12   level, everyone cares about the snowpack, everyone cares

13   about spring blooms and other issues.  How would this

14   regulation, even if adopted worldwide, do anything to affect

15   any of those conditions of the environment.  That's what we

16   then asked the regulators responsible for this regulation

17   and here is what they said:

18             (A video clip of Charles Shulock was

19             played.)

20             MR. CLUBOK:  We tried to think of anything else we

21   could think of.  I will admit we did not think about

22   insurance rates.  I heard someone earlier today, maybe it

23   was Ms. Witherspoon who said that insurance rates might be

24   going up because California is near the coastline and

25   certain issues.  And so one wonders, if this regulation were

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 1   passed, even if adopted worldwide, would that affect

 2   insurance rates in any way?  That would be one way you could

 3   actually see an impact from the regulation.  I daresay

 4   that's not the case.  You'll see we asked about everything

 5   else we could think of and the answer was the same for each.

 6             (A video clip of Charles Shulock was

 7             played.)

 8             MR. CLUBOK:  That was Charles Shulock, the Air

 9   Resources Board's Program Manager for Motor Vehicle

10   Greenhouse Gas Reduction and the 30(b)(6) designated

11   representative of the Air Resources Board on this subject.

12             We asked him if he had a personal opinion if there

13   was going to be any real world impact and he said no.

14             But I am just going to skip forward to -- After we

15   had asked him all these questions we said well let's try

16   Mr. Cackette, who is the Air Resources Board's Deputy

17   Executive Officer if there was any other information that he

18   was aware of in any way that related to the subject and here

19   is what he said:

20             (A video clip of Thomas Cackette was

21             played.)

22             MR. CLUBOK:  I asked a similar question to

23   Mr. Flint.

24             (A video clip of Steven Flint was

25             played.)

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 1             MR. CLUBOK:  You know, those words were very

 2   carefully chosen.  Mr. Flint paused a long time and thought

 3   about his answer.  I had asked him, was there any

 4   environmental impact from the regulation.  After thinking

 5   about it for awhile he very carefully said:

 6                  "We have not identified specific

 7             environmental benefits would accrue from

 8             implementation of this regulation."

 9   A very candid answer.

10             And Mr. Flint had available to him and worked

11   closely with the California regulators.  They all share

12   their information, they testified they reviewed it

13   carefully.  And even with this careful, thoughtful review

14   they couldn't identify any benefits, any environmental

15   benefits that would accrue from implementation of this

16   regulation.  That's a fairly extraordinary comment.

17             There is an impact, though, of the regulation it

18   turns out and perhaps that is what Mr. Flint had in mind

19   when he thought so carefully about his regulation.

20   Unfortunately the impact is a negative environmental impact.

21   The regulation, excuse me, will increase smog-forming

22   pollution and we asked Mr. Flint also about that subject.

23             (A video clip of Steven Flint was

24             played.)

25             MR. CLUBOK:  So we know there is going to be more

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 1   pollution if normal course of events happen.  That is, fuel

 2   economy improves so people drive more.  So we asked him if

 3   he had, if anyone he was aware of had quantified that

 4   impact.

 5             (A video clip of Steven Flint was

 6             played.)

 7             MR. CLUBOK:  Again Mr. Flint was the 30(b)(6)

 8   representative on this subject so he knows, he's the person

 9   who knows the most about it in New York after receiving all

10   the information from California.  That's an increase in

11   pollution due to vehicle miles traveled.  There is another

12   problem with the regulation in that it's going to slow fleet

13   turnover causing increased pollution as a result of an aging

14   fleet, and again no effort to consider that or quantify it.

15             (A video clip of Steven Flint was

16             played.)

17             MR. CLUBOK:  There are other adverse pollution

18   risks in this regulation, none of which were analyzed

19   either.  One in particular that came up in the discovery

20   process in internal emails and in the testimony was an issue

21   of whether or not the particulate matter emissions that

22   would be permitted from diesel power engines could have an

23   immediate and local effect on local climate change.

24             That's something that is a tradeoff potentially.

25   With diesel fuel you get better fuel economy but you may

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 1   have more either health-based emissions or you may have an

 2   effect on global warming that's localized.  That is an issue

 3   that the regulators chose not to even consider or analyze at

 4   all in connection with this regulation.

 5             We have submitted in the rulemaking the evidence

 6   of what the emissions increase will be.  This is net

 7   increase when you calculate the so-called rebound effect or

 8   the additional vehicle miles traveled if fuel economy were

 9   to go down -- I'm sorry, were to go up.  The fleet turnover

10   effect and then the reduced -- upturn in emissions because

11   you need less fuel being delivered.

12             And this chart that we have presented here was

13   presented in the rulemaking and it suggests that the

14   regulation by the year 2020, that's pretty soon relatively

15   speaking, would have the impact of approximately two million

16   additional cars being driven.  It's as two million more cars

17   were driving around in California.  That's how much

18   additional smog-based or health-based pollution would result

19   from the regulation.

20             Now that's not looking into 2100, which is how far

21   you have to go to even get an insignificant impact on global

22   warming but that's within at least a time period that is the

23   normal time period that people analyze the effects of

24   regulation.  And you can see how quickly that negative

25   impact ramps up.

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 1             Those are all of my prepared remarks.  I would

 2   like to just briefly respond to one thing that we heard

 3   today.  I heard it outside in the press conference and I

 4   guess we're going to keep hearing this.  And that's sort of

 5   the argument that goes like this.  It says, well, there they

 6   go again.  The automobile industry has in the past objected

 7   to regulations and they're just doing that again.

 8             Now I won't go in detail about all of the

 9   different past instances.  I think much of that is being

10   mischaracterized and we could talk about how the industry

11   has very much been a partner in improving safety, emissions,

12   addressing issues with regulators, et cetera.  But to the

13   extent it's even relevant to go back in time, particularly

14   35 years to find some quotes that suggest the automobile

15   industry has been reticent in doing its part.

16             You know, if we're going to go back in time and

17   look at past events what is a far more relevant comparison

18   would be just about 10 or 15 years when the Air Resources

19   Board staff, frankly the same staff, the exact same staff

20   members who applied their engineering judgment to determine

21   what the costs and benefits of this regulation would be,

22   those staff members predicted that electric vehicles by the

23   end of the 1990s could be sold to the public at an

24   incremental cost of something like $1500 with the invention

25   of new technology that wasn't yet available.

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 1             As Mr. Douglas' chart shows, now the Air Resources

 2   Board's best experts, they now admit that it's at least ten

 3   times that cost.  Far, far greater than was predicted back

 4   then.  Back then the industry went along with it and they

 5   actually said, let's try.  Let's invest billions of dollars.

 6   And that's again, testimony that was presented in federal

 7   court.  We asked the same staff members, isn't it true that

 8   you had predicted that the cost of the sales quota for the

 9   electric vehicle portion of the old ZEV mandate was going to

10   be something like $1500, they said yes.  They now admit that

11   they were off by about ten times and they admit that that

12   mistake cost the industry billions of dollars.

13             I think this waiver proceeding needs to be judged

14   on the facts of this waiver proceeding and this regulation

15   needs to be analyzed under the criteria of Section 209(b)

16   for itself.  But to the extent that people want to go back

17   in time and talk about what's happened in the past, there

18   are many examples on both sides and we think that's not

19   really a productive approach.

20             But otherwise we appreciate very much the

21   opportunity to present this evidence against the evidence

22   we've -- some of the evidence we've gathered from the staff

23   members who worked on this regulation and we will be

24   submitting this and responding to some other issues in our

25   written comments.

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 1             PRESIDING OFFICER GRUNDLER:  Thank you very much.

 2             Do panel members have any questions for the

 3   Alliance representatives?

 4             PANELIST SIMON:  I had one.  Mr. Clubok, please.

 5   I recognize you presented testimony today and evidence about

 6   what the representatives in New York and Vermont have done

 7   in their analysis.  Are you implying that California did not

 8   take on those issues in terms of their record when making

 9   their records for their program?

10             MR. CLUBOK:  Well, what the representatives from

11   New York and Vermont said is that they simply took the

12   information that they had received from California.  So they

13   said in one part they did nothing independently but all they

14   did was collect the information from California.

15             And so to the extent that they couldn't discern

16   any of these studies or any of these impacts from the record

17   they had received and carefully reviewed before they adopted

18   the regulation we think that's telling.  Obviously we also

19   had quite a bit of information from California staff members

20   as well regarding the impact of the regulation.

21             There is some dispute, I understand, about the

22   pollution impact of the regulation but the chart that we

23   have up on the screen right now I think represents the best

24   evidence of the health-based pollution impact.

25             PANELIST SIMON:  Thank you.

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 1             PRESIDING OFFICER GRUNDLER:  Related to that can

 2   you tell me or submit for the record what assumptions you

 3   made with respect to the rebound effect that generated this

 4   graph.

 5             MR. CLUBOK:  Yes, we will submit -- It's all in

 6   the rulemaking record.  We provided all of that and it's in

 7   the record.  We are happy to go into detail about that in

 8   the written comments if that would be helpful.

 9             PRESIDING OFFICER GRUNDLER:  The same with the so-

10   called jalopy effect?

11             MR. CLUBOK:  Yes, we will.  There is also I

12   believe some testimony by the regulators that goes to the

13   rebound effect and we may submit that as well.

14             PRESIDING OFFICER GRUNDLER:  Thank you.  Karl,

15   anything else?  Thank you.

16             Please proceed.

17             MR. MURRAY:  Good morning.  My name is Michael

18   Murray and I am the Director of Corporate Environmental

19   Policy for Sempra Energy.  I want to thank you for the

20   opportunity to come and present our testimony today.

21             Sempra Energy strongly supports the Air Resources

22   Board's request for a waiver of preemption to allow CARB to

23   implement regulations to reduce greenhouse gas emissions for

24   passenger cars, light duty trucks and medium duty passenger

25   vehicles.  We urge the EPA to grant a waiver of preemption

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 1   at the earliest opportunity.

 2             The Clean Air Act expressly recognizes

 3   California's right to set vehicle emission standards that

 4   are stronger than the federal standards and the right of

 5   other states to adopt California standards.  The

 6   Environmental Protection Agency has granted California's

 7   waiver request more than 40 times in the last three decades.

 8   Each time EPA has found that California has met the

 9   requirements under the Clean Air Act.  There is no basis for

10   EPA to treat this request differently.

11             Sempra Energy considers CARB's request

12   particularly compelling in light of actions in California

13   since CARB has made its request.  With the signing into law

14   of Assembly Bill 32 last year California has embarked on an

15   aggressive program to reduce the level of greenhouse gases

16   emitted by activities within the state.  AB 32 sets a target

17   to reduce the state's GHG emissions to 1990 levels by 2020.

18             Since mobile sources account for almost 41 percent

19   of statewide greenhouse gas emissions it is vital for the

20   state to be able to look at the transportation sector for a

21   fair share of emission reductions in order to help the state

22   achieve its goals.

