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Carbon-emission law on front burner

By   /   Friday, August 15th, 2008  /   Comments Off on Carbon-emission law on front burner

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A new state law that tackles climate change has prompted one of the nation’s top legal practices to merge with a Southern California firm heavily involved in the issue.

“California is at the epicenter of the nation’s environmental movement brought about by greenhouse gas emissions,” said Mark Garcia, marketing director at the Weston Benshoof Rochefort Rubacalva MacCuish law firm, which on Sept. 1 officially merges with Atlanta-based Alston & Bird.

“One of the key reasons for the merger was how the firms complement each other in this area,” said Garcia, who works in both the firm’s Los Angeles and Westlake Village offices. “It was a good fit.”
He said Weston Benshoof attorney Jocelyn Niebur Thompson has been working closely with the California Attorney General’s Office on the carbon credits program, which is an integral part of AB32.

That’s a measure signed into law earlier this year that requires the state Air Resources Board, or ARB, to develop regulations and market mechanisms that will ultimately reduce California’s greenhouse gas emissions by 25 percent by 2020.

The credits program would require companies to buy rights to emit carbon gases.

Charles Kolstad, economics professor at the University of California, Santa Barbara, said that program – known as “caps and credits” – would have a huge impact on businesses in the state. “You’ll have three kinds for firms: those who can afford to buy the [carbon] permits; those that can reduce their emissions; and those that will go out of business,” said Kolstad, who has worked with the ARB in the past. “Firms can buy and sell those rights.”

Kolstad said not many California firms would cease operation under AB32 constraints, but if similar state or federal laws were passed in the future elsewhere in the country, some companies – such as those who run coal-fired plants – might be hurt.

Bob Mowrey, the top environmental attorney for Alston & Bird, said the main reason his firm has come to California is because it’s the national leader in cutting back on greenhouse gases.

That’s why Mowrey spoke at a Green2Gold Investor’s Summit in downtown Santa Barbara on Aug. 9 – less than a week after his firm announced a merger with Weston Benshoof. Mowrey’s new colleagues, Thompson and Garcia, also attended the Santa Barbara event.

“Alston & Bird is glad to be in California,” Mowrey told a crowd of about 35 investors and green product makers at the Contemporary Arts Forum in Paseo Nuevo. Because of AB32, he said, “The country’s eyes are on California,” he said.

He specifically referred to mandatory caps that will begin in 2012 for significant greenhouse gas emission sources. But what California and the United States do to cut emissions is only part of the solution, Mowrey said.

To illustrate the enormity of the problem, Mowrey said, China is starting operation of a new coal-fired power plant almost every week, while the United States has canceled or put on hold 58 similar plants.

“China has a booming energy intensity,” Mowrey said, adding that China has 20 of the world’s 30 most-polluted cities.

Despite China’s plans to put many more greenhouse gas emissions into the atmosphere, Mowrey said doing nothing about the problem would mean serious problems in this country.

“The key is technological innovation coupled with policy incentives,” Mowrey said. He said AB32 encourages innovation and offers incentives, but much remains to be seen as to how California will carry out that mandate. One thing is certain, he said: The new law will affect the way businesses are regulated and permitted.

Because of its huge economy – its gross state product is $1.543 trillion – California is the 12th-largest emitter of carbon in the world despite leading the nation in energy efficiency standards.

Mowrey said federal officials are looking to California to see how AB32 is enforced. Kolstad told the Business Times he agrees that the Golden State is a proving ground for greenhouse gas emission regulation.

Kolstad said he thinks some people in California believe the federal government will step in and impose its own regulations that call for greenhouse gas emission reductions on a national level.

However, Mowrey said the current Liebermann-Warner bill in Congress may miss the mark in its call for federal carbon credits since it fails to take into account existing state and federal laws and policies.

Mowrey said he already sees conflicts in the measure that may mean debate on Lierbmann-Warner may be prolonged and sticky because of the nation’s soft economy and uncertain outcome of November’s presidential election.

The presumptive presidential nominees, Sen. John McCain, R-Ariz., and Sen. Barack Obama, D-Ill., both support a carbon-credit program.

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