AS TEMPERATURES and sea levels have risen, glaciers receded and snowpacks melted, the governments of the world have dithered over how to save the planet from global warming. Last week, California showed them.
I started studying the economics and science of climate change in 1984 as the Republican counsel for the Senate Committee on Environment and Public Works. I believe the legislation that California representatives sent to Gov. Arnold Schwarzenegger on Friday not only leapfrogs the Kyoto Protocol (the international global warming agreement that former Vice President Al Gore praises and President Bush vilifies) but establishes a framework for revolutionizing the way the world contends with air pollution and its threats.
With AB 32, California has become the first government I know of to attack greenhouse emissions without mandating a carbon "cap-and-trade" system. "Cap and trade" sets a standard for emissions, but it also allows companies to trade in the right to pollute up to that standard. That means companies that cut emissions can sell "emission rights" to other companies that don't want to invest in cleaner technology. It doesn't eliminate pollution as much as create a market in it. Despite immense pressure from businesses and outspoken support of trading by some environmental groups, the Legislature has allowed carbon cap-and-trade but refused to mandate it.
The Los Angeles Times editorialized that cap-and-trade "worked well in the context of the Clean Air Act." Not so. The measure of success should be whether health and environmental objectives are met. The purpose of Clean Air Act trading was to restore life to lakes and streams, especially in the Northeast, that had been acidified by pollution from coal-fired power plants. But 16 years later, lakes and soils in the Northeast are still acidic and probably will remain so for another half a century.
Refusing to mandate cap-and-trade opens the door to new market mechanisms for reducing pollution. Sweden's "feebates," for example, tax relatively dirty polluters or their products, then rebate all the money to relatively clean polluters. The feebate used against smog-forming oxides of nitrogen caused emissions to drop 40% within 12 months in Sweden.
Another such mechanism is Japan's requirement that polluters pay lost income, medical bills and burial costs to nearly 100,000 victims of air pollution, which has resulted in the world's cleanest power plants and refineries.
