Climate Change Summary Newsletter and Commentary

Climate Change Summary Newsletter and Commentary

January 25, 2010

By: Steven L. Hoch

California –FIRSTS

GHG rules by CARB may ban non-hybrids for certain larger vehicles

CARB has launched a GHG emission-reduction rulemaking that may eventually limit vehicle manufacturers to sell in the state only hybrid versions of certain medium-and heavy-duty vehicles, such as those used by utilities or for delivery purposes in urban areas, according to the plan for the rules. Officials are discussing provisions for certification and testing standards for medium- and heavy-duty hybrid vehicles that are expected to form the foundation of a future sales restriction. The rulemaking could eventually draw backlash from key stakeholders, including public and private fleet operators who might face increased costs if they are required to purchase hybrid trucks rather than conventional vehicles. See:

http://www.arb.ca.gov/cc/hybridtruck/hybridtruck.htm

Without regard to various legal issues that such a ban may trigger, this proposal is probably a highly problematic step for CARB to take for a number of reasons. First, various manufacturers will provide information that the technology won’t be available in a reliable package to deal with the required loads for a considerable length of time. Second, not only will fleet operators and others decry the cost, but some may have to maintain duel fleets, one for strictly urban usage and others for other environs including medium and long hauls. It is doubtful that one power system would efficiently and economically work for both, at least in the short to medium term. Time will tell. Stay tuned and watch to see if this proposal creeps into some federal requirement as climate change legislation morphs with the newly oriented Congress.

Unintended Consequences

California cool car rule may impede communication

A rule currently being prepared by the California Air Resources Board to limit the solar heat that streams into cars could have the side effect of reducing the quality of cell phone signals. California's "cool cars" regulation, which could lower air conditioning use and therefore reduce CO2 emissions, "significantly and negatively affects wireless devices and network performance in a number of situations, including the completion capability and location accuracy of [emergency] calls, particularly in rural areas," CTIA-the Wireless Association said in a letter last week. CTIA's testing found that cell signal strength was reduced by 8 to 11 decibels in vehicles with full glazing, and by 3 to 6 decibels in partially glazed vehicles. "This loss reduces the chances of call completion up to 50 percent in areas with no overlapping cell site coverage," the group said. "Signal loss also leads to up to a 30 percent lower chance of successful E-911 call location in rural locations." California has found in its testing no problems with cell phone calls. The board is reviewing CTIA's later and should issue a final regulation by month's end. See:

http://detnews.com/article/20100120/AUTO01/1200329/1013/Calif.-cool-car-rule-may-hurt-cell-phone-reception

While reduction of cell phone conversations in cars may have a positive safety effect, given our current way of life, any such problem that might occur because of mandatory changes in vehicles will likely not be appreciated by the citizens of this state. It’s the theory we have espoused before, that our legislators have not considered the reaction they will get from the average person who has not yet been, but will be, personally impacted by such proposals Of course, it is not clear whether the report is correct, but in the court of public opinion, the possibility of an impact may be all that is needed to get people upset. On this issue, there probably won’t be a public uprising for sure, but it’s the issues like this that should be watched carefully to determine public acceptance. Ultimately, if there is no acceptance, there will be no change unless by absolute fiat which is unlikely.

Push for natural gas to limit GHGs poses unintended pollution impacts

In a push to replace coal with natural gas, increased use and production of the fuel is already resulting in unintended pollution consequences that could be difficult to address. EPA is already working on air quality regulations and requiring first-time GHG reporting for natural gas operations. More difficult to address is the question of whether hydraulic fracturing—a controversial technology for extracting natural gas that pumps chemical-laden water and sand into rock seams—results in contamination of groundwater. But questions about fracking’s impacts are politically fraught as industry officials warn that new regulations from EPA could shut down some operations. Environmentalists are also split on the issue, with some Sierra Club offices actively supporting policies to encourage increased gas use while some of the club’s local chapters—especially those close to drilling operations—opposing it.. See:

http://carboncontrolnews.com/index.php/ccn/show/push_for_natural_gas_to_limit_ghgs_poses_unintended_pollution_impacts/

Tradeoffs are always the rule, not the exception, so the fact that there are some regulations needed for the actual production should not be a surprise. Those regulations must be reasonable and permit production instead of restricting it. But what is important to note here is that the fracking issue could impact another important resource, water. That requires some careful consideration. That the environmental groups are split on this issue is interesting. It pits a big picture view (we need to stop using coal) versus what may be very localized concerns (if used here it may cause a problem here). Fracking is a method that improves supply and/or lowers price and is already in use. Read more at:

http://www.chron.com/disp/story.mpl/business/energy/6764645.html?plckFindCommentKey=CommentKey:b75e2662-3ae1-499d-8d4e-10eaf633c46c

