AB32 and Beyond: A Laboratory on the Next Steps in California's Policy on Global Warming

Description

When Gov. Arnold Schwarzenegger signed into law AB32, which mandates the widest restrictions on carbon dioxide emissions in the nation, the focus of debate immediately shifted to how the state would implement the new law.

In an effort to help sort that out, the Milken Institute hosted a workshop,"AB32 and Beyond," that brought together public policy leaders, heads of industry, financial executives and others to examine the implications of the legislation, particularly on the expanding carbon trading and alternative energy markets.

The session, moderated by Joel Kurtzman and Glenn Yago of the Milken Institute, included a primer from Dan Skopec, undersecretary of the California Environmental Protection Agency, who has been instrumental in educating different stakeholder groups on the major features of the bill. He laid out the preliminary timeline for the implementation of AB32, emphasizing that the next few months will be crucial for the market advisory committee, which must recommend emissions-trading guidelines and design features to the state's Air Resources Board.

Richard Sandor, founder and CEO of the Chicago Climate Exchange (CCX), the world's first greenhouse-emission registry, reduction and trading system, spoke about the origins of the exchange and how it will be able to help California industry comply with AB32 mandates.

Jane Brunner, a councilwoman in the City of Oakland, one of the earliest government members of CCX, discussed her city's sustainability and carbon-reduction programs. Measuring and verifying the impacts of their programs were the motivations behind joining CCX, she said.

Joe Pettus, a senior vice president of Safeway, explained why his company felt the need to join both CCX and the California Climate Action Registry. His company, which is one of the largest commercial users of electricity in the U.S., was motivated by the desire to know exactly when, how much and from where their energy (and hence carbon emissions) flowed. Determining their ecological footprint was important to them not only from a business standpoint but also from a reputation and stewardship standpoint.

Other panelists were Dennis Albiani, former deputy legislative secretary with the Schwarzenegger administration, who talked about the genesis of the bill; Dan Braun, director of Global Environmental Finance at Stark Investments, who provided the capital-market perspective and value propositions resulting from AB32; and Bill Marcus of Calyon Financial, a key player in domestic and international carbon-trading regimes.

Participants realized that every move California makes in this area will be closely scrutinized, and therefore, careful planning and consideration of complex economic and social issues cannot be overlooked, they agreed.