1 Catherine Witherspoon Presentation to EVA September 10, 2007 Helsinki, Finland Climate Programs in California

2 California Climate Action Plan Driven by self-interest Intended to create wider momentum Bounded by state’s high growth rate and already efficient energy system Significantly different than Kyoto or proposed EU package

3 0.7 o F higher temperatures 3-8 inch rise in sea level 12% decrease in spring run-off Snowmelt and spring blooms have advanced by 1-3 weeks since 1975 Source: Cal/EPA Environmental Indicators Report (2002) CA Impacts – Past 100 Years

4 CA Impacts – Next 100 Years mid-case estimate 75% loss in snow pack 1-2 foot sea level rise 70 more extreme heat days/year 80% more ‘likely ozone’ days 55% more large forest fires Twice as many drought years 4 Source: Climate Action Team Report (2006)

5 GHG Emissions Per Capita SwedenChinaIndia RussiaJapanE.U Tons of CO2 Equivalent Source: Climate Analysis indicators Tool (CAIT US Version 1.0, CAIT version 4.0), World Resources Institute, 2007 (data is for CY 2001 – 2002 and includes CO 2, CH 4, N 2 O, HFCs, PFCs, and SF 6 emissions for countries and CO2, CH4, N2O, and F-gases for CA) 24.3 U.S. CA 13.4 World Average World Average

6 California Growth Pressures Current population is 37 million –2050 forecast is ~60 million –47% increase from 1990 to 2020 Vehicle travel rises 2% per year State economy $1.5 trillion –Growing 4-5% per year

7 Governor’s Solution Announced June 2005 Stop GHG emissions growth Return to 1990 baseline by 2020 Cut emissions 80% more by 2050 Use combination of regulations, market measures, policies and incentives Link up with rest of nation and world

8 Magnitude of the Challenge 11

9 Source: March 2006 CAT Report, adapted from CEC, 2005 California’s GHG Emissions (2002) Total statewide inventory ~ 500 MMTCO2E Agriculture & Forestry 8.0% Transportation 41.2% Others 8.4% Electric Power 19.6% Industrial 22.8%

10 Potential Control Strategies (2006 Action Plan) Source: March 2006 Climate Action Team Report Vehicles and fuels41 MMT24% Forestry33 MMT19% Land Use/Transportation27 MMT16% Energy Efficiency21 MMT12% Other Utility Measures19 MMT11% Renewable Portfolio Standard14 MMT8% Waste Management6 MMT3% Other, Miscellaneous13 MMT7% TOTAL174 MMT100%

11 Legislative Intervention and Messages To Governor: “prove you’re sincere” To Regulators: “get to work” To Industry: “don’t assume markets” To NGOs: (mixed messages) To all: high stakes demand open process

12 Assembly Bill 32 Global Warming Solutions Act of 2006 Locks in 2020 emission target Makes CARB lead authority Requires comprehensive plan Requires early regulatory actions Requires mandatory GHG reporting Rulemakings to be finished by 2011 Allows market measures Two advisory committees (EJ, Econ & Tech)

13 Ongoing Policy Friction Debate over what will be regulatory and what will be market-driven Different views regarding the desirability of federal pre-emption Fear of repeating 2003 energy crisis Current fiscal crisis, funding for AB 32

14 Shared Technological Optimism “GOLD made CA, GREEN will sustain it” $1.5 trillion economy Exports account for 25% Key sectors: machines, computers and electronics, food, transportation equipment, chemicals Green technology next big driver

15 California’s Economic Analysis Climate plan net positive for CA economy 83,000 new jobs, $4B growth Huge savings from energy efficiency and vehicle emission standards Remaining strategies priced at 0-$50/ton

16 8%17%25%33%42%50%58%

U.S. EPA Analysis of Cap & Trade Legislation Good news –No harm to U.S. economy Bad news –Much higher prices for gas and electricity Dept of Energy’s analysis pending 17

18 What’s Happening Now in CA July – draft scoping plan for 2020 December – low carbon fuel standard Ongoing – lawsuit over car waiver Ongoing – design of cap & trade Ongoing – expanding partnerships

19 What’s Happening Across US 9 Northeast States starting market program for power sector 6 Western States and 2 Canadian Provinces set regional GHG target Quasi-national GHG emissions registry U.S. EPA ordered to begin regulations

20 What’s Happening in DC Energy bill passed –Tighter CAFE standard for cars, trucks –Higher renewable fuel mandate –Clean coal R&D Cap & Trade legislation pending Presidential election Shift in Bush Administration position

21 Range of Views about EU ETS What CA and/or US should do Good idea, worth exploring Less effective than taxes Stalling tactic to avoid hard choices Impossible to do well 2 nd phase critically important

22 DialogueDialogue California vs. Europe’s situation and possible choices? Validity of economic assessments and cost curves? Importance of getting all countries focused on the same goal?

23 Thank You