Today's date:
Summer 2013

States and Provinces Can Fight Climate Change Together

Gray Davis served as governor of California and is a board member of the Climate Action Reserve, the nonprofit successor to the California Climate Action Registry. Jean Charest served as premier of Quebec and is the former deputy prime minister of Canada.

QUEBEC—Climate change has no boundaries. It affects everyone in our global community. Actions taken in one place—like increasing emissions at an old power plant—have a negative impact on those living half a planet away. For this reason, effective solutions to climate change must also have no boundaries.

We have watched as international climate negotiations have stuttered and stalled, yet we remain hopeful, seeing progress now building from the ground up rather than the top down. Recently, an unprecedented collaboration took shape when the state of California and province of Quebec formally agreed to link their cap-and-trade programs, demonstrating that states and provinces can successfully work together to magnify the strength of their efforts.

For more than a decade, California has been taking the lead in the United States in developing a comprehensive approach to addressing climate change. As governor, I was proud to sign the first legislation in the nation to reduce global warming by reducing tailpipe emissions, a standard that has since been adopted nationally under President Barack Obama. We also established the California Climate Action Registry and the first statewide “renewable portfolio standard.” Collectively, these efforts were the foundation for ab32, the California Global Warming Solutions Act.

Not only will these reforms set California on the path to lower greenhouse gas emissions, but they will also provide the core incentives to build a 21st century clean energy economy. Just recently, Next 10 released a report showing that the pace of green job growth in California continues faster than the economy overall and that California continues to garner 60 percent of all venture capital investment in the United States and 40 percent of such investment worldwide. And all of this while per capita emissions of greenhouse gases has declined over the past five years, showing that fighting climate change and growing a new clean economy are mutually supportive.

Quebec has much in common with California. It, too, is a leader in green technology and willing to adopt ambitious environmental goals, even when they are somewhat at odds with the political winds in the rest of the country. Efforts made in recent years by the Liberal government have enabled Quebec to become a true environmental leader. Today, Quebec displays some of the best results in North America with respect to greenhouse gas emissions. Until now, the action plan with a $1.6 billion budget has led to the realization of more than 2,000 projects. The new action plan, announced in March 2012, will call for investments of nearly $2.7 billion by 2020.

The province initially established a carbon reduction goal of 20 percent and will try to target 25 percent below 1990 emission levels by 2020. This is among the most ambitious commitments in the world. And because Quebec has virtually no emissions from electricity, the reductions will be all the more difficult to achieve. Quebec has enacted its own clean vehicle and fuel standards, is building its own regulatory framework, and also sees the new clean energy and technology economy as the way forward.

California and Quebec both recognize that putting a price on carbon and letting the market find cost-effective and innovative solutions is the wisest approach both environmentally and economically. Each has designed cap-and-trade programs that rely on a common approach and that use common infrastructure. Soon these two jurisdictions will jointly hold an auction of carbon allowances and will begin mutually overseeing this new marketplace. With the establishment of a carbon market, Quebec and California have taken their places in a rapidly emerging market. According to the World Bank, the value of transactions worldwide increased from $11 billion to $142 billion between 2005 and 2010.

The strength of this partnership is not limited to the two jurisdictions alone, however. Its real strength is that the partnership creates a path for future partners to follow. Already, other US states and Canadian provinces are watching carefully and beginning to talk about joining this movement. In addition, there are now discussions with Australia, the cap-and-trade program in the Northeast US, and the European Union.

One of the great values of federalism is that it allows sub-national units to experiment and develop policy prototypes on a scale that can be evaluated and fine-tuned before being adopted by countries or regions as a whole. As more states, provinces, regions and individual nations begin taking action on their own and connecting, companies will begin to mount pressure for a single, consistent and certain system so they are not faced with a patchwork of regulations.

We can foresee a day in the not-too-distant future when governments, businesses, and the environmental community join together to drive national and international action on climate change from the ground up. And this will be the true significance and legacy of the historic linkage agreement between California and Quebec.

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California and China Cooperate on Climate Change

In a visit to China during April, California Governor Jerry Brown took a page from the Berggruen Institute 21st Century Council’s G-20 recommendations in Mexico City last May to pursue strategies on climate change through “subnational networks” in the absence of a global agreement.

At that time, the Council presented a letter from Governor Brown on this subject to then Mexican President and G-20 chair, Felipe Calderon, when the Berggruen Institute group met at Los Pinos.

When in China, Governor Brown met with China’s Premier Li Keqiang to stress the importance of collaboration between California and China on renewable energy and climate change. In addition, he:

• Signed a landmark agreement with China’s Ministry of Commerce and six Chinese provinces and regions to expand trade and investment, particularly in the sectors of new energy, environmental protection and infrastructure;

• Signed an agreement with China’s Ministry of Environmental Protection to strengthen and coordinate efforts to improve air quality;

• Met with the head of China’s most powerful government agency, the National Reform and Development Commission (NRDC), which is in charge of China’s climate change programs, to plan ways to cooperate.

Also, last April, Nicolas Berggruen and Nathan Gardels introduced Governor Brown to Gao Xiqing, President of the China Investment Corporation, China’s largest sovereign wealth fund, to discuss investment by CIC in California infrastructure, including the state’s planned bullet train.

?California Governor Jerry Brown with Chinese President Xi Jingping in California in June.