Why CA Prop 23 is wrong By Malcolm Lewis

Malcolm Lewis is Chairman and CEO of CTG Energetics.

Somebody asked me recently what I thought of California’s Proposition 23 – a ballot proposition that will be on the November 2, 2010 statewide ballot that will suspend AB 32 – the landmark Global Warming Solutions Act passed in 2006. This is an incredibly important issue, and I thought it worthwhile to share my thoughts with you.


In sort, I think it’s a really bad proposition that should definitely be a NO vote.

Why do I say that?

• It is sponsored primarily by two oil companies, in a cynical attempt to avoid reducing their own pollution.


• There is some evidence that the net economic impact of AB32 will be positive, not negative as Prop 23 assumes.


• We need to be on a technical path to reduce emissions of CO2 and other GHGs, and without AB32 this won’t happen.


• There are actually many new venture start-ups that are focusing on CO2 reduction technologies, but these will likely wither if AB32 is put on hold, since AB32 is creating the demand for CO2 reduction. One of those ventures that is really cool, as an example, takes the CO2 from the stack of a power plant, runs it through seawater, and produces cement by reacting the CO2 and the seawater! Since cement is one of the most ubiquitous building materials, and also one of the highest in CO2 generation in its manufacture, it’s a win-win.


• Another venture produces cement from the Magnesium Oxide (MgO) that is a byproduct from pumping oil wells. MgO is a major chemical component of the brine that comes up with oil and the brine has to be separated and (currently) disposed of as a major pollution problem. By making cement, it eliminates both this pollution problem from the brine AND the pollution from CO2 emissions of manufacturing cement the old fashioned way, which is so energy (and CO2) intensive. Again, without the forcing function of an AB32 to put limits on CO2 emissions, it’s not clear if this would see the light of day any time soon.


• Prop 23 is indexed to the unemployment rate, on the unproven premise that AB32 will somehow increase unemployment. Given the kinds of ventures described above, it seems likely to me that AB32 could be the catalyst for creating new industries in California that would be based upon a "clean technology" model rather than a "pollute and let someone else deal with it" model. It's arguable that the 5.5% unemployment rate that is the trigger in Prop 23 hasn't been seen in over 20 years, so this effectively kills AB32 rather than merely delaying it.


• As an example of the kinds of positive impacts that AB32 is likely to have on fostering innovation and reducing negative impacts, it is instructive to look at the history of the Building Energy Efficiency Regulations that California has enacted over the past 32 years. Starting in 1978, the Title 24 Energy Efficiency Regulations have consistently raised the bar on requirements for allowable energy usage in buildings, and the result has been that CA is the only state in the US that has maintained its per capita energy usage at a flat number over the past 30 years, rather than continuous increases. In the process, it has spawned R&D on countless technologies for lighting, windows, heating and cooling, and others that have literally transformed the global markets for these products. It has also saved billions of dollars in avoided energy costs for CA consumers and businesses. But none of this would have happened without the forcing function of the Warren-Alquist Act in the mid-1970's that created the legislative basis for the Title 24 standards.


• So these are the arguments that can be made, whether or not one believes in "climate change." But if you do believe that climate change might be impacted by man-made actions, of which CO2 emissions are by far the largest, then it makes sense to keep moving forward on AB32 as a precautionary step. If you go further (as 95% of the scientific community does based upon work over the past 20 years by the IPCC) and conclude unequivocally that there is a link between CO2 and climate change, then it would be foolhardy to derail AB32 by passing Prop 23. We are already way behind the curve in terms of taking actions that could bring the CO2 concentrations in the atmosphere back to the climatically sustainable value of 350 ppm, and without AB32 as a starting point, we will likely be unable to ever achieve that.



• To me, this comes down in many ways to the famous argument to the atheist about the rational strategy for believing in God: if there is a God and you didn’t believe, you are doomed to eternal damnation; if there isn’t a God and you did believe, you probably led a better life than you otherwise would have. Substitute "climate change" for "God" in the above sentence and you get the point.


• On a related theological perspective, it seems clear to me that mankind is violently disobeying the biblical mandate to be good stewards of God's creation.
  

Contact: ctg@ctgenergetics.com

Climate Change Obligations By Matt Burris

As the topic of climate change becomes hotter and hotter, we at CTG are increasingly working with clients to help them understand their potential obligations under state laws such as AB 32 and the California Environmental Quality Act (CEQA) to engage in activities that are becoming commonly known as Climate Action Planning. As cities and counties update their General Plans, they are required to implement a climate change program in order to demonstrate how their communities will start transitioning to a low carbon future. What we have found is that there is a growing level of uncertainty as to what might be the appropriate scope of effort to in order to develop an appropriate emissions reduction program.

We are finding that there are generally three types of climate change programs that communities, colleges, and other organizations are developing. These types of programs are largely defined by their difference in detail of the input data, the type of verification or reductions (if any), and the nature of the implementation plan.

1. Policy Grade:
   
   Policy grade programs include GHG inventories that are comprised of a minimum level of detail and statistical data rather than measured data. They present a vision, high-level policies, and measures for the reduction of emissions, but likely do not have a detailed implementation plan. Their purpose is to provide enough information to begin a dialogue on reducing GHG emissions and to establish new policies for reducing GHG emissions.



2. Regulatory Grade:
   
   Regulatory grade programs present moderately detailed GHG inventories, specific emissions reduction measures with quantified emissions reductions potential, a clear foundation for project evaluation and approval, and clear guidance to the private sector on requirements and expectations. Their primary purpose is to assist communities with the review of development applications.



3. Registry Grade:
   
   Registry grade programs present detailed GHG inventories with quantified emissions reductions potential, an implementation framework, a process for verifying reductions in accordance with the procedures of a selected registry, and steps for reporting reductions to a registry. Their purpose is to provide a program for reporting emissions reductions to an organization such as the Climate Action Reserve.

One of the key steps a community must undertake before committing to an emissions reduction program is to determine which program approach is most appropriate. Community leaders should consider what their needs are and how their emissions reduction program will be used when it is complete. Is the program meant to be mainly inspirational and begin a community discussion on how to reduce emissions? Is the program meant to provide a framework for regulating new development? Is the program meant to measure actual fuel use and emissions for reporting to the Climate Action Reserve? Additionally, communities should consider the tiering guidance of SB 97 to ensure a seamless connection with future CEQA compliance.

Communities should also consider the resources they can commit to an emissions reduction program. Very generally speaking, the level of detail involved in developing the emissions inventory and in analyzing the emissions reduction potential of various strategies correlates to the level of effort needed to complete the program. However, this is not always the case as data availability, community involvement, and political environment can also strongly affect the program development process and require additional effort.


As more communities draft emissions reduction programs, the industry will begin to better understand the process and the merits and limitations of the various grades of emissions reduction programs. As the economy recovers and communities begin implementing their emissions reduction programs, this discipline will take a leap forward, informed with the knowledge of which data works and which emissions reductions strategies are most effective, helping to reduce the level of effort needed to prepares these programs and increasing the overall sophistication Climate Action Planning.

-Matt

Matt Burris is a Director with CTG Energetics based in CTG’s Irvine office. He manages the firm’s climate services team and is currently leading efforts to develop emissions reduction programs for communities in State of California.
ctg@ctgenergetics.com