Bat fatalities at wind energy turbines

New data suggest that bats, like birds, may follow specifically defined routes when migrating rather than simply migrating in a dispersed way across a broad area. Wind energy turbines located in these routes may cause fatalities of migrating bats. The migratory behavior of bats, a topic that has received little attention in the past, is the subject of a new study in the December 2009 issue of The Journal of Mammalogy. Researchers found that greater tower height increased the probability of bat fatality, but that differences among sites in migratory bat activity also were related to the number of bat fatalities. By identifying migratory routes and the specific landscape features that bats follow, the report suggests that bat fatalities could be minimized by building wind facilities in areas with low migratory activity. See: http://www2.allenpress.com/pdf/mamm-90-06-1341-1349.pdf

While it is prudent to consider such things as bat migration (or bird migration) a more basic consideration is whether or not such a migratory pattern also interferes with placing turbines in the most efficient places to produce and distribute green energy. These issues are often in conflict. If we are not going to be able to increase the use of alternative power because of such issues, we may be imperiling the very existence of the bats anyway….or so the argument can go.

Electricity

Study suggests we could have 20 percent wind power by 2024 possible but it will be 'challenging'

Wind power could supply more than 20 percent of electricity demand for the nation's eastern grid in 2024 if a large overlay of new transmission lines is built and grid operations are reorganized to share wind energy widely across the region, according to the most detailed study of the issue to date, led by the Energy Department's National Renewable Energy Laboratory. Meeting that target would require the construction of some 100,000 new turbines, study authors said. Because wind generation is intermittent, the capacity of the new wind units would have to be above the target, rising to about 35 percent of total generation capacity. The study assumes that between 17,050 and 22,697 miles of new transmission line would have to be built, depending on the scenario. The new transmission connections would cost between $101 billion and $145 billion, using the assumed purchasing power of the dollar in 2024. See:

http://www.nrel.gov/wind/systemsintegration/pdfs/2010/ewits_executive_summary.pdf

As we have noted before, some of the requirements for green energy are not based on reality, and we are seeing more and more issues arising that negatively effect bringing green energy production to a significant level of our electric load. Indeed, the costs reflected in this study are truly staggering. In particular, the issue of transmission lines is a major impediment. (See below). Relating to transmission, the study points out: “Planning for this transmission, then, is imperative because it takes longer to build new transmission capacity than it does to build new wind plants.” That about sums it up.

Supreme Court dashes hopes of backers of federal transmission siting

The expansion of electric transmission needed to meet U.S. goals for renewable energy and reliability will be up to Congress after the Supreme Court refused yesterday to review a lower court's decision that narrowed federal authority over transmission siting. The Supreme Court rejected a request from Edison Electric Institute (EEI) for review of the 4th U.S. Circuit Court of Appeals' decision that the 2005 energy law failed to authorize Federal Energy Regulatory Commission "backstop" authority for transmission siting if a state had denied a project. Many lawmakers, utilities and independent transmission companies say states are holding up a greater expansion of transmission. See:

http://www6.lexisnexis.com/publisher/EndUser?Action=UserDisplayFullDocument&orgId=574&topicId=25148&docId=l:1111606135&isRss=true

It’s hard to take a position on this issue from a legal standpoint without considerable analysis of the underlying law referenced and we make no comment on this from that point of view. However, as noted above, the issue of transmission is much more critical than the issue of installing wind turbines themselves. A federal resolution to transmission permitting would likely be highly favorable over the patchwork set of factors that impede transmission now. But, even that will not be sufficient without significant concessions by the variety of groups who will be involved in framing the discussions. At the moment, bringing the various groups together in to reach any meaningful conclusion is not likely to occur in the immediate future. However, as noted below, public sentiment is weighted toward job creation and economic stimulation. Certainly, rebuilding our power generation capacity and transmission capability will create a LOT of jobs for many decades to come.

Public Sentiment
Poll shows legislation attracts more support when focus is on energy independence, jobs

Americans would be more likely to support climate change legislation if it were seen as a means of strengthening energy independence and as a measure to create jobs, rather than as a way to improve health and the environment, a poll released Jan. 21 found. In the poll, respondents were asked to choose the top two ideas that would make them most likely to support cap-and-trade legislation. Lessening energy dependence on the Middle East was the most popular, selected by 46 percent of respondents, followed by using cap and trade to create “hundreds of thousands of new, permanent, good American jobs” to “lift America out of the recession,” which was selected by 37 percent. By comparison, at the bottom of the list of reasons for supporting climate legislation was protecting health and reducing carbon dioxide pollution. Only 26 percent of respondents selected that choice. The second-lowest scoring reason—“America can and should be the most advanced nation in terms of science and technology”— was selected by 27 percent. Asked to select the top two environmental and economic goals for the United States, 48 percent selected “ending dependence on foreign fuels” and 33 percent selected “halting pollution of our air and water.” The choices “preventing climate chaos” and “ending climate change” were selected by 7 percent and 5 percent of respondents, respectively. “Ending global warming” was selected by 14 percent of respondents, and “reducing greenhouse gases” and “reducing carbon emissions” were selected by 8 percent and 7 percent of respondents, respectively. See:

http://www.edf.org/documents/10738_Language-of-a-Clean-Energy-Economy.pdf?redirect=language

