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California's Model Climate Policies Will Maintain Momentum in Obama Second Term

A second Obama White House guarantees California a federal supporter in its crusade to slow global warming.

Nov 8, 2012
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BrightSource's Ivanph solar project in California, first large-scale solar therm

Low-Carbon Fuel Standard: Will Obama Weigh In?

Another critical piece of California's global warming law is a rule to slash carbon emissions in transportation fuels. The Obama administration isn't directly involved with the measure, but the standards are stuck in legal limbo and the White House could opt to weigh in.

The low-carbon fuel standard—the first of its kind in the world—went into effect in the spring. Under the rule, oil importers, refiners and fuel blenders must cut the "carbon intensity" of their fuel mix by one-quarter of a percent this year and by 10 percent by 2020. The rule would discourage the use of oil sands crude and other high-carbon fuels and encourage greater adoption of electric cars and other clean vehicles.

Transportation accounts for 40 percent of California's global warming emissions and about a third of U.S. emissions.

In December, a federal judge ruled the policy was unconstitutional because it regulates economic activity outside California's borders, siding with oil companies, Midwestern ethanol producers and other opponents. Advocates appealed the decision.

The rule's fate now rests with a three-judge panel in the Ninth Circuit Court of Appeals, which is expected to issue its final decision in 2013. The Obama administration could, in theory, attempt to sway the Ninth Circuit judges by filing a friend-of-the-court brief expressing support for the program.

Obama has previously backed a national low-carbon fuel standard. On the 2008 campaign trail, he pledged to establish a program to cut the carbon-intensity in fuels by 10 percent by 2020. But he has also supported corn ethanol producers, who say the standard discriminates against them because it counts the greenhouse gases their ethanol-carting trucks emit en route to California. The president could anger them by championing the fuel rule.

"If I were betting, I'd imagine the Obama administration would stay out of this altogether," said Ann Carlson, faculty director of UCLA Law School's climate change center.

Still, the president could indirectly support the goals of the low-carbon fuel standard by continuing federal mandates and incentives for cleaner-burning fuels, experts agreed.

Obama could, for instance, extend a four-year-old production tax credit for cellulosic ethanol, which could increase the supply of a particularly low-carbon ethanol for California's fuel suppliers. Cellulosic ethanol is made from non-food crops like wood chips, switchgrass and plants—not from corn, which is a higher-carbon ethanol.

The $1.01-per gallon credit is set to expire Dec. 31, 2012, and while there's still no cellulosic ethanol being produced in the United States at a commercial scale, three plants with nearly 80 million gallons in combined capacity are expected to become operational next year. 

Renewable Portfolio Standard: Doing Fine on Its Own

Last year, California approved a tougher Renewable Portfolio Standard (RPS) requiring utilities to get 33 percent of their electricity from renewable sources by 2020. As of July, each of the three major investor-owned utilities said they were nearly two-thirds of the way toward meeting that goal.

Even so, "it it will be easier to achieve" under Obama than it would have been under Mitt Romney, said Michael Gerrard, who directs Columbia Law School's Center for Climate Change Law.

The reason is that Obama is more likely to push to extend federal loans, grants and tax credits for wind and solar energy installations and other clean technologies, which Mitt Romney indicated he might cut.

California's first RPS was passed in 2002. The policy has helped turn the state into the  backbone of the U.S. clean economy. The state accounts for more than half of the country's solar projects and about 10 percent of all wind farms.

Nearly 170,000 California residents have jobs in the broadly defined green economy, according to a recent study. Last year California took in $3.7 billion in venture capital investments in clean technologies—more than half of all such investments in North America.

Gerrard said a national clean electricity standard that spurs a nationwide boom in installations would help California's utilities, because they're allowed to meet part of their RPS requirements by purchasing credits from owners of projects in other states.

Obama has supported a plan to require 80 percent of the nation's electricity generation to come from lower-carbon sources, including natural gas and nuclear energy, by 2035.

Zero-Emissions Vehicle Mandate: A Sigh of Relief

For California's new mandate for ultra-clean cars, Obama's victory removes any doubt the program will move forward.

The rule, approved in January, requires 15 percent of all cars sold in California to be zero-emissions vehicles (ZEV). Compliance begins with model year 2018; full compliance is expected by 2025. State regulators unanimously passed the mandate after four years of bargaining with the auto industry and environmental groups.

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