23             This will increase the ability of the state to

24   achieve reductions in the most cost-effective and equitable

25   manner by allowing it to explore a broader range of

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 1   reduction options with contributions by a larger number of

 2   sectors of our economy.

 3             The transportation sector has a number of options

 4   for reductions that the energy industry can help to leverage

 5   such as the use of natural gas as a fuel and the use of

 6   plug-in electric vehicles.  California is already exploring

 7   these and other similar options such as the use of biofuels.

 8             Sempra Energy's utilities have already taken

 9   actions in our own fleet to reduce greenhouse gas emissions.

10   We have converted over 1200 vehicles to natural gas fuel,

11   assisted many other fleets to make similar conversions, and

12   provided natural gas vehicle fueling infrastructure

13   including 16 refueling stations that are accessible to the

14   public.

15             Likewise, as a member of the California Electric

16   Transportation Coalition, our electric utility, San Diego

17   Gas & Electric, is supporting the development and use of

18   zero emission electric vehicles, hybrid electric vehicles,

19   electric transit busses and rail.

20             By granting the waiver that CARB has requested EPA

21   can help to facilitate these kinds of activities that can

22   transform the transportation industry's GHG footprint.

23   Thank you very much.

24             PRESIDING OFFICER GRUNDLER:  Thank you,

25   Mr. Murray.

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 1             Mr. Busterud.

 2             MR. BUSTERUD:  Good morning.  My name is John

 3   Busterud.  I am director and counsel for Pacific Gas &

 4   Electric Company.  PG&E is a California gas and electric

 5   utility serving 1 in 20 Americans and is a leader on climate

 6   change and clean air transportation.

 7             Climate change is an urgent issue and immediate

 8   action is needed to reduce emissions.  Accordingly, PG&E was

 9   among the first companies to support enactment of

10   California's historic climate change legislation, AB 32,

11   which is intended to achieve a 25 percent reduction in the

12   state's greenhouse gas emissions by 2020.

13             PG&E was also one of the founding members of the

14   United States Climate Action Partnership.  Our customers

15   have invested in a clean, electric generating portfolio so

16   that our greenhouse gas emissions are among the lowest of

17   any utility in the nation.

18             PG&E has a vital interest in ensuring that all

19   sectors of our economy, including the transportation sector,

20   contribute their fair share toward achieving greenhouse gas

21   reductions.  For that reason PG&E supports California's

22   request for a preemption waiver so that California can

23   implement its motor vehicle greenhouse gas emission

24   standards.

25             According to the California Air Resources Board

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 1   the transportation sector is responsible for almost 41

 2   percent of California's greenhouse gas emissions.

 3   Achievement of significant greenhouse gas reductions in the

 4   transportation sector is crucial to the state's ability to

 5   meet its goals under AB 32.  If motor vehicle greenhouse gas

 6   emissions cannot be reduced as expected other sectors of

 7   California's economy will have to make up the difference and

 8   will be unduly burdened by the need to reduce emissions by

 9   more than their fair share.

10             The Clean Air Act establishes specific, limited

11   criteria for EPA action on a preemption waiver request from

12   California.  The material submitted by California with its

13   December 21, 2005 waiver request, and in the presentation by

14   Air Resources Board Chairman Dr. Sawyer at last week's EPA

15   hearings clearly show that California has satisfied these

16   criteria.

17             First, California has determined that its motor

18   vehicle emission standards will be in the aggregate at least

19   as protective of public health and welfare as applicable

20   federal standards.  In our view the information submitted by

21   the ARB also shows that its protectiveness determination is

22   not arbitrary and capricious.  That California does need its

23   own motor vehicle emission standards to address compelling

24   and extraordinary circumstances and that the California

25   standards are consistent with Clean Air Act section 202.  On

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 1   that basis the Administration -- the Administrator must

 2   approve the waiver request.

 3             I also want to address two of the points on which

 4   EPA specifically requested comment.  First, the fact that

 5   the California standards in question relate to global

 6   climate change should not make any difference in EPA's

 7   evaluation of the waiver request.  Nothing in Clean Air Act

 8   Section 209 regarding the California waiver, or elsewhere in

 9   the Act for that matter, provides any statutory basis for

10   evaluating the waiver criteria differently for a California

11   emission standard that regulated greenhouse gas emissions.

12             Second, the US Supreme Court's decision in

13   Massachusetts v. EPA is relevant only because it establishes

14   that EPA has statutory authority to regulate greenhouse gas

15   emissions for motor vehicles.  Which means that approval of

16   a waiver for California motor vehicle greenhouse gas

17   emission standards is also within EPA's regulatory

18   authority.  Massachusetts v. EPA does not otherwise affect

19   EPA's evaluation of the waiver criteria.

20             For these reasons PG&E encourages EPA to promptly

21   grant California's request for a preemption waiver so that

22   the motor vehicle emission standards vital to reducing the

23   state's greenhouse gas emissions can be implemented.

24             Thank you for the opportunity to testify here this

25   morning.

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 1             PRESIDING OFFICER GRUNDLER:  Thank you.

 2             Mr. Epstein.

 3             DR. EPSTEIN:  Thank you very much.  My name is Bob

 4   Epstein.  I am here today representing Environmental

 5   Entrepreneurs; we are a national group of volunteer business

 6   people.  We focus on the economic benefits of good

 7   environmental policy.  And collectively our members have

 8   started more than 800 companies in the Unites States.  I

 9   feel we have a great deal to offer at this hearing in terms

10   of a business perspective that is not from the automotive

11   industry or any particular industry but a general look at

12   how these things work and how they drive innovation.

13             My message is pretty straightforward today.  We

14   request that you grant the waiver and grant it without

15   delay.

16             E2 was the principal business organization that

17   worked with Assembly Member Fran Pavley in 2001 and 2002 to

18   both analyze the bill and help demonstrate the fact that it

19   both was technically feasible and economically beneficial to

20   California and potentially to the entire United States.

21             Nothing has changed in that method and I'd just

22   like to comment on a few points.

23             First of all you have already seen that the

24   consequences of not addressing climate change are severe,

25   particularly to the state of California.  But we don't hold

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 1   ourselves to any unique standard there, it's dangerous for

 2   everybody.

 3             Secondly, the technologies that were considered

 4   were limited to those that were demonstrateable or already

 5   in production in 2002/2004 time period.  This was to make it

 6   as favorable as possible for the auto industry to comply

 7   with the bill.  And at that time using known technologies it

 8   was shown we could get a 30 percent reduction by 2016.

 9             The third was to demonstrate doing this was a net

10   economic benefit to the consumer.  This was analyzed based

11   on the fact that it would be lower operating costs.  Now at

12   the time this was done the assumption was gas would be $1.78

13   as adjusted for inflation.

14             So the analysis that you just saw earlier from the

15   auto industry as well as previous ones would all need to be

16   revised concerning the fact that in today's prices -- I

17   don't know if anyone expects to ever see $2 gas again but

18   the higher gas prices are a mitigating factor.  So that

19   basically means that the analysis is even more favorable if

20   it were to be redone today.

21             Now the other thing we looked at is the history of

22   regulations and how do you estimate what is going to be the

23   price of the vehicle and how do things work out.  And this

24   failure to not be able to predict accurately has been

25   consistent both by the industry, by EPA, by the California

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 1   Air Resources Board.

 2             And I just want to give you one example drawn from

 3   the 1990 federal Clean Air Act that looked at the '96 Tier 1

 4   standards.  At the time the industry submitted an estimate

 5   it would cost $432 per vehicle, your own staff at EPA

 6   estimated the cost to be $150 per vehicle, and finally the

 7   US Bureau of Labor Statistics upon taking the data

 8   discovered the actual cost ended up being $88.42.

 9             And there is a reason why it's hard to predict

10   this.  Because until something goes into effect you can't

11   calculate what the innovations will be.  And that's our main

12   point here is the costs are likely to be significantly lower

13   because given the challenge and requirement to do it the

14   innovations, just like in every other measure, will occur

15   and they will create things that we could not have predicted

16   in advance or it wouldn't have been prudent for a regulator

17   to make any assumptions about.

18             Let me also talk about the reasonableness of the

19   time frame.  As you know AB 1493 was passed in 2002.  The

20   regulations were adopted in September of 2004, a full five

21   years in advance of the model year of which they'd be

22   required.  So we feel that ample opportunity has been given

23   to allow time to come into effect.

24             And lastly I'd like to address this question about

25   whether this regulation makes a difference in terms of

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 1   climate and also in terms of health and safety.  And I find

 2   no inconsistency with our request for a waiver to be granted

 3   and Mr. Clubok's demonstration that happened here a few

 4   minutes ago and let me explain why I believe that.

 5             First of all, transportation accounts for 40

 6   percent of our greenhouse gases and that is a material

 7   amount.  Worldwide it's probably about 30 percent, between

 8   30 and 33 percent.  So that is a material part of the

 9   problem.  Addressing it is a material part of the solution.

10             But no one ever said that unless you get there in

11   one step it doesn't count.  There is a requirement on the

12   part of this regulation that the steps to be taken be

13   technology feasible and to be a starting point.  Our number

14   one objective is to reverse the trend.  This is the fastest

15   growing segment of greenhouse gases.  We have to slow it, we

16   have to stop it and we have to reverse it.

17             So this regulation chose a starting point based on

18   technical feasibility.  One way to interpret Mr. Clubok's

19   comments here would be to say, these are not aggressive

20   enough.  And on that point I completely agree.  I believe at

21   this point if the regulations were looked at we could be

22   much more stringent than what's in there but that is not

23   what is on the docket for today.  It's a starting point and

24   it is based on giving the industry ample opportunity to

25   advance.  I fully agree that going forward over time it has

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 1   to be more aggressive because it's one-third of the

 2   pollution.  But we are asking you for a waiver today so we

 3   can get started.

 4             The next point is about the cost of vehicles.  As

 5   I've mentioned in the testimony just previously you can't

 6   predict that.  All you know is that consistently the

 7   regulators' estimates are conservative and things come in

 8   much better than planned.  Also we see rising fuel prices

 9   here and increasing pressure on that.  That is only going to

10   serve to benefit the cost-effectiveness.

11             And lastly I don't understand at all the argument

12   that says, if we make cars too inexpensive to drive it will

13   be bad for your health.  If we look at what we can do in

14   California a huge amount of emissions are from a relatively

15   small number of vehicles.  We can put programs in place to

16   help buy those out, et cetera.  So if your only issue is a

17   mitigation of how you deal with the fact that we're making

18   driving more affordable, and that's a bad thing, that can be

19   managed through other mitigating measures.

20             So in summary I urge you to give us the waiver we

21   need.  If we look at what's happening in California, this

22   state is determined to lead this effort on a worldwide

23   basis.  We have regular visitors from the EU, from Japan.

