< California Gets Tough on Global Warming

IRA FLATOW, host:

This is TALK OF THE NATION: SCIENCE FRIDAY. I'm Ira Flatow.

Supporters call it a groundbreaking environmental law. Opponents say it spells economic doom, and besides that, in the end, it won't help the environment. What am I talking about? I'm talking about the law that was passed last month by the state of California. It's the first law in the nation, first federal or state law, that aims to curb global warming by setting mandatory caps on greenhouse gas emissions.

You'll remember that's what the Kyoto Protocol did. And that was one of the reasons why the U.S. refused to sign onto that protocol, saying mandatory caps would harm the U.S. economy. But California, the 12th largest emitter of greenhouse gases in the world said, well, we'll go it alone. So the state is taking the lead, as it has done in the past. As we know, California has led many, many things in reducing emissions and this time targeting the state's largest polluters.

So this hour, California's plan to curb greenhouse gases and slow global warming. Can a state actually cut its emissions without wrecking its economy? What new technologies will need to come online so these tough standards can be met? And will it make a difference globally? What California does if other states don't follow suit and the federal government refuses to take action.

Our number: 1-800-989-8255, 1-800-989-TALK. Do you think your state should do the same thing? What do you think about California, can one person make a difference?

Let me introduce my guests. Dan Kammen is a co-director of the Berkeley Institute of the Environment and professor in the Energy and Resources Group at UC Berkeley. He joins us today from the campus.

Welcome back to the program, Dr. Kammen.

Dr. DAN KAMMEN (Co-Director, Berkeley Institute of the Environment, UC Berkeley): Thank you so much.

FLATOW: You're welcome. Margo Thorning is senior vice president and chief economist at the American Council for Capital Formation in Washington, D.C. She joins us from her office there.

Welcome back to the program, Dr. Thorning.

Dr. MARGO THORNING (Senior Vice President and Chief Economist, American Council for Capital Formation): Thank you.

FLATOW: You're welcome. Terry Tamminen is the author of Lives Per Gallon: The True Cost of Our Oil Addiction, just out from Island Press. He is a special adviser on energy and environmental policy to California Governor Arnold Schwarzenegger and former secretary of the California Environmental Protection Agency in Santa Monica. He joins us from KPCC in Pasadena. Welcome to the program.

Mr. TERRY TAMMINEN (Author, Lives Per Gallon: The True Cost of Our Oil Addiction): Thanks for the invitation.

FLATOW: You're welcome. Was the governor very much behind this? Was this his idea?

Mr. TAMMINEN: Oh, absolutely. Three years ago when Arnold Schwarzenegger was a candidate for governor, we drafted an environmental action plan which included dealing with climate change. And we laid that architecture in place over the first two years of his administration and then over this past year put an entire climate action plan into place, part of which got made into law in the form of our Assembly Bill 32 and another bill, 1368, that are the subject of I think what we're talking about today and include the caps and some market-based ways to achieve the reductions.

FLATOW: Give us a little thumbnail sketch for all the other folks outside of California who are not familiar with what this law does. Tell us a little bit about it.

Mr. TAMMINEN: Well, it says that - first of all, I think one of the most important parts of the bill are in the preamble. The legislature has looked at the science. It believes that California is already suffering impacts from global warming, which range from losing our snow pack in our Sierra Nevada Mountains, which is the source of much of our drinking water and agriculture water and so forth, to coastal erosion and human diseases already evident. And so therefore the legislature says we've got to act.

And the key components of the bill, they take the targets - which Gov. Schwarzenegger announced last June in 2005 - and makes them the law, as you mentioned in your preamble, that they are now the cap in California on these greenhouse gas pollutants. And we're trying to dial back about 25 percent from where we are today by the year 2020.

And then it says that the California Air Resources Board will be the architects of how to accomplish those reductions and to live under those caps. And the Air Resources Board is the world-class regulatory body that has delivered a lot of these kinds of programs which have been very, very successful in cleaning up our air.

FLATOW: Other pollutants - sulfur - have worked very well. A system of cap and trade has worked well. Is cap and trade the same policy working here? Can you trade the credits?

Mr. TAMMINEN: It is. As you mentioned sulfur...

FLATOW: Yeah.

Mr. TAMMINEN: Exactly. Sulfur dioxide, which was responsible for acid rain, we don't have that threat any long, particularly in our Northeast of the United States, because of a cap and then trading. Same thing with lead in gasoline. We got the lead out as a result of this very same concept.

FLATOW: Mm-hmm. Dan Kammen, is this law taking the right approach, do you think, to reducing greenhouse gases emissions in California?

Dr. KAMMEN: Oh, I really think it is. I mean it's taking an economy-wide look for the first time, and that's really important because that gets everyone involved. And with the cap and trade system that Terry's talking about, we've also got a market force where industries are going to get the opportunity to pick and choose.

