California’s environmental regulators have revisited their credit program for zero emissions vehicles, which hasn’t done enough to position the state for the kind of carbon savings needed to meet future targets. 

The zero-emissions subsidy hasn’t suffered from a lack of funding in the recent past. “Earlier this year, not long after declaring victory on a hard-fought measure expanding the state’s emission reduction mandate, Gov. Jerry Brown and lawmakers announced a late-session deal on where to send some of the revenue from the state’s cap-and-trade program,” the Fresno Bee recalled. “A big chunk of money in the compromise went to the Air Resource Board’s Low-Carbon Transportation initiative, including over $200 million to bolster programs offering financial incentives for purchasing cleaner vehicles.”

But Brown and the board have struggled to figure out just how to pump zero-emission vehicle acquisitions up to where they must be for California to hit its ambitious emissions targets in coming years. “Brown has argued business interests and resistant legislators will prefer the reliability of cap-and-trade to more stringent dictates,” the paper added earlier this month. “Whether or not the Legislature musters a vote to extend the program beyond a 2020 limit set in statute, the ARB has already begun sculpting regulations that could sustain the system without a vote.”

Photo courtesy of mashable.com

California’s powerful environmental regulator has ordered the recall of all Volkswagens, Audis and Porsches equipped with software secretly installed to defeat emissions tests.

“On November 25, the California Air Resources Board sent an In Use Compliance letter notifying Volkswagen, Audi and Porsche to start the process necessary to recall and repair illegal emissions software in all 3-liter diesel vehicles, model years 2009–2015, sold in California,” NACS reported. “According to a press release, the automakers have 45 business days to assemble their plan and deliver it to CARB.”

The figures were added atop the 482,000 cars Volkswagen had previously admitted to rigging, as Bloomberg noted. “That revelation, concerning 2-liter diesel engines from the 2009 through 2015 model years, sparked criminal probes in Europe and the U.S. and led to the resignation of the company’s chief executive officer.”

Flexing its muscle

The new letter marked just the latest twisting of the screws from the Board, which has aggressively pursued action against the auto maker. “The notice from the California Air Resources Board came less than a week after state and federal regulators disclosed that Volkswagen Group automakers installed software to cheat emissions tests on more diesels than initially thought,” AP reported. “The U.S. Environmental Protection Agency and the California Air Resources Board said last week the software was on about 85,000 Volkswagen, Audi and Porsche vehicles with 3-liter, six-cylinder engines going back to the 2009 model year.” Cars were programmed, according to the New York Times, to trigger a “special eco-friendly mode with lower emissions of nitrogen oxides” when they detected that a lab test had begun.

The Board was instrumental in flushing out Volkswagen’s malfeasance, helping blindside the company by making the revelations public. In a remarkable twist, the Board recently confirmed comments made by director Mary Nichols, published in a German business magazine, “suggesting that the German government may have had information as early as 2010 about Volkswagen AG’s difficulties meeting restrictions on nitrogen oxide emissions in the U.S.,” the Wall Street Journal reported. “Ms. Nichols said she was surprised that Ms. Merkel had such specific knowledge of the problems with nitrogen oxide emissions that German manufacturers faced.”

Just last month, it slapped the company with the second of two notices of violation. “On September 25, the California Air Resources Board sent letters to all manufacturers letting them know we would be screening vehicles for potential defeat devices,” Richard Corey, the Board’s Executive Officer said. “Since then ARB, EPA and Environment Canada have continued test programs on additional diesel-powered passenger cars and SUVs. These tests have raised serious concerns about the presence of defeat devices on additional VW, Audi and Porsche vehicles.”

An unending scandal

The damage to Volkswagen has been substantial: “Dealers labored for most of the month with inadequate saleable inventory on their lots,” as the Orange County Register reported, with the auto maker saying “sales of its namesake brand declined 25 percent from a year earlier, largely because the company couldn’t sell any diesel-powered cars.” The company, which confessed it had cheated emissions tests on its diesel cars, halted their sale, falling back on only its gasoline-powered vehicles.

Trouble has spread overseas as well. Although Volkswagen had previously said it was unsure whether the cheating software violated European regulations in addition to U.S. and Californian ones, German regulators recently announced that it did. “The determination by German regulators that VW had cheated could affect a flurry of European consumer litigation, though it is unclear what fines the company might face in Europe,” the Times observed. “While European Union member states were supposed to enact penalties for cheating on automotive tests several years ago, few have done so.”

In the wake of a big legislative setback, Gov. Jerry Brown’s wish to use regulations to cut fuel emissions is swiftly coming true.

This month, Democratic lawmakers couldn’t muster enough votes to slash gasoline use by half within 15 years. Now, the state Air Resources Board has taken action widely seen as compensatory. “The action, coming two weeks after a stinging defeat for Gov. Jerry Brown’s planned 50 percent cut in petroleum use by 2030, signaled his administration’s determination to press forward with an aggressive environmental agenda through the regulatory process rather than by legislation,” noted the New York Times.

Resurgent regulations

In a unanimous, 9-0 vote, the board chose to reactivate California’s standards on low-carbon fuel, created years ago but recently held in legal limbo. The regime constituted “the first regulation of its kind in the U.S. when it was established in a 2007 executive order by then-Gov. Arnold Schwarzenegger,” as the Wall Street Journal reported. “It had been frozen since 2013, as the state made revisions to the law following a court challenge.”