24   Every week there are visitors here.  This law has already

25   had an impact worldwide.  It's getting everybody focused on

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 1   how do we get less greenhouse gases while still allowing

 2   people to drive their vehicles.  We all agree on that as the

 3   goal.  I urge you to pass this waiver without undue delay.

 4   Thank you very much.

 5             PRESIDING OFFICER GRUNDLER:  Thank you.  Any

 6   questions for the remaining witnesses?

 7             Thank you all for your time and for your

 8   testimony.  I'd like to invite Panel number 4 up.  It's

 9   great to welcome back our former colleagues Mary Nichols.

10             MS. NICHOLS:  Thank you.

11             PRESIDING OFFICER GRUNDLER:  And Dr. Lloyd.  I saw

12   him earlier.

13             MS. NICHOLS:  Actually Dr. Lloyd asked me to

14   apologize.  He had to catch a plane so he will not be able

15   to join us.

16             PRESIDING OFFICER GRUNDLER:  Ms. Nichols, when

17   you're ready please proceed.

18             MS. NICHOLS:  Thank you very much.  I must say --

19             PRESIDING OFFICER GRUNDLER:  Will you press your

20   button so we can all hear you.

21             MS. NICHOLS:  There we go, thank you.  I's a

22   pleasure to be here this morning.  It's a pleasure to be

23   with former colleagues.  I can't exactly say it was a

24   pleasure to be reminded that of the many waiver requests

25   that EPA has handled I personally have been involved either

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 1   at the state level or on the federal side in quite a

 2   substantial number of them.  But I hope that gives me some

 3   perspective to bring to this hearing.

 4             I am here supporting the grant of the waiver.  I

 5   think it's well-justified and I think the program is

 6   important.  And I am not going to duplicate the points that

 7   have been made well by others but I would like to try to

 8   just focus in on a couple of the issues that I think are

 9   relevant to the waiver.

10             In preparing for the hearing today I did go back

11   and think about whether there have been events in history in

12   dealing with past waivers that might be particularly useful

13   for your panel to consider in putting together your decision

14   here.  Because obviously this is a hotly contested issue and

15   the auto industry clearly feels very strongly that the

16   waiver shouldn't be granted or they wouldn't have mounted

17   the kind of attack that they have shown here today.

18             Frankly I have never seen in my history of dealing

19   with the industry the kind of ad hominem attack that was

20   mounted here today.  The out of context use of testimony

21   from an unrelated court proceeding to me was frankly

22   somewhat shocking.  But clearly it indicates that there is

23   something at stake here.

24             So I wondered whether some of the same issues in

25   terms of dealing with a really quite different state program

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 1   might have presented themselves in the past.  And I did get

 2   a copy of a document which isn't available on-line.  I know

 3   it's available to you because it's in your archives.  It's

 4   called the Waiver of Federal Preemption for California Low

 5   Emission Vehicle Standards and it is dated January 8 of 1993

 6   and signed by then-administrator William Riley.

 7             What I think is interesting about this, about this

 8   decision, aside from the fact that it does go back to a

 9   former President Bush and a different set of political

10   players, is that it deals with a set of California standards

11   which were just totally different than what EPA was doing at

12   the time but where EPA had to make a decision about the

13   legal standard that was applicable in this matter.  It's a

14   quite lengthy and I think very well-reasoned decision, about

15   188 pages to be exact.

16             But in talking about the standards, and again I

17   won't repeat the legal arguments that were ably presented by

18   the Governor's Chief of Staff or the Attorney General of the

19   State of California, who was by the way the man who

20   appointed me to the Air Resources Board so I think he knows

21   what he's doing here.

22             But in terms of the deference that was to be paid

23   to the California approach, it's laid out quite clearly that

24   the standard that EPA is going to be looking at here is one

25   of essentially saying that unless California is being

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 1   demonstrably arbitrary and capricious in its finding of a

 2   compelling need that it is not the place of EPA to step in

 3   and think differently.

 4             It is also interesting that since this is the

 5   decision that originally involved the ZEV waiver, which

 6   again, you know, is a new kind of animal.  It was not an

 7   emissions standard per se, it was a specific mandate to do

 8   something that related to the type of technology being used

 9   as opposed to air emissions.  The administrator found that

10   where there wasn't a specific regulation by EPA that would

11   preempt this regulation, even if there might be a conflict

12   with other federal statutes, and in this case it was a

13   different federal statute, the NEPAC that was being alleged

14   to conflict, that there was no issue of federal preemption.

15             So I would encourage you to look to this decision

16   as at least one source of thoughtful analysis of how to deal

17   with this kind of situation.  Again, it also deals at some

18   length with the issue of whether the standards have to be in

19   the aggregate as protective as opposed to being more

20   protective.  And it talks both about the enforcement

21   mechanism and the standards themselves.

22             Because at that point the auto industry, which was

23   opposing the waiver, was making a very strong claim that

24   because at that point California's inspection and

25   maintenance program was less effective than the federal

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 1   inspection and maintenance program that in use the

 2   California cars would not actually be as clean as the

 3   federal cars.

 4             Again I think that's a kind of an interesting and

 5   potentially useful avenue to pursue in looking at this

 6   argument about what the end-use effects will be if it turns

 7   out that the cars that are built under this waiver become so

 8   cheap to drive that people are driving them more and

 9   therefore creating more emissions.  Actually that kind of

10   reminded me once again of the old arguments between the auto

11   and the oil industries about, you know, who was to bear the

12   cost of meeting cleaner air standards in California.

13             But basically I think the message that I am here

14   to deliver as a friend of both agencies that are dealing

15   with the situation is that when in doubt it's best to go

16   with the state of California, and if there is no compelling

17   reason not to do so I think that is what Congress told you

18   to do.  Thank you very much.

19             PRESIDING OFFICER GRUNDLER:  Thank you, Mary, it's

20   great to see you again.

21             South Coast, welcome.

22             MR. HOGO:  Good morning.  I do have a short

23   PowerPoint presentation if that could be brought up.  And

24   while that is being brought up I'll start my testimony.

25             Good morning.  My name is Henry Hogo, Assistant

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 1   Deputy Executive Officer in the office of Science and

 2   Technology Advancement at the South Coast Air Quality

 3   Management District.  Thank you for the opportunity to speak

 4   today and express the South Coast AQMD staff's strong

 5   support of California's request for a waiver of federal

 6   preemption of the adopted greenhouse gas emission

 7   regulations for light and medium duty passenger cars and

 8   trucks.

 9             US EPA's approval of the waiver request will

10   provide not only reduction in greenhouse gas emissions  but

11   also concurrent reductions in criteria pollutant emissions

12   critical for the South Coast Air Basin to attain applicable

13   federal eight-hour ozone and fine particulate air quality

14   standards.

15             The Draft 2007 Ozone and Fine Particulate Air

16   Quality Management Plan for the South Coast Air Basin calls

17   for reductions from all criteria pollutants to meet

18   applicable federal air quality standards.  And note that

19   this plan calls for over 30 percent reduction in oxides of

20   nitrogen by 2015, and in 2023 76 percent reductions, for the

21   region to attain the federal eight-hour ozone air quality

22   standard by 2024.  In addition, the draft plan identified

23   control measures that could provide concurrent greenhouse

24   gas benefits.

25             As you can see here, over 30 of these measures,

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 1   total measures, are mobile source measures.  Mobile source

 2   contributes over 80, 85 percent of the air quality problem

 3   in the South Coast Air Basin.

 4             While the principal purpose of today's hearings is

 5   on California's regulation of greenhouse gas emissions from

 6   light and medium duty vehicles we strongly believe that

 7   California's regulation will provide concurrent reductions

 8   of greenhouse gases and criteria pollutants.

 9             Based on over four decades of air pollution data

10   compiled by the South Coast AQMD one central fact must be

11   recognized by the US EPA as it examines this issue.  Peak

12   ozone levels in Southern California are heavily influenced

13   by risking temperatures.  As a result the South Coast Air

14   Basin faces the most serious ozone vulnerability to rising

15   greenhouse gas emissions in the entire nation.  California

16   needs these standards to meet compelling and extraordinary

17   air quality conditions.

18             California's regulation on light and medium duty

19   vehicles, of which there are over 11 million registered

20   vehicles in the South Coast Air Basin, is the first step in

21   helping to reduce these higher temperature impacts, thus

22   reducing the resulting ozone increase.  The regulation at

23   issue here will also directly result in fewer NOx and VOC

24   emissions, reducing both ozone and fine particulates.  In

25   addition, many of the advanced mobile source technologies

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 1   such as hybrids and plug-in hybrids will lead to reduced use

 2   of petroleum based fuels and reduced criteria pollutant

 3   emissions.  Automobile manufacturers will look to these

 4   advanced technologies to comply with California's

 5   regulations.

 6             Lastly, improvements in vehicle efficiency would

 7   also have direct air quality benefits due to reduced

 8   emissions from refineries, fuel distribution and retail

 9   marketing.

10             The US EPA's favorable decision will have an

11   immediate effect in reducing not only greenhouse gas

12   emissions but also air pollution on a more local level.  I

13   would like to end my comments with the following slide.

14             And this slide shows the population exposure to

15   ozone and PM above the federal ambient air quality

16   standards.  The pie chart on the left shows that the South

17   Coast region has about 52 percent of the population-weighted

18   particulate matter exposure compared to the rest of the

19   nation.  In addition, as seen in the pie chart on the right,

20   the South Coast region has over 25 percent of the ozone

21   exposure, and therefore the health impact burden, compared

22   with the rest of the nation.

23             The success for the South Coast Air Basin to

24   attain federal air quality standards relies directly on

25   achieving the benefits of California's entire mobile source

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 1   control program, including their expeditious implementation

 2   of greenhouse gas emissions controls under AB 1493.

 3             I am going to divert a little bit from my prepared

 4   statement to respond on the Alliance comment about increased

 5   hydrocarbon and NOx emissions due to the regulation.  Our

 6   Air Quality Management Plan shows that VMT, vehicle miles

 7   traveled, will continue to increase.  And despite this

 8   increase the California mobile source control program will

 9   bring those emissions down.  What we believe will happen

10   with these regulations is that it will help bring the

11   current levels down even further. So we strongly disagree

12   with the Alliance comment.

13             In summary, we strongly urge US EPA to approve

14   California's request for waiver of federal preemption under

15   Section 209(b) of the federal Clean Air Act.  The South

16   Coast AQMD legal staff has reviewed the waiver request and

17   is in full agreement with the California Air Resources

18   Board's response to the questions posed by US EPA in its

19   notice.

20             Thank you for this opportunity to speak.  We will

21   provide more specific written comments on this important

22   decision.  I'll be glad to answer any questions you may

23   have.

24             PRESIDING OFFICER GRUNDLER:  Thank you very much.

25   And if you could submit for the record your analysis of the

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 1   situation in the South Coast with respect to VMT and

 2   emissions with respect to this whole protectiveness dispute

 3   that would be useful to us.

