[to discover the exciting outcome of this weekʻs earlier post, you will have to await the publication of The War on California in the next few weeks; in the meantime, todayʻs post introduces the story about what will become the stateʻs most infamous ʻSolutionʻ to fossil-fueled climate crises.]
“Whatʻs that?” I queried of my fellow all-female consultants as we emerged from yet another meeting, as a van adjacent to the capitol’s south entrance deposited a bulky item on the well-manicured grounds.
“Itʻs the governorʻs podium,” my colleague responded. “See the govʻs seal on the front?”
“Yes, I see the podium, but whatʻs he carrying in his other hand?”
Approaching the curb, we looked more closely. “Itʻs his platform!” She responded to my puzzled expression. “You know, the wooden box he stands on to appear larger than life when towering behind the podium.”
“You have got to be kidding me!”
“Come on Bruce, itʻs a Hollywood thing. For Schwarzenegger, this is all political theater.” As we entered the marbled halls, we were laughing. “Oh itʻs theater alright, theater of the absurd.”
Within days my attention turned to the first in a series of broadly outlined discussions about what might appear in the proposal being finalized for hearing before my committee. The bill, eventually celebrated as one of California’s premiere environmental laws -- the Global Warming Solutions Act, popularly known as AB 32 advanced a program supporters referred to as “cap-and-trade;” something that its detractors would later refer to with as Californiaʻs pollution trading scheme. The basic architecture required regulatory agencies, including the California Air Resources Board to set limits on the largest emitters of greenhouse gases combined with a vaguely stated trading program.
This bill would contain an essential flexibility for these large emitters that made AB 32 very different from Californiaʻs classic regulatory approach. Beginning with a benchmark of total greenhouse gas emissions, a declining cap for these emissions would be imposed on the largest emission sources - designed to decrease total emissions to an earlier baseline - in this case, the earlier and lower 1990 measurement of total statewide emissions. Large emission sources, facilities such as refineries or energy plants owned by very large corporations, would be allowed to trade emission credits in an auction with other facilities not utilizing all their own credits. The concept held that as the cap on emissions decreased over time, credits would become more expensive, driving up the price of greenhouse gas pollutants. Companies would have various avenues to figure out how to deal with pollution, but eventually all emitters would be compelled to utilize less costly and less polluting alternatives.
From the start I found the billʻs title misleading, given that an array of California laws already addressed various facets of global warming. With the availability of plentiful regulatory mechanisms, why was these members of the Assembly so enchanted with trading mechanisms as a means for addressing the climate crisis? I would slowly awaken as to why the billʻs emphasis on a trading mechanism continually nagged at me. soon learn about a central feature that made this approach so distinctive.
During an early meeting with supporters, tentative language circulated for a bill being drafted by the Legislatureʻs attorneys that appeared to be suspiciously like the work of the larger environmental groups in Washington, D.C. (and quite unlike the product of Californiaʻs environmental advocates). One telltale characteristic was that language crafted by many of Californiaʻs environmental attorneys typically reflected an obsession with fine details, whereas proposals from inside the Beltway as well in Congress often proceeded with broad provisions. For many of us inside Californiaʻs capitol, the Congressional model of drafting overly broad provisions in law only invited challenges and delays by powerful opposing interests.
Before launching legislation in D.C., one could first road test it in a state legislature. The main advocates in D.C. were laying the groundwork in California for a piece to follow as the national model, based on what they hoped would be the California law. A centerpiece of the bill used "market mechanisms" to define how global warming would be addressed, with the use of a trading scheme. Although trading had been used at that time in a program in Southern California, AB 32 advocates argued that theirs was a distinctive architecture.
At this point, as typical when working in the arena of concepts without benefit of actual language or empirical data, I resorted to a sophisticated technology honed by staff over many years. I picked up the phone to survey my ever-expanding universe of informal advisors stretching from journalists and physicians to regulatory scientists and activists in Los Angeles to gain from their deep knowledge. I was especially interested in the perspective of one who, over many years, was among the elite wizards responsible for pumping up the quarterly statements of major global firms through use of financial instruments. The source, of course, was my brother.