ARB's Nichols discusses state's plans for EPA climate regs

Can California successfully blend its own climate law with U.S. EPA's greenhouse gas emissions regulation? During today's OnPoint, Mary Nichols, chairwoman of the California Air Resources Board, discusses her state's proposal for blending California law with EPA rules. She also explains how California's new governor, Jerry Brown (D), will affect the state's environmental initiatives.


Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Mary Nichols, chair of the California Air Resources Board. Chairman Nichols, it's great to have you back on the show.

Mary Nichols: Thank you, it's a pleasure to be here.

Monica Trauzzi: Changes in the California governor's office coming this week, how are you expecting the Air Resources Board work to change under Governor Jerry Brown?

Mary Nichols: Well, in some ways it will be just a continuation of what we've been doing all along. We're very fortunate that in his last office, before he became our governor, Jerry Brown was the attorney general of the state of California and we worked very closely with him and his staff on the defense of AB32. He represented us in our long battle which ultimately succeeded after President Obama was elected to get the California vehicle emissions standards enacted and made enforceable. And now, of course, we're in a wonderful new era where we're working closely with U.S. EPA on the next round of greenhouse gas emissions standards for vehicles. He was also very active in his defense of A.B. 32, our state climate law, and of our rules in general. So he knows our field very well and he's a terrific supporter.

Monica Trauzzi: So, as far as you can tell, no big changes coming on the direction that you guys take?

Mary Nichols: No, I think so. I think the main change is really one of emphasis in terms of state government with a governor who's been elected primarily to focus on the budget and getting our economy healthy again. So, the first thing he's going to be spending his time on, of course, is presenting a budget and getting the legislature to hopefully work with him on a package of cuts and spending changes. And then to focus, really to the exclusion of everything else I think, on job creation. That's going to be where his attention will be and I'm happy to say that he sees air-quality and our climate program as being a part of that effort.

Monica Trauzzi: And one of the big issues facing all states right now is the implementation of EPA's greenhouse gas regulation. How will California blend its own climate rules with EPA's rules?

Mary Nichols: Well, one of the reasons why I'm in Washington right now is to talk with people at EPA and elsewhere about that. We've been talking to our colleagues in the states, many of which, like us, have been working for quite some time now on progressive energy policies and on alternative ways of reducing greenhouse gases. And we're hoping that we can put together some creative ideas that will allow for EPA to recognize state efforts as being the equivalent of some of the things that they are looking at doing under the Clean Air Act. We are supporters of the Clean Air Act. We are supporters of EPA. We have a long history of working collaboratively with them, running sometimes parallel programs, but, nevertheless, states like to tweak things in ways that are uniquely beneficial to our particular mix of sources or energy supplies. And we want to be able to keep doing that now that EPA is moving forward, as they have to under the Clean Air Act, to add greenhouse gases to the mix of pollutants that they're worrying about. So we think we can do that, but we'd like to do it in a way that is as flexible as possible.

Monica Trauzzi: And is your sense that EPA will grant you that flexibility?

Mary Nichols: I think EPA is very open to those kinds of ideas fortunately. Both Gina McCarthy, the air administrator, and Lisa Jackson have very strong experiences as state officials themselves in the environmental area. And, while their responsibilities obviously are national now, they do have a more open door then we've sometimes seen in the past to states.

Monica Trauzzi: Did EPA give the states enough time to prepare for these regulations? It seems like some states are having a harder time than others.

Mary Nichols: I can't speak for all the states, but most of the states that we work with through the Western Climate Initiative, the states that are in the Regional Greenhouse Gas Initiative in the Northeast are very attuned to what's been going on at EPA. So there were no surprises when they came out with their proposal.

Monica Trauzzi: How complex are these regulations?

Mary Nichols: I think the complexity has been exaggerated a bit. You know, it may be that there are some people who are just waking up to the existence of these programs. But for those of us who have been working in the field, there's really nothing surprising or new here. It's very much in line with the way EPA has gone about doing rulemaking in the past. The Clean Air Act is a big and complicated statute. It touches so many different industries, so many different sources. But the reality is that for the larger emitters, they're very familiar with these programs.

Monica Trauzzi: Do you think California will have an easier time complying because you've already done so much work on climate in your state?

Mary Nichols: Well, in some ways, sure. We start out with a cleaner energy mix than many states do and that obviously makes it easy, most of our large sources. And we're not a state that has mostly large industrial sources, we have a lot more small and medium-size businesses actually than we do very large businesses. But still, you know, we've got over 400 firms that are part of our cap and trade program and they're all pretty familiar with the EPA permitting processes.

Monica Trauzzi: You had your own battle to fight last year on Prop 23 in California. Is that a sign of how things may play out here in Washington on EPA regulation? I mean how far do you think EPA is actually going to be allowed to go when it comes to regulating emissions?

Mary Nichols: Well, I think there's some lessons from Prop 23. You know, we had, in some ways, the good fortune, although it might not have felt that way at the time, to be attacked. And we were attacked in a very direct way by primarily a couple of Texas-based oil companies who decided to put an initiative on the ballot and put some very major dollars behind trying to go to the people and convince them that doing anything about greenhouse gas emissions was going to be an energy tax. That it was going to be a job killer. And so they put those issues squarely in the public eye. But then they created an opportunity for many elements to come together that hadn't really worked together very effectively or cohesively in the past to say, wait a minute, we're changing to a different kind of an energy economy here. Sure, we don't want Texas oil companies telling California what to do and that's a kind of a political slogan. But underneath that there were all kinds of community colleges, the senior citizens group, public health organizations, local governments, as well as the more mainstream environmental groups that came together and said, you know, we're on the verge of making California into a state that is a mecca for new jobs, new industries that are making new kinds of fuels, clean energy, why would we want to stop that? Why would we want to send a signal that we're headed backwards? This is just the wrong way to go. And so it turned out that it was a very effective campaign. We won by the largest percentage margin of any issue on the ballot or any candidate. It was a tremendous victory and I think it gave us an opportunity really to talk to the public about what's going on in California and why saving our energy efficiency and renewable programs is so important to our long-term future.

Monica Trauzzi: And now that a cap has been approved, what are the next steps for the Air Resources Board?

Mary Nichols: Well, we've got some work to do to implement these regulations over the next year. The program starts in 2012 and by the time we get to January of 2012, we've got to have worked out a lot of our allocation and enforcement and market monitoring mechanisms. We're midway through our implementation of our low carbon fuel standard with companies now filing reports on the carbon content of their fuels. We're moving forward with a new round of vehicle standards. So there's plenty to work on, but, happily, we've met all the major rulemaking milestones that were in the original A.B. 32 legislation and now we're into a phase where we're just making it all happen.

Monica Trauzzi: All right, we're going to end it right there. Thank you for coming on the show.

Mary Nichols: Thank you.

Monica Trauzzi: Nice to see you.

Mary Nichols: Thanks.

Monica Trauzzi: Thanks for watching. We'll see you back here tomorrow.

[End of Audio]



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