This article was first published on Clean Energy Wonk.

California's RETI process lends insight into the near-term prospects of solar, wind, geothermal, and biomass.  

In September, California's Renewable Energy Transmission Initiative (RETI) released their Phase 2A report, which outlined potential transmission corridors to collect renewable energy from Competitive Renewable Energy Zones (CREZ) that had been identified in previous phases. As part of Phase 2A, they also screened each CREZ for environmental impact, and the potential difficulty of obtaining land for renewable energy development.  

I previously looked at the results from Phase 1A and gained some insight into the cost of renewable energy technologies. However, what renewable energy projects actually get built has to do with a lot more than just economics. If it raises too many environmental concerns, such as infringing on endangered Mojave Ground Squirrel habitat, it isn't going to get built.

Drawing on the spreadsheet "Supplemental Materials, CREZ Data" I put together the following charts, graphing the economics of each type of renewable energy in each CREZ against the expected environmental impact of that CREZ.  

Each circle represents one type of renewable energy at one of 35 CREZs. Concentric circles in different colors appear where a single CREZ offers multiple types of renewable energy development. The only difference between the two graphs is the size of the circles. In the first graph, circle sizes represent the potential annual energy production (GWh/yr) of a CREZ, while circle sizes in the second shows power rating (MW.) Geothermal and biomass resources are relatively larger in the first graph because these are typically baseload technologies generating electricity near peak capacity all the time, while solar and wind are variable.

The cluster of circles in the middle right represent resources outside California: they were not rated for environmental concerns, so I assigned them an arbitrary value in the middle of the range in order to display them on the charts.

Economic/environmental tradeoff?

I found it surprising that there is little evidence of a tradeoff between economic viability of CREZ's and environmental impact. In fact, the circles in the graphs above are generally clustered along a line from the lower left (high environmental impact, bad economics) to the upper right (little environmental impact, good economics). A tradeoff between economic viability and environmental concerns would manifest itself in a clustering along a line from the upper left (bad economics, little environmental impact) to the lower right (good economics, large environmental impact.)

Considering these four major renewable energy technologies, as they might be deployed in California, there is no real tradeoff between economics and the environment.  The best economics coincide with the least environmental impact. If we were to include energy efficiency in the analysis, the trend would be even more pronounced: energy efficiency has the best economic profile of all, yet avoids the use of energy and hence does less harm to the environment.

The exception here is biomass. The small green dots don't show a pronounced trend in any direction, meaning that there may be some tradeoff for biomass. Such a tradeoff would not be surprising, because harvesting plant matter on a large scale is bound to have significant ecosystem impacts. Note that biomass here does not include such technologies as waste to energy, which can be environmentally benign, or even an improvement compared to land filling. In this study, the biomass in remote regions that do not yet have transmission, since lack of sufficient transmission was one of the requirements to be a CREZ.

With clean energy, it may actually be possible to do well while doing good.

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California is at it again. State regulators just set energy efficiency standards for new TVs, mostly the big flat panel models that gulp kilowatts. As a result, consumers will save about $8 billion in the next decade in the form of lower electricity bills and carbon pollution will drop equal to removing 100,000 cars from the road. As my dad used to say, “a penny saved is a penny earned” - - so why doesn’t the Consumer Electronics Association (CEA) want you to get your share of that saved carbon or those 800,000,000,000 pennies?

The CEA fears that TV makers won’t be able to add more bells and whistles to future products, because such features might draw too much additional power. Given that I can already download every show, movie, and video game ever made - - and control my entertainment center without leaving the couch - - what else would next generation TVs do for me? Make and deliver the popcorn?

In fact, if past is prologue, this new regulation will drive innovation and exciting new technologies that can be adapted into other products. Past California energy efficiency mandates have not only made Californians 40% more energy and carbon efficient than average Americans, they have also inspired the invention of things like laser printing, a process that is now used to “print” layers of materials onto thin film for making new transparent solar panels.

In response to California energy efficiency mandates that were first promulgated in the 1970s, companies like Hewlett-Packard designed the inkjet printer and within a decade were essentially printing money by selling the new technology to both businesses and consumers. After seeing them in action, Nobel Prize winning chemist Alan Heeger figured out that you could use the same process to combine thin layers of compounds that together create electricity when exposed to light. Now companies like Konarka and Energy Conversion Devices (NASDAQ: ENER) are printing their money on rooftops - - laminating solar panels, the thickness of human hair, onto products like roof tiles and windows, turning entire buildings into solar energy power plants.

And this time, the energy misers in the Golden State are not alone in saving those pennies - - the new TV regulations were supported by California’s investor owned utilities (IOUs), including PG&E, Sempra, and Edison International, because it’s good for their bottom lines. To reduce pollution and carbon, the state Public Utility Commission has long rewarded utilities for investing in energy efficiency. Watch now for those IOUs to offer money to consumers to scrap old inefficient TVs (just as they now pay to scrap your old refrigerator or clothes dryer), because it reduces their need to build new power plants and actually increases their profits. They will likely earn billions more in valuable carbon credits when the western carbon market is launched in 2012 from those investments.

Yes, as Senator Dirksen used to say, “a billion here and a billion there and suddenly you’re talking real money.” If he were alive today, he’d be reminding us of that maxim - - beamed into our living rooms on a new energy and carbon efficient TV.

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Dianne Feinstein (D-Calif.)

Dianne FeinsteinSen. Dianne Feinstein is expected to vote in favor of the Kerry-Boxer climate bill.  In a November 2009 letter to a Grist reader, she doesn’t explicitly endorse the bill, but she does say it “represents an important step”:

Dear [Constituent]:

Thank you for writing to express your views about the “Clean Energy Jobs and American Power Act.” I share your support for taking strong action to reduce greenhouse gas emissions, and I welcome the opportunity to respond.

Climate change has already begun to change the world as we know it. Eight of the Earth’s nine warmest years on record have occurred since 2001, and these rising temperatures are shrinking snow packs and glaciers, changing patterns of drought and flooding, and increasing the frequency and intensity of wildfires. I agree that the United States must take meaningful action to prevent catastrophic climate change and mitigate its impact. The urgency is unmistakable.

On September 30, 2009, Senators John Kerry (D-MA) and Barbara Boxer (D-CA) introduced the “Clean Energy Jobs and American Power Act” (S. 1733), which sets a greenhouse gas emission reduction target of 20 percent below 2005 levels by 2020 and 83 percent by 2050, authorizes funding for domestic and international climate adaptation efforts, and invests in the infrastructure and workforce necessary to make a permanent shift toward low-carbon, renewable energy and energy efficient technologies. This comprehensive climate bill represents an important step toward achieving meaningful greenhouse gas reductions, mitigating the public health and environmental impacts of climate change, increasing our energy security, and achieving long-term economic growth.

Please know that I remain committed to working to advance measures that address climate change, create jobs and increase our energy independence. I will be sure to keep your thoughts in mind should S. 1733, or similar climate legislation, be considered by the full Senate in the 111th Congress.

Again, thank you for writing. If you have further questions or comments, please contact my office in Washington, D.C. at (202) 224-3841. Best regards.Track the climate debate and take action

Sincerely yours,

Dianne Feinstein United States Senator

Do you know what your senators think about climate legislation?  Ask them, then tell us what you find out.

Find out about other senators by clicking on their names in the right column.

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It’s not just the ads showing a baby-boomer couple sitting in matching bathtubs on a beach at sunset where you can find performance anxiety these days. Try looking in the hardware aisle and at the gas station.

Rather than ban inefficient incandescent light bulbs, for example, California lawmakers set an efficiency performance standard -- which was adopted by the feds -- so in 2012, you won’t be able to buy energy-wasting bulbs. That spurred Phillips to develop and market their “Halogena Energy Saver” incandescent bulb that is 30 percent more efficient than conventional versions. The performance standard approach -- instead of government picking winners and losers -- clearly worked for both environmentally minded policy makers and bottom-line minded businesses.

The stealth performance standard that will hit another part of daily life -- your car -- relates to gasoline and diesel fuel. California adopted a “low carbon fuels standard” that says the carbon content of fuels sold in the state must decline 10 percent by 2020. Fuel sellers can achieve that by slashing emissions from refineries ahead of other carbon regulations; by blending petroleum with lower carbon-content fuels like sustainable biofuels; by selling non-carbon fuels like hydrogen; or anything else that reduces the carbon content of the total portfolio of fuels sold.

Senator Barack Obama embraced making this a national standard almost two years ago and many lawmakers of both parties like this technology-neutral, competition-enhancing approach to reducing carbon. Chevron, Toyota, and several others also have endorsed this approach, because it allows them to find the cheapest ways to comply with the policy goal and perhaps to develop solutions they can market to others. Nothing like a good profit motive to accelerate public policy.

Of course this spells trouble for companies that are hoping to market fuels made from high carbon-footprint sources like the Canadian tar sands. Given that it takes up to four times as much energy to extract and refine that gunk into anything useful, it’s a sure bet the resulting products won’t find much of a market if fuel sellers are trying to lower the carbon content of their products. An online investor news service has a list of stocks that are exposed, at least in part, to this significant/growing liability -- may be a good list to keep handy of stocks to avoid.

Based on the successes of the performance standards approach so far, academics and policy makers around the world are looking for more ways to use them, instead of prescriptive bans or mandates. At least in some human endeavors, it seems performance anxiety can be a good thing.

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A Penny Saved Is…

Silicon Valley is by nature an optimistic place. After all, inventing the carbon-free future and making boatloads of money along the way is fun. And even though California is slouching toward apocalyptic collapse these days, there's always another innovation wave to ride.

In Chu We Trust? It may take big bucks from the U.S. Dept. of Energy to fun some of the renewable energy projects that California entrepreneurs have on the drawing boards.Photo Illustration / Tonya RicksSo it's always interesting to get a more-or-less unvarnished assessment of the state of green tech, as happened last week when a group of regulators, venture capitalists and entrepreneurs gathered at the University of California, Berkeley's business school. They were there for the Cleantech Institute, one of those pricey, closed-door seminars for executives and government officials. (I was present to "facilitate.")

