06/20/2009 05:12 am ET | Updated May 25, 2011

Obama's New California-Based Climate Policy: Six Key Things To Know

President Barack Obama announced that he is making California's standard for greater vehicle fuel efficiency and reduced greenhouse gas emissions the new national standard.

When President Barack Obama announced on Tuesday that he is making California's standard for vehicle fuel efficiency and greenhouse gas emissions the new national standard, he accomplished a number of things.

First, he set in place a plan to dramatically cut the use of oil, much of it imported from areas of the world hostile to America.

Second, he set in place a plan to dramatically cut the emission of greenhouse gases.

Third, he dramatically reversed one of the Bush/Cheney Administration's most pernicious moves -- the blocking by all means necessary, from stealth to the political overriding of the administration's own scientists -- of California's landmark 2002 tailpipe emissions law.

Fourth, he further empowered a nascent greentech industry, including new vehicles such as the electric-powered Tesla.

Fifth, he did something quite popular, as this new Gallup Poll shows, demonstrating follow through with "new center" policies.

And sixth, he enabled California and many other states to move forward with their own omnibus climate change programs. Which will be especially helpful to Obama if climate change legislation stalls in Congress.

Obama, then a longshot presidential candidate, said that California's policies were his model on Earth Day 2007 in Iowa.

In actually doing something about energy independence and climate change, Obama's new standards cover the model years 2012-2016. They will ultimately require an average fuel economy standard of 35.5 miles per gallon in 2016 and are projected to save 1.8 billion barrels of oil. That's a fuel economy gain averaging over five percent per year. And that will lead to a reduction of approximately 900 million metric tons in greenhouse gas emissions, savings equivalent to taking 177 million of today's cars off the road. Not only is this far beyond anything the Bush/Cheney Administration, whose policies left fuel economy essentially flat, would ever do on its own, this will surpass the law passed by Congress in 2007 to require an average fuel economy of 35 miles per gallon in 2020.

Essentially, this is the California program on tailpipe emissions, writ large for the entire country, as Obama noted repeatedly in Tuesday's announcement with Governor Arnold Schwarzenegger on hand with others in the Rose Garden as a special guest.

Obama also enabled California and more than a dozen other states which followed California's lead in enacting state climate change control programs to follow through with those omnibus programs.

Cutting tailpipe emissions is the lynchpin to the omnibus approach. As the single largest source of greenhouse gas emissions, vehicle emissions at the tailpipe have to be sharply cut for a climate policy to work. And tailpipe emission legislation was preempted by federal law under the Clean Air Act. Unless California received its customary waiver from the Environmental Protection Agency for more aggressive steps to counter air pollution, as it had all the time until the advent of the Bush/Cheney Administration.

California, incidentally, will be granted the waiver on the tailpipe emissions law, with Schwarzenegger agreeing to forego the state program for the time being in lieu of the national program modeled on California's. But after 2016, California is free to move more aggressively.

Then President-elect Obama addressed Schwarzenegger's global governors' summit on climate change in LA.

This is hardly the first time that Obama has looked West, to California, for his model for national policy on climate change and energy.

In his Earth Day address last month in Iowa, he pointed to steps taken a few decades ago in California that have kept per capita energy growth flat through conservation, energy efficiency, and renewable energy technology, while energy usage nationally has skyrocketed.

"They put in some good policy early on that assured that they weren't wasting energy," Obama said. "Now, if California can do it, then the whole country can do it. Iowa can do it."

What happened those several decades ago is that then Governor Jerry Brown sharply shifted California's direction on energy policy, cutting California's annual rate of growth in electric power demand from 7% to 2% during his two terms as governor. In the process, California's energy policy developed a heavy focus on conservation, energy efficiency, renewable energy sources, and cleaner-burning fossil fuels in the form of natural gas-fired plants as a bridge to the renewable future.

As California's governor, Schwarzenegger and, before him, Gray Davis, picked up the ball on renewable energy, and other more conservative governors kept Brown's focus on energy efficiency.

After last November's election, Obama delivered a video address to Schwarzenegger's UN-sponsored Governors' Global Climate Summit in LA. "My presidency," declared Obama, "will mark a new chapter in America's leadership on climate change that will strengthen our security and create millions of new jobs in the process."

Obama declared that his national goal will be that already established by California under Schwarzenegger. "We'll establish strong annual targets that set us on a course to reduce emissions to their 1990 levels by 2020."