 4             MR. HOGO:  We will.

 5             PRESIDING OFFICER GRUNDLER:  Thank you.

 6             MR. HOGO:  Thank you.

 7             PRESIDING OFFICER GRUNDLER:  From the Bay Area,

 8   Mr. Hilken.

 9             MR. HILKEN:  Good morning.  I am Henry Hilken, I

10   am the Director of Planning and Research at the Bay Area Air

11   Quality Management District.  Thank you very much for the

12   opportunity to speak to you this morning.

13             The staff of the Bay Area Air District strongly

14   supports ARB's waiver request and we urge EPA to grant it

15   promptly.  We believe these emission reduction regulations

16   are very important and necessary to improve air quality and

17   public health in California.

18             The Bay Area District was created by the State

19   Legislature in 1955 to regulate air pollution in the Bay

20   Area.

21             Over the past more than 50 years we have made

22   significant progress in air quality in the Bay Area.  The

23   maximum concentrations and number of days over health-based

24   standards have gone down dramatically.  That's true for

25   pretty much the entire state of California so it's really

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 1   something for us to be proud of.  However, most of the state

 2   still does exceed health-based standards and so much more

 3   needs to be done.

 4             These levels of air pollutants in the Bay Are and

 5   elsewhere in California do have health effects, direct

 6   health effects, on the residents of California.  Asthma

 7   attacks, emphysema, bronchitis, lung damage.  As you are

 8   well aware children and the elderly are the most susceptible

 9   to these effects so it is really critical to the health and

10   welfare of our state that we move forward with these and

11   parallel regulations.

12             We are very concerned that the increased

13   temperatures that could result from global warming will

14   worsen air quality conditions in California and reverse much

15   of the progress that we have made over the years.

16             We currently in the Bay Area suffer or experience

17   less than 20 extreme days per year.  An analysis by the

18   California Energy Commission has looked at various scenarios

19   but predicted under various scenarios of global warming that

20   the number of extreme heat days could increase to up to 40

21   or as much as 130 days per year.  Which would certainly

22   increase the number of days where we would exceed or would

23   experience high ozone levels in the Bay Area.

24             And our own preliminary analysis has shown that

25   fairly modest temperature increases in the Bay Area will

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 1   significantly increase ozone concentrations in our region.

 2   So we really see this as important from the global climate

 3   change perspective but also from our public health

 4   requirements in the Bay Area.

 5             And as you're well aware and I know other previous

 6   speakers have touched upon, there are many other impacts

 7   beyond air quality that climate change could and probably

 8   will have on the state, reduced snowpack, impact to our

 9   agriculture, rising sea level.  That is a particular concern

10   in the Bay Area.  We have many billions of dollars of public

11   infrastructure investments along the San Francisco Bay

12   shoreline.  That's true for much of the California

13   coastline.  And even modest increases in sea level would put

14   those investments at risk.

15             And so it is because of these reasons that local

16   and state and regional agencies are stepping forward and

17   addressing climate change.

18             The Air District, the Bay Area Air District

19   established our climate protection program two years ago,

20   precisely for the reason that I've mentioned earlier.  We

21   were concerned that increasing temperatures could reverse a

22   lot of the progress that we have made over the years.  There

23   are a lot of local governments and businesses and community

24   groups in our region that are working on climate change, we

25   are working very closely with them.  We really want to make

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 1   the Bay Area and the entire state a leader on climate

 2   protection.

 3             Similar as you know, as you're well aware,

 4   California is clearly a leader on climate protection.  The

 5   Governor and the Legislature have made it abundantly clear

 6   that the state is going to move aggressively in reducing

 7   greenhouse gas emissions.  The Governor has established very

 8   aggressive emission reduction targets.  And the Legislature

 9   in adopting AB 32 and the Governor in signing AB 32 have

10   made it clear that we are going to be implementing very

11   aggressive programs to reduce greenhouse gas emissions.  The

12   emission reductions under these regulations, the 1493

13   regulations, are critical.  They are a critical component to

14   this statewide effort.

15             As other speakers have noted, motor vehicles

16   contribute over 40 percent of the greenhouse gas emissions

17   in California.  We have to tackle motor vehicles if we are

18   going to have any hope of addressing climate change in

19   California, the United States and throughout the world.

20             So this is nothing new.  State and local

21   governments have worked closely together for many years on

22   air quality programs.  I mentioned much of the progress that

23   we have made over the years in the Bay Area in regulating

24   maybe stationary sources.  The region has spent many

25   millions of dollars to reduce emissions from stationary

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 1   sources.  And industry in the Bay Area is among the cleanest

 2   in the country.

 3             Similarly the California Air Resources Board has

 4   taken dramatic steps in reducing air pollution.  They are a

 5   world leader in air pollution control.  They have -- Their

 6   ARB regulations on motor vehicles and other mobile sources

 7   set the standard, quite simply, and they have been

 8   instrumental in improving air quality in California and have

 9   been followed and had profound benefits in the rest of the

10   United States.

11             So we need the partnership of the federal

12   government today.  We need you to work with the state and

13   approve this waiver so that we can move forward and

14   implement these regulations to reduce these emissions

15   further.

16             California is the second largest emitter of CO2 in

17   the country.  The United States is by far the largest

18   emitter of CO2 in the world.

19             As I have noted and others have noted, motor

20   vehicles contribute a major portion to greenhouse gas

21   emissions.  We have to address motor vehicle emissions of

22   greenhouse gases.

23             The AB 1493 regulations call for auto makers to

24   limit CO2 emissions from new vehicles.  The technology is

25   readily available and cost-effective, it's available today.

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 1   We have over the years, as previous speakers have noted,

 2   there have been -- In response to federal and state

 3   regulations auto makers have been able to step up and

 4   produce the technology to achieve these standards.  We are

 5   very confident that they can do so once again.  This is

 6   nothing new for the auto makers, they have been doing it for

 7   years.

 8             Indeed many countries -- The United States fuel

 9   efficiency lags considerably behind much of the

10   industrialized world, Canada, Europe, Japan, Australia.

11   Even China's new standards are more stringent than the CAFE

12   standards or fuel economy standards in the United States.

13   So auto makers already will have to produce vehicles that

14   are more efficient than we see today to sell their product

15   in other countries.  So we don't see this as a leap in the

16   United States.

17             So in conclusion we see these regulations as

18   critical to reducing greenhouse gas emissions in California.

19   It is extremely important for protecting the public health

20   of Californians and we urge EPA to grant the waiver

21   promptly.

22             PRESIDING OFFICER GRUNDLER:  Thank you,

23   Mr. Hilken.  Thank you all for your testimony, appreciate

24   your time.

25             I'd like to invite Panel 5 to come forward.  Panel

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 1   5 is comprised of additional local air quality district

 2   representatives.  We'll start off with Northern Sonoma

 3   County, Barbara Lee.

 4             MS. LEE:  Good morning, Panel Members.  My name is

 5   Barbara Lee.  I am the Air Pollution Control Officer for the

 6   Northern Sonoma County Air Pollution Control District.  I

 7   appreciate this opportunity to testify before you today in

 8   support of the request by the Air Resources Board for a

 9   waiver under Section 209(b) of the Clean Air Act.

10             As you are aware and have certainly heard today,

11   this waiver request is a very important part of California's

12   efforts to do its part to address global climate change.  It

13   is important that California does this and it is consistent

14   with the state's standing as a global economic and

15   environmental leader.

16             At the same time, however, what is important to

17   focus on is that this waiver request is part of the state's

18   longstanding and comprehensive program to reduce emissions

19   from motor vehicles and to achieve clean air for all

20   Californians.

21             Congress rightly recognized the need of the state

22   of California to set tailpipe emission standards for motor

23   vehicles and provided this waiver process to support

24   California's efforts.  Congress further recognized that

25   other states benefit when California does this and allowed

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 1   them to rely on the standards that California adopts.  This

 2   waiver process allows California to advance the science to

 3   reduce pollution for motor vehicles while ensuring that

 4   engine manufacturers have a clear and consistent set of

 5   standards to meet.  History shows us this process works.

 6             The Air Resources Board has tremendous technical

 7   expertise and rulemaking capabilities, as you know.  The

 8   staff and the Board have consistently put into place

 9   feasible and effective tailpipe emission standards that

10   reduce emissions from motor vehicles without harming

11   industry.  In fact, over the decades ARB standards have

12   promoted technology advancement and business growth.

13             The Clean Air Act provides clear standards for you

14   as you review this waiver request.  And after reviewing the

15   state's extensive and robust process in setting its

16   standards you will have to conclude, as you have in the

17   past, that California has not acted capriciously, that it

18   does need to maintain a separate vehicle emissions program,

19   and that this program is consistent with the requirements of

20   the Act.

21             On the points that you had specifically comment:

22   First, the Clean Air Act allows the waiver for tailpipe

23   emission standards, which this is.  The pollutant basis is

24   not limited and a comparison to the CAFE standards is not

25   required.  Second, the recent Supreme Court decision

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 1   confirms that this waiver request is squarely within your

 2   purview.

 3             The request before you today is if historical

 4   importance in the battle to protect our climate and our

 5   environment.  But you should recognize that it comes to you

 6   as part of a longstanding, feasible and effective program

 7   regulating tailpipe emissions for motor vehicles.

 8             This waiver request, like so many before that you

 9   have approved, will advance technology and clean air in

10   California and ultimately throughout the nation.  Its costs

11   and benefits have been carefully balanced by the Air

12   Resources Board as they have historically done with all of

13   their emissions standards.

14             I urge you to stand up for clean air, for fair and

15   effective government process, and most importantly for the

16   future of our climate and our world.  Please grant the

17   waiver request and do so expeditiously.  Thank you.

18             PRESIDING OFFICER GRUNDLER:  Thank you.  Next I'd

19   like to call on Mel Zeldin representing the California Air

20   Pollution Control Officers Association.  Mel.

21             MR. ZELDIN:  Thank you and good morning.  I am Mel

22   Zeldin, Executive Director of CAPCOA, the California Air

23   Pollution Control Officers Association, which is a nonprofit

24   organization representing the air pollution control officers

25   from all 35 local air districts in California.

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 1             I am pleased to be here today to express our

 2   association's strong support for the state's waiver request

 3   on motor vehicle greenhouse gas emissions.  The state has

 4   presented EPA with very compelling and convincing evidence

 5   and rationale that climate change is occurring and that

 6   granting California a waiver is absolutely necessary.  We

 7   fully support the ARB's statements.

 8             I would also like to add that there is currently

 9   an increasing groundswell of concern about climate change at

10   the local level.  Each of our 35 members has its own air

11   pollution control board, all of which include locally

12   elected officials.  In many of our air districts these

13   officials are asking staff for guidance on what can be done

14   at the local level to contribute to the efforts in combating

15   global climate change.

