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Legislature still working toward greenhouse gas institute

You can’t go anywhere without hearing about the green economy these days. When President Obama talks about stimulating the nation out of recession, green jobs are the key. Gov. Schwarzenegger takes every chance he gets to visit a fuel-cell manufacturing plant , or offer tax breaks to companies that promise to build new, environmentally friendly products in California.  

For years now, the Public Utilities Commission and state lawmakers have haggled over a way to create a taxpayer-funded institute to centralize research and development to look for ways to reduce greenhouse gasses. This year, Sen. Alex Padilla, D-Los Angeles, has taken up the mantle left by former Senate leader Don Perata, D-Oakland, to try to create a new climate change institute.

Padilla’s bill, SB 128, has been shelved for the year, but the concept of the greenhouse gas institute is not going away. Fiscal realities have made it impossible to create a new program, that would be funded by a hike in utility rates. But lawmakers and PUC chairman Michael Peevey have not given up on the concept.

“I’m still committed to it,” said Padilla. “But we’re not going to be able to use any general fund revenues for it, as we try to minimize cuts to health and welfare. The other alternative is to through utility (rate payers), and we didn’t feel it was the time to go in that direction, either.”

Questions of who would pay for the institute, who will control it and where it will be housed are among the key political questions dogging the concept. The effort to create the climate change institute has set off turf wars between the PUC and the Legislature, and set off a battle between lawmakers in northern and southern California, each vying for a piece of the new public money that would fund the institute.

A bill by Perata reached the governor’s desk in 2008, but it was vetoed by Schwarzenegger.

The institute would have been financed, in part, with roughly a $1.20-a-year levy on millions of private and public utility customers. The institute would have had an annual budget in the neighborhood of  $50 million and financed research into the causes and solutions of global warming, a phenomena that many scientists believe is an irreversible result of modern industrial expansion.

In vetoing the bill, SB 1762, the Republican governor agreed with the state Chamber of Commerce, the California Manufacturers and Technology Association, the major retailers and the California Taxpayers Association, among others, who opposed the bill.
The governor said he was unhappy that the bill placed greenhouse-gas research “entirely within the UC system. Doing so does not recognize the role that the other segments of California’s higher education system can provide, not only for climate change research, but for the development and deployment of new technologies that will reduce our greenhouse gas emissions and keep California at the forefront of these emerging technologies.”

The governor also cited fears the new institute could limit the state’s ability to capture federal stimulus dollars, billions of which are earmarked specifically for promoting green job growth.

“This is ill-advised as it may deprive the state from being able to receive federal funding for projects that must be administered by particular state agencies. It would be a disservice to Californians…”the governor wrote in his official veto message.

Padilla’s bill takes a slightly different tact, but it is sure to go through a number of revisions if and when it is resurrected next year. As of now, the bill is still mostly a placeholder. It  does not specify a governance structure for the  Institute, the size or scope of the research to be undertaken by  the Institute, or the funding source for the Institute’s operating costs or research,” according to a Senate analysis of the bill.

Padilla says the idea of the institute would be to leverage federal stimulus dollars, and coordinate efforts to meet new state greenhouse gas requirements set forth in AB 32, the greenhouse gas reduction bill authored by now Sen. Fran Pavley, D-Agoura Hills.
Perata’s bill was one of the most important greenhouse gas bills to reach his desk in 2008, and was marked by months of Capitol infighting.

The bill would have set up a powerful czar over greenhouse gas emission research whose PUC term expires at the end of 2008 and who would have held sway over grants and research funneled through the academia-based institute. The supporters of the plan include Peevey and the University of California, where the institute would be headquartered.

In addition to the ratepayers’ fee, the California Climate Change Institute would have been financed with about $12 million worth – about half – of the natural gas fees that currently go to an Energy Commission research program known as PIER. The institute’s total budget would have been about $500 million dollars over the next decade. The intention was to woo federal matching money, too – a likely prospect because of the federal government’s infusion of cash into carbon emission research. Since the goal of the institute, which was written into the legislation, was to get matching money for 100 percent of its income, the CCC1 would have had authority over $1 billion.

But the controversy surrounding Perata’s bill wasn’t just related to greenhouse gases or carbon emissions or science or global warming.

It was related to money and power, a familiar tale in the Capitol.

The bill would have made the institute the undisputed leader of California’s greenhouse gas research, a position of national and even international significance. It cut into funding from a program administered by the California Energy Commission – the CEC was not pleased with this and fought the bill – and shifted the money directly to the institute. It effectively prohibited – as the governor said – the CEC, and others, from doing future greenhouse gas programs in order to protect the institute’s turf. The president of the University of California would have selected the institute’s executive director, who in turn would have had the power to write the institute’s charter and decide grants.


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