“The California regulation further tightens the state’s emissions regulations, already the most stringent in the U.S. It requires fuel makers to reduce emissions by developing cleaner fuels or adopting greater use of biofuels. It also requires fuel producers to take into account all emissions for delivering gasoline, diesel or biofuels to California customers.”

Tweaks to the rules made in the wake of the court challenge included “streamlining the application process for alternative fuel producers seeking a carbon intensity score,” according to Ethanol Producer Magazine.

The interventions quickly drew howls from the oil and gas industry, which views the rules’ requirements as unattainable. Tiffany Roberts, director for fuels and climate policy at the Western States Petroleum Association, told the Sacramento Business Journal they weren’t feasible, suggesting that “even if oil businesses are able to incorporate those pollution-cutting methods, they still cannot meet the program’s aggressive standards.” Defenders of the plan, meanwhile, focused on its perceived benefits. “It will drive new technologies, not only in transportation fuel but in hybrid cars, electric cars and other means of transportation,” Pacific Ethanol spokesman Paul Koehler told the Business Journal.

Political heat

Industry interests haven’t fueled the only criticism of Brown’s regulatory approach, however. Earlier this month, the administration heard out the complaints of a gaggle of state lawmakers — including Democrats — frustrated by the activism and assertiveness of the Air Resources Board. Their debate with Brown “turns on questions of how the state can meet its environmental goals with the right balance between the executive branch, which prizes the ability to act independently, and state lawmakers, who want their own stamp on government programs,” according to the Los Angeles Times.

That disagreement came to a head amid the collapse of the Senate’s planned 50 percent cut in statewide petroleum use. “If the board made decisions adversely impacting constituents, many of whom have already been struggling economically, the consequences could be dire,” uneasy Democrats feared, as CalWatchdog previously noted. “What’s more, angry voters would have little way to respond but at the ballot box.”

While state Senate pro Tem Kevin de Leon portrayed the cut’s failure as the consequence of a massive industry campaign, Assemblyman Mike Gatto, D-Glendale, instead focused on the Air Resources Board’s “tremendous arrogance,” the Times reported, “noting that he’s never taken campaign money from the oil industry but remains skeptical about the measure.”

But the board’s recent successes at advancing its agenda suggested its influence was set to grow. Tipped by concerned scientists, it launched the investigation into the Volkswagen Group of America that revealed the auto company’s secret years-long use of “a defeat device to circumvent CARB and […] EPA emission test procedures,” as emissions compliance chief Annette Hebert revealed.

Bloomberg NEF, a media enterprise focusing on the energy sector, isn’t the only credible entity to make this complaint about a key part of California’s push to force a shift from fossil fuels to cleaner-but-costlier sources of energy.

Much of our climate change skepticism stems from the government’s involvement and manipulation of the scientific data, and the subsequent creation of a cap and trade system, designed to punish and tax business. Cap and Trade is not about saving the planet; it is about revenues, and killing the California economy and jobs.

Not long ago, it became abundantly clear that no one in the state has a handle on the implementation of AB 32, California’s Global Warming Solution Act of 2006, or the potential repercussions from the vast law. California continues to forge ahead blinded by the potential revenues extorted from businesses and customers, despite the phony science and altered data.

Since Gov. Jerry Brown decided to monetize CO2 carbon emissions, and approved plans to tax utility customers, business owners and taxpayers for the emissions, the state stands to take in an extra $1 billion in revenues.

Phony science

The Daily Caller recently reported about this phony science. “Leaked documents obtained by the Associated Press show that the U.S. government and several European governments tried to get climate scientists to downplay the lack of global warming over the past 15 years.”

“The U.S. government along with some European nations tried to convince the report’s authors to downplay the lack of warming over the past 15 years,” the DC said. “The highly anticipated United Nations report on global warming is expected to affirm the link between human activity and global warming, but scientists are still having trouble explaining away the lull in rising global temperatures over the past 15 years despite rapidly rising greenhouse gas levels.”

And now, one MIT scientist rips the latest International Panel on Climate Change report:

MIT Climate Scientist Dr. Richard Lindzen told Climate Depot on September 27, 2013:

“I think that the latest IPCC report has truly sunk to level of hilarious incoherence.  They are proclaiming increased confidence in their models as the discrepancies between their models and observations increase.”

… in attributing warming to man, they fail to point out that the warming has been small, and totally consistent with their being nothing to be alarmed about.  It is quite amazing to see the contortions the IPCC has to go through in order to keep the international climate agenda going.

Pravda even mocks global warming

“For years, the Elites of the West have cranked up the myth of Man Made Global Warming as a means first and foremost to control the lives and behaviors of their populations,” Pravda writer Stanislav Mishin wrote in ”Global Warming, the tool of the West.”

“What better way to staunch protests at worsening economic and life conditions than to make it feel like an honourable job/duty of the people to save ‘Gia.’ At the same time, they used this ‘science’ as a new pagan religion to further push out the Christianity they hate and despise and most of all, fear?” Mishin asked.

“Gia worship, the earth ‘mother,’ has been pushed in popular culture oozing out of the West for a better part of the past 1.5 decades. This is a religion replete with an army of priests, called Government Grant Scientists.”

