Schwarzenegger’s ecological drive may be just more Hollywood

Published on

The Sunday Independent (South Africa)

Overnight, the former Mr. Universe had morphed from a gun-toting action movie star into a leading contender to become chief executive of the world’s eighth-largest economy.

The date was August 9 2003, the election was less than two months away, and he was rushing to form a platform. Needing to reach progressive Californians, he put global warming near the top of his list.

Spending the weekend with his wife, Maria Shriver, a member of the Kennedy clan, in Hyannis Port, Schwarzenegger discussed his ideas with Robert Kennedy junior, an outspoken environmentalist. Kennedy put him in touch with Terry Tamminen, an activist on water pollution in southern California.

Tamminen was sceptical. A fund raiser for Al Gore, he was critical of the Republican record – especially the Bush administration’s rejection in 2001 of the UN’s Kyoto protocol to curb greenhouse gases. Now this Hummer-driving Republican was asking him for advice.

“The Republican Party hadn’t covered itself with environmental glory,” says Tamminen, the author of Lives Per Gallon: The True Cost of Our Oil Addiction. “Then I thought, this man could be the next governor, so don’t we want to make sure he has the most progressive policies? I decided to dive in.”

Three years later, the governor ushered in the Global Warming Solutions Act, the first US legislation of its kind. The law, signed on September 27 last year, requires California’s industries to reduce greenhouse gas emissions to 1990 levels before 2020 — a 25 percent cut.

Five states passed similar laws this year, while five bills in the US senate and house of representatives are pressing for 14 percent carbon dioxide reduction targets by 2020.

“California is the model,” says Daniel Esty, the director of the Yale Center for Environmental Law & Policy. “Governors in a dozen states are now taking the issue seriously, and the groundwork is being laid for a federal policy.”

Hollywood script

Other leaders rang the climate alarm much earlier. Gore called for changes when he was vice-president and heightened the debate with his documentary, An Inconvenient Truth, while former UK prime minister Tony Blair championed Kyoto.

Yet America’s global warming script is being written by an actor who wowed Hollywood as an unstoppable cyborg called the Terminator.

“I was very determined to prove you could create economic growth and protect the environment simultaneously. I knew my strength was being a Republican. I could win the business community over,” he says.

US policy will have huge ramifications for the rest of the world: it is the second-biggest source of greenhouse gases after China. If average global temperatures rise between 1.1 C and 5.5 C by 2100, as many scientists predict, it could jeopardize the water supply for a projected 60 million Californians.

Deteriorating air quality, coastal erosion, pest infestation and monster wildfires could also convulse the state, the 12th-largest emitter of greenhouse gases in the world.

Such scenarios could befall entire continents, according to this year’s report by the UN’s Intergovernmental Panel on Climate Change.

Big problems

“I love tackling big problems,” the governor said in June. “I don’t like incremental steps. I like big things.”

There are few things bigger than melting icecaps and rising oceans. Schwarzenegger’s critics suspect his crusade is more Hollywood razzle-dazzle than a hard-nosed policy that will succeed in cutting carbon.

Jamie Court, the president of the Foundation for Taxpayer and Consumer Rights, says the governor is an opportunist who seized on global warming because going green has become a popular issue.

Unlike Gore, who has called for action since the early 1990s, Schwarzenegger didn’t present himself as a global warming warrior until 2005.

“He deserves credit for pulling off a massive show,” Court says. “But when the public doesn’t see results, they shouldn’t be surprised.”

But environmentalists who have worked with Schwarzenegger say he has become an influential ally.

“He’s serious about getting this right, and no one else could get the kind of media attention he can,” says Fran Pavley, a former Democrat from southern California who co-authored the global warming law.

Bulging coffers

Venture capitalists have poured funds into his election coffers as well as into start-ups making everything from clean coal to ethanol derived from wood chips.

“Renewable energy is the next big growth cycle,” says Vinod Khosla, the founder of Khosla Ventures. He gave $20 000 (R136 000) to the governor’s 2006 re-election bid. “I believe that because California has this global warming law, you will see the next 10 Googles emerge here.”