16             What is remarkable is that the actions and

17   solutions to a global problem are being initiated at the

18   grassroots local level.  Incrementally every action to

19   reduce the manmade carbon footprint, however seemingly small

20   or insignificant in the context of a global scale, when

21   accumulated over many such small actions adds up to

22   something that will make a difference.

23             Nonetheless substantive programs to reduce

24   greenhouse gases must be implemented at the state and

25   national level to effectively address a problem of this

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 1   magnitude.  Federal, state and local agencies as well as the

 2   private sector all need to do their part.  California has

 3   exhibited remarkable leadership in moving forward in this

 4   arena and it is imperative that EPA not stand in the way of

 5   this vital progress.

 6             In closing, we have only one planet to sustain

 7   human life as we know it and we have an obligation to do all

 8   we can to preserve it.  EPA stands for Environmental

 9   Protection Agency and I can't think of a more important time

10   or issue than this for you to uphold the mission embodied in

11   your name.  We urge you to grant the waiver and let

12   California do its part to protect our planet for our

13   children, grandchildren and many generations to follow.

14   Thank you for the opportunity to speak.

15             PRESIDING OFFICER GRUNDLER:  Thank you.  And now

16   from the City and County of San Francisco.

17             MS. BALI:  Good morning, almost afternoon.  My

18   name is Vandana Bali and I am speaking on behalf of the

19   Department of the Environment at the City and County of San

20   Francisco.  I thank you for the opportunity to testify

21   today.

22             We strongly support the California Air Resources

23   Board's request for a waiver in order to implement

24   California's Clean Cars Law.  Granting this waiver is

25   essential to promote improved air quality and public health

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 1   in California.

 2             As everyone has stated already earlier before

 3   today, California has the dirtiest air in the nation.  Motor

 4   vehicles continue to be a major source of emissions that

 5   cause air pollution, accounting for 40 percent of

 6   California's total global warming emissions.  In San

 7   Francisco motor vehicle emissions account for 51 percent of

 8   the total greenhouse gas emissions.  San Francisco holds

 9   itself accountable for its contribution for global warming

10   and we issued a Climate Action Plan in 2004, committing

11   ourselves to dramatically reduce our overall greenhouse gas

12   emissions to 20 percent below 1990 levels by 2012.

13             The Clean Cars Law provides a feasible, cost-

14   effective pathway to substantially reduce emissions from

15   vehicle technologies that are proven and readily available

16   today.  Without this law vehicle greenhouse gases, as well

17   as ozone and particle pollution, will continue to rise as

18   more cars travel more miles on the road today.

19             Research has demonstrated that bad air can lead to

20   premature death, aggravate respiratory health, and it

21   disproportionately impacts vulnerable populations like

22   children, people with compromised immune systems and the

23   elderly.

24             The impacts from global warming and climate change

25   present serious threats to local governments.  Local

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 1   governments are the first line of defense against global

 2   warming.  Police, fire and emergency responders, hospitals,

 3   senior centers, emergency shelters, water and local utility

 4   districts, all will bear the immediate brunt of responding

 5   to calls for help in crises linked to global warming.

 6             San Francisco as you know is a coastal city

 7   surrounded on three sides by water and it is extremely

 8   vulnerable to climate change.  We are further at risk

 9   because we depend on the Sierra snowpack for our water

10   supply and for hydroelectric generation that supplies power

11   for our public transit systems, among other municipal needs.

12             According to a joint study by the Union of

13   Concerned Scientists and Ecological Society of America, some

14   of the possible effects of climate change on San Francisco

15   include: Rising sea levels that could potentially be

16   devastating.  Low lying areas such as San Francisco

17   International Airport, which is built on a wetland, Treasure

18   Island, AT&T baseball park, portions of our financial

19   district, our marina and harbor facilities could e

20   threatened.  Increased storm activity could increase beach

21   erosion and cliff undercutting.  Warmer temperatures and

22   more frequent storms due to El Ni¤o will bring more rain

23   instead of snow to the Sierras, reducing our water supply.

24             Such dramatic changes to San Francisco's physical

25   landscape and ecosystem will be accompanied by financial and

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 1   social impacts.  Tourism, San Francisco's fishing industry,

 2   and the regional agricultural industry could suffer.  Food

 3   costs could rise, property damage could be more prevalent,

 4   and insurance rates could increase.  The city's roads,

 5   pipelines, transportation, underground cables and sewage

 6   systems could be severely stressed or overwhelmed if rare

 7   instances of flooding or storm damage become more commonly

 8   -- occur more commonly.

 9             The environment plays a large role in some

10   diseases carried by insects as well.  Warming could make

11   tick-borne Lyme Disease more prevalent nd could expand the

12   range of mosquito-borne diseases such as West Nile Virus.

13   Another threat to the health of San Francisco residents is

14   the air pollution caused by higher temperatures and

15   increased ozone levels.  Neighborhoods in the southeast

16   portion of the city where asthma and respiratory illnesses

17   are already at high levels would be especially at risk.

18             So in conclusion, the longer we delay the more

19   emissions we spew.  It is critical that we reduce vehicle

20   emissions in order to decrease pollution and greenhouse gas

21   emissions and thereby improve public health.  Local

22   governments cannot bear the cost burden of increased local

23   government services due to increases in air pollution and

24   global warming emissions

25             We strongly urge the US EPA to grant this waiver.

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 1   Thank you.

 2             PRESIDING OFFICER GRUNDLER:  Thank you.  Feel free

 3   to submit your button for the record.

 4             Next we hear from the City of Fresno.

 5             FRESNO CITY COUNCIL PRESIDENT PEREA:  Thank you.

 6   First let me thank you for being here today.  I have sat in

 7   your positions many times so I know what you are going

 8   through in having to listen to a lot of testimony and you

 9   only have seven more panels to go.  Because I know what

10   you're going through and since we're getting close to lunch

11   I'll be brief.

12             First let me start again by thanking you for being

13   here in California.  We appreciate having the opportunity to

14   comment today on this very important issue for many of us in

15   the state, but especially for us in the Central Valley.

16             I come to you today wearing two hats.  One as the

17   Council President for the City of Fresno, with a population

18   of over a half-million people, and a governing board member

19   of the San Joaquin Valley Air Pollution Control District.

20             Now what I can tell you about the San Joaquin

21   Valley is that the issue of air pollution and global warming

22   is at the center of a very hot debate at the local level.

23   It is an issue that is in the hearts and minds of every

24   constituent throughout the San Joaquin Valley.  And every

25   study and poll that is done by, whether it's newspapers,

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 1   universities or public policy institutes, will tell you

 2   that's true.

 3             And because it is such a big issue in our

 4   community local elected officials are responding to that in

 5   many different capacities.  At the local level what I can

 6   tell you, what we're doing at the City of Fresno and many

 7   other cities throughout the valley is that we are rapidly

 8   converting our fleets to alternative fuels.  We are adopting

 9   strict, green building standards and we are also using more

10   solar energy.

11             In fact just two weeks ago the City of Fresno

12   decided to move forward on the largest municipal airport

13   solar installation in the country.  And we are continuing to

14   do so at a rapid pace because of the issues and the concerns

15   that are being raised by many of our constituents throughout

16   the San Joaquin Valley.

17             Now let me take off my City of Fresno hat and put

18   on my Governing Board Member hat for the Air District.  What

19   I can tell you as far as the Air District is we are doing

20   our best and working hard to make great strides on a more

21   regional level.

22             Just a few examples of some of the things that

23   we're doing in the San Joaquin Valley is we are beginning to

24   regulate farmers in a much more strict way.  Depending on

25   who you talk to some say it's not strict enough but we think

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 1   we're moving along in a very meaningful way.  We are

 2   requiring -- prohibiting people to burn their fireplaces on

 3   certain days when the ozone and the air pollution is

 4   specifically bad.  And we also have adopted the Independent

 5   Source Rule, which is the first of its kind in the nation

 6   that applies to home builders and holds them accountable for

 7   the air pollution that their land developments create

 8   throughout our community.

 9             But the one thing we recognize is that much more

10   needs to be done.  The challenge that we face in the San

11   Joaquin Valley, like many other communities, is that over 60

12   percent of our pollution is caused by mobile sources.  Now

13   of course as you know this is a source that we have no

14   direct control over.  We are doing our best to be creative

15   and that is where the ISR rule came in, to try to mitigate

16   some of the pollutants and CO2s that emit from mobile

17   sources, but we don't have that direct jurisdiction.

18             So we need your help.  We really need your help so

19   that California can then set its own standards so that local

20   agencies like mine can then do its share to make sure that

21   we are holding ourselves accountable for the pollution that

22   we create through local decisions that we're making, whether

23   it's through land use, whether it's through, you know,

24   different rules or regulations that we adopt as Governing

25   Board Members.  By granting this waiver you give us, you

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 1   empower local residents to do more at the local level.

 2             I just want to leave, end with just a couple of

 3   statistics that I hope you'll keep in the back of your mind

 4   when you're making this decision, because it's a big

 5   decision, and these are statistics given to us by the

 6   American Lung Association.  That is that Kern, Fresno,

 7   Tulare and Merced Counties are among the top ten counties in

 8   the nation for the number of at-risk people exposed to

 9   dangerously high levels of ozone pollution.  Five of the

10   valley's eight counties are on the 2005 top 25 worst

11   polluted counties list.

12             Children in the Central Valley are more than 35

13   percent likely to have asthma than their national

14   counterparts.  And as a consequence one-third of children

15   with asthma in the valley miss one or two days of school

16   every month, leading to more than 800,000 absences a year

17   and a loss of $26 million per year in valley schools.  In

18   addition nearly 12,000 people in the  San Joaquin Valley Air

19   District are hospitalized each year for asthma, including

20   more than 5,000 children.

21             My request again is simple.  Just give us the

22   opportunity, give us the tools to manage and change our own

23   destiny.  Our district is in the process and we have a

24   request in to the EPA to go into an extreme attainment

25   designation.  Our problems here are serious, they are

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 1   critical, and it is the biggest public health concern in the

 2   Central San Joaquin Valley.  Please help us help ourselves.

 3   Thank you.

 4             PRESIDING OFFICER GRUNDLER:  Thank you very much,

 5   Mr. Perea.

 6             Now from the Sacramento Air District, Brigette

 7   Tollstrup.

 8             MS. TOLLSTRUP:  Thank you.  Thank you for the

 9   opportunity to speak today on this critical topic.  My name

10   is Brigette Tollstrup, Program Coordination Division Chief

11   at the Sacramento Metropolitan Air Quality Management

12   District.  Our district is one of 35 local air districts in

13   California and our area of coverage is Sacramento County,

14   with a population of nearly 1.4 million residents.

