The biggest take-away from day two of the summit is that much of what will happen in terms of global climate policy will happen at the regional level and through these kinds of regional and local agreements. President-elect Obama's message to the attendees yesterday committing to adopting California's standards nationally (25% reduction below 1990 levels by 2020) will set a national baseline, which is tremendous. The hope is that Copenhagen will set a baseline globally. However, it appears that these regional, state and local collaborations have the potential to go further, particularly as investments in clean technology are shown to create jobs and revenue. As Carter Roberts, President and CEO of the World Wildlife Fund put it, the ultimate prize is a global agreement, but it will be built on commitments made at the national level and actions taken by states and provinces. One hopes that in time, commitments at the state and national level will build from the baseline set at the global level.

Dr. Sabine Miltner of Deutsche Bank put it another way. The costs of climate change abatement are somewhere north of €400 Billion per annum from 2010 - 2030. The carbon market alone won't cover this, it will require regional and sectoral approaches, as well. She also urged that the various stimulus packages being rolled out in the U.S. and elsewhere be targeted at infrastructure to support the low carbon economy; public transportation, smart energy grid, low energy building and efficiency. She estimated that 1.5 million jobs in California are a direct result of the state's efficiency measures. If done properly, we could see a net gain from investment in a low carbon future.

Governor Schwarzenegger explained that at a time when the California economy is struggling, a solar plant in Sacramento is looking to hire 1000 new employees, crediting the green technology sector with keeping the state afloat during these difficult economic times. He cited the statistics from the Mayors' Conference on Clean energy; that 2.5 million new jobs can be created through green investment.

Governor Jim Doyle of Wisconsin talked about his state's investments in bioenergy, including $150 million research center at the University of Wisconsin and plans to eventually run their state's cars on cheese (or at least the ethanol byproduct of cheese making). Tax credits for these kinds of innovations are being provided by states like Wisconsin and California because they provide green collar jobs. Doyle sees the opportunity to convert Wisconsin's old manufacturing operations into modern, green technology businesses with the right investments and incentives.

The Director General from the Department of Climate Change, People's Republic of China was a bit less sanguine, explaining that there needs to be a framework for sustainable development in order to have success and pointing out that developed country growth has gone hand in hand with emissions. He also was realistic about getting China off of coal, claiming it would be more difficult than staging the Olympic games. In China, wind power is growing by 146% per year, however, and Chinese policy is now promoting renewables.  

When asked by Scott Pelley of 60 minutes how Illinois has managed to ban new coal-fired power plants despite being a coal mining state, Governor Rod Blagojevich was brutally honest; "with very low approval ratings." He went on to say that sometimes you just have to keep doing what you think is right. He and Governor Sebelius of Kansas were clear that there is no such thing as clean coal. Governor Sebelius has vetoed the development of new coal plants and committed Kansas to 10% wind energy by 2010, a marker they have already reached, and 20% by 2020. She went on to point out that every state has renewable assets to tap into, they simply need to recognize the economic opportunity that green, clean jobs provide. (Photo: Duncan McIntosh, Office of the Governor)

Governor Charlie Crist spoke about depoliticizing addressing climate change and working with the Democratic minority in the state legislature to get laws passed. Governor Doyle pointed out that it is easier for Republican governors to work with Democratic legislatures on climate change issues than it is for Democratic governors to work with Republican legislatures and expressed his dismay at the idea that science could become a partisan issue. He said this issue, however, is largely resolved with the election of Barack Obama and action at the national level. And Governor Schwarzenegger added that the only hole in climate science is whether the effects will be serious, disastrous or catastrophic.

The news from British Columbia was mixed, calling the province ground zero on climate change. 80% of their pine forests are being decimated by pine beetle infestations because of warmer winters. And mountain lions are being found in the Arctic looking for food as they move further and further north. Rising rivers and creeks are creating floods and then droughts as season's heat up. All of this is costing $200 million to address.

On the positive side, BC has created North America's first revenue neutral carbon tax, taxing "less of what you earn and more of what you burn". The $10 per tonne carbon tax is offset with reduction in income taxes on businesses and individuals. And while the conventional wisdom is that a carbon tax is not politically viable in the U.S., why wouldn't most people prefer to be taxed on carbon use rather than income? An income tax goes up as you earn more but a carbon tax goes down as you burn less. It puts the amount you pay under your control.

Mexican states like Baja California are matching California's carbon emissions targets and attracting investments in solar and hydropower. Ontario, Canada is looking to phase out coal completely by 2014 although it is currently 1/3 of the energy supply, even as population is expected to grow by 3- 4 million in the next 25 years. They are looking to the German model for guidance on conservation and renewable investments that can get them there.

In the Indian Himalayan state of Sikkim, they are grappling with melting glaciers, and the results of climate change, although India accounts for just 4% of global emissions. He went further pointing out that 600 million people in India live without modern energy using devices and 750 million earn just $1 per day. The challenge he pointed out and reiterated by the governors from Brazil and Indonesia is to allow for economic development while addressing climate issues. Without understanding the needs and challenges of their countries, we cannot reach a global climate policy.

In part, this was the purpose of yesterday's MOU on deforestation; to recognize forests as an important part of the equation in cap and trade and financially compensate places like Brazil for forest maintenance. Deforestation in most of the world accounts for 20% of emissions, with 80% coming from fossil fuels. In places like Brazil, that equation is reversed with 70% of emissions coming from deforestation. Governor Braga of Amazonia called for giving economic value to healthy forests, while at the same time investing in education and quality of life. He also needs help in changing their horizontal economy, which has relied on deforestation for agriculture and logging, into a vertical one, where they are able to export finished products rather than just raw materials.

In Jakarta, 72% of pollution comes from automobiles, so they are looking to improve public transportation and follow New Delhi's model of converting fleets to natural gas. As the largest gas producing country, this is a smart and economical way to reduce emissions and pollution. They don't have a lot of investment funds for renewables, so are looking to share in research and development happening in the developed world.

Michael Cox of the California Student Sustainability Coalition spoke eloquently on the climate crisis being rooted in our values and how we cultivate capital and how the economic system externalizes risks and costs onto the environmental system. He talked about a transition from an economic bottom line to one that takes into account the economy, social equity and the environment. This starts, he says with greening the education sector, from research priorities to curriculum.

Governor Schwarzenegger followed that up with the observation that "fossil fuels created unprecedented prosperity but are now the enemy, threatening to destroy all of us." He sees the transformation to the green economy happening with fairness and equity, calling fossil fuels elite because they are limited and controlled by a very few. He went on to say that developing green fuels democratizes economies because there is unlimited access to wind, sun, moving water and things that grow. His emphasis is on technology saying that guilting people into using less hasn't worked. "People should use their big t.v., but powered by solar. They should fly their airplane, but with different fuel. They should have their Hummer, but powered by electric. And god forbid they should stop using their Jacuzzi!"

Schwarzenegger went on to say that America must listen to other countries. As the biggest polluter until recently, it is a mistake to now expect other countries to fall in line, especially since Washington has not taken on its responsibility. He reiterated his enthusiasm for President-elect Obama's specificity of commitments to follow California's standards and then added "America should have a goal of 33% reductions!"

The day wrapped up with a signing ceremony, led by Mary Nichols of the California Air Resources Board (and potential EPA administrator) where participants, plus 11 other governors, signed on to a declaration recognizing the mutual responsibility to avoid catastrophic climate change, establish a framework for ongoing collaboration, and identify areas with the most promise. Leading into Copenhagen, it is an excellent start. (Photo: Duncan McIntosh, Office of the Governor)

Further Reading:

• Governors' Global Climate Summit Convenes in Los Angeles