March 1, 2010 - From the February, 2010 issue

Fran Pavley Vows to Fight California Anti-AB 32 Ballot Measure

California's cutting-edge suite of landmark environmental legislation encountered a number of serious threats in February 2010: a ballot initiative to suspend AB 32 until unemployment drops drastically began circulating the state for signatures and numerous bills meant to bypass CEQA review requirements for development projects were introduced in the Legislature. In the following TPR/MIR interview, California State Senator and Author of AB 32 and AB 1493 Fran Pavley previews what is sure to be a watershed political battle for climate change legislation in the state, with broader implications for other states, collaboratives like the Western Climate Initiative, and the anticipated federal climate change legislation.

Fran Pavley

AB 1493, also known as the Pavley tailpipe standards, was finally granted the necessary waiver by the U.S. EPA last June. How has the EPA's waiver impacted implementation of the program?

I'm thrilled it will be a national standard. That was the goal all along and I thank the other 13 states that have adopted the California clean car emission standards. They helped put collective pressure on Washington, D.C. to grant the waiver. What a difference the new president makes. Last May at a ceremony in the Rose Garden, which I attended, all the CEOs of automobile manufactures surrounded Obama, agreeing that they will move forward with the California tailpipe regulation as well as taking into consideration the CAFE standards proposed by the Department of Transportation.

What's your read, from your perspective as a state senator, about the American publics' willingness to move forcefully ahead on the array of game changing climate initiatives that you were a part of spearheading in California?

The public, because of the downturn in the economy, has focused the attention of the legislature on jobs. But we have an incredible amount of support for creating jobs to support clean energy policies. According to the annual PPIC polls people selected from all demographic groups and geographic areas around the state show that Californians strongly support policies to develop a clean, secure energy future. The clean car law that you referenced has amazing support; the public definitely gets the benefit of ridding our dependence on foreign oil and is very supportive of anything we can do to reduce air pollution, including global warming emissions.

The problem is that a narrow group of people, who really haven't ever supported clean air and clean water laws, let alone global warming pollution reduction targets, are using the economic downturn as a way to roll back environmental protections.

We may have a fight on our hands; I don't want to underestimate that. It will depend on how many powerful special interests groups get involved. This effort to rollback environmental protections is connected to a national strategy to slow down or derail a federal energy policy. If they can be successful here in California, that may have an impact on whether the national government moves forward.

What is so interesting to me in this discussion, especially in the last few months, is that many people have said, "we lost our jobs because of AB 32." The new emissions reductions don't even begin till 2012. About 40 percent of the solutions are in place with the clean car law moving forward and energy efficiency policies that have been adopted.

It's always risky to be an early adopter. California, with your leadership and the governor's, was an early adopter of climate change legislation. What's the price paid for economic growth, and how can the AB 32 Scoping Plan mitigate the price of being first?

Maybe it is somewhat risky, but it's also an economic advantage to be first. By being first out of the box, we could push a comprehensive federal policy, which everyone prefers. One out of every ten Americans lives here in California, so we do effect change.

By getting in front we can seize a sort of window of opportunity to become the home of these new clean tech businesses and the new jobs for the future. Any delay by the opposition in moving forward will send businesses and jobs to competitors. We're already seeing that China is very aggressive in manufacturing new technologies that are being sold around the world.

The good news has been that by sending a market signal that California is open for business, one out of every four patents in R&D are coming from California. In addition, 40 percent of venture capitalist money that comes into the country goes to California businesses. There is unbelievable interest in our community colleges, occupational centers, and our universities. During this recession the one bright spot in the economy has been the increase in what we call "green jobs."

Clearly the jitters from the economic recession are being played out in places like Arizona, which has just backed out of a broad regional effort to limit greenhouse gas emissions in the west through a cap-and-trade system. One of the questions arising from Arizona's recent decision is whether it will trigger a domino effect among other regional partners. How do the forces advancing the AB 32 agenda respond to Arizona's concerns?


