Gov. Schwarzenegger senses troubled polar bears looming.

California’s landmark Global Warming Solutions Act (AB 32) is stirring a mixture of excitement and angst in boardrooms across the state.

Approved Aug. 30 by the California Legislature, AB 32 intends to decrease greenhouse gas emissions to 1990 levels (25 percent below present emissions) by 2020. Even more ambitious, the measure calls for a reduction of greenhouse gas emissions to 80 percent below 1990 levels by 2050.

Many California business leaders are concerned about how to drastically curb their annual release of carbon dioxide without increasing costs, especially if other states don’t follow suit.

“Our primary concern is that AB 32 will drive our costs higher and take jobs and greenhouse gases elsewhere,” said Vince Sollitto, vice president of Media Relations and External Affairs for the California Chamber of Commerce. But a report issued in August by the University of California, Berkeley, found that returning California greenhouse gas emissions to 1990 levels by 2020 could boost annual gross state product by $60 billion and create 17,000 new jobs by 2020.

In its March 2005 final report to Gov. Arnold Schwarzenegger (R), California’s Climate Action Team noted that current greenhouse gas emissions cost the state $60 billion and 9,000 lives a year due to poor air quality. The team is led by Alan Lloyd, secretary of the California Environmental Protection Agency (EPA).

The new law will include a mixture of mandatory regulations, incentives and market-based systems. It establishes the first greenhouse gas emissions “cap and trade” system in the United States, allowing companies with reduced emissions to sell credits to companies exceeding limits. Incorporating renewable energy sources and better energy-efficiency programs will be the keys to keeping costs down, say backers of the legislation.
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