In August 2006, the California state legislature passed the landmark Global Warming Solutions Act, which mandates that the state's green-house gas emissions be rolled back to 1990 levels by 2020. NRDC co-sponsored the legislation with Environmental Defense and, with the help of NRDC's sister group Environmental Entrepreneurs, brought industry and business leaders together in favor of regulations across all sectors of the economy. It was with the support of high-profile businesses such as Pacific Gas and Electric that the assembly passed the bill, which establishes the world's toughest carbon dioxide reduction goals.
"This was the moment that we'd all been waiting for," says NRDC president Frances Beinecke. "The whole world was watching to see whether California would pass this bill. Now the world will watch as California takes the lead in developing a comprehen-sive greenhouse gas control program and a clean energy market."
Such a market is already evolving, and California is at the forefront of the clean technology wave. The state will need to use a broad range of strategies to meet the aggressive greenhouse gas reduction targets set by the act. These will likely include tough regulations, incentives, and market mechanisms, such as a carbon-trading framework that will operate much like a stock exchange, allowing California businesses to identify the most cost-effective ways to meet the statewide emissions caps. This so-called cap-and-trade approach will enable California businesses to buy and sell carbon emissions credits in a global marketplace.
California's law will also serve as a springboard for national action. Last fall Governor Arnold Schwarzenegger met with former New York Governor George Pataki to discuss plans to cooperate on greenhouse gas emissions programs. California businesses may one day trade carbon emissions with utilities operating in Northeast and mid-Atlantic states, from Maine to Maryland, under the Regional Greenhouse Gas Initia-tive, a cap-and-trade system that will go into effect in 2009. NRDC played an instrumental role in negotiating the policy framework for the northeastern initiative, which aims to reduce emissions by 10 percent by 2019. That may not seem like much, but considering the current rate of increase in emissions, it will slash greenhouse gas pollution from the region's electric utilities by 35 percent, relative to what it would have been without any caps. Pennsylvania, Massachusetts, and Rhode Island are considering joining the northeastern initiative, and several western states, led by New Mexico, Utah, and Montana, are looking to establish a similar framework in the West.
California's market-based system could link up not only with the East Coast program but also with the European Union's carbon trading sys-tem, through which 25 member nations could buy and sell emissions credits with participating U.S. businesses.
Broadening state-level support for global warming solutions could help spur federal action to head off the disastrous consequences of cli-mate change forecast by leading scientists. Not the least of the hazards posed by the accumulation of greenhouse gases in the atmosphere is the threat to our national economy. "Most climate scientists now warn that time is short for beginning serious emission reductions if we are to avoid dangerous climate impacts," said Daniel Lashof, science director of NRDC's Climate Center, in an article he co-wrote with NRDC colleagues for the November 3 issue of Science magazine. "A new approach is needed that is capable of gar-nering enough support to be enacted promptly while also requiring the deep reductions needed by midcentury." With a new Congress around the corner, Lashof and his colleagues have offered up a three-pronged strategy, based on the emissions reduction schemes being formu-lated on the state level, that will allow the United States to minimize the economic impact of carbon regulations on businesses and consumers while increasing its investment in the clean energy technologies that will offer long-term emissions reductions.
"It's a centrist approach that lets everyone win," Lashof says. "Begin now and we can avoid the economic burden of a crash finish."