This poll should be studied carefully by many who seek to both motivate public opinion and bring about real results. It would seem that less of the ”sky is falling” rhetoric and more “let’s free ourselves from Middle East oil” entanglements plus we can “help the economy” by creating jobs is a clear and simple measure that almost everyone can get behind.

Securities and Exchange Commission

SEC to Hold Meeting on Climate Risk Disclosure

The SEC is considering an interpretation of disclosure rules that would require businesses to reveal climate-related risks to the public. In November 2009, investors representing about $1 trillion in assets filed a supplement to a 2007 petition, updating information about the risks of climate change and asking the SEC to require disclosure of climate-related risks. See: http://www.sec.gov/news/openmeetings/2010/ssamtg012710.htm

In 2010, the SEC may provide companies with guidance clarifying climate change disclosure obligations. But at this time, the entire matter is wide open and “up for grabs”. The outcome of the SEC process could substantially impact the value of a corporation, some very negatively. Once the guidance is provided, there will also be years of battles, in court, in various other agencies and within various professional groups, such as the law, accounting and engineering. We are just at the beginning and any public corporation should take note and be involved.

Climate Change Summary Newsletter and Commentary

Climate Change Summary Newsletter and Commentary

January 18, 2010

By: Steven L. Hoch

California - FIRSTS

California Advisers Call for Sale of GHG Permits, Estimate $20 Billion in Revenue Annually

Nearly all of the GHG emissions permits issued under a California emissions cap-and-trade program should be sold, not given away, and their monetary value returned to households, a state-appointed advisory panel said Jan. 11. The reasoning is simple: Households will shoulder the brunt of the higher energy costs that will come from setting a price on carbon. If the price of carbon is $20 to $60 per ton, the state could raise $2.5 billion to $7.53 billion in 2012 and $7.3 billion to $21.9 billion in 2020. At least 75 percent of the value of the permits should be returned to households, either through lump-sum payments or tax cuts, the report recommended. The remaining 25 percent should go to public investments, such as infrastructure, and to programs to help businesses comply with climate policies, the report said. See:

http://www.climatechange.ca.gov/eaac/documents/eaac_reports/2010-01-10_EAAC_Allocation_Report_Draft.pdf

The federal cap-and-trade programs under consideration are structured to provide free allocations to utilities to cushion the cost of changeover to green power and to protect the rate payers from the capital costs which would be incurred as a result as new systems are developed and brought online. California, on the other hand, is likely not going that way, seeking instead to use some of the revenue to assist households. The concern expressed by many is that CA can not avoid using the money to deal with its budget woes thus possibly leaving rate payers to bear all the costs. But the utilities are not happy because they are left to find funds on their own. In fact, the three major California utilities are publicly threatening legal action against CARB if this plan moves forward as is. What exactly will happen is not clear. But what is clear is that California will have a cap-and-trade system and many (or most) of its features will wind up in the federal system if there is one. Stay tuned.

California Adopts Guidelines for Analyzing GHG Impacts of New Projects

California Natural Resources Agency on Dec. 30 adopted guidance for analyzing and lessening greenhouse gas impacts linked to new policies and development projects. The rulemaking updates statewide guidelines for implementing the California Environmental Quality Act (CEQA). The act requires public agencies to review proposed policies and projects to determine if measures are needed to offset harmful environmental impacts. The amendments update 14 sections of the guidance document (Public Resources Code section 21000 et. seq.) and two appendices, one related to energy conservation and the other an environmental checklist form. The updated guidance advises public agencies to describe or estimate greenhouse gas emissions associated with a project and to determine a project’s impact on forests, the consumption of fuels or other energy sources, parking, and all modes of transportation including public transit, bicycle, and pedestrian facilities. While it offers guidance on determining the significance of greenhouse gas impacts, the document does not include specific significance thresholds. See:

http://ceres.ca.gov/ceqa/docs/Adopted_Text_of_SB97_CEQA_Guidelines_Amendments.pdf

CEQA is different from NEPA, but there is already discussion on the federal level about changing NEPA to specifically deal with climate change. The changes in CEQA will no doubt influence that discussion. But here in California, CEQA has been effectively used by many NGOs to block or make more cumbersome the necessary approvals for climate change infrastructure. (See below) The language in the new guidance document is not a model of clarity and while many NGOs have stated that the guidance document is too weak, the same groups will certainly not shy away from using the document. The mantra from many NGOs has been we can do both, i.e., be green and take care of the environments other concerns. While that may be true in some instances, there may have to be a sea change in certain attitudes if and when the issue moves from sustainability to survivability, and many of these same NGOs state that this moment is on the very near horizon.

