As the mid-term elections approach, Californians will not only be faced with a choice for a new governor, but also new energy legislation that will have ripple effects throughout the country. Proposition 23 would suspend the existing Global Warming Solutions Act of 2006, which aimed to lower carbon emissions 25% by 2020, until the state’s unemployment rate falls below 5.5%. If enacted, the measure will further delay progress in Washington on climate legislation and lead to a very long wait for a regional carbon market.

California has been hit with some of the worst unemployment rates in the country. According to the US Bureau of Labor Statistics 12.4% of the state’s population were unemployed in September 2010, 2.8% higher than the national average. When Governor Arnold Schwarzenegger signed the Act in 2006, unemployment was at 4.6% but that was also during a very different economic climate throughout the country.

Both California gubernatorial candidates Republican Meg Whitman and Democrat Jerry Brown say they oppose Prop 23. However, this is not only a state issue. The outcome of Prop 23 will reflect the path of climate legislation on a national level. Even though the candidates in California are united on this issue, Washington is divided, where Republicans and Democrats are at odds on the passage of comprehensive climate legislation that would enable a national cap-and-trade market and legally reduce emissions.

If Prop 23 passes, its effects will be felt in Washington. This can give lawmakers further fuel to negate any type of national carbon cap. The Global Warming Solutions Act was also prepared to establish a regional cap and trade market, one of the few initiatives in the country. If Prop 23 is enacted, that situation will not only put a carbon market on the backburner for California, but it will also hinder any type of national carbon market. A potential positive note is that if it is passed, the Global Warming Solutions Act will only be suspended until unemployment drops below 5.5%, giving hope that it can be resumed in the near future. However, unemployment rates in California have dropped below 5.5% levels only three times in the past 40 years. California and Washington will be in for a very long wait.

On the other hand, if Prop 23 fails, that may give politicians in Washington the leverage they need to pass national legalisation. They can argue that the American people, especially those in California, want state and perhaps national regulation of carbon emissions. They can use the failure of Prop 23 with the gubernatorial winner to gather support. It can also be used to promote an increase in the investment in renewable energy sources. California can set an example and become a national leader in the development of clean energy technology.

In 2009, only 36% of Americans believe climate change is man-made, according to a study byPew Research Center. This figure has reflected failed climate legislation in Washington. If Prop 23 fails, it may be an indication of a change in public perception that can provide tools for the Senate to pass national legislation.

Although as yet unofficial, an exciting new development is expected when President Obama will soon – probably later today – announces new federal rules for automobile emissions and mileage standards.

When Obama cleared the road for a federal waiver, which would have allowed California (and 13 other states which would have followed suit) to develop more stringent fuel efficiency standards, there were concerns that this will lead to a patchwork of regulations around the country. The new regulations which are about to be announced should redress these fears and bring the whole of the US up to the standards set by the Californian regulations (see fact sheet for California’s regulations, though the two set of rules use difference measurements, so complex conversions are needed to actually compare them). They will also mark the first ever limits on GHG tailpipe emissions in the United States.

Although some of the details are not completely clear, and there seems to be some confusion as to exact numbers, these rules which will take effect in 2012, will create a car and light truck fleet which is about 40% cleaner and more efficient than what we have today, by 2016. This is four years earlier than is required under current federal law, which was passed in 2007 but never enforced, as no regulations were made by the Bush administration.

This development will have wide support as it follows months of discussions with the ailing American auto industry, as well as fit in with the Waxman-Markey ACES bill which calls for a nationwide standard. Car manufacturers welcome the pending announcement in part because this will allow them to better plan for the future market, after finding themselves lagging behind Japanese and European manufacturers.

The expected announcement is naturally also supported by environmental politicians and NGOs. And as Daniel Becker, director of the Safe Climate Campaign said – “This is the single biggest step the American government has ever taken to cut greenhouse gas emissions.”

UPDATE - and now it’s official. With executives from 10 automakers by his side, and environmental leaders applauding from the audience, President Obama announced a new national fuel efficiency policy. The policy will cover model years 2012-2016, and by 2016 will require an average fuel economy standard  of 35.5 mpg (or 15km/litre. Compare this to the 35 mpg by 2020, which is what the 2007 CAFE law requires. The current average is 25 mpg). Obama mentioned that 1.8 billion barrels of oil will be saved over the lifetime of vehicles sold in the next 5 years (this is the equivalent of shutting down 194 coal plants or taking 58 million cars off the roads for a year).

This policy is a result of an unprecedented collaboration between the Department of Transportation, the Environmental Protection Agency, Amrican auto manufacturers, the United Auto Workers, environmental leaders, the State of California, and other state governments.

