April, 2009:

KEVIN YAMAMURA, McClatchy Newspapers – Apr. 23, 2009

California became the first state in the nation Thursday to mandate carbon-based reductions in transportation fuels in an attempt to cut the state’s overall greenhouse gas emissions.

The California Air Resources Board approved a phased-in reduction starting in 2011, with a goal of shrinking carbon impacts 10 percent by 2020. Fuel producers can comply in different ways, such as providing a cleaner fuel portfolio, blending low-carbon ethanol with gasoline or purchasing credits from other clean-energy producers.

California’s low-carbon fuel standard could lead to a national measure under President Barack Obama, as well as shape how the transportation sector evolves. But businesses and oil industry critics warned that more research is necessary and that its action would lead to higher costs for consumers in a recessionary economy.

Board Chairwoman Mary Nichols hailed the low-carbon fuel standard as a major step in moving the nation away from oil dependence and toward alternative fuels that generate lower greenhouse gas emissions.

“By changing the way we think about fuels and requiring them all to be lower carbon, I think we are now finally creating an opportunity for other types of advanced transportation to compete on a level playing field,” Nichols said.

California Gov. Arnold Schwarzenegger asked the air board in 2007 to consider a low-carbon fuel standard as way to meet the state’s overall goal of cutting greenhouse gases 25 percent by 2020, as mandated by a 2006 law.

The air board looked at the entire carbon “intensity” of fuels, rather than the impact of emissions from use alone. That meant considering the emissions from the start of production to lasting impacts not directly related to fuel supply.

That led to some controversy over the air board’s regulations dealing with corn-based ethanol producers.

A staff analysis assigned additional greenhouse-gas consequences to their fuels alone based on the potential impacts that ethanol production has on forests and green space. The theory is that increased ethanol production reduces the existing amount of farmland for food crops, which in turn leads to cultivation of untouched land that previously captured carbon.

Ethanol advocates challenged the report’s findings, disputing that their corn-based production had a significant impact on greenhouse-gas increases elsewhere. But they also suggested that petroleum and other fuels were not given the same treatment.

Gen. Wesley Clark, a former Democratic presidential candidate, testified on behalf of Growth Energy, an ethanol advocacy group. He said that greenhouse-gas emissions related to the U.S. military in the Middle East should be considered as part of oil’s calculation.

“There are indirect effects for many fuels, but the only indirect effects that have been looked at are the indirect effects in land use for biofuels,” Clark said. “So if we’re going to look at indirect effects, and I think we should, you have to take a broader look and roll in more.”

The air board promised to work with ethanol producers to update formulas related to the indirect effects of fuels as warranted by future research. But it stood by its findings that other fuels did not have significant indirect impacts.

“The preliminary analysis is there is no other fossil fuel option that has any direct land use effect that comes anywhere near any of the biofuels,” said Daniel Sperling, an air board member and a University of California-Davis transportation studies expert. “We will be looking carefully to make sure that initial assessment is correct. But I do want to make it clear there was no effort just to focus on the biofuels.”

Environmentalists and health organizations praised the low-carbon fuel standard as a significant step toward shrinking the state’s carbon footprint and providing cleaner air for residents.

Roland Hwang, transportation program director for the National Resources Defense Council, said the ethanol regulation is appropriate because it will force ethanol producers to seek cleaner and more sustainable forms of fuel production.

Bonnie Holmes-Gen, senior policy director for the American Lung Association of California, testified that the new fuel standard would help “reverse the legacy of negative air quality, public health and environmental impacts from petroleum fuels.”

But oil producers said too many uncertainties surrounded the new regulation and could lead to unintended consequences, such as supply problems.

“We know that when (consumers) want fuel, they want it when they want it and where they want it, and they want it to be affordable,” said Catherine Reheis-Boyd of the Western States Petroleum Association. “And if they don’t have that, they’re usually pretty expressive about how unhappy they may be.”

Small business groups also testified in opposition Thursday, some noting that California could hurt its businesses by forcing them to pay higher costs to comply.

“We’re doing this alone, and what concerns us is that we might really put ourselves at a competitive disadvantage,” said Mark Martinez, CEO of the San Joaquin County Hispanic Chamber of Commerce. “So I want to caution you to really evaluate the concerns of the economy and our small businesses.”

© 2009 Miami Herald Media Company. All Rights Reserved.

Green Channel Staff, Questex Media Group, Inc – Apr 22, 2009

Large enterprises are unprepared for the inevitable coming wave of carbon regulation, a Gartner survey of businesses worldwide has found.

Nearly half of those surveyed said their organization’s planning was not influenced by the prospect of carbon pricing or regulation, and another 36% said they were not sure what preparations their company was making.

Gartner said the businesses were almost certain to be subject to carbon reporting and pricing in the future and now was the time to begin. IT management teams needed time to gather the necessary data to establish carbon tracking and reporting systems.

A total of 45.7 % of respondents said that carbon pricing was not influencing their organizations planning, while just 18.3% said it was influencing their organization’s planning for the next 24 months.

The international survey was based on a questionnaire sent to 626 enterprises about their plans for carbon reporting and pricing, and current and future implementation of carbon reporting or management systems.

“While the number of enterprises using or planning to use carbon tracking systems exceeds those legally required to do so, given the inevitable requirements to support carbon reporting in the future, the percentage of enterprises preparing is low,” said Gartner research vice president Simon Mingay.

Regardless of current regulations, enterprises should be building carbon information systems because pressure will inevitably “come down the supply chain to be transparent about carbon emissions,” Mingay said.

When it came to preparedness for the next two years, the UK and France recorded some of the lowest percentages at 7.9% and 10.5% respectively, compared to 21.1% of Chinese and 20% of Indian enterprises.

However, as a region Western Europe was best prepared – 32% said they had some kind of system in place, twice as many as Asia-Pacific or US businesses.

A further question about whether organizations would be implementing reporting or management software during the next 18 months showed most were not yet thinking about how carbon pricing or reporting requirements will affect their business.

“This apparent lack of preparation, and the inevitability that most enterprises will come under increased scrutiny from customers, investors, partners, key stakeholders and, eventually, regulators, should come as a wake-up call to policymakers, boards, senior leadership teams and CIOs,” said Mingay.

“Despite the lack of specific regulations, midsize and large enterprises in developed economies need to recognize that they will be paying for their emissions at some point — it’s just a matter of when, how much and through what kind of mechanism.

“Regardless of the recession, enterprises will find themselves under increasing pressure from stakeholders, including investors and customers, to be more transparent about emissions and reduction programs.”