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ALEX COHEN, host:

From NPR News it's Day to Day.

And today California released a plan that would reduce the state's greenhouse gases by 10 percent by the year 2020. Congress rejected a similar federal plan less than a month ago. California says cutting emissions will not only benefit the planet, it will benefit the economy. Marketplace's Sam Eaton is here now and Sam, this is a win-win, California is saying. How does it plan to meet emissions reduction of what? Ten percent?

SAM EATON: Well today's announcement is essentially a blueprint for how California will deliver on that ambitious climate law passed back in 2006. And what today's details reveal is a plan that will touch virtually every sector of the state's economy. Coal-fired power plants, landfills, transportation, you name it. The primary tool is a cap and trade system like the federal system that would essentially turn CO2 emissions into, or the reduction there of, into a new currency that can be bought and sold. The thinking behind this is that is that it would use market forces to reward the energy efficiency in everything from buildings to electricity generations to the kinds of fuels oil companies sell here. The program would also encourage things like walkable cities, high-speed rail instead of air travel, and more hybrid cars.

COHEN: So this sounds like it might necessitate a big investment. So how does it benefit the economy?

EATON: Yeah, this is where - there definitely are huge costs involved here and state officials say they're still trying to work out the specific numbers, especially when it comes to the price tag for individual industries. Obviously big emitters like coal-fired power plants and oil companies will be hit hard, but overall, state regulators say the benefits of the climate program will outweigh these costs and in fact they predict it would actually give California's economy a one-percent boost beyond what it would be under a business-as-usual scenario. I talked to Berkley Climate Policy Expert Dan Kammen and he says critics' prediction that energy costs would spike are unfounded.

Dr. DAN KAMMEN (Climate Policy Expert, UC Berkeley): Diversifying the energy economy is the single best defense against high prices, and in fact when Colorado passed its renewal portfolio standard, it saw electricity rates go down for consumers.

EATON: And that's because new investments in Colorado in wind power buffered the state against the surging natural gas prices. California, of course, would do this on a much larger scale.

COHEN: So as we said earlier, Congress rejected a similar plan a little while ago. Does California face any risks by going it alone?

EATON: Well it definitely - it's definitely going to be a long four years between now and the plan's official 2012 start date, and there's a lot to be worked out between now and then as thousands of stakeholders try to influence how it plays out. Obviously it would be much easier to do this under the guise of a nationwide climate plan with all the resources that would come with that, especially if costly mistakes were made.

COHEN: Thanks Sam. That's Sam Eaton of public radio's daily business show Marketplace.

BRAND: A look of the town of Unity, New Hampshire when Day to Day continues.

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