Mishin is right. Global warming, climate change hysteria and environmentalism has become a ‘religion’ of irrational proportions. But it has also become a giant financial scheme as evidenced by the many government subsidized ‘Solyndra-type’ clean-energy scandals.

And, even as the TIME magazine cover spoof showed in 2009, the United Nations IPCC lied about the effects of global warming by using phony science and doctored data. It was revealed that The International Panel on Climate Change science was a deliberate hoax.

This very expensive climate change hoax appears to be thriving today under the careful manipulations of the California Air Resources Board, and Gov. Jerry Brown.

But in a 2012 interview, Dr. Richard Lindzen told the NY Times, “You have politicians who are being told if they question this, they are anti-science. We are trying to tell them, no, questioning is never anti-science.”

By Katy Grimes

SACRAMENTO — While the California Air Resources Board continues to forge ahead like a blind bull in a china shop with its far-reaching climate change plan, the extent of the destruction that could result is beginning to become evident.

At a legislative hearing Tuesday, it became uncomfortably apparent that CARB officials simply do not understand what drives the free market. Unfortunately for California, the agency’s environmentalist supporters and much of the Legislature are in the same boat.

Despite warnings and the many legislative hearings where business and trade associations have detailed serious concerns, CARB has made no changes to its scoping plan or cap-and-trade program. Nothing gets corrected,  no in-depth economic analysis is ever completed. The far-reaching agency just continues to move forward with its plan to reshape the state’s economy, appearing to be unaccountable even to the Legislature.

‘Health-based’ standards = zero GHG emissions

The Senate Transportation and Housing Committee conducted another hearing on AB 32’s implementation – this one aimed at light-duty vehicles (cars and light trucks, mini vans, and sport utility vehicles) and the fuels, mostly gas, that they use in California.

AB 32, California’s Global Warming Solutions Act of 2006, set the 2020 greenhouse gas emissions reduction goal into law.

“In recognition to the threat to our environment, human health, and human society posed by global warming, California enacted AB 32 to reduce greenhouse gas emissions significantly by 2020,” the committee analysis said. “ARB indicates that reducing GHG emissions to 1990 levels by 2020 and 80 percent of 1990 levels by 2050 means completely altering the types of cars Californians drive, and the fuels we use.”

CARB has been heavily pushing the 2050 goals more recently, because as the agency’s Richard Corey admitted, “the last three years have seen the biggest drop in carbon emissions.” California has nearly met its 1990 levels of carbon emissions, and done this without radically changing the standard of living in the state.

In CARB’s cross hairs: all conventional automobiles

But that is apparently not enough.

“California must move toward a zero-based emission system,” air board executive Alberto Ayala said. “These are health-based air quality standards,” he added.

This “health-based standards” is a new phrase for the CARB and its supporters. It was used throughout the hearing.

“Poor air quality is central to asthma, cardiovascular [health problems] and premature deaths,” Ayala said. “Transportation is a significant part of this challenge. The strategy to reduce  must focus on this sector.”

While there are other sources of pollution CARB could go after, it is clear that the air board has chosen the automobile as villain number one. Ayala noted “70 percent [of pollution] is particulate matter, and 40 percent is carbon emissions.”

Taking CARB’s activism one step further, Ayala even said the CARB is now “pushing fuel-cell vehicles.”

“Be careful of being seduced by technology,” state Sen. Mark DeSaulnier, D-Concord, warned Ayala. “We can’t set aspirational goals but not expect the private sector to come up with the changes.”

CARB plans on ridding the state of 85 percent of its 22 million internal combustion engine vehicles by 2050 through implementation of its Low Carbon Fuel Standard.

Currently, only 0.0002 percent of vehicles in California use alternative fuel or have hybrid engines, a number acknowledged by several of the transportation experts at the hearing. Hybrids, electric cars and alternative vehicles just don’t sell. They are much more expensive than internal combustion engine vehicles,  most are unattractive, and the purchase costs versus savings don’t pencil out on a spreadsheet.

Instead of working with auto manufacturers to help create fuel-efficient and hybrid vehicles people will buy, CARB continues to mandate unrealistic policies and goals.

Low Carbon Fuel Standard to make cost of travel soar

Central to the air board’s policy strategy is the Low Carbon Fuel Standard program, which took effect in 2011 and requires a reduction in “carbon intensity” in all fuel.

CARB calculates emissions in the carbon intensity calculation, but also includes extraction and how the fuel is refined and transported. As part of its calculation, CARB also assigns scores to oil from all over the world. The gasoline produced from it must be mixed with “cleaner” fuels to achieve a carbon reduction.

Showing what a subjective process this really is, the air board includes factors such as  environmental-friendliness of the oil-producing country.

The Western States Petroleum Association has a big problem with CARB, and for good reason: The inadequate supply of low carbon intensity fuels and biofuels will very shortly leave oil refiners with no viable compliance options. According to a recent study commissioned by the association, the low carbon fuel standard would produce a steep decline in demand for refined products, particularly gas, resulting in a loss of 20 to 30 percent of the state’s refining capacity by 2017, and up to a 35 percent loss by 2020.

California’s cap-and-trade auction program, according to the WSPA, will increase the cost of making gasoline and diesel up to 69 cents per gallon, depending on the cost of carbon allowances.