The good news: Speakers reported that investors are starting to turn on the taps again when it comes to funding green tech startups.

But don't expect a return to the halcyon days of 2008 when $4 billion poured into all manner of green technology companies. In the wake of the "Great Recession," VCs are reassessing their investment strategies as it becomes clear that the success of their portfolios will be influenced to a large degree by government policy and incentives.

"This has been the biggest August in 10 years," said Annette Finsterbusch, director of Applied Ventures, the investment arm of semiconductor and solar equipment maker Applied Materials. "September didn't slow down at all and October is looking pretty hot and heavy as well. Things are feeling different -- there is a happy ending to this sluggish time."

Alex Kinnier is a partner at Silicon Valley venture capital firm Khosla Ventures, which recently raised $1.1 billion to invest in green tech startups. He said Khosla currently has investments in 65 companies, many of them in stealth mode or "what you might call sponsored research at universities."

These days Khosla is taking a harder look at renewable energy companies that will require billions of dollars in startup costs before they begin generating revenue -- like getting a utility-scale solar power plant online.

"The questions we're asking have changed," he said. "For investments that require huge amounts of capital for big plants and need massive changes in infrastructure, you need to take a collaborative approach."

That's VC-speak for using other people's money to spread the risk around.

"The scary thing is that anything that is a game-changer will take a billion dollars to just to test whether the technology will scale," said Neal Dikeman, a partner at Jane Capital Partners, a San Francisco merchant bank.

Google, meanwhile, is taking a different tact, as Google does.

Luis Arbulu, a member of the investment team for Google.org -- the search giant's philanthropic arm -- said the company is not fixated on making a killing on its investments. (No surprise there: Sergey Brin and Larry Page could probably fund a slew of green startups from the change rattling around the coin compartment of their Priuses.)

"You want to be binary," said Arbulu. "You want a technology to either blow it out of the water and be the next big thing or collapse."

But disruptive startups will depend on government policies and largesse, given credit-crunched investors' aversion to bankrolling new technologies to the tune of billions of dollars.

Take BrightSource Energy, a solar power plant builder backed by Google and a clutch of Big Oil companies. It is depending on securing a federal loan guarantee to build its first solar farm. The project, to be built in the Southern California desert, will deploy a new technology untried on a commercial scale.

"There are no disruptive technologies in energy, only disruptive polices and incentives that make technologies look disruptive after the fact," Dikeman declared.

I'm not sure the other panelists bought that line, but they did appear to be in agreement that the U.S. Department of Energy will guide renewable energy technologies in the coming years.

Pam Contag is a serial entrepreneur now running a startup called Cygnet Biofuels. "I've been out looking for funding and investors are asking, 'What are your chances of getting DOE money,'" she told the Cal audience, noting the first thing she did at her last startup was to hire a lobbyist in Washington.

Thomas Glascock, an attorney in the global finance practice of San Francisco-based law firm Orrick, said federal loans will backstop startups that scare away conservative bankers unwilling to finance a $2 billion solar thermal farm deploying a novel technology.

He said solar power companies generating power from tried-and-true technologies like photovoltaic panels may be able to obtain loans to finance 70 percent of a project. But a new solar thermal technology with greater "equipment risk" may only secure enough bank financing to pay for 40 percent of the construction cost.

"Photovolatics have a couple of advantages," Glascock noted. "PV is not viewed as a risky. PV is scalable. You can do a power plant in chunks."

In other words, you can just keep adding solar panel arrays to generate more electricity and profits. On the other hand, a solar thermal power plant, which uses mirrors to concentrate the sun's energy on a liquid to create steam to drive an electricity-generating turbine, doesn't begin producing power until the entire project is completed.

There was a reason the seminar agenda was heavy with top officials from the California Energy Commission, the California Public Utilities Commission and the California Environmental Protection Agency: No matter how good your green technology, if you can't navigate the Golden State's environmental bureaucracies you're dead in the desert.

Regulators said many of the dozens of massive megawatt solar power plants planned for the arid Southwest are not going to get built; there's simply not enough deep-pocketed bankers to finance all the projects, enough transmission lines to connect them to cities or enough water to cool them. Inevitably, some projects will die on the drawing board as regulators start taking harder looks at untried technologies.

"Our strategy has been to let a thousand flowers bloom but we have realized that more is not necessarily better and we're now being more selective on procurement strategies," said Paul Douglas, an official the California Public Utilities Commission, which must approve large-scale solar green energy projects.

"We're taking a 100-year-old electrical infrastructure, turning it on its head and asking it to connect thousands of renewable energy sources, many of them out in the desert."

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Corrections below

The Cleantech Open has helped more than 100 startup companies find their footing since it launched in California three years ago.  Now the business competition is expanding in some interesting ways.

Earlier this year it added regional events in the Pacific Northwest and Rocky Mountains. This fall it also launched a global “ideas competition,” open to anyone with a rough clean-tech concept, with or without a business plan. The winner gets marketing support, legal advising, and other help turning an idea into a business, all valued at $100,000. One big quirk: the ideas part of the competition is only open to 16 participating countries, and the list doesn’t include the United States.

Here’s how the contest works (skip below if you’re only interested in the ideas contest):

“Even if you don’t win, you leave this thing with a completely different attitude,” says Cleantech Open spokesperson Tim Cox. “And maybe your idea has gone from version 1.0 to version 5.0 in five months.”

There’s a certain logic to holding startup contests like this. The competition mimics the open market, but the drama is heightened, making it a bit more of a spectator sport. And the coaching from mentors could help some of these companies reach the big leagues more quickly, at least in theory.

The Global Cleantech Open Ideas Competition is Cleantech's new ideas contest. Registration closes October 15, so there’s still a bit of time to enter by answering five questions that lead to a “success paragraph,” or an elevator pitch.

One winner will advance from each of 16 countries: Argentina, Australia, Bolivia, Burkina Faso, Chile, Democratic Republic of Congo, Denmark, Ghana, Iceland, Israel, Italy, Japan, Malaysia, Netherlands, New Zealand, and South Africa. At the November 17 Clean Tech awards gala, entrepreneurs, sponsors, corporations, academics, and others will vote via text message for a winner, who gets $100,000 in business support.

We’ll see what comes out of it. The recent Reburbia competition by Dwell magazine and Inhabit generated a lot more novelty than substance, especially if you find novelty in concepts that propose to violate basic laws of physics.

Writes Adam Stein:

Patently silly ideas will be screened out of the Cleantech Open events, says spokesperson Tim Cox. Remaining ideas might not be imaginative in the sense of suburban airships. But potentially lucrative products also have a way of attracting interest.

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Since failing to vote gets more attention than wanting to suspend California’s climate and clean energy laws, a lot of people probably know this story:

Meg Whitman, the fourth richest woman in California, thinks she should be governor, presumably because the three richer women are busy. She freely admits that this idea just popped into her head about 18 months ago. Before then she wasn’t a member of any party and hadn’t even voted very often. That’s the kind of delightful English-style eccentric she is. She might as well have decided she was Lara Croft: Tomb Raider.

Then a funny thing happened to another part of her brain, the area where memories are stored: It became less and less clear if she had voted before 2002 — she claimed she had — or if she had ever registered as a Republican in another state — another claim she’d made and frequently repeated.

No one had seen any evidence to support either assertion. A reporter asked Multipersonality Meg if she could help.

“Go find it,” Meg snapped.

For what happened next, read the rest of the HuffPost piece, “An Open Letter from Meg Whitman About Voting.”

Less well known is her lack of civic responsibility when it comes to all Californians — and their children and grandchildren. As fellow candidate for Governor, San Francisco Mayor Gavin Newsom, explained in a September 24th piece:

strong>Meg Whitman penned an op-ed last week stating she’d suspend California’s landmark climate-change legislation, AB32, on her first day if elected governor. This is backwards thinking, and I disagree.

Fellow Californian and Nobel Prize winner Energy Secretary Steven Chu has already explained what could happens to the state if we fail to adopt aggressive emissions reduction strategies (many of which have been pioneered by the state):  “Wake up,” America, “we’re looking at a scenario where there’s no more agriculture in California.”

Experts estimate that the four largest clean-energy industries (solar, wind, biofuels, and fuel-cell) will have combined annual revenues of $255 billion by the middle of the next decade. The question isn’t whether the world will move towards cleaner living – the question is how soon this trend will take hold.

There is no better, more fertile place in the United States for green technology and green-collar jobs to take shape than California.

California’s challenge is competitiveness, grasping as much of the share of these markets as possible by being the industry leader in greenhouse gas abatement technology. To date, we’ve done a great job – California captured $6.6 billion in green capital between 2006-2008. And all these start-ups need workers; so green jobs have the potential to be for California what the defense industry was in 1980s.

According to the Pew Charitable Trust, between 1997 and 2007, “clean energy spurred the opening of 10,209 businesses with 125,390 jobs in California.”

That’s 125,000 people working on protecting our environment and earning family-sustaining wages at the same time. And all these new jobs came about before AB32 really kicked in! The potential employment upside to AB32 is staggering. Growth in green-collar jobs outpaced overall job growth nationwide by 250 percent – astounding.

Clearly, being on the cutting edge of innovation is a net positive for California’s economy, not a negative. As we mark the three-year anniversary of AB32’s signing today, we should acknowledge that its oft-vilified targets are not only achievable but also actually good for California’s economy. The Governor’s own Climate Action Team reported back in 2006 that AB32 would provide “billions of dollars in savings for businesses and residents, and tens of thousands of new jobs by 2020.” It’s both affordable and plausible.

We’re proving as much in San Francisco. Our Local-Global Climate Action Plan sets the ambitious target of reducing our greenhouse gas levels 20 percent below 1990 levels by 2012. Well, we’ve already achieved a 5 percent reduction below 1990 levels, and we’ve still got a few more years to get all the way to 20 percent.

Our focus on green industries has reaped benefits for our local economy. We have the eighth-lowest unemployment rate in California. New cleantech companies are opening their doors week after week.