California Adopts First Statewide Green Building Code

The California Building Standards Commission approved the first statewide green building code. Taking effect January 2011, the nation’s first mandatory green building code – dubbed “CalGreen” – lays out specific constraints for newly constructed buildings. It requires builders to install plumbing that cuts indoor water use by as much as 20 percent, to divert 50 percent of construction waste from landfills to recycling, and to use low-pollutant paints, carpets, and floors. It also mandates inspection of energy systems to ensure that heaters, air conditioners, and other mechanical equipment are working efficiently. And for non-residential buildings, it requires the installation of water meters for different uses.  The code also allows local jurisdictions to retain stricter green building standards, if they already exist, or to adopt stricter versions of the state code if they choose. Critics say the rules fall short of rigorous standards adopted by Los Angeles, San Francisco and more than 50 California jurisdictions in league with the U.S. Green Building Council, a national non-profit group of architects, engineers and construction companies. See:

http://www.csmonitor.com/USA/2010/0115/California-adopts-first-statewide-green-building-code        and
http://www.bsc.ca.gov/default.htm

These codes apply to all state buildings and no doubt will be adopted by many counties and cities that do not have their own more restrictive codes. There has been some talk about a national building code, but there is little likelihood of that ever being coming to fruition. The point of CalGreen is to set a base level or a default. The impact to the cost of homebuilding and renovation in CA is not yet clear, but in an economy that is in great trouble already, any increase of the costs of construction will have an additional adverse effect on the homebuilding sector. Increasing energy efficiency in homes and businesses needs to be accompanied, in the short term, with some type of significant tax relief to get it moving. Homeowners and business owners will no doubt save money in the long run with greener homes and buildings, the upfront costs need amelioration.

Percentage of Renewable Energy from California Utilities Decreases; Red Tape Blamed

Barring a rapid construction boom, California’s privately owned utilities are unlikely to meet a state mandate that directs them to generate at least 20 percent of their power from renewable sources of energy by the end of this year. Gregg Morris, director of the Green Power Institute, told a gathering of biomass executives in Sacramento that the 2010 target, which passed into law in 2002, has produced plenty of market activity and speculation but few new power plants. “We’ve done a great job of signing contracts,” Morris said. “We’ve done a very poor job of actually bringing power online.” In fact, according to Morris, the utilities subject to the renewable portfolio standard - Pacific Gas & Electric Co., Southern California Edison and San Diego Gas & Electric Co. - have lost renewable energy as a total percentage of generation since the program was first implemented. According to the California Public Utilities Commission, which tracks RPS projects, Morris’ skepticism is on the mark. In 2008, the IOUs served 13 percent of their retail electricity sales with renewable power, with SoCal Edison in the lead (at 15.5 percent), compared to 11.9 percent for PG&E and 6.1 percent for SDG&E. What’s the problem? A CPUC analysis says that more than 7,000 megawatts of IOU contracts have been signed for “RPS eligible” energy. But while it appears the procurement side is working, actual project development has been snagged behind a maze of regulations, a transmission shortfall and overlapping agencies with jurisdiction. See:

 http://blogs.edmunds.com/greencaradvisor/2010/01/percentage-of-renewable-energy-from-calif-utilities-decreases-red-tape-blamed.html

In a recent speech before the UCLA School of Public Policy, I spoke about the fact that we can build all the green power we want but we can’t get the transmission lines in place to handle it and that there did not seem to be enough emphasis on that critical issue. These delays are being encountered not only because of the issues that Mr. Morris notes above, but also because the issue of transmission lines routes are often held up by local land use rules and need to proceed through a lengthy, and increasingly contentious, CEQA process. Our laws and processes where not made to handle what some call a crisis, nor where they drafted with the idea that there would be a need for a demonstrative change in the basic backbone of our energy infrastructure. Unless there is some follow on legislation or regulations that removes these impediments, shortens the process or creates some alternative pathways to resolve the issues being faced, there is an unlikelihood of a successful transition to a major supply of green energy in California.

