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Sun, Nov. 17

Governor: Cost of vehicle greenhouse emission standards "not realistic'
State won’t participate in cap-and-trade system

PHOENIX -- Arizona motorists looking for new cars in 2012 may escape being forced by state regulations to purchase more fuel-efficient vehicles.

Gov. Jan Brewer has ordered a review of the regulations pushed through two years ago by Gov. Janet Napolitano to impose "greenhouse gas' emission standards on new cars and trucks sold in Arizona.

Brewer stopped short of actually directing her Department of Environmental Quality to rescind the rules. But the governor, in an interview with Capitol Media Services, said she questions the conclusion by the Napolitano administration that the higher costs of these vehicles would be minimal.

"With the economy the way it is and the expense of the cars that would need to be purchased by the people of Arizona, it's just not realistic,' she said.

While Brewer is seeking more information on vehicle emission standards, she already has decided Arizona won't participate in a regional "cap and trade' system for industrial emissions of carbon dioxide and other gases that many scientists say cause global climate change. There, she said, the conclusion already is clear: It will put a financial hardship on Arizonans who will have to pay more for their electricity.

In fact, Brewer said she questions many of the assumptions about the assertions that human activities are causing massive changes in the environment.

"At this point in time I'm sure there is some cause,' she said. "I don't believe it is to the extreme of what some people would like us to believe.'

But Brewer stopped short of actually pulling Arizona out of the Western Climate Initiative, composed of the governors of several western states and Canadian provinces, which already has been crafting cap-and-trade standards. The governor said while she doesn't intend to have Arizona comply with whatever the group adopts, it makes sense to continue to monitor what it is doing.

"I have said from the very beginning that if I'm not at the table we're going to be on the menu,' Brewer said. "We're just insisting on a menu that includes alternatives to cap and trade.'

The essence of a "cap and trade' system starts with an inventory of how much greenhouse gas each source is emitting. The next step is a schedule of how much that needs to be cut and how fast.

Companies that are unable to meet those reductions would be entitled to purchase pollution credits from other firms who cut emissions more than the target.

"I have never been a big supporter of cap and trade,' Brewer said. "I think we could focus less on the regulation and maybe more on renewable energy, more investment certainly in "green' jobs.'

Closely linked to that, Brewer said, is the whole question of having regulations that affect only Arizona and some western states and provinces.

"It's not a local environment issue,' she said.

"It's a global environment issue,' Brewer continued. "And it's got to prove that it will be successful before we move down that road.'

Then there's the question of what utilities will have to spend to capture greenhouse gases.

"Our citizens of Arizona cannot afford increases in the cost of electricity and fuels,' Brewer said. "So we have to be very cautious of what direction and how quickly we move.'

Brewer's desire not to have Arizona and its regional allies out in front of the issue mirrors arguments made by utility companies.

Ed Fox, vice president of Arizona Public Service, has said a cap and trade system will increase costs to residential and business consumers and, by extension, put Arizona firms at a disadvantage with competitors elsewhere without similar limits.

Philip Dion, his counterpart at UniSource Energy, the parent company of Tucson Electric Power, has said any cap-and- trade system should be enacted nationally. He said it would be unfair for Arizona consumers and businesses to bear the higher costs when lower greenhouse-gas emissions benefit the nation.

The issue of whether Brewer ultimately decides to scrap the vehicle emission standards also is likely to turn on cost.

During hearings in 2008. an economist hired by vehicle manufacturers argued that the rules would add at least $6,000 to the cost of new cars and light trucks. At the same time Wynn Bussman, an economist hired by the manufacturers, pegged the net savings from things like increased fuel efficiency at less than $1,000.

That figure was disputed by Pat Cunningham, at the time the deputy director of the state Department of Environmental Qualify. He called the manufacturers' claim little more than "advocacy,' citing instead figures from the California Air Resources Board which peg the price tag for vehicles at less than $1,100 more with savings from lower gasoline use and maintenance approaching $3,000.

But Knox Kimberly, lobbyist for the manufacturers. scoffed at the figures as "intellectually dishonest.'

"There is no free lunch,' he said.

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