We accomplished this growth by ensuring that our city offered an affordable business climate and the best-trained workforce in America. Much as we did in San Francisco, we need development policies that co-equally concentrate on growing business and developing the workforce.

California should explore the feasibility of two-year payroll tax exemptions for new hires in cleantech, modeled after the state’s existing hiring credits – instead of targeting groups of workers or areas, we’ll focus on hiring into industries. We need pointed business-attraction strategies to aid in the formation of cleantech clusters. Let’s be aggressive in pursuing green industry startups and companies looking to relocate.

On the jobs side, our state needs cutting-edge workforce development programs, including clean-industry apprenticeships, job-placement assistance, tuition subsidies, and state policies to encourage growth in green industries.

I’m excited about the potential of the emerging green economy for California, both in economic growth through venture capital and entrepreneurship as well as the vast number of jobs we stand to create. I believe our fundamental and stark difference of opinion on AB32 merits a discussion in a public forum, so today I am inviting candidate Whitman to participate in this debate. I encourage her to accept so the voters of California can get a clear view of our positions on this vital issue.

At this critical juncture, we need leadership that’ll drive economic growth through green-collar industry development, not tired old jobs vs. the environment rhetoric that ignores the vast growth potential of cleantech in California. I look forward to pursue an ambitious green collar jobs strategy for the state, just as we’ve managed to successfully do in the City and County of San Francisco.

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A Tesla Roadster gets a boost from a SolarCity charging station in SalinasPhoto courtesy SolarCityYou can't get more California greenin' than this.

Peter Rive can charge up his Tesla Roadster electric sports car in his San Francisco garage with carbon-free electricity supplied by a solar array on his roof. Then, if he's in the mood for a road trip, he can drive to Los Angeles, stopping at a solar-powered charging station along the way to top off the battery.

The free charging stations on the "solar highway" -- aka the 101 -- were recently installed by SolarCity, the Silicon Valley rooftop solar company Rive founded with his brother Lyndon. (The electric-blue Roadster sitting in his garage was made by his cousin Elon Musk's startup, Tesla Motors.)

So what's a solar company doing installing highway charging stations for six-figure sports cars driven by people with seven-figure salaries?

In part, it's a result of SolarCity's connection to Tesla and grants the electric carmaker received from the state of California to demo charging stations. It makes for great PR, of course, but the bigger picture here is how the emerging electric vehicle industry will drive (sorry) the adoption of residential and commercial photovoltaic systems.

"It's our feeling that if we really want to make a difference, we have to start changing our infrastructure," says Lyndon Rive, SolarCity's chief executive. "Combine EV with PV, and we can really lead a clean lifestyle." (Jargon watch: That's "EV" for electric vehicles, and "PV" for photovoltaic solar energy.)

It's also good for business.

SolarCity earlier this month completed the acquisition of SolSource Energy, a Los Angeles company that installs electric car charging stations in homes and at businesses. So far, SolarCity has installed about 100 charging stations for Tesla customers but expects those numbers to skyrocket once automakers start introducing electric cars to the mass market over the next few years.

"That business does have potential for humongous growth," says Rive. "We've only deployed about 65,000 solar systems in the U.S., but you're talking about hundreds of thousands of electric cars over the next five years."

And once you have an EV in your garage, it makes more economic sense to put PV on the roof to supply the electricity. When you're getting free fuel from the sun for your car, you accelerate return on investment for the solar array. And, of course, you'll need a bigger solar system, which means bigger profits for installers like SolarCity.

"If you sell 50,000 cars and get 50 percent adoption rate for PV, it's very significant," notes Rive. "A lot of customers who have just bought an EV decide to get a solar system as well or vice a versa."

And when employees start arriving at work expecting to plug in before they log on, companies will have another compelling reason to go solar.

As electric cars go mass market in places like California, PG&E, Southern California Edison and other utilities will likely ramp up efforts to install distributed solar systems to ease the load on the electricity grid and avoid having to build fossil fuel power plants to meet peak demand.

That evolving solar ecosystem can be seen at Peter Rive's home on a steep San Francisco street with a view of the downtown skyline. On the roof sits a three-kilowatt solar panel array. Although Rive, Solarcity's chief operating officer, just recently took delivery of his Tesla Roadster, he planned for the car's electricity consumption when he installed solar panels and upgraded his home's electrical system a year and a half ago. (Something you, Grist readers, should consider if you are contemplating going solar and may buy an electric car one day.)

"This is the equivalent load of an air conditioner," says Rive, nodding at his new toy.

The fast-charge station is a square box attached to the wall by the garage. Installation, adds London Rive, "runs between $2,000 and $6,000," depending on whether an electric system upgrade is needed. The system can charge a depleted battery in about three-and-a-half hours.

"It's sort of like your cell phone -- you use it during the day and plug it in at night and forget about it," says Rive, taking the heavy-duty cord with a nozzle-like attachment and plugging it into the Roadster's charge port.

The solar system's control panel shows that the rooftop panels are generating more electricity at the moment than the house is consuming. "I generate enough solar during the day to offset my commute," Rive says.

Whether Tesla owners will abandon their private jets or flying first class in favor of driving their Roadsters up and down the California coast is another matter. But the way SolarCity has designed its charging station network points to the future convergence between the roof and the road.

Four of the five fast-charging stations the company built are located at branches of Rabobank, a Dutch-owned bank with 91 branches in California, many of them located along the 101 corridor. The single solar-powered charging station -- there are plans to solarize three others -- draws its electricity from a 30-kilowatt array previously installed by SolarCity at the bank's Santa Maria branch on the central coast.

The charging stations currently are only compatible with Tesla's vehicles, but will eventually add a port to charge other electric cars. (Better Place, Coulomb Technologies and Ecotality are among other startups with plans to electrify the interstate.)

"You don't want solar to be a stand-alone unit," says Lyndon Rive. "By the time you stop to use this corridor, it's been feeding electricity to the grid all day long. But when you plug in your car, it will use less than those panels produced during the day."

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Photo: Peter GrigsbyGov. Arnold Schwarzenegger and his best buddies from around the world flexed their muscles at the second annual Global Climate Summit in Los Angeles this week. Actor Harrison Ford, chimp expert Jane Goodall, and a slate of A-list dignitaries from 70 countries packed a Century City luxury hotel to debate how best to fend off the end of the world as we know it.

“We need a lot of muscle to beat this climate change,” said Schwarzenegger in his opening remarks. “That’s why I’m here today, to pump you up ... Because while all those national governments are debating over who should go first … we on the regional level are already creating the action … we are where the action is.”

Despite the climate legislation introduced by Sens. John Kerry and Barbara Boxer the day the Summit began, the focus throughout the event was on “sub-nationals;” that is, the cities, states, and provinces that may not enjoy national government status, but have been taking concrete steps to curb greenhouse gas emissions and promote energy efficiency.

Governors from Oregon, New York and Washington State joined the more than 1,000 regulators, environmentalists, and green business types from six different continents.The global networking had some positive results. At the request of the U.S. State Department, California will work with a remote Chinese province to recreate many of the state’s climate programs there.

Some partnerships drew criticism, however. Timber king Sierra Pacific Industries, California’s largest private landowner, announced a deal with the New York-based carbon credit company Equator, LLC that will allow Equator to market credits for “sequestering” 1.5 million tons of carbon in 60,000 acres of forest. Sierra and Equator likened their arrangement to removing 300,000 cars from the road for one year. Schwarzenegger hailed it as the nation’s largest carbon sequestration project. But environmental groups called the deal a sham, made possible by language that was slipped into California’s revised forestry protocols last week and that will allow timber giant Sierra to continue its clear-cutting and other harmful practices. A state official disagreed, saying there was no last minute move, and that clear cutting would in fact be somewhat restricted under the new rules.

Divisions between developed and developing countries were also on display at the Los Angeles Summit. Yannick Glemarec, a United Nations director of environment finance from France, spoke proudly of rigorous new building codes in Paris, while panelists from impoverished small coastal nations described the climate-related droughts, flooding, and rising seas that are already punishing them. “For us, it is a choice between survival and death,” said Dessima Williams, Ambassador of Grenada to United Nations and Chair of the Alliance of Small Island States.

According to Mary DeNevers of the World Bank, it could take as much as $100 billion annually to address these and other impacts of climate change. The sum, said DeNevers, is actually quite small compared to the world’s collective wealth. But she said that one of the most contentious negotiating points for Copenhagen delegates in a global climate agreement is whether developed nations should pick up that tab in addition to the poverty assistance already offered to developing nations -- or in place of it.

Some speakers took note of the ironies in the way developed and developing nations view the crisis. “You’re worried about your Bordeaux or your Pinot” suffering from rising temperatures, but “these people are worried about how to get protein,” said Stephen Schneider, a Stanford University professor and member of the Intergovernmental Panel Climate Change (IPCC), addressing the French U.N. representative. He also said that if members of the U.S. Congress were willing to spend $750 billion to bail out “greedy bankers,” they should step up to bail out starving nations grappling with drought and crop loss.

All the attendees got a tiny taste of life without first world amenities on Thursday, when power at the Hyatt Regency Century Plaza went out for more than two hours. No working lights or laptops, and worst of all, no air conditioning on a smoggy, 90 degree L.A. afternoon.

“Yeah, everybody’s behaving very sustainably, climbing the stairs instead of using the elevators,” quipped construction lobbyist Tom Carter, who was trolling the summit in for clients for his startup company, which turns captured carbon dioxide into “green cement.”

Carter and other attendees didn’t come to Schwarzenegger’s summit just for the speakers. They were there for the action in the hallways. Carter hadn’t sealed any deals, he said, but he’d met lots of potential new customers.

There was a kerfuffle over the latest “green washing” ads aired in Virginia this week by CO2isgreen.org, a Washington, D.C.-based group. The ads claim there is no cataclysmic, human caused climate change occurring, and that more carbon dioxide should be created because it is good for plants. Jane Goodall called the ads “disgraceful.” Larry Schweiger, president of the National Wildlife Federation, believes the ads are intended to persuade Virginia congressmen not to vote for national climate legislation.