Cathy Reheis-Boyd, president of the WSPA, warned that continuing with the CARB plan for cap-and-trade auctions and the low carbon fuel standard could result in refineries closing and the loss of 51,000 jobs in California. With these refinery closures and lost jobs, by 2020, the state stands to lose $3.4 billion per year or more in tax revenues, Reheis-Boyd said.

Oil’s central role in California, by the numbers

Reheis-Boyd shared some facts with the committee:

— 96 percent of California’s transportation fuels are petroleum-based.

— Californians consume 42 million gallons of gas, and 11 million gallons of diesel fuel each day.

— 1.750 million gallons of gas and half a million gallons of diesel fuel are consumed every hour in California.

— California is the third-largest fuel consuming entity on Earth, behind the U.S. as a whole, and all of China.

Reheis-Boyd said when the low carbon fuel standard was introduced in 2007, the petroleum industry was told it was a performance-based standard that would let the marketplace determine what fuels and technologies were best suited to lower California’s emissions. “Now we’re being told the only hope for the low carbon fuel standard is to compel some industries and oil companies, to invest in technologies they may not feel are economically viable or are incompatible with their long-term business objectives,” Reheis-Boyd wrote in a recent op-ed.

As more evidence that CARB’s leaders don’t understand the marketplace, they are now dictating to businesses what they should be producing.

Legislative analyst remains skeptical of CARB claims

For more than four years, the nonpartisan Legislative Analyst’s Office has raised concerns about the CARB’s implementation of AB 32, the scoping plan, and low fuel standard. “Our review found that the ARB’s economic analysis raises a number of questions relating to (1) how implementation of AB 32 was compared to doing business-as-usual, (2) the incompleteness of the ARB analysis, (3) how specific GHG reduction measures are deemed to be cost-effective, (4) weak assumptions relating to the low-carbon fuel standard, (5) a lack of analytical rigor in the macroeconomic modeling, (6) the failure of the plan to lay out an investment pathway, and (7) the failure by ARB to use economic analysis to shape the choice of and reliance on GHG reduction measures,” the LAO explained in a 2008 report to the Legislature.

The LAO position remains unchanged. Tiffany Roberts with the LAO presented a nearly identical critique Tuesday to the Senate committee of CARB’s plans.

Roberts said the CARB has never done a rigorous analysis of the costs and benefits of the scoping plan. “It could be very helpful to the state,” Roberts said. And she added the lack of analysis is a “significant weakness,” and “troubling.”

“[By] assuming that no actions are taken to reduce GHG emissions by 2020, the CARB overstates the problem that it then credits the scoping plan with addressing,” the LAO’s 2008 report found — a point Roberts reiterated Tuesday.

The scoping plan includes an inconsistent and incomplete evaluation of costs and savings associated with its recommended measures, the LAO has consistently reported.

Roberts said CARB still had a very weak basis for its assumptions about the Low Carbon Fuel Standard.

The $25 billion in annualized costs that CARB attributes to the scoping plan are concentrated in one measure—the low-carbon fuel standard. That measure alone accounts for $11 billion, or 44 percent of the scoping plan’s annualized costs, although it provides just less than 9 percent of the plan’s emissions reductions, the 2008 report found. “However, CARB further claims that these $11 billion in annualized costs would be offset by equivalent savings on petroleum products (mainly gasoline) that would no longer be purchased for transportation purposes. Therefore, according to CARB, the net annualized cost of this measure is zero.”

The California Air Resources Board must be using New Math from the 1960s if it thinks heavy regulation comes without a cost. Here is how CARB explains “annualized costs”:

“Savings are generally calculated from reduced energy used as a result of efficiency or other measure. For most measures the savings value listed in the tables results from a reduction in fuel or electricity use or the net reduction associated with fuel switching.  ‘Net Annualized Cost’ is calculated by subtracting the savings from the annualized cost.”

And Roberts was quite critical of the air board’s macroeconomic analysis. “The findings are highly dependent upon key assumptions, some of which are based on incomplete data,” she said.

Specifically, CARB is going after transportation, 
electricity, industry, and commercial and residential sectors for emission reductions. These sectors “must reduce … greenhouse gas emissions through the direct regulatory measures recommended by the program,” the LAO found. “However, after accounting for GHG emissions reductions resulting from the plan’s direct regulatory measures, the four sectors must together achieve additional reductions of approximately another 33 MMTCO2E (millions of metric tons of carbon dioxide equivalents) through the cap-and-trade program.”

Is this realistic? Because the air board hasn’t done trustworthy analyses, no one can know.

Industry’s common-sense suggestions

Several industry providers spoke at the hearing including Curt Augustine with the Alliance of Automobile Manufacturers. Augustine warned lawmakers that the state’s infrastructure is not keeping up with technological changes, and offered several easy fixes:

— Sales tax breaks on hybrid and alternative fuel vehicles.

— More HOV access on highways to help encourage sales of hybrid vehicles.

— More parking and charging access.

— Free or reduced toll road charges for hybrid and alternative fuel vehicles.

If as Gov. Jerry Brown’s plan of 1.5 million zero-emission vehicles in service by 2025 is to be implemented, Augustine said the real answer is to invest in the infrastructure to support these.

