California Unveils Ambitious Plan to Combat Climate Change

California air regulators on Thursday released the country's most sweeping global warming plan, outlining ambitious measures for cleaner cars, renewable energy and a cap on major polluters.

The 75-page draft outlines for the first time how regulators expect to achieve cuts in greenhouse gases mandated under the landmark global warming law signed by Gov. Arnold Schwarzenegger two years ago.

"This is by far the most significant step yet in California's effort to fill the void that's left by the absence of a national policy," Air Resources Board Chairwoman Mary Nichols said.

Most of the ideas have been floated for months, but making them work is expected to be difficult. In many cases, the proposals are general, still undergoing cost analyses and must go through lengthy rulemaking processes before they become law.

While the board works to meet a year-end deadline to finalize its plan, Republicans in the state Legislature are threatening to hold up the state budget this summer unless the global warming law is delayed.

Assembly Republican Leader Mike Villines said the initial plan would increase the price of fuel, electricity and natural gas while imposing costly mandates on businesses.

Members of the California Air Resources Board acknowledged the difficulties but said California must do its part to combat global warming.

Warming temperatures are projected to reduce the Sierra Nevada snowpack — a major source of the state's water supply — and threaten the habitats of native plants and animals.

Rising sea levels could erode the state's coastline and top the maze of levees throughout the Central Valley.

To reach California's global warming target, regulators are proposing oil and gas refineries produce less-polluting fuels, utilities generate a third of their electricity from renewable sources like wind and solar by 2020 and auto manufacturers build cleaner-burning cars.

Local governments will be asked to build residential developments near public transportation, shops and businesses in an effort to reduce the number of miles Californians drive.

Homeowners will be encouraged to put solar panels on their roofs and install solar water heaters, potentially resulting in an average savings of $200 a year in gas and electric bills.

Such policies are estimated to cut 133.8 million metric tons of greenhouse gases, 80 percent of the amount needed to get to the 1990 levels by 2020, according to the draft plan.

The remaining 20 percent would be met by the state's major emitters — utilities, the oil and gas industry, manufactures — as part of a cap-and-trade program.

"A cap and trade is supposed to fill in the gaps," said Derek Walker, who heads California climate program at Environmental Defense Fund, which supports the plan. "It's kind of like the grease on a bike chain that keeps everything moving but it's not the focal point.

Under a cap and trade program, businesses that cannot cut their emissions because of cost or technical hurdles would be allowed to buy emission credits from companies that have achieved cleaner emissions.

Schwarzenegger, who was in Miami on Thursday speaking at an environmental conference, and some federal officials embrace such a carbon market.

Some environmentalists, public utilities and the Democrats who wrote California's global warmiernative could provide the best incentive for change, Nichols said.

Regulators do plan to impose a smaller, separate carbon fee on California's largest emitters. That would raise the $50 million a year needed to administer the global warming program.

What it will cost industry and Californians to reduce emissions remains unclear.

Economic models project the global warming plan would boost the state's economy 1 percent higher than if it did nothing to wean itself off carbon by 2020, Nichols said. The board plans to detail costs later this summer.

Business leaders said the board is moving too quickly, citing the lack of detail on cost and other key aspects of implementing the law.

"We don't really know whether what's being proposed in this roadmap are cost-effective or not," said Catherine Reheis-Boyd, chief operating officer at the Western States Petroleum Association. "You certainly do not want to have policies that end up reducing consumers' ability to drive from A to B, heat and cool their home or turn their lights on."

The plan also envisions achieving greenhouse gas reductions through programs that encourage sustainable forestry and capture methane gas at landfills. Drivers could get money to trade in polluting cars for more fuel-efficient ones.