Some will be real innovators and will decide that they can meet and beat these targets and then have emissions credits to sell on a market. Others will decide they're going to kind of keep up with the targets and they will kind of be neutral on whether they need to buy credits or sell credits. And others will say that for their particular industry it's better to buy the credits and to offset that way.

So you've got good pushes for innovation, you've got economy-wide aspects of the trading scheme and you've also got the opportunity for individual companies to pick and choose. And I really do think that that's not only the right recipe, but California has passed a series of other laws that also are lined up with this one so that we really do have a whole set of structures in place that really make this a landmark event.

FLATOW: Margo Thorning, you don't think this is going to work.

Dr. THORNING: I think the challenges that California regulators and business and households will face are going to be really substantial. For one thing, the AB 32 requires about a 40 percent reduction in CO2 between 2000 and 2020. And that is a very serious challenge, especially when you think about the increased population. California's population will increase about 20 percent by 2020, and each new person requires more jobs - I mean requires more energy for jobs, for education, recreation and so forth.

So the challenge to meet the targets in AB 32, as well as the 1368 performance requirements and solar mandates and so forth, is going to impose very substantial economic cost. And I think California policymakers have not been well-served by the quality of the analysis that has come out in terms of trying to quantify the impact of higher energy prices on investment, on productivity growth and job growth.

FLATOW: Terry, can you respond to that?

Mr. TAMMINEN: Well, a couple of things. First of all, the fossil fuels that power much of our energy today are heavily, heavily subsidized. And so when Margo talks about adding costs in the future, what we're really doing is taking a look at those externalities.

In my book that you were kind enough to mention at the top of the show, Lives Per Gallon, I document the fact that we're spending almost a trillion dollars a year subsidizing the oil industry alone, and much more going to coal and some of the other fossil fuel industries. And that's in the terms of healthcare and defending our supply of those raw materials and crop damage and a whole host of other things.

So if you move toward more sustainable, renewable energy, and if you become more efficient, which California has done in the last 30 years - we are now about 40 percent more efficient per capita in terms of our energy consumption than the rest of the United States because of energy efficiency measures in our buildings and appliances and so forth. So if you move toward renewables and more efficiency in the energy that you are consuming, you can actually do this. And there's enough history to prove that it can be done and that it's ultimately good for the economy. It creates local jobs.

I mean just one quick example. You can't offshore the electrician's job who's going to put a solar panel on someone's roof. You can't send that job to India. That's something that'll happen right in California. You can't offshore the conversion of agricultural waste and by-products in the Central Valley in California to energy, when you convert those waste products to energy, you can't send that job over to China. So these are good for the economy and very good for the environment.

Dr. THORNING: I think that's a misconception. There will be job loss in many sectors because of rising electric utility prices, as well as transportation costs, if policies are actually imposed to force energy prices up and try to move toward renewables. Renewables are two to three times more expensive than currently generated electricity. There will be job loss in other sectors.

There may be some job gain in installing solar roofs. Which, by the way, retrofitting a house is about $27,000, and I understand strong initiatives to do that in California. But those will be subsidized by the taxpayer, and higher taxes in general are going to slow and reduce economic growth.

Dr. KAMMEN: I'm going to have to disagree with Margo on a couple of these points. Now the first is that the analysis that the state has received from a variety of sources - Boston-based consulting groups, my laboratory here at UC Berkeley, analysis performed by and for with the California Environmental Protection Agency - all indicate that the job benefits in many of these areas actually far outweigh the potential losses.

And so whether it's just a question of sort of dueling analysis or in fact the approach taken to look at what has worked well in California's economy, the success story that Terry mentioned with energy efficiency making us much more efficient than the national average came actually at a benefit to the state.

These sets of studies all clearly indicate that it's not just a little bit of money going to the solar home industry, but it's also building out ways to utilize our bio-fuel waste for fuels for power plants and to make liquid fuels for our vehicles, the potential to not only install wind power and solar-thermal in large parts of California but also - because California's not a power island, we buy and sell power with our neighboring states - to see those installations going in a variety of western states. A lot of the analysis indicates that this will be a job winner for the region and in fact is a large economic benefit. And so I do - I really want to dispute from the beginning this assertion that this is necessarily an economic loss. That's probably not true.

FLATOW: (unintelligible)

Mr. TAMMINEN: I also want to take issue with one other thing...

FLATOW: Sure.

Mr. TAMMINEN: ...if I may that Margo said. I'm - I've got a new duplex that I'm remodeling in Santa Monica, and I'm about to put a solar array on the roof that will cover about 80 percent of my energy use. And it's about $15,000 before any taxpayer-subsidized rebate, and it will pay itself back in about six or seven years. Obviously, a little bit longer if there wasn't the rebate. But again I would highlight the fact that fossil fuels are enormously subsidized today.