For many attendees, including lobbyist Tom Calera, a conference highlight was hearing Environmental Protection Agency administrator Lisa Jackson announce her first potential effort to regulate greenhouse gases from power plants and refineries. “More potential customers for us,” said Calera, noting all those power plant behemoths who might soon need a company like his to take a little carbon off their hands.

Nancy Sutley, Obama’s director of the Council on Environmental Quality, was also on hand. The former deputy mayor of Los Angeles said that while many federal officials thought regional efforts like the Western Climate Initiative -- an agreement among U.S. western states and some Canadian provinces -- should be superceded by national cap and trade legislation, she thought perhaps they could be integrated.

Schwarzenegger and other conferees would certainly agree. While grateful for any efforts on the part of their respective national governments, they were not about to call it quits on climate. On the last day of the conference delegates planned to sign two joint declarations. One demands that deforestation be addressed at the Copenhagen climate treaty negotiations in December, the other that the mighty sub-nationals be included in the international climate conversation.

“Our experience and our expertise are essential to the climate talks that will begin in just two months in Copenhagen,” said Gov. Schwarzenegger, who said he will travel to the Danish capitol to speak on behalf of the sub-national movement. “We will give the findings from this summit to the U.N. climate change negotiators to help them with their work in December. They will hear our voices in Copenhagen, believe me. We are where the action is.”

--

Video: Janet Wilson interviews Stanford's Stephen Schneider at the Governor's Global Climate Summit

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Copenhagen: Getting past the urgency trap

I really feel for the renewable energy activists in the U.S. who are trying to get the most successful policy in the world, feed-in tariffs (FITs), implemented.

The problem in the U.S. is, ironically, that so many U.S. renewables advocates actually oppose the idea (because it wasn't theirs), and even now that everyone seems to have accepted the empirical evidence that FITs simply are the most successful, one major challenge remains: getting advocates of renewables in the U.S. to understand what FITs are.

This article, for instance, about a new proposal in California is a terrible assessment. No layperson who reads it will have a good understanding of what FITs are when they are finished with the article:

In other words, this system, described as "somewhat reminiscent of feed-in tariffs," is in fact very much like the bidding processes common in current Renewable Portfolio Standards used in the U.S. FITs differ crucially on two accounts:

Under the California proposal, your proposal can apparently be rejected, in which case I suppose you don't get to put solar on your roof, and your community may not get to put those two wind turbines up on the hill outside of town even though the community itself came up with the investments. Instead, economics of scale will mean that giant investors, who can install some giant project in the middle of nowhere at a fraction of a cent cheaper per kilowatt-hour than your local community systems would be, will get most, if not all, of the pie. Power production then remains to domain of monopoly utilities (though U.S. policy is strangely held to be market-driven), whereas FITs democratize power production.

From my cursory reading, I do not see that the California proposal has anything to prevent this concentration of renewable power, but feel free to post a comment if I have missed something. As California solar advocate Adam Browning points out, "mid-size solar and other renewable energy technologies of 1 to 10 MW" are the focus of this new proposal. FITs do not, however, focus on midsize systems; in fact, their main selling point is that they ramp up everything, including small, distributed rooftop systems that you, dear reader, can own yourself -- after all, there is no dearth of large projects and project proposals in the U.S. But the tiny German state of Baden-Württemberg had some 25% more solar electric installed than all of the U.S. at the end of 2008.

Mind you, I have no problem with people thinking about other ways of doing things, and it is always possible that someone will come up with a better way than FITs. What I do mind is a misrepresentation of the facts. Our blogger is totally off the mark when he writes about the alleged main drawback of FITs (in which prices are set by the policy, i.e. by policy-makers, not utilities):

Browning agrees: "The difficulty with this approach is finding the right price." Somehow, even solar advocates, who must realize that we would already have renewables if utilities were genuinely interested in them, believe that the same utilities can price renewables better than policymakers. Of course, utilities are going to price things with an eye on their bottom line, not yours, so if you are interested in a solar roof, do you want the price you get for the solar power you generate to be dictated by the people who see you as a competitor?

Furthermore, the idea that applying different rates to different technologies produces an "unfair advantage" is patent nonsense. If anything, applying a single price to all renewables -- the common approach in U.S. policy and apparently what would happen under the legislation proposed above -- means that wind competes with solar, geothermal, biomass, and other fringe technologies like ocean power. Since wind is the cheapest, wind almost always wins the contract. Part of the magic of FITs is therefore that the same rate of return is calculated for each type of system, which produces (roughly) while level playing field for all technologies -- an investment in wind power will probably not be more profitable than an investment in solar, etc. Will the California proposal do that?

Nonetheless, we hear that pricing is hard. Somehow, the spectacular market crash of solar (but not of wind, and therefore not of FITs!) in Spain completely overshadows the roughly 50 success stories in the same number of other countries. Actually, it isn't that hard to get prices right at all. Here's the formula:

You then build in a review to take account of changes in system cost (the expected kWh depends primarily on weather conditions, not market conditions). Since prices can be expected to drop anyway for emerging technologies, you can also include an automatic reduction (say, x percent lower rates each year) to be on the safe side.

So why do we not have such things in California already? Because they work, and they will cut into the profit margins and planning processes of U.S. utilities, which are accustomed to acting as monopolies. And unlike Germany, the U.S. does not have a government strong enough to stand up to the business world and say, "these are the rules, and our citizens want renewables"

Naturally, U.S. renewables advocates are proud of the compromises they have reached with the very utilities who have failed to implement renewables up to now. As Browning himself puts it:

So there we have it: the proposed legislation is Browning's baby, in part. Again, if his policy is more successful than proper FITs, I'm sure all of FIT countries will be happy to copy what California does. But for the time being, I would simply like for folks in California to refrain from calling this proposal an FIT, which it ain't, for the reasons I describe above.

Browing's wording shows one thing: those of us in the FIT camp seem to have won an important battle, for no one can dismiss FITs as a policy success. (Browning has never supported, and probably never even properly understood, FITs.) Now, we must make sure that the policy design behind the acronym FIT is not misrepresented. Otherwise, proposals that are not FITs will benefit from the hype around FITs without actually producing the desired outcome.

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Dianne Feinstein (D-Calif.)

Like any Hollywood actor, and like any politician, Arnold Schwarzenegger likes to talk a good game. And on climate, he talks a lot. He loves to promote inconsequential gab-fests like the Governors Global Summit on Climate Change. But when the rubber hits the road, will he actually, you know, do anything about it?

Whether a bill on his desk gets a signature will tell us whether he is real or all puffery.

That bill is SB 406, by state Senator Mark Desaulnier. SB 406 would allow regional planning organizations to impose a $1-2 extra vehicle license fee in order to assist in regional planning under California’s smart growth law, SB 375.

This is critical, because California cannot meet its emissions-reduction goals unless it reduces emissions from the transportation sector; it cannot reduce emissions from the transportation sector unless it gives transportation dollars to those cities and counties whose land use plans reduce vehicle miles traveled (VMT); and those cities and counties cannot change their land use plans unless they have the personnel to do so, which requires cash. Most cities have substantially slashed their planning staffs because of budget cuts: Los Angeles’ visionary planning director, Gail Goldberg, has had to lay off dozens of people and put on hold her agenda for redoing community plans throughout the city.

Predictably, the right-wing crazies are screaming that a one-dollar-per-year fee increase will mean the end of the Republic.

So what’s it going to be, Governator? Whose side are you on? The Tea Partiers’ or the planet’s? Photo-ops like the Climate Summit don’t mean a damn thing in comparison.

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A Penny Saved Is…

In his Sept. 22 U.N. speech President Obama got it right: the battle to arrest calamitous climate change can be won only if each of us enlists, perseveres, and fights “for every inch of progress.”

It is, therefore, critical that the nation not embark on that battle with one hand tied behind our collective back.

During the long years of federal inaction, California and several other states forged ahead by enacting a range of policies aimed at restricting greenhouse gas (GHG) emissions. Now, in fits and starts, Congress is moving to create a meaningful federal program. To do that, the government should build upon and encourage state innovation. And yet, absent amendment, central features of the Waxman-Markey clean energy measure—which passed the House on June 26—would undermine the climate benefits of state climate action. Now it is up to the Senate to avert that absurd result.

The problem is this: When no meaningful cap on emissions exists, initiatives that replace fossil fuel consumption with renewable energy generation or conservation work to reduce GHG emissions. But under the House’s cap-and-trade scheme, where polluters must surrender limited allowances to cover their emissions, reduced demand for fossil fuel frees up allowances that polluters can purchase and use. Consequently, additional pollution from expanded use of coal in Ohio, for example, could nullify the climate benefits of California’s GHG regulations.

In theory, under the House bill, individual states could require polluters within their borders to surrender additional allowances. But legal and political hurdles functionally will preclude states from using this mechanism to ensure that their programs yield truly additional emissions reductions. For one thing, surplus allowances resulting from reduced demand in one state may be realized or purchased by emitters in another, and so be out of reach.

Accordingly, under the proposed trading system, efforts such as tighter state renewable energy requirements or more-stringent state vehicle emissions standards may just make it cheaper for other emitters to spew additional GHG pollution.

There is a straightforward solution. Congress could direct EPA to set aside and retire surplus allowances resulting from state initiatives. That way, state climate action will continue to produce truly additional climate benefits—as contrasted with providing windfall subsidies to fossil fuel interests.

Safeguarding the ability of states to protect the environment is nothing new. Congress established in 1955 that air pollution prevention is the primary responsibility of states and local governments. Since that time, as California’s Jerry Brown and four other state attorneys general pointed out in an Aug. 31 letter to Senators Reid and Boxer, the federal government has set minimum standards with states and local governments free to do more.