California Cap-and-Trade Revolt

A ballot initiative that would repeal the Golden State’s version of a cap-and-trade carbon tax is working its way to a vote by the California voters. In an Op-ed piece in the Wall Street Journal, the paper suggests that no matter what one thinks of climate science, it makes little sense for an individual state to unilaterally impose major new tax and regulatory costs on its own industries. “The law all but encourages outsourcing to Nevada, Texas, China and India. The stakes here are huge, and not merely for California. This is the first serious effort to roll back the environmental extremism that has dominated state capitals in recent years and is now ascendant on Capitol Hill. The green lobbies and businesses that have a monetary stake in cap and trade—including big utilities that want subsidies and Silicon Valley political capitalists investing in solar and ethanol—are sure to spend heavily to stop it. They know that an electoral defeat in the greenest of states could end their national and global hopes for cap and trade. For Californians the issue is simpler: Whether they want to continue to impose burdens that encourage employers to locate anywhere, except their once prosperous state.” See:

http://online.wsj.com/article/SB10001424052748703580904574638153342723572.html?mod=WSJ_Opinion_AboveLEFTTop

It is doubtful that the California voters will vote affirmatively on removing cap-and-trade and other parts of AB 32. As noted above, the California cap-and-trade program is geared to promise money to households to pay for the increased cost of green energy. This is highly appealing to the average voter. Further, cap-and-trade will be described as a key feature of making the green economy grow and prosper. But what the WSJ op-ed piece does demonstrate is that there is a growing volume of attack on various parts of AB32, not particularly on the issue of science, but on the issue of waste of time, money and effort. It is also a growing national trend. This bolsters the point I have raised before, that much of the climate change initiatives will be placed in the context of job creation to over come some of this push back.

Smart Meter Scare

Security Fears Threaten Smart Meter Plan

In UK, a public backlash has started concerning the use of smart meters for electricity. Fears that data on energy consumption could be misused by criminals, police or insurance companies have already curtailed the compulsory introduction of the meters in the Netherlands. Dutch consumer and privacy organizations were concerned that information relayed as frequently as every 15 minutes could allow employees of utility companies to see when properties were empty or when householders had bought expensive new gadgets. Because the UK is moving to install these devices to curtail energy usage, the utilities and government has come to the conclusion that many people do not like the idea of utility companies having a permanent window on their private life. Energy UK, which represents the six main gas and electricity suppliers, said: “The industry has been working flat out to develop the smart metering program since 2006 and continues to take on board lessons from other programs around the world.” The European Union said in 2006 that smart meters should be made mandatory, but voters in the Netherlands have vigorously opposed a compulsory rollout and succeeded in persuading politicians to vote against it. See:

http://business.timesonline.co.uk/tol/business/industry_sectors/utilities/article6987070.ece

One of the issues I have commented on in various presentations is that the average person has not yet felt the individual changes that may be required under any climate change regulatory scheme. It is one thing to be fully supportive of things that do not affect you directly (but will cost you something in the future) such as greening our power supply, but when it becomes personal, it’s a different matter. As the Dutch found out and the British are grappling with, climate change takes second place to personal freedoms and choice. Some further thought is needed. As an example, smart meters need not show when there is no or little energy use as a whole, but should aide the individual homeowner/user know where they are in a particular band of power consumption and offer warnings or actually restrict power to provide notice. Or, if there is truly a need to know when a homeowner/user is not home, consideration of methods to alleviate such legitimate concerns should be planned ahead of time and offered with necessary education.

Litigation Based on Uncertainty

Potential Lawsuit Highlights Interstate Tensions Absent Federal Climate Rules

A brewing legal showdown between North Dakota and Minnesota over the constitutionality of a requirement that utilities factor expected future carbon costs into their plans highlights lingering disagreement over how states will regulate GHG emissions in the absence of a national climate program. Such actions may spur calls from industry for the federal government to provide regulatory certainty. North Dakota Attorney General, Wayne Stenehjem, said late last month that he “very likely” would file a lawsuit in an effort to stop Minnesota’s requirement that utilities planning to sell electricity in the state—including those located beyond its borders—include in the proposals a $9-to-$34-per-ton carbon price that would begin in 2012. The Minnesota proposal is not a straightforward carbon “tax” or “tariff,” despite it’s portrayal as such in several press reports, according to state officials, industry sources and environmentalists. No fee is assessed on electricity sales, rather the estimates are used to compare different power generation options being proposed. Nonetheless, sources say the requirement disadvantages coal-based utilities in North Dakota by increasing their projected costs, and it is contributing to a shift towards renewable energy, especially wind, which is abundant in the two states. The potential Minnesota-North Dakota legal showdown is one of several state-level disputes that are playing out in the absence of a federal climate policy, and further highlights the desire among utilities for a single set of rules to play by as they plan for facilities expected to be in operation for 30 to 50 years or more. “There’s no question about the need for regulatory certainty,” another utility source says. See: 

http://www.bismarcktribune.com/news/local/article_a6fafd5a-f409-11de-bb24-001cc4c03286.html

This potential litigation raises two issues. The first is as noted, there really needs to be a federal law that could provide for a reasonably high degree of certainty of what the rules are so the players can plan and execute various plans. As it stands right now, that certainty does not exist. But more importantly from a legal standpoint are various constitutional concerns involving what one state can do to enforce its own climate change rules on another. And of course there are lots of political issues! Ultimately, many such issues will wind up before the Supreme Court of the United States.

