cap-and-trade

The Schwarzenegger Administration did an excellent job at damage control over the original dust-up over the politicization of the Air Resources Board, but the issue continues to draw headlines weeks later. Why? Well, there is a real issue of how the ARB implements the new greenhouse gas law AB 32, especially with respects to a cap-and-trade program. So, while the new leader of the ARB is declaring that everything is hunky dory over there (and basically saying that it's ok, because she is happy to play politics), there is this article in the Chron.

The rift between Gov. Arnold Schwarzenegger and Democratic lawmakers over how the state should fight global warming can be summed up in two numbers: 24 and two.

Those figures represent new jobs proposed at the California Air Resources Board to carry out the governor's preferred strategy for meeting the state's ambitious goals for curbing greenhouse gas emissions.

Under Schwarzenegger's budget plan, the state would commit 24 positions to the task of creating systems such as allowing high-polluting companies to buy credits from low-polluting ones for their greenhouse gas emissions. But the Democrat-controlled Legislature has stripped that number down to two, moving the other 22 positions to focus on regulations aimed at cutting emissions, which is what Assembly Speaker Fabian Núñez favors.

Power of the purse is the most apt phrase to describe the tact of the legislators. They passed the bill and the administration is tasked with implementing it. However, the legislature still maintains some control through the budget as to the direction that takes. The credit scheme is what is known as cap-and-trade. Democrats want to see other steps taken before the government gets in the business of administrating a carbon emissions trading system.

The Democrats are responding to the Schwarzenegger administration's political pressure that that they placed on the ARB by applying a little themselves. Considering their leverage is the budget, this particular dispute with the Schwarzenegger administration will be part of larger negotiations that are going on right now. It will continue to make headlines and create headaches for the Schwarzenegger administration, for every article will go back and mention the original scandal.

This increased attention to the ARB has ramped up the pressure that businesses and environmental groups. They are very much still under the microscope. There is a lot at stake, which is why a few jobs has so much significance.

There are two central themes to Dan Walter's column today, both worth examining: Arnold's team is in damage control mode and that their new Air Resources Board appointee is a politico. Walters points out that while Arnold's reasoning for dumping Robert Sawyer are all over the map, his advisors are "maintaining strict message discipline" over their validity.

Schwarzenegger said such characterizations are "not fair" and refused to allow top aides to testify at a legislative hearing into the firing that his spokesman dismissed as a "political drill." To them, it's water under the bridge and everyone should focus on, as press secretary Aaron McLear said Tuesday, "looking forward."

They're concentrating, instead on promoting Sawyer's successor, veteran environmental bureaucrat Mary Nichols, contending that she's the perfect choice to provide leadership on air quality and bridge the gap between environmental and business interests.

This reads like Walters tried fishing around for a cogent argument for Sawyer's ouster, but ran up against tight-lipped spokesmen, who only wanted to talk about Nichols, the new appointee. They want to move past last week's story and on to the confirmation hearings. Unfortunately for them, the Senate conformation hearing will rehash what transpired, in an attempt to assess Nichols ability to resist political pressure from the Schwarzenegger administration.

While Nichols was widely praised by the environmental community, it appears that she is much more of a political animal than her predecessor and has a history of bending to her boss's will.

The biggest difference between Sawyer and Nichols, however, isn't so much one of philosophy but of political orientation. He is a veteran energy scientist with scant political experience while Nichols, an attorney by trade, has operated in a political environment for 30 years and accepts that when one serves a governor -- this is her third -- or a president, there is just one ultimate boss.

That was driven home eight years ago, during the first months of Gray Davis' governorship, when Nichols was serving as Resources Agency secretary and unilaterally altered the state's position on a high-profile lawsuit pitting farmers against environmentalists on a major water issue. She dropped the state's support for farmers, which generated howls from agribusiness and earned her a very sharp, semi-public rebuke from Davis, who dressed her down at a Cabinet meeting, reminding her that he and only he would set policy.

Her situation was uncannily similar to the pressure that Sawyer says he was getting from the Governor's Office. He refused to buckle to Schwarzenegger, but Nichols bowed to Davis and kept her job.

Nichols has already indicated her willingness to find common ground with the governor on a cap-and-trade system. That does not mesh with the legislature, or with the wording of AB 32. It will be a topic of discussion at the hearing, and has the potential to derail her appointment. However that seems to be fairly unlikely, considering the support she has received from the environmental community.