President Obama previously recognized the essential principle last December, when he called for a “sustained, all-hands-on-deck effort” to harness “the power of wind and solar energy, to develop new technology, and to marshal the skill and dedication of scientists, of entrepreneurs, and of the American workforce.”  He intoned that “unless we act,” climate change will cause drought and famine abroad, devastating weather patterns, “terrible storms on our shores, and the disappearance of our coastline.” Stemming climate change and pursuing a clean energy economy, he concluded, is not a challenge for the federal government alone; rather, it is “a challenge for all of us.”

The President had it right then, as now. The Senate should appropriate the mandate that California established for itself in 2006 to reduce climate pollution to the maximum feasible extent. This requires, at minimum, that any new federal program build upon and not nullify state initiatives and related efforts. We can little afford to surrender an inch of progress.

Dan Galpern is an attorney with the Western Environmental Law Center.

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Global climate change is a serious environmental threat, and sound public policies are needed to address it effectively and sensibly.

There is now significant interest and activity within both the U.S. Administration and the U.S. Congress to develop a meaningful national climate policy in this country.  (If you’re interested, please see some of my previous posts:  “Opportunity for a Defining Moment” (February 6, 2009); “The Wonderful Politics of Cap-and-Trade:  A Closer Look at Waxman-Markey” (May 27, 2009); “Worried About International Competitiveness?  Another Look at the Waxman-Markey Cap-and-Trade Proposal” (June 18, 2009); “National Climate Change Policy:  A Quick Look Back at Waxman-Markey and the Road Ahead” (June 29, 2009).  For a more detailed account, see my Hamilton Project paper, A U.S. Cap-and-Trade System to Address Global Climate Change.)

And as we move toward the international negotiations to take place in December of this year in Copenhagen, it is important to keep in mind the global commons nature of the problem, and hence the necessity of designing and implementing an international policy architecture that is scientifically sound, economically rational, and politically pragmatic.

Back in the U.S., with domestic action delayed in the Senate, several states and regions in the United States have moved ahead with their own policies and plans.  Key among these is California’s Global Warming Solutions Act of 2006, intended to return the state’s greenhouse gas (GHG) emissions in 2020 to their 1990 level.  In 2006, three studies were released indicating that California can meet its 2020 target at no net economic cost.  That is not a typographical error.  The studies found not simply that the costs will be low, but that the costs will be zero, or even negative!  That is, the studies found that California’s ambitious target can be achieved through measures whose direct costs would be outweighed by offsetting savings they create, making them economically beneficial even without considering the emission reductions they may achieve.  Not just a free lunch, but a lunch we are paid to eat!

Given the substantial emission reductions that will be required to meet California’s 2020 target, these findings are ­- to put it mildly – surprising, and they differ dramatically from the vast majority of economic analyses of the cost of reducing GHG emissions.  As a result, I was asked by the Electric Power Research Institute – along with my colleagues, Judson Jaffe and Todd Schatzki of Analysis Group – to evaluate the three California studies.

In a report titled, “Too Good To Be True?  An Examination of Three Economic Assessments of California Climate Change Policy,” we found that although some limited opportunities may exist for no-cost emission reductions, the studies substantially underestimated the cost of meeting California’s 2020 target — by omitting important components of the costs of emission reduction efforts, and by overestimating offsetting savings some of those efforts yield through improved energy efficiency.  In some cases, the studies focused on the costs of particular actions to reduce emissions, but failed to consider the effectiveness and costs of policies that would be necessary to bring about those actions.  Just a few of the flaws we identified lead to underestimation of annual costs on the order of billions of dollars.  Sadly, the studies therefore did not and do not offer reliable estimates of the cost of meeting California’s 2020 target.

This episode is a reminder of a period when similar studies were performed by the U.S. Department of Energy at the time of the Kyoto Protocol negotiations.  Like the California studies, the DOE (Interlaboratory Work Group) studies in the late 1990s suggested that substantial emission reductions could be achieved at no cost.  Those studies were terribly flawed, which was what led to their faulty conclusions.  I had thought that such arguments about massive “free lunches” in the energy efficiency and climate domain had long since been laid to rest.  The debates in California (and some of the rhetoric in Washington) prove otherwise.

While the Global Warming Solutions Act of 2006 sets an emissions target, critical policy design decisions remain to be made that will fundamentally affect the cost of the policy.  For example, policymakers must determine the emission sources that will be regulated to meet those targets, and the policy instruments that will be employed.  The California studies do not directly address the cost implications of these and other policy design decisions, and their overly optimistic findings may leave policymakers with an inadequate appreciation of the stakes associated with the decisions that lie ahead.

On the positive side, a careful evaluation of the California studies highlights some important policy design lessons that apply regardless of the extent to which no-cost emission reduction opportunities really exist.  Policies should be designed to account for uncertainty regarding emission reduction costs, much of which will not be resolved before policies must be enacted.  Also, consideration of the market failures that lead to excessive GHG emissions makes clear that to reduce emissions cost-effectively, policymakers should employ a market-based policy (such as cap-and-trade) as the core policy instrument.

The fact that the three California studies so egregiously underestimated the costs of achieving the goals of the Global Warming Solutions Act should not be taken as indicating that the Act itself is necessarily without merit.  As I have discussed in previous posts, that judgment must rest – from an economic perspective – on an honest and rigorous comparison of the Act’s real benefits and real costs.

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Bring on all the water news—the good, the bad and the ugly

Courtesy Save the BayListen up all you Gristers who live along the California coast: This Saturday is Coastal Cleanup Day.  Join your friends, neighbors, frenemies and complete strangers in a community-wide effort to get the plastic crap out of the ocean.

Plastic isn’t just a problem way out in the Eastern Pacific Garbage Patch. For example, the folks at Save the Bay have put together a pretty neat interactive to show you just how bad plastic pollution is in the Bay area.

Find out how you can join the Coastal Cleanup fun: S.F. Bay Area, San Diego, Los Angeles.

And if you’re not in California, not to worry, because this Saturday is International Coastal Cleanup Day. Here’s all you need to know about how to connect with cleanup efforts in your coastal community, courtesy of the Ocean Conservancy. (Another list here.)

What’s that? You don’t live anywhere near the ocean? Well, how about spending a few minutes on Saturday picking up trash in your community.  Better yet, stop using plastic bags altogether and pester your pals to join the reusable bag crusade.

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Biochemist Oliver Peoples explains how his polymer-producing microbes could transform the plastics i

The following is an interview with Jason Burnett, who worked in the EPA under President GW Bush. In it, we discuss efforts by the EPA to regulate greenhouse gases. Burnett quit the EPA in protest in June 2008, alleging interference from the Office of the Vice President.

The interview is meant as a supplement to the story, "Everything you always wanted to know about EPA greenhouse gas regulations, but were afraid to ask."

What was your job at EPA?

I was brought in to lead the response to the Mass v. EPA Supreme Court case, and to develop the first federal GHG regulations.

Did you work on both the endangerment finding and the rules?

Traditionally, EPA has collapsed both of those into one rulemaking -- they have, in the preamble to the rule, the discussion about endangerment. That's the sequencing we were planning to have. We were, at least initially, on a very fast clock. There was political desire to get everything done by the end of the administration's time [in office].

So you felt like you could get the rules out the door fairly quickly?

There was a pretty large, impressive team put on this, up to 100 people.

There's no question there was a change of course -- for an understandable, if not justifiable, reason: Congress was in the process of passing the Energy Independence & Security Act (EISA), which did much of what we were planning on doing through regulations.

There was never a strong desire -- I daresay, in many quarters outside of EPA, any desire -- to move on to the stationary sources, but the way the CAA works, after you touch the mobile sources you automatically and immediately have to deal with stationary sources. From the political perspective at the White House, it was an unfortunate side effect -- worth doing only because it advanced the goal of increasing fuel economy of cars and trucks and creating more volume for renewable and alternative fuels. After passage of the EISA, there was another way of accomplishing those same goals, and they didn't then need to deal with the stationary source ramifications, -- namely, the PSD/NSR challenge.

Did the Bush administration ever really think they could get out of it, or were they just kicking the can down the road?

There were some people who thought they could make an argument, which ultimately would lose. And other people who said, "we don't want to make superfluous legal arguments, we'll just figure some other way of delaying." Fortunately for the integrity of our court system, they did the latter, basically by saying, "this is really complicated and interconnected, and would benefit from public input, and therefore we're going to go out and talk about all the complications and interconnections."

How do you think the Obama EPA's rules will differ from what your team came up with?

I think they'll be different in two fundamental ways. One is, they're going to be more aggressive. Two, they're going to deal with the California waiver, because the Obama admin has now granted it, whereas the Bush administration denied it. Whether the California program is in force will affect how you design the federal program. So EPA need to make at least those two adjustments.

I'm not surprised we still haven't seen the proposed rule. They probably could have pushed it a little faster, but they probably wanted to give Congress time to work through legislation. Virtually everyone believes that legislation will be better.

I keep hearing that. Is it true?

It entirely depends on how good the legislation is. It would be very easy to improve upon what the CAA would do. I have at times pushed for very narrow CAA fix. You could address the most problematic or challenging parts of the CAA in a very surgical way. At the other extreme is to pass the comprehensive, 1000-plus page bill.

How could the CAA be made more suited to the challenge of regulating CO2?

EPA certainly has discretion, and I'm confident it's being quite aggressive in pursuing ways of making GHGs fit within the CAA. But that will be challenged in court. Pretty much regardless of what they propose, there will be legal vulnerabilities. Trying to make GHGs fit within the CAA, you're going to have to be fairly creative in how you interpret certain terms and how you sequence the program.

Can lawsuits stop the regulations?

They may not delay the effectiveness of the regulations but they may make it pretty messy. Parts of the regulations may be passed back to EPA -- either left in force and passed back to EPA to rectify legal deficiencies, or taken off the books and passed back to EPA.

Exhibit A in the challenges of the CAA is the Prevention of Significant Deterioration (PSD) / New Source Review (NSR) program. EPA has a proposed rule over at OMB for review on how to work through PSD -- I haven't seen it. I'm sure EPA's trying to deal with the volume thresholds in the CAA, which say that a "significant" source of pollution emits either 100 tons or 250 tons, depending on the type of source.