FLATOW: All right, we're going to take a short break and come back and talk lots more about the issue of global warming and California's initiatives to do something about it in that state with Margo Thorning, Dan Kammen, and Terry Tamminen and your questions. 1-800-989-8255. Stay with us. We'll be right back.

I'm Ira Flatow. This is TALK OF THE NATION: SCIENCE FRIDAY from NPR News.

(Soundbite of music)

FLATOW: You're listening to TALK OF THE NATION: SCIENCE FRIDAY. I'm Ira Flatow. We're talking this hour about California's global warming plan with my guests Margo Thorning, senior vice president, chief economist at the American Council for Capital Formation; Dan Kammen, co-director of the Berkeley Institute of the Environment and professor in the Energy and Resources Group at UC Berkeley; Terry Tamminen, special advisor on energy and environmental policy to California governor Arnold Schwarzenegger and author of Lives Per Gallon: The True Cost of Our Oil Addiction. 1-800-989-8255.

Margo Thorning, just a question to you about when you do these cost analysis, like you had a huge paper on it that was very interesting to read, where do you factor in the cost of a city going underwater? I mean how do you factor in the cost of how much it costs to keep a city with global warming and the ocean's rising, like Los Angeles, New York, all the East Coast/West Coast cities? Where is that in your cost analysis to preventing that versus taking these measures, which may be costly but will - might prevent global - the kind of global warming and the sea ocean rise?

Dr. THORNING: Well, I think you need to step back and look at climate change and reducing greenhouse gases as a global problem, as you mentioned. The question of what's the most cost effective way to reduce greenhouse gas emissions globally, I think we need to focus on developing new technologies: carbon sequestration, cleaner fossil fuels, more nuclear power for electricity generation.

We need to address this globally because the growth in emissions is not coming from California or even from the U.S. I don't know if you're aware that U.S. energy consumption actually fell in 2005 compared to 2002 even though we had a strongly growing economy. So where we need to think about reducing emissions is in the developing world and getting the technology transferred there so that over time we can slow the growth of emissions and perhaps even stabilize it.

FLATOW: So you say we should just...

Dr. THORNING: (unintelligible)

FLATOW: ...we just shouldn't do anything here because it's not going to affect global...

Dr. THORNING: No, that's not what I'm saying. Voluntary measures are fine. California's very energy efficient, as the previous speakers have noted. You've already made very innovative changes. You've also lost a lot of manufacturing jobs, but you've made many changes to make your industry more efficient.

But what we need to do to address the threat of climate change is help developing countries, who will be responsible for virtually all the growth in emissions over the next two or three decades, use energy more cleanly. They need energy for economic growth. They aren't - China's already said they won't accept caps. So we need to help transfer the technology to places where it's cost-effective to do so.

My point is it's not going to be cost-effective for California to drastically reduce their emissions as AB 32 requires because California emissions are only approximately 6 percent of U.S. emissions now. They're about 1.7 percent of global emissions of greenhouse gases. And they're falling as a share of global greenhouse gas emissions, you know, because of the growth in emissions is in the developing world.

So we need to focus on strong economic growth, pulling through cleaner, less-emitting technologies, letting the rest of the world have access to these technologies, and then we can make a difference. I honestly think it will make virtually no difference no matter what California does. But what you are doing is setting yourself up a very stiff economic challenge based on a variety of different research studies. So it's going to be mostly all pain, no gain. There won't be, Ira...

Dr. KAMMEN: Ira, I've got to disagree with that.

FLATOW: Okay, go ahead.

Dr. KAMMEN: Okay, I mean I actually think that, a, the numbers are wrong but, b, the philosophy is dead-set incorrect. What we've seen consistently is that places that invest in cleaner energy technologies, better environmental protection, actually do better economically. The economic gains of doing this are likely to be quite large.

And even if that weren't the case, the California economy is one that's got a remarkable range and resource of clean-energy technologies available to be brought online, from biomass to solar to wind to likely one of the birthplaces of nano energy and a whole variety of things. And it's good business to invest in those companies.

And furthermore, to expect developing countries to invest and innovate in these technologies and adopt them when we decide to stand pat makes absolutely no sense. The best way to have a partnership, economically or politically, is to take advantage of your opportunity to lead and to do so. And because we see economic gains - again, the studies I mentioned all clearly point to an economic win for California even without the environmental aspects - the strategy that Margo is pointing out is really one of doing nothing when in fact economically and environmentally we need to cut emissions here even with the cuts that are needed in developing countries. We need over the next 50 years to reduce greenhouse gas emissions by 80 percent or more. Even with the developing countries collectively going to overtake the north in their total emissions in a decade or so, we're still going to have to make major cuts here. And the best place to begin that is where we have the economic and technological muscle to really put those in place and lead by doing.

Dr. THORNING: If we...

