Hawai’i has a chance to become the second state in the nation to mandate the reduction of greenhouse gas emissions, right behind California. As a series of islands certain to be affected by global warming’s rising seas and acidic oceans, the Aloha State has reason to make a bit of a national, or even global, fuss, but the bill (HB 226) has been watered down, so to speak, and requires further action.

Three major questions

First, who should define the regulations required to meet the bill’s target of reducing greenhouse gases to 1990 levels by 2020? Currently, the composition of the task force in charge of setting these regulations is weighted toward the polluters. In effect, the major sources of greenhouse gases, such as the utility and transportation industries, will have the most say on just how to regulate and monitor themselves.

Second, how should the costs required to reduce emissions be measured? The bill’s definition of ‘cost effective’ measurements, which will be used to decide how best to reduce emissions, is woefully opaque and does not necessarily take into account the overall impact on society. For example, what is the cost to health, such as complications from poor air quality? What is the cost to the environment? These questions are not easy to answer and that’s why knowing who defines costs and what those costs are is essential.

Finally, the timeline for implementing reductions doesn’t even begin until 2012. That’s almost five years away, and apart from some rogue states, such as, say, the United ones, the world is in agreement that not only is change required, but it’s required to take place now. So, the bill puts Hawai’i’s stake in the ground, but even most of the bill’s supporters say it’s only a first step.

Tipping the task force scales

‘Yes, I support the bill, but with extremely strong reservations and caveats,’ says Henry Curtis, executive director of Life of the Land, a Hawai’i-based environmental and community action group. ‘The members of the task force are not very encouraging.’

The problem is that the polluters–basically the electrical utilities, refineries, ground transportation and maritime industries–substantially overshadow the environmental and even economic representation on the task force. There is validity in having the major polluters at the table because they are the ones most likely to invest in and manage emissions reductions. And the bill also calls for an open public process, so it’s not quite as bad as Vice President Dick Cheney cozying up to Enron on energy policy. Still, the task force is heavily slanted toward industries with a certain point-of-view.

Rep. Cynthia Thielen, one of the bill’s sponsors and a retired environmental law attorney, says she doesn’t think the task force has enough environmental representation. ‘I’m sorry to see environmental groups so outweighed,’ she says.

But Rep. Josh Green, another of the bill’s sponsors, and Jeff Mikulina, director of the Sierra Club’s Hawai’i chapter, both say they have few concerns about the task force because industry has to support and implement the changes.

‘The task force makes recommendations to the Legislature, so if we need to we will tweak the recommendations,’ Green says. ‘And industry folk in Hawai’i are a lot better than, say, in Texas.’

Mikulina believes passing the bill will represent an important market signal to other states and the federal government that change is happening. ‘Beyond that, it’s in the details,’ he says.

The devil is in the details

How the task force and, finally, the Legislature define regulations for reductions in greenhouse gas emissions will have a major impact on how meaningful those reductions are. And that’s where defining costs becomes important.

This is no easy task. Agreeing on the ‘true’ cost of implementing public policy is about as likely as sitting at Plato’s table. Jonathan Wolff, professor of philosophy at University College London and one of the world’s leading political philosophers, discusses how valuation in public policy must go beyond economics, especially when the decision involves ecological and health factors because nature and human life require more than an industry’s economic cost-benefit analysis. After all, everyone needs air and water–no matter the price. And greenhouse gas emissions threaten the quality of both.

Rep. Thielen says she wants to modify the ‘cost language’ to better define what it means for polluters to meet the reduction goals and she wants more input from environmental groups.

From an environmental standpoint, Curtis says he wants to make sure the regulations take into account the full life cycle of emissions production. For example, he notes, Hawai’i can now burn coal to produce ethanol–and it takes four pounds of coal to make one gallon of ethanol. He says the ‘cost’ of that ethanol should reflect the cost of mining and transporting the coal, burning the coal, and processing the coal into ethanol–basically, the emissions measurement should take place at each point in the process, not just the end point when emitted by a car running on ethanol.

‘You have to look at where the greenhouse gas emissions are at each major input,’ Curtis says. ‘And that’s what I really did not see in this bill moving forward.’

