California pioneers fight against global warming with climate change plan

Taking the lead in the fight against global warming, California has outlined the broadest attempt in the US to regulate greenhouse gases. The state has called for the creation of a new emissions-trading programme, and increased renewable-energy production.

The legislation impacts virtually every part of the state's $1.6 trillion economy, asking utilities, refiners, car manufacturers, farmers, manufacturers and forest managers to cut pollution under the draft plan released by the state Air Resources Board.

The 77-page "climate change draft scoping plan" follows 18 months after Governor Arnold Schwarzenegger signed a law that mandates the most populous state in the US to reduce emissions back to 1990 levels by the year 2020, and is by far the most far-reaching of any climate-change plan in the US.

According to Daniel Sperling, a member of the Air Resources Board, who is also a transportation professor at the University of Claifornia, the law would be a model for other states, the US, and other countries as well. Governor Schwarzenegger has said that the climate law is a way to spur the state toward a low-carbon economy and stimulate investment.

California regulation is calling for 33 per cent of renewable energy ot be generated by utilities such as electric companies PG&E Corp. and Edison International, which is 13 per cent higher than the current 20 per cent target. The plan also mandates a cap-and-trade emissions programme me such as the ones used in Europe, which could generate an estimated $3.6 billion market.

It could also make for tougher energy-efficiency standards for appliances and buildings, incentives to grow trees which act as sponges for carbon, and encourage local governments to develop cities in ways that provide shorter commutes. In a conference call with the media, Mary Nichols, the air board chairwoman, said that preliminary estimates project it may increase California's economy by 1 per cent of GDP by 2020.

The scoping plan is subject to public comment, and is expected to gain final approval by the end of 2008. The rules would go into effect by around 2012, and by 2050, California plans to bring down emissions by 80 per cent, which is the amount a number of scientists say is required to avoid the most severe effects of climate change.

California's transportation accounts for around 40 per cent of greenhouse gases, electricity generation for 25 per cent, and industries such as refineries another 20 per cent according to the air board. Around 60 per cent of the required reductions come from regulations already approved by the state, which includes the strictest greenhouse-gas standards for automobiles in the US.

That rule is currently under litigation, with the US Environmental Protection Agency (EPA) refusing to allow California to implement the programme me.

California's emissions-trading programme 's map is similar to that of European nations who have used a cap-and- trade system to reach emission-reduction targets established by the Kyoto Protocol in 1997.

The largest emissions currency is the European Union (EU) carbon-dioxide allowances, which is supervised by the European Commission. The second-largest is the United Nations (UN) - certified emission-reduction credits.

Though it is still unclear as to what role international offset credits will play in allowing companies to meet their emission targets under the California trading system, the report says that the regulators are considering ''limiting the use of offsets for regulatory compliance obligations to help ensure a significant portion of required reductions come from within the state and within the regulated sectors.''

California regulators suggest that the emissions-trading programme  will generate around 20 per cent of the greenhouse-gas reductions by the year 2020. California will set a cap on emissions in 2012, and industries exceeding their allocated amount will have to buy credits from those polluting less.

Capped sectors will include electricity, transportation fuels, natural gas and large industries, according to the report.

Stanely Young, a spokesman for the air board said that the first industries to be regulated under the system will be utilities such as the Los Angeles Department of Water and Power, and oil and gas refiners including San Ramon, California-based Chevron Corp.

These companies will receive pollution credits instead of being required to buy all of them at auction, and over time, California will reduce the amount of those allowances, said Mary Nichols, the air board chairwoman.