Mr. TAMMINEN: I would actually agree with something Margo said, though, which is that we can develop the technology and lead the rest of the world. But if we don't do that with enlightened regulation and pushing the envelope a little bit, as we've done in California, that won't happen.

I'll give an example: catalytic converters on cars. If we had all said, well, let's just let the emissions from our cars continue to poison our citizens and wait for the developing world to catch up, we wouldn't have catalytic converters, we wouldn't have much cleaner cars today. We have a long way to go, to be sure, but we wouldn't have that.

And I would, however, just take issue with one thing Margo said, which is that the United States is already kind of reducing its greenhouse gases or becoming more energy efficient.

In Texas, they're currently proposing 19 old-style, coal-fired power plants, pulverized coal - some of the dirtiest technology around - and if built - and they're on a fast track to be built - if those are built, they will offset all the reductions we're going to get in California in the next 20 years. They would make Texas an emitter of greenhouse gases equal to California, New York and Florida combined. So we have a long way to go in this country before we can say we're showing any kind of leadership and point the finger at anyone else.

Dr. THORNING: Well, I'd like to point out that the EU, which is often held up as an example of an area that's supporting strong greenhouse gas emission reductions by having signed the Kyoto Protocol, the EU has reduced its emissions' intensity at about half the rate the U.S. has over the past five years. We're doing much better at reducing the amount of energy per dollar of output because we're growing four-times faster than they are. Furthermore, their own environmental agency data shows that only three of the original 15 member states will actually hit their Kyoto targets in 2010.

So countries that have experimented with this cap-and-trade approach, they're having great difficulty in meeting the targets. And the political figures simply are not likely to be able to raise energy prices enough, especially on the transport sector, to force down energy use to hit these targets. So the cap-and-trade approach is simply not a viable way to go forward, and the U.S. has managed to reduce energy intensity along the plan that the Bush administration laid out in 2001.

So I think we are making progress and we are trying, and we're spending $6 billion, $6 billion taxpayer dollars a year on climate change. So it isn't that we are standing pat. We actually have reduced the absolute amount of energy used last year and we're reducing the amount needed to produce every dollar of output while growing strongly.

Mr. TAMMINEN: Let's be clear about one...

FLATOW: 1-800-98...

Mr. TAMMINEN: ...Let me just make one quick point, if I may. Let me be clear about one thing, because we are so focused on the cap and trade and whether it's working in Europe or not.

Capping emissions on industrial emitters and then allowing them to trade as a way of collectively reducing over time their emissions will only actually get us to about a third of the reductions that we need. The rest are going to have to come from energy efficiency in our homes and our electric-generating sector. And a big part that is the 800-pound gorilla we're not talking about is the transportation sector. And in California we have a law that requires cars to reduce their greenhouse gases starting with the 2009 model year - which we're in court - that the car companies backed by some of the other business interests are challenging us on that.

And yet that's technology that's off the shelf that is already inherent in Toyota and some of the other more progressive carmakers.

FLATOW: 1-800-989...

Mr. KAMMEN: Okay...

FLATOW: ...let me just go to this phone call, because it's relevant to what we are talking about, what people are doing abroad. I want to bring in Evie(ph) from Copenhagen, Denmark. Hi. Welcome to SCIENCE FRIDAY.

EVIE (Caller): Hi. Thanks for letting me participate. I just want to say that I think we should be applauding California's initiatives, because I'm no energy expert but I have an interesting perspective from another society where it's so built in.

It's an inherent part of every day life here in Europe that people think about things like this, just the kind of cars that they drive, the way that they use water, you know, electricity. People are so focused on turning off lights when you leave a room or, you know, you don't need to turn lights on during the daytime if the sun is shining.

And things like the size of the packaging of just everyday items. When we - we came here from Texas. And when we lived in Texas every week we would have, you know, three or four big cans of garbage. But here you have to pay if you have more than one can of garbage. You have to pay extra.

So people are just really, really focused on it. And I think if they don't do something about it California or in the United States nothing's ever going to happen.

So it's hard to understand the perspective of your woman guest who says, you know, this isn't going to work. But I don't hear any other alternatives coming from her.

Ms. THORNING: Well, there is an alternative. And let me add that Denmark is projected to be 18 percent above its cumulative target in 2010. So apparently you're going to have to pay more to get your energy use down and your greenhouse gases down.

But there is an alternative. One based, for example, on the Asia-Pacific partnership on development and climate change that was signed last year between countries that emit 54 percent of all greenhouse gas emissions, including China, India, Japan, Korea, Australia, and the U.S.

And the intent of that is to try to encourage the sort of market-based reforms that will help the developing countries get access to cleaner, less-emitting technology.

For example, every new piece of equipment that's installed in China uses approximately four times more energy than a similar piece of equipment installed in the U.S. If the Chinese and the Indians had access to the very highest quality technologies for producing electricity for manufacturing goods and services, their emissions per dollar of output would be a fraction of what they are.