Bob Epstein with Environmental Entrepreneurs touted biodiesel as a viable alternative fuel source because it can be used with existing infrastructure and in cars. Epstein said biodiesel takes care of another problem by using waste in the state’s landfills to make the fuel. Epstein’s testimony indicated that while CARB is headed in the most radical direction, there are plenty of environmental entrepreneurs ready to invest in alternative fuel solutions, which may be easier to implement and  won’t require all new infrastructure.

But Epstein asked lawmakers to help get the state government out of the way so entrepreneurs can forge ahead. He warned, “The state needs to be easier to do business in.”

By Katy Grimes

A group of employers and taxpayers have sent a letter to Gov. Jerry Brown asking that he halt cap and trade “and policies to achieve greenhouse gas emission reductions.” Cap and trade is the state’s fledgling system of trading carbon credits to reduce greenhouse gases under AB 32, the Global Warming Solutions Act of 2006.

The AB 32 Implementation Group is a coalition of employers and taxpayer groups forced into compliance with AB 32. But their plea has been ignored by the California Air Resources Board and its director, Mary Nichols, over concerns that AB 32 implementation could bankrupt businesses and harm the state’s own finances.

The group now is asking Brown and CARB to make state policy more cost-effective, better administered and responsive to public concerns. Under AB 32, the governor has the authority to suspend the legislation’s implementation for one year.

But if you read between the lines of the carefully worded letter, it is clear that these employers and taxpayer organizations really fear that CARB has no idea what it is doing as it forges ahead with cap and trade in the brave new world of curbing global warming emissions.

The letter reads:

“The AB 32 Implementation Group would like to highlight that over the past five years, and in particular in the last year, business and industry have submitted numerous public comments on the overall policy aspects of linking with other jurisdictions and on the details of the program to link Quebec in particular, yet we do not see any movement to make linking more cost-effective and more administratively effective (see industry comments on holding limits for example). It is imperative that CARB come down from its ‘full speed ahead’ vision and move to make the reasonable, rational changes to make the linking regulation more cost-effective and more administratively workable.”

That makes sense. Especially since the AB 32 Implementation Group consistently says, “We support climate change policy for California that is coordinated with other western states and ultimately the federal government.”

Higher costs

Numerous studies have shown that California’s cap-and-trade auctions will lead to significantly higher energy costs. California already suffers under high energy costs — piling on even higher costs likely will spur more businesses to leave state.

As the letter hints, an oddity of cap and trade is that Nichols and CARB have fixated on linking with Quebec, the Canadian province.

The letter pointed out: “Linkage with Quebec without first assuring that the market functions properly and that market manipulation protections actually work poses new and unnecessary risks and complications.” No other Canadian province or American state is involved.

The AB 32 Implementation Group explained California’s cap-and-trade program is six times as large as Quebec’s, but Quebec’s carbon price is more than twice as high as California’s. According to the letter, “Linking with Quebec will only make the cost of offsets higher as Quebec industry will have twice the incentive to go after the limited number of offsets, thereby increasing the cost of offsets.”

But AB 32 unequivocally instructs CARB to implement AB 32 in the most cost-effective, technologically feasible manner.

Global market

CARB has withheld some of the carbon emission allowances, thereby forcing California businesses to compete for carbon allowances in a global market.

This proved what many have been saying all along about AB 32 and Nichols: She wants to play in an international arena, and AB 32 implementation gets her there.

It also goes a long way in explaining why CARB registered its new corporation, Western Climate Initiative Inc., in Delaware, not California, as I was the first to report here on CalWatchdog.com. Doing so exempts CARB from closer scrutiny back home in the sun.

Meanwhile, California businesses are pleading for relief from the governor.

By Katy Grimes

The California Air Resources Board just named the American Carbon Registry and the Climate Action Reserve as California’s two new “carbon overseers” for the state’s cap-and-trade program. The “carbon overseers” phrase commonly is used for them at CARB hearings.

Being named as the “offset project registries” allows these groups to oversee and scrutinize projects aimed at cutting greenhouse gas emissions. They also could benefit financially because becoming a carbon overseer will allows them to expand their operation significantly.

The registries’ role is to vet the clean energy projects, CARB spokesman Dave Clegern said in a press release.

And if that is not daunting enough, CARB has also hired a team of 60 inspectors to oversee projects.

Climate Action Reserve is the largest offsets registry in North America, with nearly 500 offset projects in four U.S. states and Mexico, and has certified more than 24 million metric tons of greenhouse gas emission reductions. But according to an environmental consultant who asked to remain anonymous, Climate Action Reserve is an organization largely grown as a result of the passage and implementation of AB 32. Climate Action Reserve was steadily and quietly built up since 2006 to pounce on cap-and-trade implementation, according to the environmental consultant.

At a hearing in May about AB 32 implementation, Gary Gero of Climate Action Reserve called for even more radical caps and environmental policies including forest protocols, livestock protocols and ozone protocols.  Gero said the group is looking to be “the largest liquid North American carbon market.”

It appears their wish is about to come true.

Adding to California’s regulatory burden

The cap-and-trade regulation includes an arbitrary but enforceable greenhouse gas emission “cap” on businesses, whose level will be dropped every year. CARB will distribute allowances, also known as carbon permits or carbon credits, equal to the emission allowed under the cap. Businesses are required to purchase these permits or credits in order to continue doing business in California.

