Review of Environmental Economics and Policy Advance Access originally published online on February 7, 2008
Review of Environmental Economics and Policy 2008 2(1):114-129; doi:10.1093/reep/rem030
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California's New Greenhouse Gas Laws
* Department of Agricultural and Resource Economics, University of California, Berkeley, USA; E-mail: hanemann{at}are.berkeley.edu
Since 2004, California has taken a variety of measures to control greenhouse gas emissions. This culminated in August 2006 with the passage of AB 32, which requires that overall GHG emissions in California be reduced to their 1990 levels by 2020; SB 1368, which prohibits California utilities from signing new long-term baseload power contracts with emissions higher than those from combined-cycle natural gas; and SB 107, which requires 20 percent of California's electricity to come from renewables by 2010. This article describes how California's GHG laws came to be enacted, why they took the form that they did, and how they differ from the approaches to pollution control adopted by the federal government in the 1990 Clean Air Act and the northeastern states in the Regional Greenhouse Gas Initiative. California's approach grows directly out of its prior, and rather unique, history in controlling automobile emissions and in regulating energy efficiency. Moreover, its approach reflects an awareness of some differences between GHG emissions and SO2 and NOx emissions, which are important for the design of a GHG control policy.
I am very grateful to Alex Farrell and Jason Mark for many helpful conversations on this topic, and to Maureen Cropper and Suzy Leonard for excellent editorial advice.