So global greenhouse gas emissions would grow much more slowly. But...

FLATOW: But you just - but you're just arguing, you're arguing against what you said before because you said that it would cost - be an economic hardship to create these new energy efficient...

Ms. THORNING: No, that's not true. I think we do need - and we are spending money as a society on clean coal technologies, coal gasification, carbon sequestration, new nuclear power generating systems. We are spending money and we expect and hope that those will lead to ways to produce goods and services with less energy and with less of all types of emissions.

That's done in the normal capital stock replacement cycle rather than as the new technologies become available they'll be implemented as it's time to replace capital not prematurely over a three or four or five year period.

That's what...

Mr. KAMMEN: Ira, can I speak to the capital issue briefly after...

FLATOW: Sure. I'll wait until...

Mr. KAMMEN: So, Margo, I find this argument very odd because as we both know the amounts of new coal-fired power plants scheduled to be built without the sort of leadership that not just California but the European Union and now New York and New England and Sweden are all looking to do will be over a trillion dollars of the capital you're talking about being put in.

And unless we set up the economic environment so that it makes sense to them because they're required to and they see the opportunities to make those much cleaner, carbon capture and storage ready is one part of it. But many plants can be offset by building cleaner solar wind biofuel plants instead.

And those are equally good cash-generating investments. We're not going to get There, because the amount of fossil fuels that we could potentially emit if we don't change this pathway will far overwhelm the climate system. That's scientifically established fact.

We have roughly 50 years to make a dramatic difference in our carbon emissions, not our lifestyle necessarily but our carbon emissions. If we don't do that we are going to be living in a world very different environmentally than we have any desire to live in.

These are the sorts of policies that will actually begin that process. And what you described was really a let's-hope-and-see-what-happens-when-we-retire-these-plants. We actually need to get a new generation of cleaner renewable and better fossil fuel plants starting to go online now.

And with a trillion dollars of fossil fuel investments likely to happen soon if we don't, this is not something to wait two or three decades and see what comes on line. This is a chance to operate now.

FLATOW: We're talking this hour about California's global warming plan on TALK OF THE NATION: SCIENCE FRIDAY from NPR News.

Evie, how do you like those wind generators out there?

EVIE: They're great. I was just thinking about that when you guys were talking about that. Don't forget about that because not only are they efficient but they're also - they look so beautiful. When you drive through a beautiful green area and you see all these huge windmills going around or out on the water, I think that that's something else that the people should really think about.

And I guess, you know, you guys are the experts so you - you continue this argument but just think about conservation and changing the whole way people think in the United States.

FLATOW: All right. Good luck to you out there.

EVIE: Thanks.

FLATOW: Thanks for calling. 1-800-989-8255. It's very interesting you talk about Texas building all those coal-powered plants. They are in now - they're also jumped into the lead for wind power in the U.S. So there's really a dichotomy going on in Texas.

Mr. KAMMEN: Well, usually - part of that in Texas is, of course, that the wind plants that they were building came in below cost in many of the cases. They discovered they were cheaper than building new natural gas plants.

And of course diversifying your mix so you've some natural gas, some wind, some solar facilities makes you much more insulated against the sort of price shocks and external threats be they in the Persian Gulf or elsewhere that we're now very concerned about now.

So just on economic grounds, diversifying our mix into these renewable-based technologies is good, sound geopolitical strategy as well.

Ms. THORNING: I would like to point out...

Mr. TAMMINEN: I would also...

Ms. THORNING: ...Texas implemented that because of mandates that the legislature imposed. It was not a market-based solution to the need of Texas and their growing population for more energy. It was mandated. And that's generally true across the U.S.

FLATOW: Is that a bad thing?

Mr. TAMMINEN: As Dan pointed up - as Dan pointed out...

FLATOW: Let me ask Margo, is that a bad thing, Margo?

Ms. THORNING: I think you have to weigh the cost of raising the price of electricity and raising taxes so that taxpayers can subsidize these type of renewable technologies. You have to weigh that against its impact on economic growth.

What could we do with an extra 1 percent of economic growth? Could we do more to alleviate global poverty? Would we be able to make more investments toward future technologies that will enable us to perhaps move away totally from fossil fuel.

So everything...

Mr. TAMMINEN: But Margo, I've got to...

Ms. THORNING: ...is a trade off.

Mr. TAMMINEN: ...I've got to jump in here because again in my new book, Lives Per Gallon I articulate we're spending almost a trillion dollars a year in the United States alone to subsidize the oil industry. And that doesn't even begin to get into coal or the nuclear industry. A trillion dollars a year.

And so if you want to talk about leveling the playing field and about, yes, maybe there are some subsidies in California - for example, we have a program to incentivize people to put solar on their roofs. It's a declining rebate program so at the end of 10 years you don't need the subsidy because mass production kicks in, brings down the cost for everyone, et cetera.

