Weak economy fuels assault on keystone Calif. climate law

Businesses seek to delay rules until employment rises

LEGACY ON THE LINE Governor Arnold Schwarzenegger has vowed to fight for the law, though he is backing a slow adoption. LEGACY ON THE LINE
Governor Arnold Schwarzenegger has vowed to fight for the law, though he is backing a slow adoption.
By Samantha Young
Associated Press / April 5, 2010

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SACRAMENTO — Four years ago, California earned accolades for adopting a law that would slash its greenhouse gas emissions and serve as a model for national climate change legislation.

With the state mired in a crippling recession, the law that once looked like a landmark achievement is coming under assault. The regulatory effort Governor Arnold Schwarzenegger set in motion is facing a political backlash and could come to an abrupt halt in the months ahead.

A coalition of businesses, financed largely by three Texas oil companies, is funding a ballot petition that would delay the law until California’s current unemployment rate is cut by more than half.

The leading Republican gubernatorial candidate, Meg Whitman, has vowed she would suspend the law on her first day in office, which she would have the authority to do.

Even Schwarzenegger, who has staked his legacy on environmental issues, has begun urging air regulators to take a go-slow approach. But he has vowed to fight the ballot initiative.

The possibility that a state that has set the national agenda on environmental change for decades might shelve its highly publicized climate regulations could have ramifications beyond California’s borders. In Congress, lawmakers are struggling to craft a national climate bill that uses California’s as a template, but are facing headwinds of their own.

“This could very well be an effort to focus on California with the goal of delaying federal legislation,’’ said state Senator Fran Pavley, a Democrat and one of the law’s authors.

At issue: whether imposing costly regulations on businesses is a smart move as the nation struggles to emerge from recession.

Under the measure, oil refineries, manufacturers, cement plants, utilities, and other carbon polluters are to begin cutting their emissions in 2012.

It is the first economywide cap on emissions in the nation, obligating California to reduce greenhouse gas emissions to 1990 levels by 2020, about 30 percent from the levels projected if there were no climate regulations.

Oil companies have long opposed California’s climate law.

The ballot petition is expected to qualify for the November election, with taxpayer groups, businesses, and oil companies contributing nearly $1 million so far to get signature gatherers on the streets.

The bulk of that money has come from Texas-based oil companies. Valero Services Inc. of San Antonio has given $500,000. Tesoro Companies of San Antonio and World Oil Corp. of Houston have given $100,000 each.

Critics say California cannot afford to impose environmental regulations that would raise utility bills and fuel prices and would cost jobs. Republican lawmakers say the law gives companies another reason to flee California or expand elsewhere.

That might be an appealing message to voters who are frustrated with high unemployment, continuing home foreclosures, and an ongoing state budget crisis that has forced deep cuts to social services, public schools, and higher education.

“We need to try to heal our economy before we travel a road we’ve never traveled before,’’ said state Assemblyman Dan Logue, a Republican and one of the initiative’s sponsors. “Since this is going to have such a huge effect on every person of California, what’s wrong with the public being able to weigh in and decide if this is what they want?’’

The global warming law also is a target of both Republican candidates seeking to replace Schwarzenegger, who will reach term limits after this year.

Whitman intends to trigger a “safety valve’’ in the law that allows a governor to suspend climate regulations in “extraordinary circumstances, catastrophic events, or threat of significant economic harm.’’ Ironically, it was a provision Schwarzenegger demanded on behalf of business interests at the time he was negotiating the bill with Democrats in 2006.

“Let’s take stock of where we are. Let’s understand what our alternatives are,’’ Whitman said during a March debate in Orange County.

Her opponent in the GOP primary, state Insurance Commissioner Steve Poizner, said suspending the law for just a year isn’t enough. He supports Logue’s initiative to delay climate regulations until California’s 12.5 percent unemployment rate drops to 5.5 percent and stays there for a year.

Both candidates cite a much disputed study by the dean of the business school at California State University, Sacramento, which concludes the law could cost 1.1 million jobs. That study, which also is a key element of the initiative campaign, has been discredited by the state’s nonpartisan legislative analyst.