UPDATE #2 – more details coming through mention that the EPA will indeed regulate tailpipe emissions, which has never been done before, and that Congress does not need to aprove these standards as they will be implemented through federal rules (which – together with the strong alliance backing it up – means that this is not just a pretty statement, but is a policy able to bring real changes).

Some thoughts - one of the things mentioned again and again by the different people involved, is how much collaboration went into this. It is a unique alliance between groups representing very different interests (auto industry, state governments, environmental NGOs, etc) all “marching forward in the same direction.” as California Governor Arnold Schwarzenegger said at some point. Obama notes this as well, mentioning in his statement that “it represents not only a change in policy in Washington but the harbinger of a change in the way business is done in Washington… No longer will we accept anything less than a common effort, made in good faith, to solve our toughest problems.” As the problems facing the US are are indeed tough and deeply rooted, I only hope that this is really true, and not just wishful thinking from a man who sought to ‘reach out across the aisle’ since his first days in office (and was constantly rebuffed)

UPDATE #3 – questions have been raised about how this will affect the struggling ethanol industry which is currently trying to increase the national standard from a 10% ethanol blend (that is, ethanol constitute 10% of the blend sold at the pump) to a 15% blend. Some analysts say a tougher fuel efficiency standard might harm the industry as ethanol has a lower energy content than gasoline. However when questioned, Carol Browner the president’s assistant on energy and climate change, said she did not know the answer to that.

While sorry for the workers in a struggling industry, I can’t say that I will be sorry to see the strong ethanol lobby run into some difficulties or the industry forced to change the way it produces biofuels. Heavily subsidized corn based ethanol is not the way to produce carbon neutral fuels, nor is it beneficial to the American economy as a whole.

UPDATE #4 – The new policy resolves the conflict between the federal government and the state of California regarding fuel standards. Which means that the lawsuits connected to said conflict will now be dropped and these resources can be directed elsewhere (maybe sending more environemental lobbyists to Washington??).

While Manitoba’s efforts are not as expensive or expansive as Ontario’s “right to connect” initiative or as innovative as British Columbia’s carbon tax, Manitoba has been quietly pulling its own weight when it comes to reducing GHG emissions. As it makes clear on its website, while it is by no means a major emitter in Canada, it would still rather be part of the solution than part of the problem.

To this end Manitoba has formed several cooperatives , including New South Wales, but perhaps most importantly with California. In both cases efforts have been made to share knowledge on the application of public policy, share science and technology and to look for opportunities to expand trade where it might help to reduce emissions. Taking top seat, is Manitoba’s partnership with California, bound by not only a specific agreement of cooperation on Climate Change but through the influential WCI Western Climate Initiative, an alliance of some of the biggest states and provinces in North America, committed to emission reductions. It is the WCI which has formed the framework for Manitoba’s Climate Change plans.

Manitoba’s initial plan is to match or exceed the Kyoto protocol targets. That might sound antiquated nowadays but as Manitoba points out in their executive summary, it’s aim to achieve 6% below 1990 levels by 2012, putting Manitoba on course to be the “one of the greenest jurisdictions on the continent”. It also puts them well on course to meet or exceed the WCI’s target of 15% reduction on 2005 levels by 2020.

To put their plan into action Manitoba has a wide range of Carbon reducing or (offsetting in some cases) measures, ranging from planting 5 million trees, improving building energy efficiency standards and funding for renewable energy.  Manitoba has been semi-progressive by putting a tax per tonne of coal, which will begin in 2011, I say “semi-progressive” because, as officials admit, only three companies in Manitoba actually use large amounts of coal:

• Tembec’s pulp and paper mill in Pine Falls, which was built in 1917.
• The Graymont lime plant in Faulkner.
• Manitoba Hydro’s Brandon power plant, which is to be phased out shortly and used only on an emergency basis.

If you thought these measures were not spectacular enough to warrant Manitoba’s claim that it could be one of the greenest jurisdictions in Northern America, you wouldd be right. How is Manitoba able to be so effective?

Assuming their plan succeeds or is close, Manitoba will be helped by their main source of industry coming from transport (compared with some of the heavy industry emissions compared with nearby territories Saskatchewan and of course Alberta. As a result, fuel efficiency standards can and will form the backbone of Manitoba’s efforts and can make serious dents in emissions reductions,, transport accounts for 15% of Manitoba’s GHG emissions. As a January 2009 summary makes clear Manitoba is basing its Vehicle standards on California. While California is still waiting on its waiver to set higher Vehicle standards, if it gets them, Manitoba will follow suite and adopt.