Climate Change Summary Newsletter and Commentary

Climate Change Summary Newsletter and Commentary

January 4, 2010

By: Steven L. Hoch

California Impact

Quebec to Become First Canadian Province to Implement California Vehicle Standard

Regulations that will take effect Jan. 14, 2010, will make Quebec the first Canadian province to implement vehicle greenhouse gas emissions standards equivalent to those in force in California. The regulations will apply to passenger automobiles and light-duty trucks in the 2010-2016 vehicle years that are sold, leased, or otherwise marketed in Quebec and are expected to will reduce overall vehicle emissions by about 35 percent. See:
http://green.yahoo.com/news/nm/20091229/wl_canada_nm/canada_us_environment.html

The important concept here is not that Quebec is adopting California standards, but that California remains the incubation laboratory for GHG standards. What happens here not only influences the United State, but the world as well. Being aware of the California’s actions will be critical in permitting you to understand and shape policy in other states and the federal level as well. It will also give you a window to what may happen to your business in the near future even if you are not in California.

Federal Agencies May Have to Consider Climate Before They Act

The White House is poised to order all federal agencies to evaluate any major actions they take, such as building highways or logging national forests, to determine how they would contribute to and be affected by climate change. The new order would expand the scope of the National Environmental Policy Act (NEPA) which already requires federal agencies to consider environmental impacts such as land use, species health and air and water quality when approving projects. Under the order, agencies would need to account for whether such factors as predicted rises in sea levels would affect proposed new roads along shorelines; or whether, because of temperature changes and species migration, clear-cutting a patch of forest would result in new types of trees replacing the originals. California lawmakers mandated in 2007 that state-level environmental assessments take climate change into account. See: 
http://www.latimes.com/news/nation-and-world/la-na-climate-nepa1-2010jan01,0,438175.story

Indeed, California was out front in attempting to deal with such consideration through the California Environmental Quality Act. (CEQA) In California, climate change and CEQA has been a focal point of litigation led by environmental groups and the California Attorney General. The CEQA guidelines which set forth the manner in which such impacts are to be evaluated are not yet finalized, so the preceding 3 years have been chaotic. Once the guidelines for CEQA are finalized there will no doubt be litigation over their meaning and applicability. The current drafts indicate a somewhat open-ended and vague requirement for review without much finality over precisely how one will mitigate a problem that is stated as being “global.” Further, the final rules and regulations under AB32 will not be final (absent the inevitable specter of litigation) until 2012, and so there will be no basis to reference any state law to assist in the determinations under CEQA. The Feds would do well to view California’s somewhat backwards methodology and seek to set the rules first, and then apply them to NEPA.

California’s New Green Energy Law’s Effective 1/1/2010

SB 32 - expands the existing feed-in-tariff (FIT) program by requiring investor owned utilities (IOUs) and local publicly owned electric utilities (POUs) with 75,000 or more retail customers[1] to purchase all electricity produced by eligible renewable electric generation facilities that are up to three (3) megawatts (MW) in size and located within the service area of the utility. Essentially, if you produce power at your home and you don’t need it all, the POU and IOU in your area have to buy it but they there are limits on the purchases.

AB 920 - focuses on residential and small-business wind and solar projects by expanding the existing net-metering programs to allow net-metered customers to sell any excess electricity they produce over the course of a year to their electric utility. In the past, any excess electricity was the property of the electric utility without any compensation provided to the net-metered residential or small-business customer. While AB 920 is sure to create additional interest in solar rooftops and the like, one key limitation that faces this bill is the two and one half percent of the electric utility's aggregate customer peak demand cap placed on the net-metering program.

AB 758 - focuses on meeting California’s energy needs by decreasing overall demand through cost-effective improvements in energy efficiency. Specifically, AB 758 requires the California Energy Commission, by March 1, 2010, to establish a regulatory proceeding to develop a comprehensive program to achieve great energy savings in California’s existing residential and nonresidential building stock.