Timothy Draper, a founder and managing director of venture firm Draper Fisher Jurvetson, has contributed $318 000 to Schwarzenegger since 2003. His firm is the top clean-tech investor in Silicon Valley.

Draper Fisher invests in start-ups such as Tesla Motors, which makes zero-emission, electric-powered sports cars. Elon Musk, Tesla’s primary investor, donated $22 300 to the governor’s 2006 campaign. Earlier this year, Schwarzenegger in turn test-drove Tesla’s new roadster.

But Schwarzenegger’s zeal for such green ventures has prompted his staff to make controversial moves, according to Robert Sawyer, who chaired the California Air Resources Board from 2005 to until he was fired in June. The body is charged with making rules to implement the global warming law.

In February, when Tesla was searching for a site outside California to assemble its luxury White Star sedan, Dan Dunmoyer, the governor’s cabinet secretary, directed Sawyer to allocate $5 million from a fund for alternative fuels to Tesla to encourage it to build in the state.

Public funds

Sawyer refused. He said there had been no tender and he didn’t consider Tesla, a maker of luxury cars for the rich, to be a wise choice for special treatment. Tesla wound up choosing a site in New Mexico.

The governor has built close ties to corporate interests. Since 2003 his campaigns have raked in $121 million from businesses and individual donors, making him California’s most prolific political fundraiser.

Wall Street traders are champing at the bit to cash in on the agenda. The governor is overseeing the establishment of a cap-and-trade market set to open in 2012 for buying and selling carbon emission credits.
Companies that emit carbon at a level below the cap will be able to sell emission credits to firms that want to emit more than the cap.

“We’re looking to California to be the biggest pool of liquidity in the US and a precursor to a national cap-and-trade system,” says Paul Ezekiel, the New York head of carbon trading for Credit Suisse.

Citizen advocacy groups, however, worry that consumers will bear the costs, pointing to the last time the state turned to the financial markets for a policy fix: the deregulation of its power industry in the late 1990s. Manipulation by Enron and the ensuing blackouts were one reason for Gray’s recall.

On the other side, industries such as agriculture, manufacturing and petroleum fear the global warming push could impose burdensome costs, forcing them out of the state.

The energy industry has contributed $4.3 million to the governor’s campaigns, and oil firms are adamant that a carbon market play a substantial role in meeting California greenhouse gas reduction targets under the law, says Catherine Reheis-Boyd, a lobbyist for Big Oil.

“The governor doesn’t believe environmental regulation and economic prosperity are mutually exclusive,” she says. “Our goal is to point out that this is a core principle, and he cannot move away from that.”

But Ezekiel says the state must impose tough cuts to make credits valuable and the market viable.
“We’re going to want real base-line data and rigorous caps,” he says. “We want industry to make meaningful reductions.” That’s one area where Wall Street and environmentalists can agree, he says.

Shaky start

For all the attention, the law has erased not a single gram of carbon dioxide from California’s air. The Air Resources Board is just one year into a six-year process of converting the law’s intentions into enforceable regulations. It got off to a shaky start when chairman Sawyer and chief executive Catherine Witherspoon broke with Schwarzenegger on the best way forward.

The board had to issue “early action” regulations by July 1. The governor signed off on three, including a fuel standard requiring petrol producers to cut the carbon content in fuel by 10 percent by 2020.

Sawyer tried to add a fourth item: a requirement that vehicles sold in the state use cool paints, which reflect more sunlight than usual tints, lessening the need for air conditioning and reducing fuel consumption.

Sawyer’s move clashed with Schwarzenegger’s policy of not dictating how companies should build their products. The governor fired Sawyer in a June 22 letter. Witherspoon resigned in protest days after.

The board’s rough summer is a preview of the difficulties leading to 2012, when its rules will be enforced. By then, Schwarzenegger will be two years out of office.

In the next decades, the world will see whether the governor’s global warming crusade turns into good policy, big profits, smart politics — or just more Hollywood.

Consumer Watchdog
Consumer Watchdog
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