggybacking" creates a new de facto national standard, as car makers opt to build cars for the entire country that meet California standards.

Other states have already begun to follow California's lead on auto emissions; this is not surprising given the popular support for reducing greenhouse gases.  In a recent poll, 81% of Californians favored requiring car makers to cut greenhouse gases by 2009.  New York Assemblyman Thomas DiNapoli, the chairman of the Assembly Environmental Conservation Committee, has introduced a bill that would adopt the emissions standards that CARB will set, and Newsday, one of New York's largest newspapers, has praised the bill, writing in an editorial that "NY's Car Song Should Be: 'California, Here We Come.'"  Policy analysts expect the New England states as well as Washington and Oregon to fall like dominoes and pass piggyback legislation soon. 

The auto industry has vowed that it will challenge the California Climate Bill.  The Alliance of Automobile Manufacturers, a trade association, argues that the bill is not an emissions bill but a state-made fuel economy standard.  Fuel economy standards, the bill's opponents argue, are the exclusive domain of the federal government; thus, California, just like any other state, is pre-empted from taking action in this area.  Automakers have successfully used this argument in a challenge to the zero-emissions vehicles decided in federal district court in California, and other suits are pending.  But many lawmakers in California and New York, as well as Senators McCain and Kerry, clearly believe otherwise. 

However the legal issues are decided, it is clear that, in the face of the federal government's inaction, the states are willing to provide the leadership and action on climate change that many constituents want.  And, if history repeats itself, the nation-whether through state or federal laws-will eventually follow California's lead.

California has also distinguished itself as a national and world leader in reducing greenhouse gases by passing a ground-breaking renewable energy bill that establishes the highest renewable energy requirement in the nation.  SB 1078, which sets the California Renewables Portfolio Standard, requires retail sellers of electricity to produce 20% of their electricity from renewable resources by 2017.  Sellers must increase their use of renewable energy sources by no less than 1% per year in moving toward 20%.  A fee utility consumers already pay will subsidize the program.

California's leadership stands in stark contrast to Washington, DC's.  The bill was passed a week after the Bush administration opposed a failed proposal at the World Summit on Sustainable Development which would have required that 15% of global electricity come from renewable sources by 2010.  Moreover, although the U.S. Senate passed a provision in this year's energy bill that would require 15% of the nation's electricity to come from renewable sources, its fate in uncertain: The Bush administration has opposed a national renewable energy standard, arguing that it is a costly and unnecessary government intervention in the market. 

Twelve other states besides California have set renewable energy requirements, including Nevada, which set a goal of 15% by 2015. 

The California bill will allow utilities to consider hydropower units of 50 megawatts or less in their baselines against which the increase in renewable sources is measured.  Utility companies cannot, however, use hydropower to meet the new goal because of concern about the impact of hydropower on the environment.