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California and Global Warming

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					National Association of State Treasurers (NAST) Annual Conference September 16-19, 2007 | Sunriver, Oregon

California and Global Warming
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Presented by:
Bettina “Nini” Redway Deputy Treasurer California State Treasurer Bill Lockyer

September 17, 1931 : 1st LP record demonstrated (RCA Victor, New York City), venture failed.

California Global Warming Solutions Act: AB 32
 Approved  Sets

September 27, 2006.

in statute Greenhouse Gas (GHG) target reductions to 1990 levels by 2020.

Western Climate Initiative
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Agreed to slash emissions.

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15% below 2005 levels in their states and provinces in the next 13 years.
Other states such as Arizona, New Mexico, Oregon, Washington, Utah, and Canadian provinces British Columbia and Manitoba have also joined the effort.

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Overall, the region would cut emissions by 350-million metric tons over that time period.

Regional Climate Pact Sets Limits

Source: U.S. Bureau of Economic Analysis, Gross Domestic Product (GDP) by State, 2006, U.S. Department of Commerce.

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Regional Greenhouse Gas Initiative [≈ 18.9% U.S. GDP; 16.4% U.S. pop.] Western Climate Initiative [≈ 19.6% U.S. GDP; 18.6% U.S. pop] WGA Clean and Diversified Energy Initiative [≈ 34.7% U.S. GDP; 33.2% pop.] Powering the Plains [≈ 4.9% U.S. GDP; 5.1% U.S. pop.]

Kyoto Protocol Ratification Status
(as of December 2006)

Signed and Ratified Signed, Ratification Pending Signed, Ratification Declined No Position

Source: Robert J. Keating, et al., Greenhouse Gas Emissions Trading: Emerging Markets and Opportunities for Colorado, Energy and Environmental Security Initiative.

AB 32: California Global Warming Solutions Act of 2006
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Jan 1, 2007 – Law becomes effective. Sets in statute GHG target reductions to 1990 levels by 2020. Equals approximately 174 million tons emission reduction, 29 percent below business as usual. Jan 1, 2008 – ARB to adopt regulations to establish the state‟s mandatory GHG reporting and verification program.  ARB to determine the statewide 1990 baseline and set the statewide 2020 GHG emissions limit. Jan 1, 2009 – ARB will prepare and approve the scoping plan for achieving 2020 statewide GHG emissions limit. Jan 1, 2010 – Regulations to implement early action measures. Jan 1, 2011 – Adopt GHG emissions limits and emission reduction measures based 0n Jan 2009 scoping plan.

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Cap-and-Trade
Highly likely to be a part of the California scheme. Two attractions: (1) lowers cost of achieving statewide target, (2) establishes an unambiguous cap.

California Emissions of Greenhouse Gases Must Decrease To Limit Global Warming
Total California GHG Gross Emissions & AB 32 Goals (MMTCO2eq, Including electricity imports)
600 550 500 450 400 350 300 1990
GHG Trend AB 32 Goals CA GHG Data

1995

2000

2005

2010

2015

2020

The Challenge Facing California Is To Develop Its Non-Fossil Resources Quickly Enough
California Electric Energy Resources
Scenario - 33%_ZeroCoal
(Terawatt-hours)

400 350 300 250 200 150 100 50 0 1990
Hydroelectricity Natural Gas Geothermal Nuclear Coal Wind Oil Organic Waste Solar

2000

2010

2020

California’s Largest Sources of CO2 Emissions
Commercial Electricity Generation

4%

16%
Industrial

13%

Residential

9%
Transportation

58%
Source: Draft Greenhouse Inventory Update, California Energy Commission, 2001.

California Fossil Fuel CO2 Emission Sources

Green Government for a Green Economy
A plan to fight climate change, nurture green tech, boost renewable energy, and create jobs in California:
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Make the largest investment in renewable energy, including solar power, in the state‟s history as part of a $5 billion bond package to green state government buildings, expand use of renewable energy, increase energy efficiency, and spur innovation and cost-reduction in California‟s green technology industry.

