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Tamminen: Down Under and Upside Down

Tuesday, 7 Sep 2010 | 9:36 AM ET
Water vapor rising from a Progress Energy coal plant.
Source: progress-energy.com
Water vapor rising from a Progress Energy coal plant.

Last week I visited the Australian state of Victoria, where the Parliament approved a bold plan by Premier John Brumby (of the Labor Party) to cut carbon emissions 20 percent below 2000 levels by 2020. His conservative opponent in the November election, Ted Baillieu of the Liberal Party, goes much farther than his national party and supports the plan (by the way, “Liberals” are akin to our Republicans while “Labor” is akin to Democrats). Making the economy more efficient by arguing who can cut the most wasteful carbon emissions—a bidding war that would only happen down under, right?

Back home in California, I find two gubernatorial candidates also arguing over carbon emissions. Democrat Jerry Brown supports California’s carbon-cutting, clean energy law that was passed in 2006, while Republican Meg Whitman is calling for its suspension—a very different kind of bidding war.

The Aussies, like politicians on the left and right in England and Europe, have discovered that carbon is a measure of waste and that methodical regulation and harnessing market forces to reduce emissions actually makes economies more efficient, helps reduce costs (mostly energy costs), and therefore makes exports more competitive. But Ms. Whitman is not alone in her skepticism. Three out-of-state oil companies have poured millions into a campaign to suspend California’s law by bankrolling a measure on the November ballot, Proposition 23. Who is right?

According to research by the Clean Economy Network, California’s clean tech economy has created more than 500,000 new jobs, including about a fifth of those in manufacturing and a sixth in construction, two industries that are otherwise suffering in the recession. In the first year of the recession alone, this low carbon economy added jobs at a rate of 5 percent, while the statewide economy lost 1 percent of its jobs. Since the California law was passed, the state has seen investment in low carbon technology of some $3 billion and the energy grid become decidedly more secure—almost 20 percent of the state’s power now comes from domestic renewables, which are not subject to the geopolitical risks or price shocks of oil and coal. If this clean energy, low carbon progress is slowed by Prop 23 or the next governor, those variables are predicted to boost electricity costs by a third over the next decade, according to a study by UC Berkeley Professor David Roland-Holst.

The Carbon Challenge - A CNBC Special Report - See Complete Coverage
The Carbon Challenge - A CNBC Special Report - See Complete Coverage

Speaking with officials in Melbourne, it was clear that these kinds of positive economic indicators motivated Victoria to move ahead with its own bi-partisan economic efficiency and low-carbon law. Perhaps politicians on both sides of the aisle there were also thinking of recent studies of 400 pregnant women in New York City and Poland, which showed how breathing emissions from burning fossil fuels impacted their unborn children, cutting their IQs several points by the age of five. Studies by researchers at the University of Southern California have demonstrated that kids inhaling such pollution lose as much as one percent of their lung function every year. All of these statistics can be converted into increased health care costs and lost productivity, more examples of waste and inefficiency that can be measured by levels of carbon output by an economy.

It appears that our “mates” down under may be onto something—states not waiting for their federal government to make economies and people healthier, wealthier, and more competitive. Bi-partisan action for the good of all. Sounds like lessons the voters should examine more carefully before turning California upside down.

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Terry Tamminen, former Secretary of the California Environmental Protection Agency, is a partner at Pegasus Sustainable Century Merchant Bank and the Cullman Senior Fellow at the New America Foundation. (Cracking The Carbon Code is a registered trademark of Terry Tamminen).

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