15             The Sacramento Air District is the lead district

16   in the Sacramento Region for efforts towards attainment of

17   the National Ambient Air Quality Standards.  Over the years

18   we have made great strides in reducing air pollution.  Our

19   nearly 100 employees are in the trenches every day

20   continuing to make progress.  Our federal eight-hour ozone

21   plan will require even more programs and we are developing

22   strategies to help Sacramento meet the 2006 PM2.5 standards.

23             While we have a dedicated and effective staff

24   working toward meeting current criteria pollutant standards

25   we now face a new and more daunting challenge, dealing with

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 1   greenhouse gas emissions.  We have been tracking this issue

 2   for years through our membership in the National Association

 3   of Clean Air Agencies and through the leadership on the

 4   issue shown by the State of California.

 5             In 2006 our Board of Directors adopted a forward-

 6   looking policy outlining steps to begin to address this new

 7   challenge.  Global warming will work against our previous

 8   ozone attainment efforts and these negative impacts on air

 9   quality are one of many reasons to take every step possible

10   to reduce emissions.  Projections show that even under the

11   most optimistic scenarios local average temperatures and the

12   length of high temperature episodes will both increase,

13   resulting in more exceedences of state and federal ozone

14   standards.  We simply cannot stand quietly by and allow our

15   hard-won successes to be undermined by this new challenge.

16             I would like to outline for you the serious

17   initiatives that the district and our partners in the local

18   community have undertaken to address greenhouse gas

19   emissions.

20             Like many districts in California we have been a

21   focal point for local efforts to address greenhouse gas

22   emissions.  The leadership of our local elected officials

23   are advancing greenhouse gas policies in their jurisdictions

24   and encouraging support of others through their

25   representative associations, including the National Mayors'

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 1   conference.

 2             In coordination with local cities and counties and

 3   our electric utilities a local group has been meeting for

 4   nearly a year developing strategies and program that can be

 5   implemented locally to lower greenhouse gas emissions.

 6   Global warming was identified as an important regional issue

 7   on a recent 400-person lobbying trip to Washington DC

 8   sponsored by the Sacramento Metropolitan Chamber of

 9   Commerce.

10             Our air district has taken many steps to meet our

11   own obligations.  Over 70 percent of our employees carpool

12   or take alternative transit to work, we are part of the

13   local utility's green energy program, and all of our fleet

14   vehicles are hybrids.  We continue to evaluate new

15   opportunities for reductions.  We believe we can make a

16   difference.  But every level of government must do their

17   share and implement aggressive greenhouse gas reduction

18   programs and initiatives.

19             AB 1493, the California Clean Cars Law, was passed

20   in 2002 to reduce greenhouse gas emissions from new

21   passenger vehicles and to improve local air quality.  We

22   encourage EPA to grant the waiver authorized by the Clean

23   Air Act, approving California's AB 1493 emission standards.

24   This is a critical part of the state program.  With your

25   approval California will continue to lead the nation to new,

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 1   cost-effective solutions to reducing greenhouse gas

 2   emissions and global warming impacts on our local air

 3   quality.  Thank you.

 4             PRESIDING OFFICER GRUNDLER:  Thank you.

 5   Questions?  Thank you again for all your testimony.

 6             We're going to do one more panel and then break

 7   for lunch.  I'd like to invite Panel 6 up.

 8             We'd like to begin with Secretary Curry from the

 9   New Mexico Environment Department.

10             SECRETARY CURRY:  Thank you for having me here

11   today.  My name is Ron Curry and I am Cabinet Secretary of

12   the New Mexico Environment Department.  I insist on bringing

13   you greetings from Governor Bill Richardson today.  He

14   wishes he was here.

15             Global climate change is an extremely important

16   issue to New Mexico and in New Mexico the lifeblood of our

17   state is water.  We simply don't have water to waste in our

18   state and that is why Governor Richardson has taken a strong

19   stance on all issues relating to global climate change.

20             In the summer of 2005 Governor Bill Richardson

21   issued an Executive Order setting greenhouse gas emissions

22   reduction targets for New Mexico.  The goals are to reduce

23   greenhouse gas emission to the year 2000 levels by the year

24   2012, to reduce emissions tn percent below 2000 levels by

25   2020 and 75 percent below 2000 levels by 2050.  To meet this

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 1   2020 target we needed to reduce emissions by about 37

 2   percent in a business-as-usual scenario.

 3             One of the most important things that the Governor

 4   did and the State of New Mexico did was to establish the New

 5   Mexico Climate Change Advisory Group.  after a year and a

 6   half of hard work this diverse group of 40 people, and I

 7   want to emphasize that word diverse.  They came from

 8   industry, environmental groups, local and tribal governments

 9   and they developed 69 greenhouse gas emissions reduction

10   strategies.

11             And they didn't do that by all singing Kumbaya and

12   holding hands with each other.  It was a very diverse group

13   that talked very straightforward with one another.  They

14   came up with the 69 recommendations.  And what was

15   impressive about the 69 recommendations was that 67 of them

16   were unanimous.

17             And there were included people from industry, the

18   oil and gas, there were car dealers there, the dairy

19   industry.  So we are very proud of the process in New Mexico

20   that the business leaders and the environmental leaders in

21   the state not only looked at the environmental issues but

22   the economic issues.  And we continue to press the

23   importance of the economic issue when looking at the

24   greenhouse gas emissions, period.

25             One of the unanimous recommendations from the

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 1   advisory group is the adoption of the California greenhouse

 2   gas emissions standards for vehicles.  In New Mexico

 3   transportation ranks third in the production of greenhouse

 4   gas emissions.  Emissions in this sector are expected to

 5   grow faster than any other if conditions continue as they

 6   are now.

 7             In New Mexico the coal burning generating plants

 8   are our number one source of greenhouse gas emissions and

 9   number two in New Mexico is the oil and gas industry, which

10   provides between a third and a half of our revenues for our

11   state government and our public schools.  So it's an

12   interesting group of people.  Again referring back to the

13   panel of 40 diverse people that we are very proud of because

14   they hammered these issues out.

15             The standards for the California clean standard

16   were determined to be the most cost-effective.  In addition

17   these standards will reduce transportation-related emissions

18   approximately 30 percent by 2016 and will keep an estimated

19   10.5 million metric tons of carbon dioxide pollution from

20   being released into New Mexico's air.  It is evidence that

21   if we are prohibited from adopting the California greenhouse

22   gas emission standard we will not meet the Governor's

23   greenhouse gas emission reduction target for New Mexico.

24             In the absence of a strong, national climate

25   program, Governor Richardson is pushing for regional

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 1   solutions.  On February 26, 2007 he signed a memorandum of

 2   understanding with Governor Arnold Schwarzenegger and the

 3   governors of Arizona, Washington and Oregon, creating the

 4   Western Regional Climate Action Initiative.  Most recently

 5   Utah and British Columbia became members and we expect the

 6   membership to grow.

 7             There is no reason for the EPA not to act quickly

 8   since California has met the criteria for receiving a waiver

 9   of federal preemption.  They have determined that its motor

10   vehicle emissions standards are at least as protective of

11   public health and welfare as applicable federal standards.

12   That it needs such motor vehicle emissions standards to meet

13   compelling and extraordinary conditions and that California

14   standards and accompanying enforcement procedures are

15   consistent with the Clean Air Act.

16             Climate change could seriously impact public

17   health and the environment of California; not to act on

18   reducing emissions from the number one source of greenhouse

19   gases in California would be arbitrary and capricious.

20   Compelling and extraordinary conditions already exist as we

21   are now seeing the effects of climate change globally.

22   California's request is completely consistent with Section

23   202(a) of the California -- of the Clean Air Act.

24             Urgent action is needed to address the largest

25   sources of greenhouse gas emissions in the nation.  Yet EPA

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 1   after 18 months has still made no decision on the waiver.

 2   The matter is urgent and we cannot afford to wait.  The EPA

 3   and the Bush Administration, we feel, have failed to

 4   effectively address climate change.  It would be

 5   reprehensible to bar the state from taking action to reduce

 6   greenhouse gas emissions.  The EPA should approve the waiver

 7   so states can do their job of protecting the health and

 8   welfare of their citizens.

 9             We applaud the leadership and the work of the

10   California Air Resources Board.  We went to Congress as well

11   in the last two months to discuss our concerns and again

12   talk about the processes that we have used in New Mexico to

13   come up with these conclusions.  So we ask you for your help

14   so that New Mexico can also move forward on this by the end

15   of the year.

16             We joke in New Mexico -- and I say joke.  It was

17   brought up by a member of Congress when I had the

18   opportunity to testify there in March.  He asked if our

19   concerns about greenhouse gas emissions were such that we

20   were worried about New Mexico having a beach someday.  And I

21   retorted that we had plenty of sand but we wanted to leave

22   it that way.  We didn't want to see the water lapping up on

23   the shores of Albuquerque.

24             And with that I ask you very humbly and sincerely

25   to go ahead and grant this waiver.  Thank you very much.

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 1             PRESIDING OFFICER GRUNDLER:  Thank you,

 2   Mr. Secretary.

 3             Mr. Skelton from the North East States, proceed.

 4             MR. SKELTON:  Good afternoon.  My name is Erik

 5   Skelton and I am here today representing the North East

 6   States for Coordinated Air Use Management or NESCAUM.

 7   NESCAUM is an association of state air quality agencies in

 8   Connecticut, Maine, Massachusetts, New Hampshire, New

 9   Jersey, New York, Rhode Island and Vermont.

10             California's December 21, 2005 waiver submittal

11   provides a solid demonstration that its greenhouse gas

12   emissions standards meet relevant criteria.  NESCAUM and its

13   member states therefore strongly support California's effort

14   to move forward with its standards and we ask EPA to

15   expeditiously approve the California waiver request.

16             Approximately 25 percent of total anthropogenic

17   greenhouse gas emissions in the NESCAUM region come from

18   passenger cars and light duty trucks.  In recognition of

19   this seven of the eight NESCAUM states have exercised their

20   option under Section 177 of the Clean Air Act to adopt the

21   California motor vehicle greenhouse gas emissions standards.

22             When the Northeast states implement these

23   standards beginning with vehicle model year 2009 we project

24   that they will reduce 27 million tons of greenhouse gases

25   annually in 2020 and 39 million tons in 2030.  This equates

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 1   to an 18 percent reduction in motor vehicles greenhouse gas

 2   emissions in 2020 and a 24 percent reduction in 2030 for our

 3   region.

 4             The California program is a key linchpin in our

 5   regional efforts as well.  In order to address greenhouse

 6   gas emissions from the region the New England governors have

 7   committed to reductions as part of the New England

 8   Governors, Eastern Canadian Premier's Climate Action Plan

 9   adopted in 2001.  The goals of the plan are to stabilize

10   greenhouse gas emissions at 1990 levels by 2010 and to

11   achieve more significant reductions over the long term.