But businesses which exceed this emission cap will end up paying hefty penalties to the state.

CARB describes cap-and-trade acts as an “economy-wide backstop,” built on the promise to work with other greenhouse gas emission markets and trade allowances. However, CARB sets all of the carbon allowances. It’s like being both the banker and real estate broker in the game of Monopoly.

Businesses in the state have tried to get CARB to explain how cap-and-trade will impact them as they suddenly are being forced to implement the new regulatory programs. But CARB merely plays down any impacts, and has insisted that the impacts will be minimal.

Whom will CA trade with?

California’s cap-and-trade program was supposed to be an integral part of a larger system called the Western Climate Initiative, made up of many states.

But last year, New Mexico, Arizona, Washington, Oregon, Montana and Utah all pulled out of the Western Climate Initiative, leaving only California and three Canadian provinces. Despite the U.S. exodus, California formally launched its own cap-and-trade system on Jan. 1, 2012, with a very ambitious target of carbon emissions reductions of 80 percent by 2050.

California’s only remaining official partner in the Western Climate Initiative is the Canadian province of Quebec. The province is working to launch its own scheme in 2013, and recently formally announced plans to link with California for carbon trading.

Serious flaws in trading

If California’s carbon trading partners offer more carbon allowances to their businesses and industries than California does, it will hurt our competitive advantage, just as higher in-state taxes already hurt California businesses competing against businesses in other states.

And it is very important to note that the California-Quebec relationship is not trading apples-to-apples. Quebec gets 97 percent of its energy from hydroelectric sources. Conversely, California is trying to reduce traditional electricity production, including hydroelectric power, and instead replace it with as much “renewable” energy as possible from wind and solar, algae and ethanol.

But the renewable energy sources are unreliable, and very expensive. Ironically, California will have to maintain a full backup system of coal-powered electricity because of the unreliable alternative energy.

Energy experts have been saying in recent months that California’s energy demand is too much for the alternative energy and lower usage standards.

Additionally, Quebec, population 8 million, has only 80 regulated industries under its cap-and-trade program; California, population 38 million, regulates more than 300 industries.

 What is CARB selling?

Businesses, legislators and the public have repeatedly asked CARB several important questions:

* What are California’s businesses actually being asked to buy with the mandatory purchases of carbon credits?

* What about the economic consequences of forcing California businesses to buy nothing? And are these consequences intended or not?

* What does CARB really want? What are they trying to accomplish? If the goal really is to lower carbon emissions in California then clean hydroelectric power and natural gas will do it.

Members of the California Air Resources Board refuse to answer these questions, and instead continue stubbornly to push for cap-and-trade.

By Katy Grimes

The California Air Resources Board’s first cap and trade auction in November is yet more proof that CARB is responsible for making people cough, snort and wheeze in California. While trying to convince everyone that the carbon credit auction was a success, CARB officials have blown more smog around the state than an oil-burning AMC Gremlin.

Mary Nichols, CARB’s director, refuses to talk about losing jobs and the painful state of the economy. And she’s getting away with it.

California’s radical global warming legislation

AB 32, the California’s Global Warming Solutions Act of 2006, was supposed to lower the state’s carbon emissions to 1990 levels by 2020. But since the legislation was passed, CARB has myopically insisted that Californians need to go on a carbon diet — despite evidence of fraud, refutations of the junk science behind AB 32, the exorbitant cost to the state’s economy, and no standard climate change measurements.

The state claims that it will accomplish lowering greenhouse gas levels by “capping” the carbon emissions of oil refineries, utilities and power generators and other manufacturing and industrial businesses.

However, in doing so, the agency also stubbornly has refused to answer why California should go it alone when the rest of the country, and most of the nations in the world, have pulled out of cap and trade, or were never participants in the first place.

It looks like what actually will be capped is production and productivity in the state.

Could cap and trade be the Gremlin driving the California economy off the cliff?

Faux impact

The carbon intensity of the United States is only one-quarter of China’s and is already well below the average of the world.

But the real result will be in the near future, as California’s unrealistically strict carbon emission rules will discourage in-state manufacturing and production, as businesses are financially penalized with the carbon tax.

Many climate scientists have reported that achieving zero carbon emissions from the United States will have no impact on future temperatures. This also applies to CARB’s cap and trade as well as AB 32.

If the goal is to reduce carbon emissions in order to stop global warming, taxing businesses accomplishes nothing of the sort.

But first, is there really dangerous global warming looming ahead?

Meteorologist debunks warming theory

“Not only are temperatures not increasing faster than was predicted 10 years ago, temperatures have not increased at all since the late 1990’s,” said Joe Bastardi, the Chief Long Range Forecaster at Accuweather for 32 years.

Bastardi, a meteorologist and now the Chief Forecaster at WeatherBELL, says that private companies make more accurate forecasts than the government.

Bastardi has been an outspoken skeptic of human-induced global warming.

“Furthermore, when you compare the observed temperatures of the past 10 years against all the climate model predictions, the result should do more than raise eyebrows about how much taxpayer money is being wasted on climate science that is proving to be wrong.”

The argument that global warming is causing more extreme weather is problematic, Bastardi said, “because it presumes the globe is warming.”

