September 20th, 2016


Senator, California State Senate

President, Western States Petroleum Association

Member, California Air Resources Board


It's been ten years since California Governor Arnold Schwarzenegger launched California's attack on climate change by signing a law to reduce carbon pollution across the state’s economy. That pioneering law, known as Assembly Bill 32 or AB 32, is arguably the most important piece of climate legislation in the country (and spawned a sequel, Senate Bill 32, which was signed into law by Governor Jerry Brown in September). Today, that law puts a price on greenhouse gasses and is generating billions of dollars in revenues. It also has put California at the forefront of the global move to protect the climate.

Has the law been helpful or harmful to California’s economy? A little of both, says Catherine Reheis-Boyd of the Western States Petroleum Association, which mounted a campaign to undermine the regulations imposed by AB 32. “I think it really has set a conversation for California that's a very important one.”

“But also as we look at the positive side of it, we also have to find a way to minimize as much as we can the cost of the program, such that businesses and consumers can still have the quality of life that they have as we’re trying to move forward.”

Outgoing senator Fran Pavley, one of the authors of AB 32, says that “as a former teacher, I suppose I would give it an A-minus.” There’s a lot more work to be done, she admits, but as Schwarzenegger often said, “We don't have to choose between a clean environment and a strong economy. We can have both.”

Since the law was passed in 2006, Pavley adds, “our economy has gotten bigger and emissions have gone down, and we’re on track to meet our 2020 targets.”

“So my involvement in all this is making sure to the maximum extent possible we have a win-win-win: reducing climate pollution, cleaning up the air because of the contributing factor and health impacts and also creating in-state jobs. And so it's going to take a lot of work by a lot of good people, a lot of innovation.”

Dan Sperling of the California Air Resources Board says for some aspects of the bill, such as cap and trade, it’s too early to judge the effects. “For the most part, we’re just getting started,” he says. “We have to do something. The science is overwhelming that climate change is a huge risk to the earth, to California. And the question is, how do we move forward aggressively?”

Despite the WSPA’s opposition, Reheis-Boyd maintains that the oil and gas industry has always supported energy efficiency. “I do think that it is a time where we have to look at all sources of energy as we go down this path together,” she says, adding, “In California the leadership position that it has taken is a very important one. But we have to remember we’re still only less than one percent of the greenhouse gas emissions in the world.

“So what we do matters from a leadership standpoint, but we have to make sure that we don't take such economic burden on ourselves that all we do is put our state at a competitive disadvantage unless other people are going to follow us.”

Pavley dismisses that possibility; in fact, she says, Oregon, Washington and British Columbia are already following our lead in supplying infrastructure for electric vehicles; Mexico, Canada and the United States have all agreed to adopt California’s vehicle emission standards.

“The most expensive thing I think we can do as a government is nothing,” Pavley insists. “This is a huge challenge, and we’re showing that this can be done cost-effectively and is technologically feasible. And there’s amazing amount of good news stories, as well as new technologies that are right on the cusp of moving forward.”

Sperling agrees that California’s leadership has been instrumental to effecting change on both the national and subnational level.

“The climate problem is a global problem, [and] what we do in terms of actual emission reductions in California has a small effect,” Sperling says. “But what we do in terms of policy innovation, what we do in terms of creating the industries and the innovation, really is global. And we are creating the platform in California for economic growth and leadership by nurturing those technologies…the solar technologies, the batteries, the vehicles, the Teslas.

“And so we are positioning ourselves for the future, which is going to be very different. And we’re going to be ready for it more than a lot of places.”