The bill does require the task force to look at ‘leakage,’ or the emissions produced outside the state that may offset any decrease within the state. For example, any solution would have to look at the full emissions impact of importing palm oil to make biodiesel by including harvesting emissions and, depending on how costs are defined, transportation emissions and the environmental impact of devastating rainforests. Curtis notes growing biofuels has environmental costs, too, not just from fossil fuel emissions from transportation and farming, but also soil degradation and water usage.

The implication is that fuel costs are actually too low now, even at more than $3 per gallon, but very few politicians are willing to increase prices or eliminate subsidies to better reflect the true cost of emissions.

Chris Grandy, associate professor in the Public Administration Program at the University of Hawai’i-Manoa, says government subsidies have essentially hidden the true cost of many industries, sometimes to ill effect.

‘We often grab at the hot new solution and throw money at it, and we may be in a worse position in a few years,’ he says. ‘The territorial government and even the Kingdom of Hawai’i in the 19th century explicitly subsidized sugar and pineapple. That was useful for a time, but was maintained longer than it should have been and now we have a food supply problem.’

Maurice Kaya, chief technology office of the Strategic Industries Division for the Department of Business, Economic Development and Tourism (DBEDT), which will co-chair the task force with the Department of Health, agrees it will be important to define cost based on an entire lifecycle. He notes the traditional way to value emissions doesn’t factor in the environmental effects, the cost of relying on oil from the Middle East nor the impact it has on that region, as well as Hawai’i.

Just say when

Climate change is global, and the world’s greenhouse gas emissions have increased dramatically in the last four decades. From 1970 to 2004, global emissions increased 70 percent and could go up another 25 to 90 percent by 2030 depending on how quickly and effectively action is taken, according to the Intergovernmental Panel on Climate Change (IPCC), an international group of scientists and politicians set up to assess the risk of human-induced climate change.

The Hawai’i bill doesn’t require the emissions reduction targets and regulations to be defined until the end of 2011. Curtis and Thielen both say waiting until 2012 to begin implementing greenhouse gas wastes valuable time. ‘I don’t like to let years go by where polluters don’t have to do anything,’ Thielen says. ‘We need to strengthen the bill in the next legislative session.’

Curtis says the bill met a lot of resistance in the Legislature with debate focusing on how much Hawai’i could really impact climate change. The tug-of-war between the House and Senate on the bill’s language also resulted in a longer implementation time line. He says, ‘Studying is good, but we need to be taking steps also.’

Beyond the bill

‘We don’t want to get lost in the regulatory sticks. We don’t just want to look at the punishing side without a clear vision of the whole,’ says David Cole, CEO of Maui, Land & Pineapple. ‘It’s good to do less of the bad things, but to do things differently, we need the carrots.’

Cole continues to be a major proponent of ’smart growth’ and streamlined land use processes. He notes one of the biggest contributors to emissions in Hawai’i is transportation and says the state’s Land Use Commission needs to take less of a transactional, project-by-project approach and look at the big picture because sprawl, or ‘dumb growth,’ results in more traffic and more emissions.

As a major real estate developer and agricultural land owner, Maui, Land & Pineapple would obviously benefit from some of Cole’s suggestions, and that’s why subsidies to encourage change are more complicated and more susceptible to government fallibility than taxes used to reflect total costs. Whether people and politicians like it or not, high prices are a strong deterrent and one of the most dramatic ways to change behavior.

Higher prices also encourage innovation in new markets. The IPCC notes that if ‘carbon prices’–the cost of carbon dioxide emissions–are high enough, businesses will have an economic incentive to invest in new technologies with lower greenhouse gas emissions. For example, if gas prices are much higher, renewable energy technologies, become competitive–and as more people purchase renewable energy over fossil fuels, the price will come down.

Grandy says in an idealized world, the government would not choose which technologies to subsidize. Instead, the market would offer four or five different competitive fuels, and each of those fuels would reflect their total costs.

Michael Bloomberg, the mayor of New York City, has been one of the more aggressive politicians to use taxes as a way to spur change. He has proposed a plan to tax congestion, basically assessing fees for driving within a set traffic zone during specific times. The benefit would be less traffic, which means less carbon emissions from exhaust-spewing idlers.

The problem is all these costs often hit the poor first and hardest, so government funding, even if it means subsidies, is needed to spur development of better alternatives, such as renewable energy, alternative transportation, flex-fuel or plug-in cars and safe bike paths.