The Supreme Court gave the definition of pollutant such broad range, but the volume thresholds are weirdly specific. How could Congress know how many tons of some future pollutant would be significant?

The original ICTA petition and later the Commonwealth of Mass were smart to focus on Section 202 of the CAA, which works quite well for regulating GHGs. In fact most of Title II, the mobile sources title, works quite well. There wasn't much attention paid in that case to the other dominoes that would fall upon issuing a S202 regulation. Also, there was the view that if this is what a plain reading indicates, what Congress had in mind -- you're going to regulate sources that emit 100 tons -- then you've got to find a way to make it work. And if GHGs meet the definition of air pollutants, they meet the definition of air pollutants, no matter how inconvenient that may be for the regulators and the regulated community.

Conservative advocacy group CEI says that EPA either obeys the thresholds and destroys the economy or, unilaterally and illegally, changes them.

That is something we foresaw years ago. It's a legal question.

There is a huge advantage to Congress raising that threshold. It would be a one-sentence amendment: For the purposes of greenhouse gases, the CAA threshold shall be 25,000 tons. That would solve a large fraction of the challenges.

I wouldn't be surprised if the court put EPA on some kind of schedule, where they are allowed to start out with a higher threshold, but over time that threshold had to move down to 250 or 100 tons. I hope EPA is successful in defending its proposal to lower the thresholds There are very good policy reasons not to try to apply PSD to the very smallest sources.

CEI is wants to turn this into a regulatory nightmare, so they can then stand back and say, I told you so, EPA ruins everything they touch.

Explain PSD. Why is it such a problem?

PSD applies to either new or major modifications -- it requires any new or modified facility to install Best Available Control Technology (BACT). For other pollutants, there's a long history of determining what BACT is. So we understand for a petroleum refinery, BACT today is a low-NOX burner, for instance. But right now we don't have any precedent for what constitutes BACT for greenhouse gases. So that's one problem, but it's one we can get around. EPA can start establishing this precedent.

The NSR program has been hugely contentious as it applies to regular pollutants, because there's this question as to what constitutes a major modification. That issue would come back with a vengeance when greenhouse gases come into play. A very small modification can increase GHG emissions by 100 tons. Take a coal-fired power plant that is emitting several million tons of CO2 a year -- if they increase their operations by, say, 20 minutes over the coarse of a year, that emits a huge amount of CO2, more than 100 tons, certainly. If you do something that increases your emissions a fraction of 1%, that arguably could trigger PSD and require you to install BACT. The scare story is that that will cause facility managers for any large source of pollution to really just freeze up and not make any modifications at all.

What kind of modification would entail 25,000 tons?

It's in the eye of the beholder whether it's big or small. If you think of something emitting 2.5 million tons a year, then 25,000 tons is 1%. Doesn't seem all that large. On the other hand, from the perspective of the environment, 25,000 is in and of itself a large source. The challenge we're dealing with is, these large emitters just emit so, so much CO2.

There have been pollution control exemptions. So if you're going in and making a modification for the purposes of pollution control, that in itself doesn't trigger NSR for all the other pollutants. It's a mechanism to reduce that perverse incentive -- the incentive to do nothing at all.

There's no question that will be litigated.

Say more about the BACT problem. Could IGCC be BACT for a new coal-fired plant?

The question will be, what constitutes BACT for a new coal-fired power plant? Is it carbon capture and storage (CCS) or something else?

In fact, environmental groups have petitioned EPA to find that IGCC is BACT. One of the counter-arguments will be, the baseline analysis of BACT does not include modifying the source. So if you if you propose a coal-fired power plant, BACT can't tell you to build a gas-fired plant. The argument that industry will likely make is, if I'm coming in proposing a pulverized coal plant, BACT shouldn't switch types of sources over to IGCC.

The whole issue of what constitutes BACT will itself be litigated. There will be people arguing that CCS is not commercially available and therefore can't constitute BACT. Others will argue that IGCC is modifying the source and therefore can't be considered BACT. We've yet to really even start that debate in earnest -- it will be an ongoing area of employment for lawyers.

Also, BACT is supposed to be a case-by-case review, where you're looking at the best technology at that point in time. Even if we decide today that something doesn't yet meet the threshold, someone will argue tomorrow, well, now we do.

Can a cap-and-trade system for GHGs be set up under the CAA?

I may have as much experience as anybody in that question: My first assignment when I came to EPA was to develop a cap-and-trade system under Section 111 and 111d of the CAA.

Sec. 111 is new source performance standards (NSPS), but 111d applies to existing sources. I've been of the view that if you are going to move forward with the CAA, the way to do it is to cover stationary sources -- as much as you decide, largely as a policy matter, you want to -- under 111 and 111d. Whether or not you put in place a cap-and-trade system depends on how much legal risk you want to take.

When I was at EPA we developed a cap-and-trade system under 111d. It was the mercury emissions rule, much-maligned by environmentalists because they were worried about hotspots. But no one's concerned about hotspots for CO2.

You dust off the legal argument EPA made for using 111d for a cap-and-trade system, and you search and replace mercury with CO2. You'd put both environmental groups and industry in an awkward position. Environmental groups would want to support the rule, presumably. Industry would not want to but they're already on record saying EPA has authority to issue a cap-and-trade system under 111 -- they wanted to have that for mercury.

It would be, in some ways, a more cumbersome cap-and-trade system than what Congress, at least in theory, could do. 111d is fundamentally a partnership between EPA and the states; EPA can't set a national program, period, whether it's cap-and-trade or some other program. Rather, EPA sets out the overall goals and tells the states to figure out how to regulate to meet those goals. The way it would presumably work is, EPA would strongly encourage states to opt in to the national cap-and-trade system -- or whatever it develops. But there's no requirement for states to do that.

Would the US regional cap-and-trade systems qualify under that kind of program?

I think that's exactly what would happen. EPA would set emission reduction criteria for existing sources and states would be in charge of designing programs to meet those, and the states that already have cap-and-trade programs, like the RGGI states or the Western states, would either be able to argue that their program already meets the EPA requirement, or would have to modify their program in some relatively minor ways to fit the EPA program. But what it would do is force all the other states to develop something, or essentially opt in to the federal program.

The threat of EPA regs was supposed to drive conservatives and business to the table. It doesn't really seem to be happening.

Not to the degree I might have expected. Part of the issue is that groups like the Chamber of Commerce are positioning themselves as, Just Say No. They're going to Just Say No up to the bitter end. Then they're going to complain about the regulations EPA moves forward with, even though any rational person looking forward can see that this is a natural outgrowth of their strategy.

The US Chamber is doing a disservice to their own members, for two reasons: one, many of their members stand to do quite well in a carbon-constrained world; two, they are pretending they can say no to both, when in fact the choice is one or the other.

Is there anything conservatives or business could do to stop the EPA going forward, or put roadblocks in the way?

I don't think so, because there was a lot of work in the previous administration to figure out what that road block could be, and they didn't come up with it. And that was when they had a receptive administration.

This is after we had completed our work and then it was rejected. Then, all attention was paid to, how do we relieve EPA of its obligation to respond to this? CEI and the Chamber were putting a huge amount of effort into figuring out legal theories, because if they'd come up with a plausible legal theory, it would have been forced on EPA. No theory came forward that was even plausible, and I heard a lot of theories. None passed the laugh test. If there is one out there I think it would have been discovered during that process.

More and more you're going to see the Chamber and EEI and CEI trying to figure out either how to make this a real big mess that will then cause political backlash, or at least dragging in smaller businesses that realize their industry is going to be regulated and just want others to be in the boat with them.

Do you think EPA can do it?

What EPA will face is a very large challenge and some inefficiencies, but they'll make it work. It won't be what anyone would design if starting with a blank sheet of paper, but it won't cause the US economy to come to a grinding halt.

There will be cases where there's clearly unnecessary regulatory red tape, and those will be well-publicized by the Chamber and their allies, but by and large EPA has a lot of tools it can use and a lot of creative people that can come up with systems for getting around the big problems.

One of the problems people have been talking about is, this is going to require a mom-and-pop business to get a PSD permit. Well, one, EPA may successfully raise the threshold to 25K tons. Two, even if the program is applied to sources that emit 250 tons, EPA may be able to figure out a very simple way for people to comply -- for example, instead of needing a formal permit application, you send in a post card that says, for instance, if you're building a new building, you've used an Energy Star label HVAC. Some people would complain because they didn't want to use an Energy Star system -- but that's hardly regulatory red tape, it's just a regulatory burden some businesses don't want to face. It may make good policy sense to move small businesses toward using more Energy Star equipment.

What do you think of the progressive push to preserve EPA authority in the climate bill.?

It's my general understanding that EPA authority is preserved in certain areas, modified in others, eliminated in others. It's preserved by and large in the mobile source sections and eliminated in the case of the PSD nightmare scenario. Those are reasonable decisions.

Environmental groups need to be careful what they ask for. You have to make sure you're not going to create the sorts of problems that the US Chamber and CEI are looking for. You don't want to play into their hands. You don't want to create a political backlash 5, 10, 20 years from now. Presumably you want this legislation to be in force for a long, long time rather than only being in force when you have the votes on Capitol Hill.

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Not  many "green shoots" in the Central Valley. California's severe drought--which could well be related to climate change--isn't just menacing Los Angeles.

The drought has helped tip the state's Central Valley, epicenter of U.S. fruit and vegetable production, into a severe crisis, The Wall Street Journal reports. Hammered by dry weather, the weak economy, and new restrictions on irrigation, the area's vast farms are scaling down production and firing workers. The result is a full-on economic depression--one that falls hardest on the most vulnerable workers. From the Journal article:

"We either have money for gas and medicine, or food -- not both," Helen Hernandez, a 51-year-old mother of four, said after collecting a pallet of food from the relief drive. Ms. Hernandez said her husband, David, 49, has been out of work since losing his $1,200-a-month job at a tomato-packing house last year.