But the fact is that's just playing catch-up to the trillion dollars of subsidy that is currently going just to the oil industry. What could we do in this country - to your question, what could we do in this country with a trillion dollars if it was not going to subsidize the wealthiest corporations in the history of commerce?

FLATOW: All right, we will let you ponder that over the break because we have to go away for just a few moments. Stay with us. We'll be right back with more SCIENCE FRIDAY.

I'm Ira Flatow, and this is TALK OF THE NATION: SCIENCE FRIDAY from NPR News.

(Soundbite of newsbreak)

(Soundbite of music)

FLATOW: You're listening to TALK OF THE NATION: SCIENCE FRIDAY. I'm Ira Flatow. Coming up on Monday on TALK OF THE NATION Neal Conan will be here with a look at America at 300 million. If you haven't talked about it enough, here's another opportunity to talk with Neal about the population growth.

Are we better off or just in a need of more parking? That's on Monday's TALK OF THE NATION.

We're talking this hour about California's plan to fight global warming with Dan Kammen, co-director of the Berkeley Institute of the Environment; Terry Tamminen whose latest book is, Lives Per Gallon: The True Cost of Our Oil Addiction; and Margo Thorning, vice president - senior vice president and chief economist at the American Council for Capital Formation in Washington.

Also joining us now is Karen Douglas, director of the California Climate Initiative at the Environmental - at Environmental Defense in Sacramento. Environmental Defense was a co-sponsor of AB32 which, as we have been talking about, is a first-day law that caps emissions of greenhouse gases.

I think the question we can now turn to is will other states follow? Is this the best way to go having each state come up with their own laws to address climate change?

Karen Douglas, welcome to the program.

Ms. KAREN DOUGLAS (Director, California Climate Initiative): Well, thank you very much. Good afternoon.

FLATOW: Are we - can we expect other states to follow along here?

Ms. DOUGLAS: Well, I think we certainly can. I think what we're seeing here is a vacuum of leadership at the national level. And in that vacuum a very powerful wave of local and state efforts to address global warming and take decisive action.

We've seen California step up. We saw Governor Pataki of New York joining Governor Schwarzenegger at the signing ceremony for AB32. And a number of states have very far-reaching efforts going on at their state levels to address this issue.

FLATOW: Two Republican governors.

Ms. DOUGLAS: Two Republican governors standing up at a ceremony to sign a bill passed by a Democrat-controlled legislature. It was a very bipartisan effort in California. And this issue - addressing this issue has bipartisan support across the country.

Ms. THORNING: I'd like to weigh in on that. The RGGI effort, which the speaker's alluding to, is actually...

FLATOW: What's a RGGI - what's a RGGI effort?

Ms. THORNING: Regional Greenhouse Gas Initiative. And the interesting thing that people don't know about RGGI is that the memorandum of understanding allows each of those states to grow their emissions.

So it's like - for example, Vermont is allowed to grow its emissions between now and when they hit the target of about 229 percent increase in emissions. And New York is allowed to grow its emissions by about 15 percent.

So it's analogous to telling your spouse, I am going on a strict diet and then eating a piece of pie after each meal a day. So these states are giving lip service, the RGGI states are, to curbing emissions. But the targets they've set for themselves are way above their current emission levels.

So it's not analogous to what California is doing at all. And in fact we'll competitively advantage the RGGI states vis a vis California.

Mr. TAMMINEN: Although let me jump in there because I think that's a bit misleading, Margo, that as you know the Regional Greenhouse Gas Initiative is only focused on the energy generating sector, unlike California's plan which focuses on all emitters. That is narrowly defined.

And so of course they've had to recognize that business as usual may increase their emissions overall even as they work on capping and trading emissions in the power-generating sector.

But each one of those states I can tell you from first-hand experience because we're getting a lot of calls in California asking for the benefit of our experience, talking to the governors of many other states about developing more comprehensive plans.

And all of those states are looking for ways to develop plans of their own that would ultimately reduce those overall emissions.

FLATOW: So Margo, you're saying they should include all the other folks in those states who are not included, as they are in California?

Ms. THORNING: The political difficulty is getting your citizens to accept the higher energy prices. Transportation is the key area that you mentioned for California. How to get the citizens to allow energy prices to rise sufficiently to curb their driving, to reduce, you know, commercial transport and so forth...

Ms. DOUGLAS: But it seems that there's a major misconception here if rising prices are the only alternative for solving this problem. And California's approach is to create a market that provides incentives for the development and the spread of new technologies. And the example of the 2002 Clean Car Law, which has taken effect not only in California but now applies to one-third of the North American market, is to save consumers money by using technology that currently exists to make cars that emit far less greenhouse gases and are better and more fuel efficient and pollute less.

