California unveils major plan to slash emissions

By Nichola Groom

LOS ANGELES (Reuters) - California on Thursday took a major step forward on its global warming fight by unveiling an ambitious plan for clean cars, renewable energy and stringent caps on big polluting industries.

The plan, which aims to reduce pollutants by 10 percent from current levels by 2020 while driving investment in energy technologies regulators said will benefit the state's economy, is the most comprehensive yet by any U.S. state.

It could serve as a blueprint not only for the rest of the United States, but also for other big polluting nations like China and India, planners and environmental groups said.

"This is of tremendous importance, not only for California," Mary Nichols, chairman of the influential California Air Resources Board (CARB), said on a conference call with reporters on Wednesday. "By taking action here ... we will be able to help motivate other states in our nation."

Skeptics, however, said the plan would be costly to implement and only inflate energy prices further.

"California has always paid more for power and gasoline because they've wanted cleaner fuels. It's certainly something they are used to," said Frank Maisano, a spokesman at energy company advocate Bracewell and Giuliani.

"But the larger question is, 'Does the rest of the country want to take its cues from California's energy policy?' The simple answer in these days of higher energy costs is pretty much 'no'."

At a meeting in Sacramento on Thursday, CARB staff presented a series of proposals that would become law in 2012, with some measures going into effect two years earlier.

The initiatives include implementing a cap-and-trade program on carbon dioxide emissions that will require buildings and appliances to use less energy, oil companies to make cleaner fuels and utilities to provide a third of their energy from renewable sources like wind and solar power.

The program will also encourage development of walkable cities with shorter commutes, high-speed rail as an alternative to air travel and require more hybrid and hydrogen-fueled vehicles to transport both goods and people, CARB said.

WHAT WILL IT COST?

California Gov. Arnold Schwarzenegger, whose landmark 2006 law aimed at reducing the state's greenhouse gas emissions prompted CARB's plan, supports the program, Nichols said.

CARB said the measures will benefit residents of the most populous U.S. state by reducing pollution-related illnesses including as asthma and bronchitis and stimulating investment in new energy technologies that will create jobs.

But not everyone was as confident.

California Assemblyman Chuck DeVore said the high price of renewable energy sources would pressure Californians' wallets and drive manufacturing industries out of the state.