California’s Brown Seeks Nation-Leading Greenhouse Gas Cuts

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California Governor Jerry Brown ordered emissions of greenhouse gases reduced to almost half of what they were a quarter century ago, the most ambitious statewide effort to combat climate change in the U.S.

Brown, a 77-year-old Democrat, issued an executive order establishing a target of 40 percent below 1990 levels by 2030. To do so, the state must require utilities to get more electricity from low-pollution sources, compel industries to cut smokestack emissions further and encourage greater numbers of cleaner cars on roads.

California, with the seventh-largest economy on the globe, already has some of the toughest carbon pollution regulations in the U.S. and is on target to meet its self-imposed deadline to cut emissions to 1990 levels by 2020. Now, Brown and other Democratic leaders are looking to advance those climate-change policies further even as business leaders warn they put companies at a competitive disadvantage.

“California is taking the most aggressive steps to deal with pollution and the effects of climate change,” Brown said Wednesday at the Millennium Biltmore hotel in downtown Los Angeles. “Doing that is totally compatible with the economy.”

Brown said California has been compelled to act on its own as Republicans in Washington and other U.S. states remain resistant to scientific evidence that manmade carbon pollution is causing global climate changes. His proposals have raised concerns from the oil and natural gas industry, manufacturers and Republicans, who warn the policies will raise energy prices and drive business to less-expensive regions.

Pace Setting

His executive order directs agencies to incorporate climate change in their planning and investment decisions and requires the state to consider global warming when drafting infrastructure building plans.

It also calls for an update to the “Safeguarding California Plan,” a state report on climate change, to identify how it might affect California infrastructure and industry and what actions the state can take to reduce the risks.

“We’re demonstrating in California that we can take steps to reduce carbon emissions while advancing the economy at the same time,” Brown said. “In North America, California is now setting the pace.”

In January, Brown outlined a series of environmental goals aimed at reducing carbon emissions in the next 15 years, including cutting petroleum use in cars and trucks by 50 percent, doubling the efficiency of existing buildings and increasing to half from one-third the electricity delivered from renewable sources.

Aggressive Target

Democrats who control the state Senate in February unveiled a package of bills to increase the state’s renewable energy mandate to 50 percent by 2030, force public pensions to divest from coal companies and require regulators to establish rules to cut petroleum use in half. The efforts would be guided by a new advisory committee that would try to advance the goals while spurring economic growth.

California began a cap-and-trade market in 2013 that’s designed to reduce emissions about 15 percent through the decade to help achieve the state’s goal of reaching 1990 levels by 2020. Carbon allowances traded as part of the program have sold close to minimum “floor” prices on speculation that the market will be oversupplied through 2020.

Awaiting Signal

Carbon traders have been waiting for a signal from the governor that the program will extend beyond 2020, and Wednesday’s announcement gets them at least part of the way there, Andre Templeman, founder of environmental market consulting firm Alpha Inception in Houston, said by phone on Wednesday.

“A 40 percent reduction by 2030 would be a very, very aggressive target,” Templeman said. “But a target in and of itself without a way to get there doesn’t mean anything. A target that says, ‘Here’s where we want to get and cap and trade is going to be our primary mechanism to get there would be a very positive signal to the market.”

Futures for carbon allowances that companies can use as soon as this year to cover emissions in California were unchanged on Tuesday at $12.68 a metric ton. The floor price set by the state is $12.10 this year.

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