In a Wednesday editorial, the Journal's right-wing editorial page blamed the situation on the federal government, which has restricted the diversion of water into the Central Valley to protect the coastal ecosystem to the west. Over the last several decades, water has regularly been diverted en masse from the area's rivers to irrigate the Valley's vast vegetable farms. As a reuslt, the amount of freshwater entering the coast had plunged--causing coastal fish populations to plunge as well. In response, the U.S. Fish and Wildlife Service imposed water reductions on the area--just as the drought was settling in.

For the Journal editorial page, the solution is simple--let the water flow freely into the Central Valley, fish be damned.

But should we really be sacrificing a once-robust, highly productive coastal ecosystem so that a few counties in California can go on supplying the entire nation with vegetables? (To see just how dependent we are on California for our veggies, see page 25 of this document [PDF]--or read my post on the topic from last spring.)

It's hard to see why the Delta fishery should be allowed to die to save the Valley's massive industrial farms. Moreover--this should register with the ultra-libertarians at the Journal editorial page--the diversion of irrigation water to Central Valley farmers has traditionally been subsidized to the tune of $100 million per year in taxpayer cash, according to Environmental Working Group.

I have lots of sympathy for the thousands of unemployed, struggling workers in the Central Valley. State and federal aid should flow their way. But the way forward is not a return to agribusiness as usual there. The Central Valley needs to diversify its economy in a way that works not only for area residents, but also for the surrounding ecosystem. (Besides industrial agriculture, the area's other main industry was, until recently, construction--the very kind of sprawling development that is now itself mired in a deep crisis.)

As to the question of where we're going to get vegetables as agriculture in the Central Valley withers, it's time to get serious about rebuilding local and regional food production.

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The scientific literature paints a hellish future if we don’t quickly reverse greenhouse gas emissions trends (see "Climate change expected to sharply increase Western wildfire burn area — as much as 175% by the 2050s"). Even the watered down, consensus-based 2007 IPCC report acknowledged the danger:

A warming climate encourages wildfires through a longer summer period that dries fuels, promoting easier ignition and faster spread. Westerling et al. (2006 — see here) found that, in the last three decades, the wildfire season in the western U.S. has increased by 78 days, and burn durations of fires >1000 ha have increased from 7.5 to 37.1 days, in response to a spring-summer warming of 0.87°C. Earlier spring snowmelt has led to longer growing seasons and drought, especially at higher elevations, where the increase in wildfire activity has been greatest. In the south-western U.S., fire activity is correlated with ENSO positive phases, and higher Palmer Drought Severity Indices….

Insects and diseases are a natural part of ecosystems. In forests, periodic insect epidemics kill trees over large regions, providing dead, desiccated fuels for large wildfires. These epidemics are related to aspects of insect life cycles that are climate sensitive.

Now brutal heat and drought are fueling massive California wildfires once again (see, for instance, the BBC piece "Heat fuelling California wildfire"). We can’t expect much from the status quo media (see "CNN, ABC, WashPost, and AP blow Australian wildfire, drought, heat-wave story"). So here is CAP’s Tom Kenworthy explaining "What a 1-Degree Temperature Increase Means for Wildfires" -- and I’ll end with some comments on this positive or amplifying carbon-cycle feedback:

To the average person a 1-degree rise in average spring and summer temperatures may not seem like much. But for residents of the western United States -- including California, which is fighting at least eight fires right now -- it could mean a staggering increase in the extent and cost of fires according to a recent study.

In their report, researchers at Headwaters Economics, an independent nonprofit research group in Bozeman, Mont., predict that climate change and the accelerating movement of western residents to areas near or in undeveloped forests will likely prove to be a devastating combination. That 1-degree increase in spring and summer temperatures, they conclude, will increase the area burned by seasonal fires in Montana by more than 300 percent and more than double the cost of protecting homes threatened by fire.

Though the Headwaters paper focuses on Montana, using data from 18 large fires in the state during 2006 and 2007, it has implications for fire-prone areas throughout the Rocky Mountain West. And it builds on a growing body of evidence that inaction on climate change will cost the western United States dearly.

Earlier this summer, for example, Harvard University scientists published a study in the Journal of Geophysical Research predicting that areas burned by wildfires in the West could increase by 50 percent by 2050, with even larger increases of 75 percent to 175 percent in the Pacific Northwest and Rocky Mountain West. Those increases could have "large impacts on human health" because of the added smoke and particulates released into the air, the study said.

Federal and state agencies responsible for fighting western wildfires, particularly the United States Forest Service, are already struggling to cope with the rapidly increasing costs of protecting lives and property. Since 2000, wildland fires in the United States have burned an average of more than 7 million acres a year, about double the average acreage for the previous four decades.

Federal firefighting costs have also risen dramatically, according to the Government Accountability Office, averaging $2.9 billion per year from fiscal 2001-2005 compared to $1.1 billion in the previous five-year period.

The Headwaters study predicts that state wildland firefighting costs in Montana will double to quadruple by 2025.

The increasing popularity of building homes in or near forested areas, known as the wildland-urban interface, or WUI, is a major factor in the escalating costs of fire suppression. A 2006 report by the Department of Agriculture's Office of Inspector General found that "the majority of [Forest Service] large fire suppression costs are directly linked to protecting private property in the WUI," with Forest Service managers estimating between 50 and 95 percent of large fire costs spent on that purpose alone. Though federal agencies shoulder the major financial burden for protecting those homes, development decisions in wild areas are made by local and state officials.

"While fire-prone lands are being developed, the climate is warming, leading to more large fires," write the authors of the Headwaters Economics report, which notes that with just 14 percent of the wildland urban interface developed in the West, the cost of protecting those areas will increase significantly. "More development in these sensitive areas would lead to more wildfire suppression costs, even in the absence of climate change. Climate change will only exacerbate this effect."

Climate change and its impacts on temperature, drought, and snowpack runoff will affect fires as well as many other aspects of life in the West.

Climate models predict that global warming will significantly reduce snow runoff in the West, the region's major source of water. A study published in April by the Scripps Institution of Oceanography estimated that the Colorado River, the lifeline for 27 million people in the Southwest, will not be able to produce its allocated water supply 60 percent to 90 percent of the time by mid-century. That would have major impacts on food production, recreation, and development in the fastest-growing region in the nation. It will also mean forests will dry out sooner, with a likely increase in fire activity.

And in recent years, a widespread and so far unchecked epidemic of mountain pine beetles that has killed millions of acres of trees from Colorado north into Canada has laid the foundation for a potentially large increase in catastrophic fires. Climate change has played a role in that outbreak, too, as warmer winters spare the beetles from low temperatures that would normally kill them off, and drought stresses trees.

In the western United States, mountain pine beetles have killed some 6.5 million acres of forest, according to the Associated Press. As large as that path of destruction is, it’s dwarfed by the 35 million acres killed in British Columbia, which has experienced a rash of forest fires this summer that as of early this month had burned more than 155,000 acres. In the United States to date about 5.2 million acres -- an area larger than Massachusetts -- have burned this year.

Destruction of trees by the mountain pine beetle, combined with climate change and fire, makes for a dangerous feedback loop. Dead forests sequester less carbon dioxide. Burning forests release lots of carbon dioxide into the atmosphere. More carbon dioxide adds to climate change, which raises temperatures, stresses forests, and makes more and bigger fires more likely.

It's a frightening prospect, as British Columbia's Forests Minister Pat Bell told an International Energy Agency conference last week. "I am not a doomsayer," said Bell. "I am not one who wants to say we are beyond the tipping point. But I am afraid that we are getting close to that."

The final reason to worry about the climate-wildfire connection is that wildfires are a classic amplifying feedback, since burning forests release carbon dioxide that accelerates global warming. As the 2006 Science article, "Warming and Earlier Spring Increase Western U.S. Forest Wildfire Activity" (subs. req’d), concludes soberly:

… virtually all climate-model projections indicate that warmer springs and summers will occur over the region in coming decades. These trends will reinforce the tendency toward early spring snowmelt and longer fire seasons. This will accentuate conditions favorable to the occurrence of large wildfires, amplifying the vulnerability the region has experienced since the mid-1980s. The Intergovernmental Panel on Climate Change's consensus range of 1.5° to 5.8°C projected global surface temperature warming by the end of the 21st century is considerably larger than the recent warming of less than 0.9°C observed in spring and summer during recent decades over the western region.

If the average length and intensity of summer drought increases in the Northern Rockies and mountains elsewhere in the western United States, an increased frequency of large wildfires will lead to changes in forest composition and reduced tree densities, thus affecting carbon pools. Current estimates indicate that western U.S. forests are responsible for 20 to 40% of total U.S. carbon sequestration. If wildfire trends continue, at least initially, this biomass burning will result in carbon release, suggesting that the forests of the western United States may become a source of increased atmospheric carbon dioxide rather than a sink, even under a relatively modest temperature-increase scenario. Moreover, a recent study has shown that warmer, longer growing seasons lead to reduced CO2 uptake in high-elevation forests, particularly during droughts. Hence, the projected regional warming and consequent increase in wildfire activity in the western United States is likely to magnify the threats to human communities and ecosystems, and substantially increase the management challenges in restoring forests and reducing greenhouse gas emissions.

We are simply running out of time to stop all of the carbon-cycle feedbacks from intensifying and to stop these devastating, record-breaking wildfires from becoming the normal climate.

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A Penny Saved Is…

The California Public Utilities Commission issued a new proposal today designed to significantly increase the amount of solar energy installed in the state. It is kind of like a feed-in tariff, but different.  Call it a feed-in tariff v2.0.

The proposed program would require utilities to purchase electricity from mid-size solar and other renewable energy technologies of 1 to 10 MW.  At least twice a year, utilities would issue a request for proposals for qualifying renewable projects.  The regulatory body would set a revenue requirement for each solicitation (i.e. the total amount of money that could be spent).  Utilities would then rank bids by price, then be required to take the cheapest ones first until the money runs out.  Losing bids are free to bid into the next solicitation.

On first read, there's a lot to like.  The CPUC's proposal presents an elegant solution to many of the challenges that have bedeviled efforts to grow sustainable renewable energy markets in California and around the world.