What Manitoba’s vehicle standards will mirror California’s – underlining not only the very real influence of fellow WCI members on each other to share and implement areas of public policy but also the importance California sets at a state-wide level as an alternative to Federal  inaction.  The WCI, covers 25.5 million of Canada’s 33.3 million people underlining the importance of the initiative to Canada and the weight of California’s influence. Last week I looked at how California’s clean fuel laws could undermine Alberta’s oil sands given California’s extensive vehicle ownership. Alberta was understandably concerned at the early closing of a potentially lucrative market, this week in the same vein we see how clear demarcation between leadership and opposition among Canadian states across the North American continent.  Invariably, the WCI among other things represents the political structure of North American states, but also the gap in recent years between Federal and state-wide action on Climate Change. This gap ought not to be ignored because it doesn’t do justice to the efforts at state level to reduce GHG emissions. Yet, these efforts are no means in vain, not only can they be trail blazers for policy ideas to tackle Climate change but they also represent a very large proportion of Canada’s emissions and will undoubtedly put increasing pressure on less enthusiastic states such as Alberta to shoulder some of the burden – but perhaps we shouldn’t hold our breath.

California, the US’s most populous and wealthy state and Alberta, a far less populous but nonetheless vital part of Canada’s economy sparred this week, as California seeks to push forward ever bolder Climate Change initiatives. The battle pits two states that could hardly be more dissimilar when it comes to Climate Change. California has trail blazed its way through Climate change, running against the Bush administration and much of his own party, Schwarzenegger reached out to states in the US and Canada in his attempt to direct California’s entrepreneurial dynamism to capitalise on green economics.

Alberta, has been rather different, opting for “reduction in intensity” over actual reductions in its Climate Change reduction, it has been got on well with the Harper administration’s under-whelming Climate Change efforts. The reason lies in Alberta’s not so secret oil sands which have endured a barrage of infamy from protests in Poznan, to a National Geographic report. Tar sands already in development could become an exceptionally lucrative export if as predicted oil prices continue to rise, and the US continues to look for energy supplies to be brought closer to home. While the latter is already underway in some US states and a Climate Change bill currently in discussion, the oil sands future took a different turn as rather than a continually rosier future it met it’s first major clash when one of its largest potential markets passed a bill on Thursday that will eventually ban fuels, that are deemed to emit too much carbon in their production phase.

The Bill, which passed on Thursday, (a neat summary is here) aims to diversify California’s fuel supply with a  move towards expanding the market for low-carbon based fuels, some producers of which are in California and place restrictions on high end polluting fuels.

The principle is typically bold of California, even if in the short term it will only make small changes, it effectively legislates against high end pollution fuels such as Alberta’s tar sands which are likely to become viable in the future of oil prices over the next decade rise as expected to.

The worry for Alberta is twofold, California on its own wouldn’t be a problem , as it doesn’t import any fuel from Alberta at present but a number of other states across the US and even Canada could follow suite (California is already in alliances with US and Canadian states such as in the WCI), and it effectively rules out California and potentially other states as future markets for Alberta. Furthermore, once a few states start, what’s to stop more states taking up their lead?

While ruling out future markets, is one bonus for environmental campaigners, the second is the more immediate investment impact this could have on tar sand development. As it stands tar sand is relatively undeveloped compared with its potential in Canada, but it relies on heavy investment, given the exceptional costs of extracting tar sands, although this won’t be any means derail their development, tar sands could find it increasingly harder to find the willing investors if many of the key north American markets are locked out so early.

Perhaps frustratingly for environmentalists is that this is another example of the Harper Government (who also lobbied with Alberta against the legislation) incorrectly gauging the changing tides in North American Climate Change politics.. As a recent editorial in the Chronicle Herald highlighted, Harper’s like many other politicians saw environmental legislation as a drain on the economy, despite considerable economic evidence and in sharp contrast to the position of many states, within such as Quebec and Ontario, who have been ramping up their investment to capitalise on the future market. The Harper government may well have missed a valuable window of opportunity to consolidate Canada’s position in green

Low water levels at Folsom Lake, California. Image by planetlight.

On Friday, California Governor Arnold Schwarzenegger announced a state of emergency due to severe drought conditions hitting the state of California. The drought is causing a huge strain on already bleak economic conditions for the state. The below-average rainfall and dry winters over the past three years could cost an estimated 95,000 jobs and $3 billion for California. The main source of irrigation water for the state will likely go dry this year for most farmers. Consequently, Schwarzenegger is calling for an immediate reduction in water usage by businesses and individuals with a possible mandated reduction within the month.

The drought has largely affected the Central Valley, a fertile region responsible for the production of over half of U.S. grown vegetables, fruit and nuts. The Central Valley region is at the heartland of California agriculture with state production valued at more than $36 billion a year. The conditions have forced local communities in California to draw on their reserves, creating an even further risk for catastrophe.

The state has already taken a hard hit during these tough economic times including severe budget short falls and unemployment reaching well above the national average at 9%. This drought has lasted three years already and conditions are unlikely to get better any time soon.