12             New Jersey's economy-wide greenhouse gas reduction

13   legislation set similar goals.  New York has spearheaded a

14   regional initiative to reduce global warming emissions from

15   large power plants.  Given the transportation sectors'

16   contribution to the greenhouse gas inventory, achieving the

17   region's climate goals will require effective means to

18   address the motor vehicle component.

19             The need for action is no longer in dispute, as

20   again is confirmed recently by the world's scientists.  I

21   would refer you to the latest Intergovernmental Panel on

22   Climate Change report on climate change impacts, adaptation

23   and vulnerability.  In terms of the specific risks of

24   climate change for the Northeast states a study funded by

25   the federal US Global Change Research Program noted that

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 1   global warming at the higher end of the projections would

 2   raise the average year-round temperature in Boston to a

 3   level currently measured in Atlanta, Georgia.

 4             Associated impacts on the region could include

 5   more frequent and intense storms, increased damage in

 6   coastal areas from flooding, reduced revenue from

 7   traditional New England industries such as maple syrup and

 8   skiing as well as a variety of stresses on fishing grounds,

 9   forests and coastal ecosystems.

10             We believe that mounting evidence of the impacts

11   of global warming necessitate immediate action to reverse

12   the growth of greenhouse gas emissions from every sector,

13   including transportation, as part of a comprehensive, state-

14   led effort to combat global warming.

15             To assist the Northeast states in developing a

16   viable strategy to reduce motor vehicle greenhouse gases

17   NESCAUM's sister organization, NESCCF, which stands for the

18   North East States Center for a Cleaner Future, conducted the

19   most comprehensive study to date to assess the feasibility

20   and costs associated with the introduction of technologies

21   to reduce greenhouse gases from passenger cars.

22             The NESCCF study team, which included contractors

23   that work regularly with the automobile industry, used state

24   of the art computer modeling to evaluate 75 different

25   technology packages on five vehicle types.  The study team

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 1   also conducted a comprehensive cost analysis on the

 2   technologies evaluated.

 3             The study found that cost-effective technologies

 4   exist to reduce motor vehicle greenhouse gas emissions for a

 5   range of reductions up to 55 percent.  The study was

 6   designed to replicate a program that met the California

 7   greenhouse gas regulation requirements and restrictions.

 8             The NESCCF study found that technologies currently

 9   in production such as improved air conditioning, variable

10   valve timing and lift, six speed automatic transmissions and

11   cylinder deactivation can be used to reduce motor vehicle

12   greenhouse gas emissions by 25 percent.  Much greater

13   reductions up to 55 percent can be achieved through the use

14   of more advanced technologies such as stoichiometric

15   gasoline direct injection, hybrid electric and diesel

16   vehicles.

17             Two-thirds of the technologies evaluated in the

18   analysis are already in high volume production, defined as

19   over 500,000 units manufactured per year.  Examples of

20   vehicles that are available today with these technologies

21   include GM Tahoe, Suburban, Silverado and other models with

22   cylinder deactivation.  Honda Accord, Ridgeline, Fit and

23   other models with variable valve timing and the turbocharged

24   Volvo S60.

25             Recent high gasoline prices and the associated

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 1   high costs of operating vehicles have spurred automobile

 2   manufacturers to introduce some of these technologies at no

 3   additional cost to consumers.  Other cars, SUVs and trucks

 4   are being planned that will include these and other

 5   technologies.

 6             The recent supreme Court decision in Massachusetts

 7   v. EPA further supports the position in three important

 8   ways.  First the Court determined that greenhouse gases fit

 9   well within the Clean Air Act's capacious definition of air

10   pollutant.  Second the court found unpersuasive EPA's

11   argument that California's regulation of motor vehicle

12   greenhouse gases would require it to tighten mileage

13   standards.  And third declared that EPA's steadfast refusal

14   to regulate greenhouse gas emissions presented a risk of

15   harm, both actual and imminent.

16             As you know on May 14 President Bush directed EPA

17   and the Departments of Transportation, Energy and

18   Agriculture to take first steps towards regulations to

19   reduce gasoline consumption and greenhouse gas emissions for

20   motor vehicles using the President's 20 in 10 plan as a

21   starting point.

22             The President set a target date at the end of 2008

23   for completion of this process.  Under this approach the

24   earliest the federal government is likely even to be in the

25   proposal stage for motor vehicle greenhouse gas standards is

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 1   well after the 2009 model year when the first low carbon

 2   California vehicles enter the market.  Clearly the

 3   California program on the way now will achieve significant

 4   public health and welfare benefits many years earlier than a

 5   prospective federal program.

 6             While we are pleased that EPA has now initiated

 7   the comment period and is holding this public hearing on

 8   California's request we are mindful that California

 9   submitted its request over 15 months ago.  We are now

10   hopeful that a positive decision is finally forthcoming from

11   EPA.  However, in light of the significant time that has

12   already passed without constructive steps taken we strongly

13   urge EPA to take final regulatory action on the greenhouse

14   gas waiver request for passenger vehicles.  Thank you.

15             PRESIDING OFFICER GRUNDLER:  Thank you.

16             Next we are going to hear from the National

17   Association of Clean Air Agencies.

18             MR. GREENE:  Good afternoon.  I am Larry Greene,

19   Executive Director of the Sacramento Air Quality Management

20   District.  I am here today on behalf of NACAA, the National

21   Association of Clean Air Agencies, which represents the

22   state and local air pollution control agencies in 54 states

23   and territories and over 165 metropolitan areas across the

24   country.  I serve on the NACAA Board of Directors.

25             On behalf of our association I thank you for this

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 1   opportunity to testify on California's request for a waiver

 2   of federal preemption under Section 209(b) of the Clean Air

 3   Act to permit enforcement of California's new motor vehicle

 4   emission standards to control greenhouse gas emissions.

 5   NACAA is pleased to offer its strong support for full and

 6   prompt approval of California's request.

 7             The state of California has traditionally led the

 8   national effort to reduce air pollution, dating back to 1963

 9   when California adopted the nation's first motor vehicle

10   emissions standards.  Congress has consistently recognized

11   and supported California's leadership role in its design of

12   the federal Clean Air Act, which specifically authorizes

13   enforcement of California-developed motor vehicle emission

14   standards in California and other states subject to

15   relatively minor procedural constraints.  This provision has

16   benefitted greatly not only California but the entire

17   nation, allowing states to serve as laboratories of

18   innovation.

19             In September 2005 after extensive research,

20   consultation with the auto industry and public comment the

21   California Air Resources Board adopted greenhouse gas

22   regulations.  The regulations meet the challenge laid out by

23   Assembly Bill 1493 to achieve the maximum, feasible and

24   cost-effective reduction in greenhouse gases for motor

25   vehicles in a way that will not harm California's economy,

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 1   will be cost-effective for California's drivers and will

 2   preserve the right of any citizen to drive whatever class of

 3   vehicle he or she desires.

 4              In December 2005 CARB requested that the US

 5   Environmental Protection Agency grant a waiver of federal

 6   preemption under Section 209(b) of the Clean Air Act to

 7   permit enforcement of California's regulations.  This

 8   request has been pending before EPA for 17 months.

 9             In the Clean Air Act Congress finds that the

10   reduction of air pollution, including that which may have an

11   effect on climate and weather, is the primary responsibility

12   of states and local governments.  Although the Act

13   establishes a federal program to set minimum requirements to

14   serve as a floor for state regulation it specifically

15   authorizes more stringent state regulation.

16             While consideration of the potential adverse

17   impact on commerce of many different state emission

18   standards led Congress to preempt states other than

19   California from adopting motor vehicle emission standards

20   Congress does in Section 177 of the Act provide that each

21   state can decide whether to enforce the federal emission

22   standards or the at least as stringent California standards

23   for new motor vehicles sold in-state.  The federal

24   government has no permissive role in this decision.

25             Since CARB's adoption of the greenhouse gas

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 1   regulations 11 other states, Connecticut, Maine, Maryland,

 2   Massachusetts, New Jersey, New York, Oregon, Pennsylvania,

 3   Rhode Island, Vermont and Washington, home to 70 million

 4   people, have recognized the benefits of these rules and have

 5   adopted statutes or regulations that permit enforcement of

 6   California regulations in their own states.

 7             However, these state programs cannot be enforced

 8   until and unless EPA grants California's request for a

 9   waiver.  Thus EPA's failure to approve California's request

10   in a time fashion vitiates states roles to protect the

11   health and welfare of their citizens.

12             As established by Congress, and interpreted by EPA

13   over the past 30 years, EPA's role in granting a waiver to

14   California on a particular motor vehicle emission rule is

15   narrow and deferential.  EPA is not to substantiate its

16   judgment for that of CARB as to whether a standard is too

17   technically challenging or too expensive.  Moreover, EPA may

18   not base its decision on statutes other than the Clean Air

19   Act or other policy considerations.  Rather, EPA must grant

20   California's request for a waiver unless it can demonstrate

21   that the conditions of Section 209(b) of the Act are not

22   met.

23             EPA must grant the waiver unless it can be shown

24   by clear and convincing evidence that CARB acted in an

25   arbitrary and capricious manner when it determined that the

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 1   addition of the greenhouse gas regulations did not render

 2   California's mobile source program considered, as a whole,

 3   less protective than the federal program.

 4             Here it is difficult to imagine how regulating

 5   greenhouse gas emissions, where the federal program does not

 6   contain any parallel regulations, does anything other than

 7   make the California program even more stringent than it was

 8   before these regulations were adopted.

 9             Given the fullness of the public process employed

10   by California and the strength of the administrative record

11   of support for California's decision there is no basis for

12   EPA to determine that CARB's decision was arbitrary and

13   capricious.

14             EPA must grant the waiver unless it determines

15   that California no longer needs to maintain an independent

16   motor vehicle emissions program.  Under prior precedent the

17   issue is not whether California needs a particular standard

18   or whether any particular standard will significantly

19   contribute to resolving an identified problem unique to

20   California.  EPA determined as recently as December 2006,

21   one year after California submitted this waiver request,

22   that there were compelling and extraordinary conditions

23   warranting a continuing California vehicle emissions

24   program.

25             In order to now reject California's waiver request

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 1   EPA would have to establish that something has occurred

 2   since that time that warrants the elimination of the

 3   California program.  In this instance California has amassed

 4   an extensive record and documented its continued struggles

 5   with air pollution.  With pollution from motor vehicles in

 6   particular and with global warming.  There is nothing to

 7   suggest any significant change in circumstance.

 8             EPA must grant the waiver unless it determines

 9   that California's motor vehicle program is not consistent

10   with the requirements of Section 202(a) of the Act.  Since

11   California's program contains the same limitations as found

12   in Section 202(a) the required consistency is established.

13             In its April 30, 2007 Notice of Public Hearing and

14   Comment on California's waiver request EPA specifically

15   solicits comment on three additional matters.  NACAA will

16   respond to each of these in our written comments as well.