And so there are many, many new technologies that by showing leadership and creating a market, can be developed.

FLATOW: Karen, can you tell us what's happening in other states, specifically?

Ms. DOUGLAS: There are a number of activities in other states that are very exciting. Two states, Wisconsin and New Jersey, have already announced or introduced bills very similar to AB32. In Michigan there's a greenhouse gas registry. There's a move towards regional registries in the Northeast and in the Midwest. There's activity in Ohio to establish a state commission, very much like California's Climate Action Team, to advise on ways to reduce emissions. And six states have stakeholder processes to develop climate plans. Those include New Mexico, Arizona, North Carolina, Montana and Utah. In addition, the state of Illinois has just announced a climate plan.

And this is really the tip of the iceberg. There are many, many cities across the country that have also endorsed their own Kyoto-like goals, mayors across the country who are stepping forward and providing decisive leadership on this issue and who are very supportive of AB32. So I think what we're seeing is a great determination across the country to really do something about global warming.

Mr. KAMMEN: There's even more going on at the state level as well, and that is that we already have a number of states that have already passed standards to require a certain fraction of their energy to come from renewables, so-called renewables portfolio standards. And they vary state by state based on the political reality, the natural resources available.

But what you're seeing is now that a significant fraction of the states in the country have adopted versions of this. They are now looking back towards Californians in the ways that Terry and Karen talked about to think about the next step. And everyone who is knowledgeable about the science of climate change recognizes that these cuts have to be done through some mechanism and that if we fritter away this decade, or even part of the next one, waiting and seeing what other countries will lead, we're making our job nearly impossible. And that's not a gloom-and-doom. That is we recognize what the climate science says. We have an opportunity now to bring these together.

And these coalitions of not just states - Tony Blair was also present by video screen at the signing - so you're seeing a number of actors taking a leadership position, recognizing both the environmental gains, but also there is a real economic benefit, not the loss that Margo's talking about, but a benefit to being the earlier actors to innovate and develop the technologies. And so this is really a new opportunity.

Ms. THORNING: I'd like to respond to that. If there were such an economic benefit you wouldn't need government mandates to impose them. You would find the market naturally picking them up. And of course energy efficiency is something that the market has taken up in the course of the normal replacement of the capital stock. And you mentioned Tony Blair in the U.K. They are on track, barely, to meet their Kyoto target, but their emissions are projected to rise sharply after 2010. There's no way they're going to be able, without severe economic loss, to adopt tighter targets for the second commitment period that is being discussed in the EU.

So what we need to focus on is developing the technologies that will enable us to slow...

Mr. KAMMEN: And that's what California is planning to do.

Ms. DOUGLAS: And the benefits...

Ms. THORNING: ...without...

Ms. DOUGLAS: ...of developing this technology can be measured very concretely. And this is analogous to the development of technology to reduce air pollution. Since 1970, the Clear Air Act has limited emissions of pollutants, and over time those limits have provided about $40 in public-health and air-quality benefits for every dollar invested. In a similar way, the Clean Air Act created a $19-billion-a-year industry and employed something like 130,000 people, and U.S. firms earn about $3 billion a year from exporting these technologies and services, many of which are exported to Asia.

In the same way, by taking the leadership on clean-energy technology, California and other states that act like California have the opportunity to really be in the lead, to both re-tool their economies for this coming century and to produce goods and services that will be needed all around the world.

FLATOW: Karen, are you hoping that states start creating sort of a cookie-cutter pattern around the country until they eventually link up here?

Ms. DOUGLAS: Well, that's one way to do it. We don't think that's the best way to do it. It's ideal to have a good, strong national and ideally international system. But in the absence of a national system and in the absence of any clear indication that there's going to be a national system put in place imminently that has enforceable regulations that creates the true market that a cap-and-trade system would create, it's essential that states take action, and it's certainly possible that by linking up California, the RGGI states and other states around the country that want to take action, we could create a very large carbon market, and we could drive policy not only in this country but worldwide.

FLATOW: When do expect legal challenges to state efforts to start happening?

Ms. DOUGLAS: Well, so far there's been no real indication that anyone is about to launch a legal challenge because there's no federal law regulating greenhouse gases in the way that California's regulating it. There's no preemption argument. States are generally free to pass laws that benefit their citizens or their residents without worrying about federal preemption so long as there's no federal law on the books actually preempting them.

FLATOW: 1-800-989-8255. Let's go to the phones, to William in Nashville. Hi, William.

WILLIAM (Caller): Hi, how are you? I appreciate very much the opportunity to be on the call and appreciate the various panelists that you have there. It's a very healthy discussion, I think one that probably needs to go on a broader basis, but I appreciate very much to make a comment or two and ask a question.