In a recent article, Bastardi explained:

“In fact, the global temperature trend line has been stable for more than a dozen years, while carbon dioxide has increased 7%. If CO2 was the driver, then why have global temperatures stopped increasing?

“Keep in mind that CO2 represents 0.0395 percent of the Earth’s atmosphere. Arguing that CO2 is driving the small temperature variations in our climate as opposed to the oceans, which cover 70 percent of the planet and have 1,000 times the heat capacity of air, or the output of our sun, is scientifically disturbing.

“Weather is more publicized nowadays because of its impact on society and the constant push of the global warming agenda. Increases in population result in more people being in the path of Mother Nature’s fury.”

Global Warming alarmists and activists

Bastardi asked:

“How do these people have any credibility? How do they get away with this?  It’s mind boggling that it’s gotten to a point where the EPA is dictating policy based on what is an obvious fraud, or if you want to be gentle about it, creates enough doubt to back off.”

Bastardi said that if the U.S. is sincere about economic recovery, we need to “get rid of the EPA running roughshod over factory owners, and lower the corporate tax rate to below China’s  (it is so hard to believe that Chinese tax rates are lower) and you will find that companies will stay here and pay a decent wage to build air conditioners. But not if you are clamping down on people based on questionable, don’t-have-a-leg-to-stand-on ideas about CO2 warming the planet.”

Bastardi goes on to explain, “Global warming activists attribute every major weather event to man because they are either uninformed about history, or choose to ignore it. They own every answer. It could snow cheese in New York tomorrow morning and that would be from global warming.

“All the Intergovernmental Panel on Climate Change projections for our climate have proved to be wrong. Global temperatures have stopped increasing and are nowhere near estimates made a decade ago. The IPCC incorrectly predicted Arctic sea ice would disappear by now.”

Faux goals

But don’t let the facts, data, and history get in the way of a revenue-producing, controlling government program.

Instead of actually reducing carbon emissions, in California a business can merely purchase get-out-of-jail carbon credits. But this nullifies the goals of AB 32.

Another problematic area is that AB 32 does not provide CARB the authority to withhold allowances from businesses to sell at auction for the benefit of the State. This taxing function was not included in the authorizing legislation and was never discussed at the committee hearings while the bill was progressing through the legislative process.

Interestingly, the legislative committee videos held during 2005 and 2006 have disappeared. The California Channel, the official videographer of the California Legislature, recently pulled all videos prior to 2009. I have made several written requests and phone calls to the California Channel for access to these videos, but have never received a response.

Additionally, the Legislative Analyst’s Office, and many others, have concluded that an auction is not necessary to reach the greenhouse gas emission reduction goals in AB 32.

Flaws and faux reporting

The AB 32 Implementation Group, comprised of employers and taxpayer groups concerned about protecting jobs and the California economy, while implementing the state’s policies to meet AB 32 goals, has been trying to deal with CARB since implementation began. The group’s members acknowledge that AB 32 is law, and have tried to work with CARB to reasonably implement the law.

“CARB announced, prior to the November auction, significant changes would be made to the allowance obligations of certain entities in 2013 and unspecified changes to adjust the assistance factor for energy-intensive trade-exposed industries for the allocation rules in 2015 and beyond,” the AB 32 Implementation Group reported last week.

“This unfinished work creates uncertainty and makes it impossible for the employers subject to the regulation to account for future costs increasing the chances of leakage.  CARB has also not developed the tools to monitor, much less solve, the problem of emissions leakage and job loss that from a new multi-billion-dollar energy tax on the state’s economy,” the group said.

Put that in your Gremlin and drive it.

By Katy Grimes

SACRAMENTO — The monthly meeting of the California Air Resources Board on Thursday was nothing more than a mutual admiration society and big tax-and-spend club. After board members shared esteem for one another and CARB staff, several members of the audience jumped in to grovel before the board, instead of showing fear of the omniscient state agency.

The self-congratulatory tone at the final board meeting before the November California Cap-and-Trade Program Greenhouse Gas Allowance Auction should have been enough to make even the most hardened bureaucrat wince, but instead, the agenda did that.

Help us!

Earlier in the week, the AB 32 Implementation Group delivered a letter to Gov. Jerry Brown advocating policies to achieve greenhouse gas emission reductions to meet AB 32 goals in a manner that will protect jobs and the economy.  They said they were disappointed that CARB has not made very necessary repairs to the Cap and Trade program before the November cap-and-trade auction of allowances, and asked Brown to step in to exercise his authority under AB 32.

Part of the self-congratulatory tone from CARB board members is because they have made it right up to the November Cap and Trade auction without having to address the concerns of the public, employers, taxpayers, manufacturers and other industries, who have begged them to stop the auction, or face more business closures, downsizings, and “leakage” to other states.

The Legislative Analyst’s Office said the greenhouse gas auction of allowances is not necessary to achieve the mandates of AB 32, which is to reduce greenhouse gasses to 1990 levels by 2020. California is already showing greenhouse gas emissions reductions to 1992 levels. So many in business facing the very real prospective of having to buy expensive carbon credits just to keep doing business in the state are asking why the auction has to take place.

Windshield washer fluid, smog check program, and “Clean truck month” were on the agenda Thursday. These issues sound innocuous enough, but not in the hands of the Air Resources Board.