Unfortunately, government funding for most energy research programs is paltry, flat or declining.

Moving forward

Gov. Linda Lingle has until July 10 to decide whether to sign or veto the bill. For a leader with environmentalism on her placard, this bill should be just the beginning of an ongoing process that also takes immediate action.

The Legislature found that climate change impacts Hawai’i’s economy, public health and environment and will continue to have detrimental effects on some of the state’s largest industries, including tourism, agriculture, recreational and commercial fishing, and forestry. These industries need representation or at least a required and significant voice on how to value the costs and benefits of emissions regulation.

A solution proposed by Wolff might work. He recommends allowing each group affected by the policy–and not just the major affected industries–to come up with its own economic evaluation. Taken together, these evaluations provide a multi-dimensional look at costs and benefits. In other words, the task force should have a public process, diverse points-of-view and a comprehensive framework to help define regulations.

But they better hurry up because the real question is: What is the cost of not reducing greenhouse gases?

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Ethanol: The greater hoax?

Remember when the ‘greatest hoax ever perpetrated on the American people’ was the threat of catastrophic global warming? That’s what U.S. Rep. James Inhofe, former chairman of the Committee on Environment and Public Works, said on the Senate floor in 2003. He’s no longer the chairman, and it turns out the threat is pretty much real.

But it looks like the next great hoax may be a product pitched as a solution to global warming: Ethanol. A new study by Stanford atmospheric scientist Mark Z. Jacobson shows E85 (an 85 percent ethanol and 15 percent gasoline blend) may actually be a greater overall public health risk than gasoline.

The study showed cancer rates with E85 would be about the same as with 100 percent gasoline, but in some parts of the country, E85 was shown to significantly increase ground-level ozone, which has major harmful health implications, especially for the lungs and immune system. The study showed E85 increased mortalities in the U.S. 4 percent above projected ozone-related death rates from gasoline-fueled vehicles. Hawai’i already has one of the highest asthma rates in the country.

Hawai’i also has a mandate that at least 85 percent of the state’s gasoline contain 10 percent ethanol (E10). There is no local ethanol production available yet, and all the state’s ethanol is imported using fossil fuel.

Companies such as Maui, Land & Pineapple and Gay & Robinson are investigating and developing ethanol production capabilities using sugar. Sugar-based ethanol is almost eight times more energy efficient than corn-based ethanol, so it requires less fossil fuel to produce. Unfortunately, as Jacobson’s study showed, the negative health effects of E85 will be the same, whether the ethanol comes from corn, switchgrass or other plant products, including sugar.

‘My feeling is government has walked way over the line here and has basically bet pretty heavily on ethanol–and we may not be pleased,’ says Chris Grandy, associate professor in the Public Administration Program at the University of Hawai’i-Manoa.

The Legislature recently amended the renewable energy tax credits program to extend tax credits for solar and wind to fuel-cell technologies. Rep. Cythnia Thielen is a big proponent of wave energy and is working to recruit companies who produce it. None of these technologies is perfect, and many are still too expensive to be used commercially, but all have low greenhouse gas emissions.

‘There are alternatives, such as battery-electric, plug-in-hybrid and hydrogen-fuel cell vehicles, whose energy can be derived from wind or solar power,’ Jacobson says in a quote from a Stanford News press release. ‘These vehicles produce virtually no toxic emissions or greenhouse gases and cause very little disruption to the land–unlike ethanol made from corn or switchgrass, which will require millions of acres of farmland to mass produce. It would seem prudent, therefore, to address climate, health and energy with technologies that have known benefits.’

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Task Force Comparison: Hawai’i vs. California

Hawai’i - 10 members

• Four members from affected business sectors*, two appointed by House, two by Senate
• Deputy director (or designee) of DOH environmental health administration
• Director of DBEDT (or designee)
• Two members from UH climate change commission
• Two members for environmental organizations one appointed by House, the other by Senate
• Co-chairs: DBEDT and DOH

California - 11 Members

Five members from separate local air quality management districts
• One expert in automotive engineering or closely related field
• One expert in science, agriculture or law
• One physician, surgeon or health effects expert
• Two public members and one remaining member with expertise in air pollution control or qualifications from three categories mentioned above
• Chair: appointed by governor from members

*’Affected business sectors’ are electrical utilities, refinery operations, ground transportation industry, or maritime industry.