Comment Log Display

Thank you for providing the opportunity for public input into the
appropriate disbursement of funds resulting from the cap and trade
program allowance auctions.  First, I would like to note the global
interest in this program and that the implementation of the auction
as well as the investment of the funds raised, are being keenly
watched around the world.  The international community is, once
again, looking to California to lead the way to reduce GHG
emissions through a variety of aggressive energy reduction
measures.

A number of research reports have been issued in the past couple of
years, in which California’s energy future and GHG emission
projections have been analyzed in great detail.  These reports
recognize that, with a phasing out of nuclear and coal-based
electric generation and a planned major increase in the
electrification of the transportation sector, there will emerge a
major gap in electric generation by 2050. While California’s
continued investment in various energy efficiency, conservation,
and renewable technologies is important and will, by 2050, have a
major cumulative impact on the state’s GHG emissions mitigation to
conform with Governor’s Executive Order S-3-05, these measures will
not be sufficient to close the gap.

 Other countries provide illustrative examples. Germany, for
example, phased out its nuclear program and made a strategic
decision to generate electricity from renewable resources in
addition to efficiency programs.  This admirable strategy
nevertheless found that its renewable sector was unable to meet
demand, that electricity prices have soared, and that the country
has now approved a major re-investment in coal-based generation. 
Expert consensus is that the state’s future energy demands and GHG
emissions reductions will be met only by including low- to
negative-carbon electricity and fuels generation.  This means
applying carbon capture, utilization, and storage, not only to
natural gas power plants, but also to sources such as biomass
plants or biofuel refineries.  While technologies exist today to
apply CCUS to these emissions sources, they are not optimized to
compete with other GHG emissions reductions strategies, which often
are subsidized, incentivized, and for which compliance
methodologies exist. 

I urge that the cap and trade auction proceeds should in part be
directed to assist research, development and demonstration of this
family of very critical technologies, including better capture and
separation processes, utilization technologies such as manufacture
of building materials and biofuels, and storage options that may
create or revitalize important energy industries in the state. In
addition, using cap-and-trade auction revenues to develop sound
methodologies to allow these technologies to be accepted compliance
options would do much to facilitate their adoption by GHG emitters.

  
I would be pleased to share further details with the ARB.