And when he celebrated Earth Day 2007 in Iowa City, while still an underdog candidate for the presidency, he said that he would model his approach after California's with hard targets on greenhouse gas emissions, the development of new green tech industrial sector, and a cap & trade system.

California has adopted two landmark climate change laws, in 2002 and 2006, which became models adopted by many other states. In 2002, the bill by then LA Assemblywoman, now state Senator Fran Pavley, who was also on hand Tuesday at the White House, to cut tailpipe emissions of greenhouse gases, signed into law by then Governor Gray Davis. (Davis had served as Brown's gubernatorial chief of staff.) When I sounded Davis out about the bill in early 2002, he wasn't sure. But in short order, he came on board and helped foster its passage, signing it into law in defiance of a threatened statewide referendum against it sponsored by big automakers.

Governor Arnold Schwarzenegger signed California's omnibus climate change program into law in a ceremony on San Francisco's Treasure Island.

That legislation, hotly contested from the beginning, is the model for the new national standard just announced by Obama.

In 2006, after a set of executive orders by Schwarzenegger in 2005 on climate change, a bill by Fran Pavley again and then Assembly Speaker Fabian Nunez established a comprehensive program for reducing greenhouse gas emissions across the board. The latter bill, AB 32, signed into law by Schwarzenegger in an elaborate ceremony on Treasure Island in the middle of San Francisco Bay -- with then Prime Minister Tony Blair beaming in by satellite from England -- incorporates the first Pavley bill, which was heavily opposed by Detroit automakers. Without it, the California program can't work.

Former Governor-turned-Attorney General Jerry Brown, joined by Schwarzenegger, battled the Bush/Cheney Administration and auto makers in court to promote California's climate change program.

While Schwarzenegger joined with other states, encouraging them to adopt greenhouse gas reduction legislation modeled on California's, as more than a dozen have, Jerry Brown, now California's attorney general, battled the Bush/Cheney Administration and industry groups in court, organizing other states to join in the legal actions.

When the presidential candidates came to California last year, Brown, Schwarzenegger, and others pressured them to promise to give California the okay to implement its climate change program. The four finalists -- Obama (who had already given private assurances), Hillary Clinton, John McCain, and Mike Huckabee -- all publicly pledged to do so. Though McCain seemed later to backtrack on the overall issue.

As a result of Obama's moves, California's broader climate program can now go into effect, both here and in many other states. Should omnibus climate change legislation stall in Congress, it can begin to go into effect in backdoor fashion through the states due to the federal waiver allowing implementation of California's already enacted and legally tested law.

The new vehicles industry gets a big boost as well from the new national standard on vehicle fuel efficiency and greenhouse gas emissions. While the administration isn't, at this particular moment, investing directly into new car companies while the old ones -- in which it is now heavily invested -- are still in doubt, new companies have more of an opening.

Obama's new policy gives a boost to new vehicles, such as this forthcoming Tesla sedan, demonstrated at CEO Elon Musk's SpaceX facility.

Also on Tuesday, Daimler took a 10% equity stake in California-based Tesla Motors. Tesla produces the well-regarded Tesla roadster, a very fast and very expensive ($100,000) all-electric sports car, and is moving to a second model, a stylish Model S sedan for half the price. Not the easiest thing to do in the midst of a deep global recession.

So the cash infusion from Daimler is timely, and -- as Tesla board member Steve Westly, a venture capitalist and former California state controller, points out -- should lead to the first new automobile plant in California in more than 40 years.

Tesla gets a needed cash infusion and more production know-how to move forward with production of its second model. Tesla has more than a thousand orders for the new sedan, currently a prototype, which it plans to produce in 2011. And Daimler gets access to battery and charging technology for its own electric car program.

Obama's move is a big step in terms of the economy, the environment, and national security.

For all the Bush/Cheney Administration's talk of defending America as its supposedly highest priority, its energy policy only made America more dependent on foreign oil, keeping America dependent on parts of the world hostile to us. Obama's new standard will reduce the flow of money outside the country and, while slightly increasing the initial cost of a new vehicle, reduce the cost of running that vehicle.

The new policy sharply cuts greenhouse gas emissions as well as standard air pollution from vehicles, both of which went up sharply under the previous administration with its encouragement of gas guzzlers.

And it spurs the transformation of the economy. America can lead the way in greentech. It did once, but now trails. With a shift in the resource base for the world's largest market, America can lead the world in a global economic transformation that is already underway.