It is uncertain at this time how the economic and environmental crises in California will affect Schwarzenegger’s environmental initiatives. However, a tightening of any government spending without federal relief seems highly probable.

Following President Obama’s request to the EPA to reconsider whether states should be allowed to set stricter tailpipe emissions than set by the U.S. government, the New York Times speculated that Obama’s action signaled a move toward broadening the role of states. The Times argued that the new administration is supportive of “progressive federalism”, a movement made by state governors and attorneys general to enact, among other things, tougher laws on consumer protection and environmental initiatives than provided within the federal framework. If we are headed toward a new movement in progressive federalism, will we then see an influx of state-led environmental initiatives? And, if not, what role will the state’s initiatives play in Obama’s agenda?

The possibility for an influx in state-led initiatives exists and the presidential honeymoon period seems an ideal time for governors and attorneys general to put forth their own agendas for change. However, the current economic crisis will likely curtail any such state aspirations. Many U.S. states are running significant deficits including a state of crisis in California. Therefore, enacting environmental initiatives by states will likely prove extremely difficult if not backed by federal funding. 

Furthermore, this move by Obama does more to counteract bad Bush policies than signify a new direction for the EPA and state rights. The article by the New York Times failed to mention that the rejection of California’s request to set tougher emission standards by Bush’s EPA was the first of its kind in 40 years. Prior to this, the EPA allowed states to exceed requirements set forth by the federal government. This action by the Obama administration, then, was not only an attempt to strengthen tailpipe emission standards; it also serves President Obama’s interest in reversing dangerous precedents set forth by the Bush administration.

In addition to counteracting Bush policies, revisiting California’s request to the EPA falls in line with Obama’s Energy and Environment agenda. Darren Hutchinson, Professor of Law at American University Washington College of Law, argues that Obama’s support for state-led environmental reform only occurred because states were seeking to tighten – not loosen – tailpipe emission standards. In this instance, according to Hutchinson, Obama “is using states to promote more progressive ideas than the national politics would tolerate.”  

If Hutchinson is correct, which I suspect that he is, then we will likely only see support by the Obama administration for state-led initiatives that are in line with his agenda such as greening the United States image. Efforts by states to retaliate against Obama’s climate change initiatives will likely be met with much less support by the Obama administration. For all of these reasons, a strong push toward progressive federalism seems unlikely at this point in time. Rather, we will likely see a mix of both state and federal initiatives, provided that the states’ initiatives fit in to Obama’s vision for the United States.

Only one week into office and U.S. President Barack Obama is charging full speed ahead on fulfilling his campaign promise to bring change to Washington. In an effort to reverse former President Bush’s policy on climate change and take the United States in a new greener direction, Obama asked the Environmental Protection Agency on Monday to review whether states should be allowed to set more stringent emission standards than those that are currently federally mandated. Additionally, Obama directed American automakers to develop more fuel efficient cars and trucks for models with release dates starting in 2011.

More than a dozen states have adopted the more stringent standards set by California which requires a 30 percent cut in emissions and a federal waiver could lead to more states signing on. While environmentalists are understandably thrilled at the direction of the new administration, Obama’s announcement has led to resistance by both automakers and Republicans. The two leading arguments put forth by the opposition are that a reversal in Bush’s order will be costly to automakers in an already struggling economy and state-led emissions requirements creates the possibility of a patchwork of different standards for different states. Alternatively, the automakers want uniform mileage and emission standards set nationwide along with assistance and incentives for car buyers to alleviate the added cost. While environmentalists may be applauding Obama’s announcement, the argument made by the automakers does deserve consideration.

When the Bush administration showed reluctance to legislate any significant curb in tail-pipe emissions and increase fuel efficiency requirements, the effort of states to step in and tackle the issue of greenhouse emissions themselves appeared a win for environmentalists. Furthermore, future U.S. presidents might not be as green-minded as President Obama. In such instances, state-led emission standards can provide the greatest opportunity for environmentalists to bring change to the auto industry by allowing states to set their own bar for the auto companies to meet.

However, should Maryland suddenly decide to set even more stringent standards than California, what does this mean for the automakers? The answer is additional costs and confusion for the auto industry. This will inevitably lead the car companies to try to meet the most stringent standards to avoid a patchwork of different regulations. While this may be a positive result for environmentalists, it also means huge costs anytime a state decides to tighten its requirements beyond the then-set industry standard.

The Obama administration is in a great position to bring change to the U.S. auto industry including the opportunity to institute a nation-wide tightening of emissions beginning with the model put forth by California. This could reduce confusion over state-by-state regulations and lessen the price tag for adjustment.

While I applaud President Obama’s push toward reducing emissions, considering a nationwide approach may prove to be a more effective, less confusing and less costly way to reduce auto emissions nationwide.