I guess in listening to Dr. Thorning, I do agree that, you know, from the perspective of what we're looking at here, this is in fact a global problem and a global issue. And in turn, when you go back and start looking at the economic consequences and looking at the state of California implementing this type of law, I think from an economic development standpoint, I'm hard pressed to find how those industries in the state and those that may be looking to go there will not be adversely affected with surrounding states as well as with their global competition with, you know, let's say competitors in India or China relative to the type of standards that they have to have in those countries.

And so I guess in listening to some of the feedback from some of your other panelists about the issue of economic development, you know, they state that reducing emissions is really going to make companies more competitive, create more jobs and better technology. And my question is, if that is in fact the case, then why aren't the companies just doing this on their own? Why do we have to have California or other states implementing laws in that regard?

FLATOW: Let me just remind everybody, I'm Ira Flatow. This is TALK OF THE NATION: SCIENCE FRIDAY from NPR News.

Mr. TAMMINEN: Let me jump in as the person who organized a lot of this on behalf of the state as the former EPA secretary.

FLATOW: Sure.

Mr. TAMMINEN: The answer is, many companies are adopting this and have been doing so and in fact have laid the groundwork for much of the work in our Climate Action Plan and in these laws that we're talking about today. They've kind of proven this. And the companies - there's a group called The Climate Group, which you can find their Web site, and they highlight the stories of companies around the world and some specifically in California and how in reducing carbon emissions - I mean, what's the number one way to do that? It's to make your business more energy efficient, by converting appliances or buildings or factories to be more energy efficient. So you immediately start saving money from day one to pay back those investments, and then after that you obviously have a profit.

And then you have a profit in another way, because we have a thing in California called the Climate Action Registry, where those early adopters, nearly 100 of them at this point - large companies - have registered those reductions, and when there's a trading scheme, the law says that they have to be given credit for that early action. So they're going to have literally money in the bank in the form of those credits that they can trade to others.

And so we know that this does work. The role, I think, of enlightened regulation coming on the heels of those early adopters is to say, all right, let's get everyone else now to do this because we're facing an urgent problem, just like we did, as Karen Douglas mentioned before, with criteria air pollutants in the past.

Ms. THORNING: I'd just like to jump in, picking up on the urgent problem question. I think a variety of studies show that quickly reducing energy use and greenhouse gas emissions will have a detrimental impact because of the premature obsolescence of the capital stock. To step back and look globally, the worst problem in the world is lack of sanitation and lack of water that is causing four to five million children to die every year, according to the World Bank.

(Soundbite of phone ringing)

Ms. THORNING: If we sacrifice economic growth for ratcheting down greenhouse gas emissions, we reduce our ability to deal with what are some of the world's worst, most challenging problems. So we need to try to balance our approach, to slowly reduce greenhouse gas emissions, and the U.S. has made significant progress in reducing that growth rate.

(Soundbite of phone ringing)

Ms. THORNING: But we also need to maintain strong economic growth so that we can address a variety of social concerns, and energy and economic growth are intertwined. And it's true we get more energy-efficient all the time, but if we try to force it faster than the normal replacement of the capital stock, we will suffer absolute slowing of economic growth, and lower job growth, and loss of competitiveness.

FLATOW: Dan.

Mr. KAMMEN: This is really a red herring here, because this is not forcing it. This is actually a measured process that will take place over the course of roughly two decades, here. There's actually a lot of time in California, given the pace of change of industry and the planning horizon for companies. Many of the companies that Terry mentioned, as well as a large network of companies called the Environmental Entrepreneurs Group, have already said that these are timetables they can work with, and in fact we're seeing aggressive business-to-business and business-to-industry consortia forming to find ways to meet these targets, And in fact, to discover the areas where there's innovation possible -faster than California's law is saying.

So I think what you're really seeing is, for people who want to look forward, there's a true opportunity to use this opportunity to make a difference. And if you want to look backward and say well, we're not going to act until others do so, well I guess that that's your right. But California isn't bound by a law to say let's not green the economy.

FLATOW: All right, we've run out of time. I would like to thank all my guests. Karen Douglas, director of the California Climate Initiative at Environmental Defense in Sacramento, California; Terry Tamminen, who is special advisor on energy and environmental policy to California Governor Arnold Schwarzenegger. He's also former secretary of the California Environmental Protection Agency and author of Lives Per Gallon: The True Cost of Our Oil Addiction, just out from Island Press. Margot Thorning, senior vice president and chief economist at the American Council for Capital Formation in Washington; Dan Kammen, co-director of the Berkeley Institute of the Environment and professor in the Energy and Resources Group at the University of California at Berkeley. Thank you all for taking time to be with us. Have a good weekend.

Copyright © 2006 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

Accuracy and availability of NPR transcripts may vary. Transcript text may be revised to correct errors or match updates to audio. Audio on npr.org may be edited after its original broadcast or publication. The authoritative record of NPR’s programming is the audio record.