Calif. experiments to curb climate change

New York TimesOctober 13, 2012 

— Braced against a steep slope, Robert Hrubes cinched his measuring tape around the trunk of one tree after another, barking out diameters like an auctioneer announcing bids. “Twelve point two!” “Fourteen point one!”

Hrubes’ task, a far cry from forestry of the past, was to calculate how much carbon could be stored within the tanoak, madrone and redwood trees in that plot. Every year or so, other foresters will return to make sure the trees are still standing and doing their job.

Such audits will be crucial as California embarks on its grand experiment in reining in climate change. On Jan. 1, it will become the first state in the nation to charge industries across the economy for the greenhouse gases they emit. Under the system, known as “cap and trade,” the state will set an overall ceiling on those emissions and assign allowable emission amounts for individual polluters. A portion of these so-called allowances will be allocated to utilities, manufacturers and others; the remainder will be auctioned off.

Over time, the number of allowances issued by the state will be reduced, which should force a reduction in emissions.

Risky business

To obtain the allowances needed to account for their emissions, companies can buy them at auction or on the carbon market. They can secure offset credits, as they are known, either by buying leftover allowances from emitters that have met their targets or by purchasing them from projects that remove carbon dioxide or other greenhouse gases from the atmosphere, like the woods where Hrubes was working.

Dozens of verifiers from different fields, from chemists to accountants to foresters, will be the first line of defense in making sure the benefits are real.

Hrubes said his goal in any audit was to ensure that the forest’s owner was “being conservative whenever a judgment call has to be made” in calculating greenhouse gas reductions.

The outsize goals of California’s new law, known as AB 32, are to lower California’s emissions to what they were in 1990 by 2020 – a reduction of roughly 30 percent – and, more broadly, to show that the system works and can be replicated.

The risks for California are enormous. Opponents and supporters alike worry that the program could hurt the state’s fragile economy by driving out refineries, cement makers, glass factories and other businesses. Some are concerned that companies will find a way to outmaneuver the system, causing the state to fall short of its emission reduction targets.

“The worst possible thing to happen is if it fails,” said Robert Stavins, a Harvard economist.

A new market develops

Just three years ago, California’s plan was viewed as a trial run for a national carbon market that one day might tie into existing markets in Europe and elsewhere. President Barack Obama’s first budget proposal included a cap-and-trade program to cut national greenhouse gas emissions 14 percent by 2020; the House later passed an energy and climate bill that incorporated such a program.

But in 2010, political forces backed by the biggest emitters, oil and coal companies, blocked the plan in the Senate. In that year’s midterm elections, conservative Republicans disavowed their party’s role in creating similar programs; they continue to deride it as “cap and tax.”

California air regulators are proud of their record in leading the nation to new auto emissions standards in the 1960s and efficiency standards for appliances in the 1970s. And so the pressure is on the state’s Air Resources Board to get this right.

At first, only four means of carbon reduction will be approved for offset credits: timber management, the destruction of coolant gases, cuts in methane emissions from livestock waste and tree planting projects in urban areas. Already, developers of offset projects in more than 20 states are preparing to enter the new market, which for now accepts only credits generated in the United States. Some projects send coolant gases to be destroyed at an incinerator in Arkansas; others, tied to dairies in states like Ohio, Virginia and Wisconsin, will capture methane from livestock waste.

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