It puts steel in the ground.  California's strong Renewables Portfolio Standard has resulted in signed and approved contracts for more than eight gigawatts of large-scale renewable energy projects across the state (with another six GW of contracts of signed contracts under review by regulators); however, many of the planned projects have yet to be brought online. CPUC analysis identifies transmission as the single most significant barrier to large-scale renewable project development.  This new proposed program stimulates immediate activity by establishing a market for smaller renewable projects that can be incorporated into the existing utility infrastructure without the construction of new transmission. The smaller projects will also likely be easier to finance, another critical hurdle in the current economic climate.

It gets the price right.  Some governments have used standard-offer, fixed price feed-in tariffs to incentivize renewable energy development. The difficulty with this approach is finding the right price.  If the price is set too low, it does not stimulate the desired market activity.  If the price is set too high, ratepayers pay unnecessary costs, suppliers throughout the value chain are not encouraged to reduce prices, and the program can lose political support.  By using a market mechanism to determine the contract price, the CPUC's program uses competition to establish a price that is both sufficient for project development and protective of ratepayers.  With the price of solar modules coming down 40 percent over the past 6 months and predictions for a lot further to go, it's hard to see how else to do it.  This method harness and accelerates cost reductions by encouraging the whole value chain to work together to be competitive (read this for the role of silicon and recent market dynamics in solar's costs).  We expect dramatic market activity at price levels that will attract the interest of policymakers around the country.

It can be implemented quickly. As a practical matter, the proposed auction mechanism can also be implemented much more quickly than some alternative approaches.  There is real urgency in the matter, as the U.S. Treasury Grant Program, established as part of the stimulus package, is only available to projects that have begun construction by 2010.  If approved, this program could be delivering results within the grant eligibility window.

It overcomes legal hurdles.  In an earlier phase of the proceeding, one of the state's largest utilities, Southern California Edison, challenged the CPUC's authority to establish a feed-in tariff, claiming that the Federal Power Act only gives the Federal Energy Regulatory Commission the authority to require purchases above 'avoided costs.' Under this federal law, California regulators are restricted in their ability to set specific prices.  This proposal elegantly avoids SCE's legal challenge by establishing a specific requirement for electricity of a certain type, and letting market mechanisms establish price levels.

We've spent a year on this docket, and will spend a lot of time going over the details of the proposed program to guide our suggestions for further development.  I guarantee that a lot of people will also have opinions on modifications.  But initial impressions are that there is a lot to like.  The program ensures that renewable energy projects will be built quickly and at the lowest cost to ratepayers.  And it throws the doors wide open on an entirely new renewable energy market in the state: mid-sized solar projects that generate clean electricity for all Californians. Coupled with the highly successful California Solar Initiative program for customer-owned solar, the gigawatt of utility-owned/IPP distributed generation program, and existing channels for large utility-scale projects, California will be able to lay claim to one of the most comprehensive and dynamic solar markets in the world.

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‘Heretic’ battles straw man

Owners of forestland in the Pacific NW could benefit more under a national carbon offsets system, as trees common to the region store more carbon per acre than East Coast species. Pictured: Douglas firs in an Oregon forest.Courtesy Ecotrust's sbeebe via FlickrThough most people probably think of national parks when they think of forests, more than half of the 750 million acres of forestland in the United States is actually privately owned, much of it by individuals and families, according to the American Forest Foundation, a nonprofit advocacy organization.

Together, these trees suck up about 10 percent of U.S. carbon dioxide emissions annually, according to the Environmental Protection Agency, a portion that could double to almost 20 percent with increased sustainable management practices like replanting cut trees and lengthening cut rotations.

But many of these family-owned lands are small -- a few hundred acres in size. Alone, these small plots don't sequester much carbon. This makes it difficult for forest owners to participate in voluntary carbon markets, which typically trade carbon by the tens of thousands of tons. In addition, private owners often can't afford to inventory and verify the amount of carbon sequestered by their forest on their own.

That's why there's growing interest in packaging small parcels of forestland into carbon portfolios that can then be traded competitively on voluntary markets.

Woodlands Carbon Company, an Oregon-based pilot project funded by the American Forest Foundation, is just one so-called aggregator looking to pool the carbon trading power of forest owners. It focuses specifically on West Coast clients, who are especially primed to benefit from carbon offsets with lands planted with trees like Douglas Fir and Hemlock Spruce that can sequester more than 1,000 metric tons of CO2 per acre over a 125-year period. Its sister organization, CarbonTree, focuses on the East Coast.

"We bundle all of the smaller woodland owners together so that they can get access to these markets," says Mike Gaudern, chief executive of Woodlands Carbon. "They wouldn't have access to these markets unless they had an aggregator to work on their behalf."

Special Series: What's the deal with offsets?Photo illustration by Tom Twigg / GristParticipating in the carbon offset market can be technically challenging, so companies like Woodlands help educate private landowners and foresters through informational workshops that walk potential clients through the many steps of carbon trading. In July, Woodlands hosted two workshops where 120 landowners and foresters came from Oregon, Washington and even California.

"It was a pretty successful event," says Gaudern. "There were landowners there that represented close to 60,000 acres of forestland that will be immediately eligible for carbon offset trading."

In addition, Woodlands offers revolving loans for landowners to complete their carbon inventories, which landowners then pay back through carbon sales.

Woodlands plans to have its first bundle of carbon offsets ready to sell by the end of the fall, most likely either over-the-counter or through the Chicago Climate Exchange (CCX), which requires landowners to sign a contract attesting that the land will be maintained as forest for at least 15 years.

Approximately 9,000 individual farmers, ranchers and forest owners are currently enrolled in CCX, according to Brookly McLaughlin, director of communications for the exchange. Together, they have earned approximately 16.4 million metric tons of offsets since the program's inception in 2003.

The short-term contracts appeal to Ken Faulk, president of the Oregon Small Woodlands Association, because he believes that the focus should be on reducing carbon emissions in the short term. Faulk owns 155 acres in the Willamette Valley in Oregon and is currently inventorying his forest so he can sell carbon offsets through Woodlands Carbon.

"If people truly believe that we're going to be on a fossil fuel economy for the next 100 years, then maybe we should be worried about putting carbon away in the trees for a 100-year rotation," says Faulk. "But I think our goal should be to get the most carbon dioxide out of the atmosphere as soon as we can."

Clint Bentz, an Oregon family forest landowner and chairman of the Oregon Tree Farm System, also believes short-term contracts are the way to go.

"We think the shorter time frame is not only more palatable to the landowners, it's also more valuable because it keeps everybody's attention," says Bentz. "Keeping everybody's feet to the fire with these shorter contracts works better with human nature."

Carbon offsets also provide an additional revenue stream for landowners feeling the squeeze of falling timber prices.

"Nobody's going to get rich off of carbon offsets, but it's a real help," says Bentz. "Recognizing these ecosystem services [like carbon sequestration] is one of the bright lights that we're seeing to help offset the costs of sustainably managing forests."

Of course, as long as the price of carbon remains low, many landowners are holding off in the hopes that a national climate law would spur prices.

"For most people who do the math if they're actually in the sustainable forestry business, they're going to stay in the timber business and not the carbon business right now," says Bill Stewart, a forestry specialist at the University of California Cooperative Extension.

Still, some private owners are getting a head start on the offset market now, before carbon legislation is passed. "We see it as trying to get ready to have these offsets available in any future federal legislation and to have the infrastructure in place to make this work for landowners," says Ted Dodge, executive director of the National Carbon Offset Coalition and Woodlands' carbon broker.

But not everyone agrees that short-term contracts will best benefit the planet, in part because landowners could clear cut their trees after the contract expires. Ecotrust, an environmental organization based in Portland, Ore., is hoping that any federal legislation for carbon offsets would include strict regulations and long-term contracts similar to the Climate Action Reserve's (CAR) protocols, a carbon market that began in California and is now looking to go national.

"Climate Action Reserve's protocols that are being developed are much more rigorous [than CCX's] in terms of permanence and additionality," explains Brent Davies, director of forestry for Ecotrust. Additionality means that the project wouldn't have happened without carbon offset funds.

For example, CAR's standards require that forest owners agree to a permanent conservation easement, a legal agreement that requires owners to permanently give up land development rights. But since many private owners aren't willing to make that commitment, CAR is considering substituting the conservation easement requirement for a 100-year contract.

"We found that the 100-year contract is more acceptable to private landowners who don't want to necessarily bind their great, great grandchildren to this requirement," explains Gary Gero, president of CAR. The California Air Resources Board will vote on the new draft in September.

David Eisler, a landowner in the coast range of Oregon, is looking for the sort of long-term contract that CAR offers because he wants to guarantee that his forest stewardship practices will continue after he passes. He is working with Ecotrust on carbon credit possibilities for his property, an 80-acre tract of land that serves as habitat for spotted owls and endangered coho salmon.

"Our efforts to really protect some of this high quality forestland and ancient trees could be gone in a blink once the property changes hands," says Eisler. "That's why I'm looking for a conservation easement, but I'm also looking to carbon credits to commit to very long term forest stand."

Peter Hayes, a landowner who manages about 800 acres in the Northern Oregon Coast Range, is also looking to sell carbon credits on a long-term basis, but says he has yet to find a carbon offset project that fully meets his family's stringent conservation goals.

"Our approach is to be eagerly involved in understanding and following what's going on, but constructively skeptical and critical before we choose to commit our land long term," says Hayes.

Because opinions on carbon offsets are akin to the number of leaves on a branch, one solution may be to include a broad range of options for carbon offsets in the new carbon legislation. By casting a wide net, more people will be able to participate, which will therefore bring in the largest amount of carbon.

"I don't think it should be either/or situation," says David Ford, executive director of the Oregon Small Woodlands Association. "We have a rather large problem. We're not going to solve it with a narrow solution."

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I’m thinking about reporting on this house as an example of sensible environmental design reproducible for the masses. Can anyone help me decide? This is a press release (emphasis mine):

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