Windshield Washer Fluid regs

In 1990, CARB authorized changes to windshield washer fluid to lower Volatile Organic Compound emissions from the fluid. Initially, they recognized that the changes to the washer fluid would render it useless in freezing temperatures, and allowed the old formula to continue being sold in parts of the state with the colder temperatures.

But over the years since 1990, the Air Resources Board altered the exempted areas, and again lowered the washer-fluid VOC emission requirements four or five times. Ultimately, the washer fluid in the freezing temperature areas was worthless and a safety hazard.

At Thursday’s CARB meeting, after months and months of studies and staff time, CARB had to relax the washer fluid standards so that people living and working in mountainous regions of the state in freezing temperatures could use a washer fluid that actually works and won’t cause crashes.

Smog check program

CARB, together with the Bureau of Automotive Repair, is proposing to change the Smog Check program from the tailpipe emission test, to testing with a car’s onboard computer for emission levels.

Anyone who drives an older car knows the uncomfortable feeling of holding your breath during the tailpipe smog check test, hoping and praying that the car passes.

CARB wants to change the test on cars manufactured in 2000 and newer, to plug in to the car’s computers and read the engine data. They say it will take about three minutes, instead of the 20 minute tailpipe test, and mechanics and technicians can’t cheat to get a passing score for the auto owner.

Cars 1999 and older will still receive the same tailpipe test.

CARB and the Bureau of Automotive Repair also plan to increase the fine for cheating from $2,500 to $5,000 on station owners and technicians. They propose to do this with expensive new computer equipment that stations and mechanics will have to use. And there is an application process with CARB and the automotive repair bureau for the stations which want to be a part of the new program.

The more disturbing part of the presentation was that the CARB staff was very excited about all of the data that can be collected from a car’s onboard computer. It’s not just about the smog.

CARB Board member Daniel Sperling suggested that drivers should be taxed on the smog they produce. “Has there been any thought given to basic economic principles to just charge drivers for their emissions?” Sperling asked. “Economists have talked about this for decades.”

This launched CARB staff members into a discussion with board members about the “incentives” they’ve tried to impose for years to encourage people to get rid of older cars.

“I think that if we’ve had a hard time convincing the public of a carbon tax, not sure a tax is a good idea,” said CARB Board member James Balmes.

But he was interrupted by CARB Director Mary Nichols before he could finish his thought. “Hey, congratulations on getting ‘carbon tax’ back in the discussion,” she said.

Balmes pointed out that most of the poor drive older cars and a tax on emissions would unfairly hurt them.

The discussion led to how new technology would allow CARB to “track emissions” from cars through the onboard computer.  Nichols said that finding a way to monitor C02 would be a good project for a grad student.

CARB’s Clean truck month

Nichols then talked about how successful the new diesel regulations have been in forcing truck owners to replace their diesel engines with new ones at a cost of $50,000 to $60,000 each. Truck owner-operators who could not afford to do this have gone out of business.

However, the diesel regulations imposed by CARB were doctored, as I have written about extensively. Even with this information, CARB forged ahead with the program and killed a great many small businesses.

CARB’s enforcement arm

CARB has now “partnered” with law enforcement to ensure compliance. The California Highway Patrol has been ordered to pull truck drivers over to run tests on their engines to see if they are complying with CARB’s diesel regulations.

CARB calls this their “full commitment to compliance.” There was a great deal of talk at the meeting about enforcement and penalties.

Last month, enforcement activities were conducted at CHP inspection stations, border crossings, truck stops, roadside locations, rest stops and port facilities.

Additionally, there was a well-coordinated media campaign orchestrated by CARB. Board members and staff bragged about the 37 news stories done by television news. They even showed clips of a few news stories. These were not public service announcements.

So now we have the California Air Resources Board writing the news, and compliant media reporting it as if it is spontaneous.

The CARB board meeting ended after discussing a resolution to the Cap and Trade program to cap prices at the level of the price containment reserve.

Dorothy Rothrock, with the California Manufacturers and Technology Association, was the only audience member to speak out vehemently against CARB’s Cap and Trade program. “We are disappointed that CARB is moving forward without fixing the serious flaw of auctioning allowances to raise revenue in the cap and trade program,” she said. “CARB’s plan to kill manufacturing jobs is not necessary to achieve AB 32 goals. There is still time before the auction for the board to make a firm commitment to provide free allowances for all the compliance periods between now and 2020.”

The CMTA also explained on its website:

“The Emissions Market Assessment Committee met in September and identified a few more issues that CARB should resolve before the first auction.  The EMAC economists said that CARB should define what constitutes ‘resource shuffling’ — at this time electric power utilities and traders throughout the west do not know what is illegal ‘resource shuffling’ and what is normal power trading behavior.  Yet CARB’s regulation makes resource shuffling illegal and subject to penalties, also uncertain, starting in January 2013. This isn’t just an academic concern. EMAC said “uncertain liabilities associated with imports to California could discourage, and therefore raise the cost of, power imports into the state.” 

Many say that the price containment reserve will probably not protect companies from high prices, especially in the final years of the program. CMTA is concerned that California could have a market failure similar to the energy crisis of the 1970s, when prices skyrocketed and politicians stepped in to stop the market.

EMAC suggests the price containment reserve should “be strengthened and clarified before market operations commence.”