The move on both creation of incentives for individual home and business owners to generate part of their electric load and conservation are a core element of California’s energy saving scheme. These two aspects provide for the possible broad based support and contribution to a solution. The question, of course, will be how effective this can be alone in stimulating action by the states citizens. Likely, there will have to be tax or other financial incentives included to get over the initial investment impact that such systems mandate. Of course, who will pay for it and how remains to be seen.

Novel Approaches

Push Clocks Forward to Cut Carbon

The Royal Society for the Prevention of Accidents (ROSPA) suggests that to cut carbon clocks should be set forward. ROSPA says it has been requesting for many years for the UK to move to a system called Single Double Summer Time (SDST), which would put the clocks one hour ahead of Greenwich Mean Time (GMT) in winter and two hours ahead of GMT in summer. According to a recent Cambridge University study, the move would cut carbon emissions by 450,000 tonnes each year, equivalent to 85 per cent of all the power generated by wind, wave and solar renewable energy in England and enough to power every household in Edinburgh. See: http://www.thegreencarwebsite.co.uk/blog/index.php/2009/12/17/push-clocks-forward-to-cut-carbon-says-charity/

The concept here may well make sense. It would be worthwhile to make sure it works in other latitudes, which may be a key factor. But the concept of dealing with the low hanging fruit first in such circumstances is appealing. Another bonus is we get more acronyms! You gotta love more acronyms.

Cash Cows Boost Carbon Trading; Cleaning up in California Greenhouse-Gas Emissions

The thousands of dairy cows in California's San Joaquin Valley can produce the daily equivalent of waste of a good size town.  Manure is cleaned out of the barns with high-pressure water and turned into liquid slurry, which is pumped into an outdoor lagoon. The solid waste separates from the liquid and falls to the bottom of the lagoon, where it becomes food for bacteria. As the bacteria digest this waste, they produce methane gas that rises to the surface of the putrid lake, releasing thousands of tonnes of methane. A Quebec Company - L2I Solutions, is turning this odorous, harmful sludge into millions for itself and the farmers in rural California by creating a carbon-offset program, handling the paperwork and the verification process and acting as a middleman between the farmers and the carbon brokers, who do the actual selling and trading. 28 San Joaquin Valley dairy farmers have signed up with them to use a waste-filtering technology before pumping the manure slurry into their lagoons. The waste that is filtered out in this two-step process is reused as bedding for the cows and as fertilizer. As a consequence, less manure enters the lagoon, eliminating a good deal of the food for bacteria and the corresponding methane. The methane that has been saved or "offset" from entering the atmosphere can be quantified. One tonne of carbon dioxide equals one carbon credit. Since methane, according to the U.S. Environmental Protection Agency, has a global warming potential 23 times that of CO2, each tonne of methane not released into the atmosphere is worth about 23 carbon credits. L2I Solutions estimates in the span of the offsetting program, which runs until 2015, the farmers, together, can create about 1.6 million carbon credits. The price of those credits is variable.   See

http://www.kelowna.com/2009/12/21/cash-cows-montreal-based-l2i-solutions-is-turning-dairy-farm-waste-into-cash-with-the-help-of-carbon-brokers-cleaning-up-in-california-greenhouse-gas-emissions/

California has a very large dairy population and its existence is both an environmental issue to some but a definite economic plus to the region. The industry has been a favored target of environmentalists who have made some unusual suggestions on how to avoid and handle gas production from cows. So this solution may be a good alternative, creating less methane and get some money for it. The price of milk is very low and has been that way for some time and farmers are losing money hand over fist. So if the income from this process will assist them in stabilizing their businesses, it may make enormous sense. What we don’t need is our cows leaving for another state; we have all those great cow commercials which would be useless.

Electric Cars

Plug-In Cars May Not Soon Cut Oil Use, CO2 Emissions

Sales of plug-in cars, touted by the Obama administration and automakers as a way to curb oil use and greenhouse gases, may be held back for decades by battery costs, a study for the U.S. government found. Rechargeable autos in 2010 may cost $18,000 more to build than conventional gasoline cars because of their lithium-ion batteries, the National Research Council of the National Academies said in a summary of the study today. Batteries probably won’t be cheap enough until 2030 to spur sales that would reduce oil use and carbon pollution. The study suggests conventional hybrids that don’t need to be plugged in, such as Toyota Motor Corp.’s Prius, may be a better near-term option for curbing oil use. President Barack Obama has set a goal of having as many as 1 million plug-in electric vehicles on U.S. roads by 2015. To meet that target, the Energy Department this year provided $11 billion in low-cost loans and grants to accelerate production of rechargeable vehicles. To entice consumers, there’s a $7,500 U.S. tax credit for plug-in car purchases. See:

