* Calif. climate chief says Brown can still make changes
* Environmentalist Brown hasn't said much on cap-and-trade
* Climate chief sees 2012 market start; Not clear if Jan 1
By Peter Henderson
LOS ANGELES, April 17 California Governor Jerry
Brown could still make changes to the state's ambitious plan
for a greenhouse gases market, the state's climate change
regulator said, even as she battles a lawsuit that could delay
the program's start next year.
The lawsuit, as well as complex technical issues and the
distraction of a political fight over the state budget, are all
obstacles for the most populous state to get its greenhouse
gases market off the ground.
California is the last hope of U.S. environmentalists to
revive a national climate change agenda. The state plans to set
a limit on emissions and let factories and power plants trade
rights to pollute. The hope is that the most efficient will
profit from their knowledge and new industries will emerge.
If it succeeds, the plan known as cap-and-trade could
spread to other states. Similar legislation failed in the U.S.
Congress and many hope national leaders would reconsider if
California does well.
A lawsuit by poor communities who fear cap-and-trade could
worsen air quality in their part of the state is forcing
regulators to consider other options. "We have to be open to
the possibility that there could be other approaches," the
state's top climate regulator, Air Resources Board Chair Mary
Nichols, said at a conference late last week.
"And certainly the current governor deserves a chance, like
the last one did, to put his mark on the program."
Previous Governor Arnold Schwarzenegger, for instance,
instructed that a substantial number of pollution permits be
given away instead of sold by the state.
Nichols plans to brief Governor Jerry Brown before a July
board meeting to consider key details of the program.
The state lost the first round of the lawsuit but Nichols
expects to win on appeal and said that Brown had not indicated
"in the slightest" that he wanted to change cap-and-trade.
Still, "he hasn't had a chance to yet, because of the
budget, to get fully briefed on the program, or to indicate,
you know, whether he would like to see changes," she said at
the Navigating the American Carbon World conference in Los
Angeles, which was sponsored in part by Point Carbon. Thomson
Reuters owns Point Carbon as well as Reuters News.
Brown's support of the state's broad climate change law was
a hallmark of his campaign last year to be governor again,
nearly three decades after a first two terms. But he focused on
creating green jobs and did not dwell on the cap-and-trade
greenhouse gas market, a contentious part of California's plan
to cut emissions to 1990 levels by 2020.
"Where he stands is a big mystery," said Brent Newell, one
of the lawyers for the Association of Irritated Residents suing
the state over cap-and-trade. Brown has been an advocate of the
poor, but he reappointed Nichols, a longtime colleague who is a
driving force of cap-and-trade, Newell acknowledged.
Brown doesn't have much time to make up his mind --
Nichols aims to put finishing details on cap-and-trade soon. "I
am not discussing any delay, I am not suggesting delay, I'm not
announcing delay," she told reporters. She added in an
interview, "As of this moment I have no reason to think we
can't start the program in 2012." She declined to commit on a
Jan. 1 start, adding, "I'd rather not be pinned down to that."
Even a slight delay from the Jan. 1 target could
complicate matters. Michael Gibbs, Deputy Secretary for Climate
Change at CalEPA argued that companies should be held
accountable for a full year at a time, but that the state had
some flexibility to delay auctions of credits.
"Because (emissions) reporting is annual, my personal
opinion is that compliance should begin January 1 of a given
year to match the reporting requirement," said Gibbs in an
interview. But the first auction of credits to companies did
not necessarily have to be mid-February, as planned. "Say it's
March 14. Is that fatal?" he asked.
Many in the market do not think a delay would be fatal.
"If it slips we'd be something disappointed but we don't
think it would be devastating," said Steve Corneli, senior vice
president of sustainability, policy and strategy at merchant
utility NRG Energy Inc, which has gas plants and renewable
energy investments in California.
(Editing by Bernard Orr)