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Establish a state-operated carbon credit bank to make the state a constructive force in any market-based system to reduce global warming emissions under AB 32.

California Green Bonds: Greening State Buildings – $5 Billion
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$3.5 billion for solar installation – produces estimated 450 megawatts (MW) of non-grid, renewable energy. $900 million for fuel cell installation, biofuels, and other renewable technologies – produces estimated 150 MW of renewable energy. $600 million for building retrofit and retro-commission – produces estimated 40 percent increase in energy efficiency, or roughly 1,100 MW.

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Green Government Bonds
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Starting in 2003, all new government facilities built in California should be carbon neutral. Such a carbon neutral goal for new buildings has been endorsed by the US Conference of Mayors, the American Institute of Architects, US Green Building Council, among others

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Green Government Bonds
For existing facilities, we must move aggressively to implement current rules to increase energy efficiency and expand renewable energy for government buildings.  There are currently 27 retrocommissioning projects underway, expected to yield an 8 to 10 percent reduction and corresponding GHG reduction.
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Green Building Bond: Nourishing the Economy
The California Green Bond will:  Foster green technology advances in architecture, engineering and technology.  Create jobs by nurturing green tech and renewable energy industries.  Help California businesses by ensuring they don‟t bear a disproportionate share of meeting the mandated GHG reductions.  Make renewable power cheaper and more accessible to businesses and homeowners.

Cap-and-Trade: What is it?
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Require major industry sectors such as manufacturers and utilities to participate in a plan that would cap the total amount of carbon each sector can produce. Cap would decline over time. Allocate emission allowances (emission permits) – either by giving or auctioning them - to businesses within the regulated industry sectors. Allow for trading of allowances. Monitor and enforce

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Eventually, allow trading for allowances from individuals outside of the regulated sectors (offset markets).

Carbon Credit Bank
The bank’s emission credits could come from three main sources:
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Credits from projects that receive taxadvantaged financing from the State Treasurer‟s Office-managed entities and other state agencies. Credits earned by state agencies. Credits deposited by local agencies, earned from global warming-friendly projects financed through tax-advantaged means.

2. 3.

Bank Would Use the Credits In a Variety of Ways
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Sell them and use the proceeds to finance environmental cleanup projects in communities which suffer from acute pollution problems. Retire them. They could not be used again and, as a result, emissions would be reduced. Use them to back revenue bonds that would finance renewable energy and green projects, helping create jobs and economic opportunities.

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Provide them to businesses as an incentive to locate to California.

September 17, 1934 : RCA Victor releases first 33 1/3 rpm recording (Beethoven‟s 5th).

CalPERS and CalSTRS: Environmental Investment Initiatives
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CalPERS has targeted $200 million for investments in environmental technology solutions that are more efficient and less polluting than existing technologies.

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CalSTRS has put $425 million into a private equity program for “Clean Sector” investing and worldwide equities for sustainable investments.
CalPERS and CalSTRS are signatories to the Carbon Disclosure Projects letters and questionnaires sent to the Financial Times 500 companies regarding greenhouse gas emissions and risks. The signatories included 154 institutional investors representing more than $21 trillion in assets under management. CalPERS and CalSTRS have been working to support the Investor Network on Climate Risk‟s „Call for Action‟, a 10-point plan that calls on U.S. companies, Wall Street firms, and the Securities and Exchange Commission to intensify efforts to provide investors with comprehensive analysis and disclosure about the financial risks of climate change. CalPERS Real Estate Environmental Strategy has set an energy reduction goal of 20 percent in it core real estate portfolio over the next five years. The pension fund owns approximately $5 billion of core real estate, including investments in office, retail, industrial, and apartment buildings. CalPERS and CalSTRS joined leaders and other institutional investors managing $4 trillion in assets in calling on U.S. lawmakers to enact strong federal legislation to curb the pollution causing global climate change.

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Contact

Bettina “Nini” Redway Deputy Treasurer Office of California State Treasurer Bill Lockyer 916.653.2995 bredway@treasurer.ca.gov www.treasurer.ca.gov


				
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