http://www.bloomberg.com/apps/news?pid=20601209&sid=auIq_IVzAkDI

Here’s the problem. It would appear that the push for full electric autos is on getting added steam from the power utilities. But the NRC is a fairly conservative scientific group that is not often to far off the mark, and thus this report should be taken seriously. Let’s analyze this: 1. Electric cars will be too expensive and to have them built and sold economically will require government subsidies (not just rebates) to get them built profitably. 2. We need to get more power (presumably green) to “fuel” these vehicles and that is a long range problem that has many components that remain, as of yet, unresolved (like getting enough transmission capability). 3. A little known fact is that the world’s leading supplier of the material used in these batteries is China. It makes no real sense to put the car before the battery. Hybrids make a lot more sense, but they need to be bigger and come in all variants, trucks, SUVs, large sedans etc. We can dream of a green Hummer (now owned by the Chinese by the way).

Cap and Trade

Senate Rules Force Review Of Tax Incentives To Supplement Climate Bill

With Senate budgetary rules forcing a reduction in the number of allowances that could be distributed in a cap-and-trade program, proponents of pending legislation are looking for other mechanisms that could be used to provide incentives for key stakeholders and generate buy-in from wavering senators, and there is some talk of including modifications to the tax code to benefit manufacturers and clean energy companies in lieu of giving as many allowances to those industries as in the House bill, according to sources on and off Capitol Hill. Senate budget rules differ from the House by requiring a longer view on assessing deficit impacts from spending proposals. With the Obama administration focused heavily on job creation—and a yet-to-be-written Senate jobs bill seen as a higher immediate priority than climate legislation—there also is something of a tug-of-war emerging over what package will see more clean energy tax incentives attached to it. Some say those measures may be more likely to appear in a quick-moving jobs bill than climate legislation whose path to passage is much less clear, but there also is said to be push-back from Senate leadership against any effort to strip from a climate bill provisions that could be vital to garnering votes. See: http://carboncontrolnews.com/

Let’s face it, with unemployment at 10% anything that Congress does is going to be scrutinized by the public first as to its impact on jobs and the economy and likely a far second, the environment. Also, there is a real possibility that cap-and-trade will not succeed so that tax policy to induce “green jobs” may be necessary so that both the economy and the environment are positively impacted, or at least one is. Having both negatively impacted would be real dumb. This is a high stakes poker game that will be played out in Washington DC early in 2010 (or as soon as health care is passed, defeated or otherwise dealt with).

Rutger’s Scientists Oppose Cap-and-Trade

Several prominent Rutger’s scientists have come out strongly against cap and trade. Cap-and-trade is a pretty lousy idea," says Paul Falkowski, Ph.D., director of Rutgers University's Energy Institute. "It doesn't reduce emissions in the near term, and we have to reduce, not just keep emissions steady. If we put a cap on and start trading, we'll slowly get off a carbon diet, but it's not going to be a steep curve, and it's going to be painful." Karina Schäfer, Ph.D., a Rutgers ecosystem ecologist, is similarly skeptical about a carbon market: "Cap-and-trade will be the next bubble. We've seen how unstable the financial and housing markets are - we've watched them increase and crash. Do we want to have the earth's climate rely on those instruments?" Another problem some scientists see with the cap-and-trade scheme is the inclusion of carbon credits for areas that operate as "carbon sinks" such as forests and wetlands that sequester carbon in plant matter and soil, keeping it out of the atmosphere. Industries and utilities can buy credits as part of their obligation to reduce emissions, lessening the financial pressure to build renewable sources of energy. Falkowski opposes carbon credits on principle. He remarked, "Imagine this scenario. A burglar comes in and steals everything in your house. You're left with nothing. You go out and ask for $5 for dinner. The burglar gives you $5 and then wants a tax credit for being so generous. We have deforested the eastern lands, and we want a carbon credit now that we're letting a little bit of it grow back. It's a political game." See: http://www.newjerseynewsroom.com/science-updates/new-jersey-scientists-oppose-cap-and-trade-support-carbon-tax

They are not the only ones. Slowly, cap-and-trade appears to be losing its luster in the United States for many reasons, some real and some highly absurd. The uncertainty as to what the economic system will look like that drives climate change initiatives is now decreasing carbon trading prices and contracting the market, making it look less viable when it is just reacting to its environment. There are lots of good things to say about cap and trade though as a viable system that will not immediately fix the perceived problem, but will create a market based incentive to fix the problem over the medium and long range, which is likely where it is really needed. The complexity of the system, however, may prove to be its own worse enemy to get it passed into law and has to be simplified as much as possible to permit carbon to be traded appropriately with the goal of reduction of emissions in mind as opposed to merely making money on the trade. Brokers should have fun with new TV ads offering their carbon trading services by the ton! However, watch California. Our cap and trade system will be on the books by 2012!