Calif. emissions laws costly?

WASHINGTON, DC, United States (UPI) -- As California takes its first baby steps toward implementing the most aggressive climate-change policy in the country, experts debate the economic feasibility of attaining the state`s goals.

Its overarching policy lies in the California Global Warming Solutions Act of 2006, which requires greenhouse gas emissions in the state to fall back to 1990 levels by 2020. One of Gov. Arnold Schwarzenegger`s executive orders, S-3-25, addresses long-term goals by aiming at an 80 percent emissions reduction below 1990 levels by 2050.

The state`s ability to reach these goals holds implications not only for Californians, but the rest of the nation`s climate-change policy as well, Samuel Thernstrom, director of the American Enterprise Institute`s program on culture and freedom, said at a panel discussion last week.

'The stakes are obviously very high,' he said. 'If California succeeds in this effort, that would be a remarkable achievement. If it fails, then the critics of greenhouse gas regulations will point to it as justification to take a very different approach with national policy.'

While the state has set its goals, the means to achieve them remain uncertain. And although these goals can be met, the economic cost may be too much for residents to swallow, said David Montgomery, vice president of CRA International, a group of business consultants.

'There will be a cost ... in all scenarios that meet the targets by 2020,' said Montgomery, who helped conduct a study on the economic impact of California`s climate laws in conjunction with the Electric Power Research Institute, a non-profit organization.

The report evaluated six possible strategies in terms of their ability to reach both the 2020 and 2050 emissions targets, as well as their economic cost. Some policies appear more effective than others.

'If we look at broad, market-based policies, such as cap and trade, they beat command and control regulations hands down,' Montgomery said.

Researchers project only four of the policies will meet the 2020 goal, and only two will reduce emissions to the 2050 target. The two most aggressive policies each include hefty costs.

One scenario assumes all current and potential energy sources will be used in order to reach 80 percent emissions reductions, including maximum use of solar and wind energy and carbon sequestration and storage. Its price tag rings in at $511 billion.

The second assumes the same parameters as the first, but includes nuclear power, although the state currently will not allow the construction of any new plants. The nuclear addition reduces costs to $444 billion -- the cheapest option for the state if it wants to reach its 2050 goal, Montgomery said.

'It`s cheapest because nuclear power has zero carbon emissions,' he told United Press International. 'When you have nuclear power available without emissions, you can provide more energy' for less money.

Nuclear power creates controversy, however, because of concerns about the radioactive waste left over. Proponents, though, herald it as an essential element of California`s success.

'Nuclear energy is by far the most significant part of the clean-air portfolio today, and has to be part of any serious discussion about mitigating the effects of global climate change,' said Deborah Nelson, spokesperson for CASEnergy Coalition, a pro-nuclear organization. 'A diverse mix of renewable energy sources, including nuclear power, is our best chance for a real solution to meet our growing energy needs in the U.S.'

Other alternatives, such as a comprehensive cap-and-trade program, which sets a limit on the amount of greenhouse gases that can be emitted and then allows companies to buy emissions shares from each other, would reach the 2020 goal, but not the 2050 target, and still cost quite a bit.

Still others, including meeting a previous state goal of 20 percent renewable energy in the power sector by 2020, won`t meet the 1990 levels mandated by the Global Warming Solutions Act, according to the report.

However, some feel the report reflects worse conditions than reality, because California will likely have several partners in its effort. A current Western state initiative has brought Oregon, Washington, California, Arizona, New Mexico and Utah together to address climate change in the region.

'There is a good chance that California will not act alone,' said Dallas Burtraw, a senior fellow at Resources for the Future, a non-partisan think tank. 'What is in this report is in some sense a worst-case scenario because it`s California going it alone.'

Others think the push to lower emissions will actually benefit the economy by increasing jobs in the green energy sector.

'In being a leader in terms of taking a strong stance on reducing the state`s emissions, California is also opening up new business opportunities for the state,' said Kit Batten, director of environmental policy at the Center for American Progress, a left-leaning think tank. 'There`s a buzz in California about the low-carbon energy future being the new dot-com boom.'

The renewable energy industry also projects economic benefits. The sector has already made progress toward achieving the state`s renewable portfolio standard that requires 20 percent of electricity come from renewables by 2020.

'All the considerable progress that we`ve made toward the 2020 goal indicates that we`ll be able to achieve the 20 percent goal with no significant additional cost than if we were getting energy from fossil fuels,' said Nancy Rader, executive director of the California Wind Energy Association, a trade association representing wind energy companies.

Although the power sector hasn`t significantly increased the percentage of power coming from renewables yet, as soon as pending infrastructure comes on line, the industry will see a 'large chunk' coming from renewables, Rader told UPI.