Mary Nichols, Chairman of the California Air Resources Board, gave the keynote address at the Yale Environmental Law Association’s second annual New Directions in Environmental Law Conference. While she was on campus, she sat down for an interview with Agustín F. Carbó-Lugo, a MEM candidate at the Yale School of Forestry & Environmental Studies.
Agustín Carbó: Environmental justice groups argue that California’s greenhouse gas emissions cap-and-trade program will create “hot spots” in low-income communities. How is California addressing these concerns from a legal and programmatic perspective?
Mary Nichols: First of all, when we began developing the cap and trade program, we were operating under the requirements of AB 32, which has very specific provisions that order the Air Resources Board to consider environmental justice in every aspect of our decisionmaking. And before we could even begin to adopt a market-based program of any kind, we had to make certain findings, including findings that the program would not increase air pollution in any community in the state.
So from the beginning we were analyzing the rule and developing it in a way that we felt [we] would be able to make those kinds of findings -- that [process] involved looking at how the program would actually operate in a worst-case situation: Assuming that the most polluting companies in the state subject to the rule were trying to buy as many credits as they could rather than cleaning up themselves, would they actually be able to do that in a way that would increase localized air pollution?
We were able to satisfy ourselves based on some scenarios that we developed that it could not happen because of existing air quality regulations already on the books. But we also, in the course of writing the regulation, put in some safeguards that we felt would make sure – and hopefully assure concerned members of the public – that it was not going to happen. Those safeguards involved extra monitoring at the localized level and the ability to take action to disallow further use of imported allowances or offsets if we found increased pollution from facilities under the cap and trade program.
One reason we think there’s not a real issue here, despite the concern, is that there’s a tendency on the part of facility owners to make decisions based on actual costs of compliance with the program. In other words, putting a price on carbon causes people to take a look at their operations and decide how to operate more efficiently. Generally speaking, the oldest, dirtiest plants are also those where the company has chosen not to clean up because they’re not operating very efficiently in addition to the pollution that they put out. Either they decide to clean up – and thereby also improve their operating profile – or they’ll tend to shut down their least efficient facilities and concentrate on the places where they get more output per unit of fuel.
The other reason is that when we look at our low-income and minority communities in California with the greatest concentrations of toxic contaminants, the sources of those pollutants tend not to be the industrial facilities themselves, but instead community-level transportation like the ports and the rail yards where the major pollutants of concern are diesel toxic emissions. These facilities are not being directly affected by the cap and trade program, but they are subject of a lot of other regulatory attention from the Air Resources Board these days.
We do understand how in parts of the world – where there are great concerns about whether localized communities have any kind of air pollution protection – adding in carbon trading or carbon allowances could add to a community’s concerns if they’re not also accompanied by a push to deal with health. But in our situation in California, we just don’t think it’s an issue.
Agustín Carbó: Is California’s cap-and-trade program pushing the climate change agenda to a national level? Do you foresee that eventually the federal government may preempt this issue?
Mary Nichols: Some of the thinking behind the original AB 32 was clearly that if our state and other states adopted climate legislation, especially if that legislation was in some ways conflicting or created different pressures on companies, that it would make them more anxious to support federal legislation.
The truth is, a lot of impetus behind the adoption of the Waxman-Markey legislation by the House of Representatives came from the business community; large companies that operate at the national and international level were already experiencing the push and pull of being held accountable in different states and were hoping Congress would step in and preempt state programs like ours. Of course, no bill was passed in the Senate, and it looks now like it’s going to be a long time before that happens.
But I expect that someday Congress will take action. There will be federal climate legislation and if it has a cap and trade element, then state programs probably will be merged into that program. Whether it would be an absolute preemption or a set of steps creating incentives for states to join I can’t say – either way, we would much prefer to be operating under a national program rather than running our own; it’s just more efficient that way.
Agustín Carbó: In light of skeptics and partisan propaganda that insists climate change is not real, what needs to happen to gain more public acceptance and force the U.S. government to commit to international initiatives to fight climate change?
Mary Nichols: I don’t think the impediment has anything to do with science. The science debate is a distraction. Scientists are still debating exactly how cigarette smoking causes cancer. That’s the nature of science – to continue to raise problems and objections.
I recognize that people will be questioning the accepted consensus on human-caused climate change for many years into the future. But the fact is there is enough agreement on the need to curb our emissions of greenhouse gases. That’s not what’s holding back any kind of effective regulatory or legislative program. It’s politics, and it’s the cost – and until there’s a sufficient demand and understanding that there are ways to do this that don’t hurt the economy, that actually help the economy, we’ll continue to see blockage at the national level.
Agustín Carbó: Recent UN Framework Convention on Climate Change (UNFCCC) negotiations have made it clear that climate protection will depend on actions on the ground in both developing and developed countries, a concept that may involve Nationally Appropriate Mitigation Actions (NAMAs) and Low-Emissions Development Strategies (LEDS). Is California considering to design, plan and/or implement some of these measures?
Mary Nichols: I think the California program and the programs we’ve worked on with other states and other subnational groups through various mechanisms – including the Western Climate Initiative and others — constitute that kind of on-the-ground control measure. We think what we’re doing is actually developing some of the operating rules and the experiences that will make it possible for other places to do some of the things we’re doing. The cap-and-trade program is only one example. We also have the low-carbon fuel standard, our advanced fleet cars programs, our industrial audits – there’s a panoply of rules that we’re working on.
But I think what’s more relevant to many parts of the developing world are programs we’re working on that involve incentives and/or voluntary programs – working with agriculture, working with local sanitation districts, helping to promote better technology for the capture and reuse of methane from waste materials. These areas are critically important if we’re actually going to make a dent in the overall buildup of greenhouse gasses. And these are programs that are also underway in California, but they’re not all necessarily being led out of the Air Resources Board. We have a variety of other government agencies at the state and local level working together with the private sector to pioneer some of these activities.
It’s very exciting to pick up the paper every morning to see examples new technologies. For example, there’s a little rural community outside of Las Angeles called Norco, which is famous because it’s zoned for horses. Along with the horses, they also have a very large waste disposal problem – and the city has been spending tens of thousands of dollars each year to collect and truck the stuff to a land disposal site. They’ve just signed a contract with a subsidiary of Chevron, which is developing for them a waste-to-energy plant. The plant will not only alleviate the cost of disposal, but also provide the city with some of its electrical power. This is great stuff, and it’s happening because of interest in waste disposal, energy policy – and it also helps our climate numbers.
This interview has been edited and condensed. A video recording of their conversation is available below as well as here.