The national strategy has not been derailed; it's been slowed down. It's delayed somewhat by the challenges on the healthcare agenda, but Congress is moving forward aggressively with components of a federal policy in energy efficiency and ramping up investment in renewables and alternative fuels. The California ballot initiative may give some states some concern. However, Arizona and other states are continuing to implement policies to create a clean, secure energy future. In Sacramento, just last week, the Canadian consulates in San Francisco and L.A., as well as representatives of businesses in Canada and the U.S. who share that market, very enthusiastically championed moving forward with the Western Climate Initiative. The cost of not moving forward with the targeted greenhouse gas reduction policies will be very expensive.

In January, CARB's economic and allocation advisory committee presented recommendations on cap-and-trade regulations, recommending an auction system as the best mechanism for cap-and-trade. Is that still on course and is the auction, in your opinion, the best way to proceed?

The challenge right now is to continue to analyze how offsets and auctions will work. AB 32, to refresh everyone's memory, gave the authority to CARB to implement market-based mechanisms. But if you look closely at the law, the law does two things: sets a cap and requires mandatory reporting. There's some controversy over what percentage of auctions, if any. How do you phase in gradually? How does it not trigger short-term spikes in electricity prices? The auction and offset part is still under discussion, but in the AB 32 timeline there is no date for implementing any market-based mechanism. But the governor has some interest because this is his last year in office. Moving forward, they should come up with a way to phase-in gradually any kind of market-based mechanism, especially regarding offsets and auctions. There is probably a need for continuous discussion with CARB and affected stakeholders on this part, because we kept hoping there was going to be a federal program in place, and there is question as to whether a California-only program makes sense; most people think it needs to be regional or national.

How critical is it to California's cutting edge initiatives on climate change that there be both a federal climate change bill and a global agreement on GHG reduction targets?

It's absolutely critical to move in that direction because what we all need to get back to is looking at the cost of not doing anything. I chair the Senate Committee on Natural Resources and Water; we're getting ready to spend billions of dollars of money because of dwindling snow pack, wildfires, and sea level rise. There's a real cost globally and to our state from not mitigating greenhouse gas emissions.

We also need it eventually because our businesses are very interested in creating programs with other states and other countries, which becomes problematic if we're not all operating on the same baselines and protocols for enforcement purposes. California's AB 32 has been consistent with the outline on the federal bill, and we'll see that moving forward.

California, as well as Washington, has been so partisan for many years, but it seems that you and Governor Schwarzenegger work uncommonly well together. How does one find common ground in the hyper partisan environments of Sacramento and Washington, D.C.?

I feel like we've just been incredibly fortunate. After the passage of the clean car law, signed into law by Governor Davis, and we had the recall, I thought, "Here we have a Republican governor, all our environmental work will be thrown out." One of the biggest surprises is you have a Republican governor championing this issue, and he has brought together a coalition of supporters broader than what we started with. He has very clearly stated that this is not a choice between the environment and the economy-it's good for the environment and the economy to adopt these laws. One of the reasons we've seen initiative here in California, is that everyone knows that any attempts to move through the Legislature-any bills to delay or suspend this law-would be vetoed by the governor. That's why they're doing an end run through the initiative process. He's been a consistent and strong advocate of these laws, not only in our state, but nationally and internationally. We were in Copenhagen, and he certainly has a rock star status in the global arena.

Let's close by asking what you've learned about climate change from eight years of political battles. How has you thinking and your views evolved?

I started out thinking of it primarily as a way to mitigate environmental problems. My evolution has been toward a clear understanding of how this could help the economic engine for new jobs and a new economy for the 21st century. The other evolution started with the understanding that the laws are a benefit to many. For AB 32 and the clean car laws, we built a coalition that expanded on the environmental groups. It included doctors and nurses and health organizations. It included the interfaith council communities. It broadened to Silicon Valley business interests who understood the opportunity. From what was considered just an environmental bill came an economic bill. By the time AB 32 passed we've had the largest utility company in the state, PG&E, supporting it. Waste Management, the largest waste hauling organization, supported it. Those companies are still on board and we have a large cadre of the small business community also in support, who are benefiting from these new jobs.


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