17   Our responses will offer further support for granting

18   California's request.

19             In conclusion, California's greenhouse gas

20   regulations and its request for a waiver are clearly in the

21   public interest.  The rules start the process of

22   demonstrating that this country can address global warming

23   and at the same time create jobs, enhance energy security,

24   reduce our dependance on foreign oil and save money for the

25   consumer.

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 1             The rules further provide a number of innovations

 2   that will allow California and the 11 states that have

 3   elected to opt into the requirements to continue to serve as

 4   the laboratory for development of national programs,

 5   consistent with the intent of Congress expressed in the

 6   Clean Air Act, thus providing a greater degree of robustness

 7   to the federal, multi-agency  greenhouse gas decision-making

 8   process now scheduled for completion by December 2008.

 9             NACAA urges EPA to respond to California's 2005

10   request without further delay and grant complete approval of

11   the request for a waiver of federal preemption.  Thank you

12   for this opportunity to testify.

13             PRESIDING OFFICER GRUNDLER:  Thank you,

14   Mr. Greene.

15             We will take a break now and reconvene at 1:15.

16   And we will stay here until everyone has an opportunity to

17   present their views.

18                  (Whereupon, the lunch recess

19                  was taken.)

20                              --oOo--

21

22

23

24

25

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 1                         AFTERNOON SESSION

 2             PRESIDING OFFICER GRUNDLER:  We are ready to go

 3   with Panel 7, our science panel.  And I'd like to ask

 4   Dr. Peter Gleick, Gleick to begin, from the Pacific

 5   Institute.  Welcome.

 6             DR. GLEICK:  Yes, it's Gleick, thank you very

 7   much.  And thank you both to the EPA and the Air Resources

 8   Board for inviting me.  It's always a little dangerous, I

 9   guess, putting on a panel of scientists right after lunch

10   but that was your schedule, not ours.

11             PRESIDING OFFICER GRUNDLER:  We like science.

12             DR. GLEICK:  Good, me too.

13             Let me begin by offering a little bit of my

14   credentials.  I'll submit written testimony and my CV will

15   be attached.  I am the Director and co-founder of the

16   Pacific Institute in Oakland, which is an independent

17   research institute.  I am an elected member of the US

18   National Academy of Sciences.

19             I have done quite a bit of work early on on the

20   impacts of climate change on water resources, especially in

21   the western United States.  I am a MacArthur Fellow.  And I

22   have been asked by both the US government and the

23   Intergovernmental Panel on Climate Change to review portions

24   of the latest IPCC, as I am sure a number of my colleagues

25   on the panel.

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 1             I am going to talk about two issues.

 2             PRESIDING OFFICER GRUNDLER:  Your parents must be

 3   very disappointed in you.

 4             DR. GLEICK:  Yeah.  I'm going to talk about two

 5   issues and that is water and the rising seas and the impacts

 6   on California coastal communities and resources.

 7             California's Legislature recognized pretty early

 8   in this waiver process, and the rulemaking record supports,

 9   both extraordinary and compelling conditions in California

10   that make us especially vulnerable to climate change and the

11   impacts of climate change.

12             In particular we have a very large coast, a very

13   long coast, and coastal resources that are especially

14   vulnerable to sea level rise and changes in storm patterns,

15   changes in patterns of storms off the Pacific that hit the

16   west coast.  And our water resources are fundamentally tied

17   to climate.  The climate pattern in California is the

18   hydrologic cycle and as the climate changes our water

19   resources will change as well.

20             As noted I think in previous EPA decision the Air

21   Resources Board has continually demonstrated the existence

22   of compelling and extraordinary conditions.  And I think the

23   issue of climate change and the impacts on California

24   support that.

25             In terms of the impacts of climate change, which

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 1   is I think going to be the focus of most of the panel here

 2   today, there is a very strong, scientific basis for

 3   understanding already what California can expect.  There are

 4   over 1,000 peer reviewed scientific papers alone that

 5   address the issue of climate change on California water

 6   resources.  Of course of particular interest to us.

 7             The state is already beginning to think about

 8   mitigating and adapting to serious impacts on our water

 9   resources.  The Governor has proposed infrastructure changes

10   and management changes to deal with climate change and water

11   resources.  We are already thinking about how to deal with,

12   if we can, rising seas and impacts on the coastal, on

13   coastal communities.  And I would argue that this waiver is

14   a key part of that strategy for mitigating and adapting to

15   climate changes that are probably going to be to some degree

16   unavoidable.

17             But the key here I think is that there is a big

18   difference between fast impacts and a big difference between

19   slow impacts.  And there is a big difference between large

20   impacts and small impacts.  And a key fundamental part of

21   the state strategy to reduce greenhouse gas emissions is to

22   change the impacts that we are going to experience from fast

23   to slow and from large, hopefully to relatively small.

24             There are going to be thresholds, there are going

25   to be things that don't happen for a while and then do

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 1   happen quickly.  The degree to which reducing greenhouse gas

 2   emissions permit us to either avoid those thresholds or to

 3   put them off into the future and give us time to figure out

 4   strategies for adapting and mitigating is really critical to

 5   us.

 6             I brought a few slides, I am going to show very

 7   few of them.  I really just want to talk about three, I

 8   believe.  Okay.  Probably the best understood impact of

 9   climate change for California is going to be the loss of

10   snowpack.  You've heard a little bit about it already today.

11   The science of how rising temperatures is going to affect

12   California's snowpack is excellent.  It is probably the best

13   understood, highest confidence impact on water resources in

14   the entire United States.

15             What basically the science is saying is that as it

16   warms up in California we are going to lose more and more of

17   our snow.  What falls as precipitation is going to fall more

18   as rain in the winter rather than snow.  What does fall as

19   snow is going to run off faster and earlier.

20             Now this slide shows two different scenarios for

21   two different time periods.  Lower emissions and higher

22   emissions for the period from 2020 to 2049 on the left and

23   lower and higher emission scenarios for the later period in

24   the century, 2070 to 2099.

25             And the only thing I really want you to look at is

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 1   that first -- there are two points here.  First of all we

 2   lose snowpack no matter what.  A lot of snowpack.  Which

 3   California water managers understand is going to complicate

 4   our lives enormously.  But the other point to notice is that

 5   lower emission scenarios buy us both time and magnitude of

 6   impact.  The emissions, the lower emission scenarios have

 7   slower loss of snowpack and less loss of snowpack.

 8   Basically this is bad news overall but it also points us to

 9   strategies for reducing emissions any way we can to reduce

10   the impacts of these rising temperatures.

11             Similarly we worry about sea level rise.  And very

12   briefly, this is the historical record over the last 150

13   years of sea level rise in San Francisco Bay.  It has been

14   going up, it's gone up about nine inches over the last 150

15   years.  This is that same record with the IPCC's projections

16   over the next century, approximately.  And it's a triangle.

17   You can see there is an upper range and there is a lower

18   range.

19             The difference between the upper range and the

20   consequences for, for example San Francisco Bay, and the

21   lower range, are enormous.  It is the difference between

22   unfortunately billions of dollars of impacts and perhaps

23   hundreds of billions of dollars of impacts.  Whatever we can

24   do to get onto the lower trajectories for any of these

25   impacts of climate change is a good thing.

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 1             There are going to be unavoidable impacts of

 2   climate change, we understand that.  But we also understand

 3   how important it is to couple reductions in emissions with

 4   policies for adaptation and mitigation.  And that is really

 5   the message.  The message is, reducing emissions buys us

 6   time and it perhaps saves us lives and hundreds of billions

 7   of dollars of consequences.

 8             Now the other people on the panel I'm sure will

 9   talk more about water, they'll talk about fires, about

10   ecosystems.  Let me just conclude by saying I think it is

11   pretty clear that the law and the economics all support a

12   granting of this waiver.  I am not competent to comment on

13   that.  But I think it is also pretty clear that the science

14   supports a granting of this waiver.  And I would argue that

15   further delay could potentially be seen not as a scientific

16   issue or a legal issue but as a political one.  And I urge

17   you to promptly settle the review and to grant the waiver.

18   Thank you very much.

19             PRESIDING OFFICER GRUNDLER:  Thank you,

20   Dr. Gleick.

21             Dr. Bales.

22             DR. BALES:  Is this on?

23             PRESIDING OFFICER GRUNDLER:  No.

24             DR. BALES:  I'll just talk.

25             PRESIDING OFFICER GRUNDLER:  Press the button at

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 1   the bottom of the base.

 2             DR. BALES:  I see.  How about now?  That must be

 3   on now.  Thank you.  Thank you also for receiving my

 4   testimony today.  Let me also first introduce my

 5   qualifications to speak on the subject of the unique

 6   vulnerability of California's Sierra Nevada snowpack to

 7   climate change and the critical impacts.

 8             I am a professor at the School of Engineering and

 9   the Sierra Nevada Research Institute at the University of

10   California in Merced.  And if you don't know where Merced is

11   it's south of here in the Central Valley.  I joined this

12   newest and tenth campus four years ago as a founding faculty

13   member.  Before that for 19 years I was a professor of

14   hydrology and water resources at the University of Arizona.

15             I am a fellow of the American Geophysical Union,

16   the American Meteorological Society and the American

17   Association for the Advancement of Science.  And I have

18   published over 100 papers on the subjects related to what I

19   am talking about today.

20             My primary field of research is the hydrology and

21   climate of seasonally snow-covered mountains.  I have

22   carried out research in the Sierra Nevada for over 20 years

23   and have supervised about that many masters and PhD theses

24   on research there.  I also do research on polar, using polar

25   ice cores.

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 1             Now I want to draw on material from a paper that

 2   my colleagues and I published last year that presented

 3   evidence that the Sierra Nevada water cycle is on the

 4   threshold of three important changes, and try to attach a

 5   few numbers to that, and on the dramatic effect these

 6   changes will have on the water resources of California.

 7   These changes, as Peter mentioned, are shift from rain to

 8   snow (sic), earlier snowmelt and more severe flooding.

 9             I am going to talk about these three figures,

10   which illustrate those three points.

11             The Sierra Nevada snowpack is on the threshold of

12   change because it is a relatively warm snowpack; in contrast

13   to say the Colorado Rockies, which are a much colder

14   snowpack.  That is, a lot of the snowfall occurs at

15   temperatures just below freezing.  So a three degree Celsius

16   or five degree Fahrenheit increase in the average

17   temperature, well within projections for coming decades,

18   could shift about one-third of this precipitation from rain

19   to snow.  This is strictly based on data, historical data,

20   not on climate model forecasts.

21             And this same temperature increase would result in

22   about 60 fewer days with average temperatures below

23   freezing.  That means the snow will melt earlier, it won't

24   come as early in the fall, it will melt earlier in the

25   spring and we may have melts during the winter season too.

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 1   That is the winter will be about two months shorter.

 2             Now the Sierra Nevada -- I'm going to switch to

 3   the next slide.  There.  I'll switch to this one then I'll

 4   switch back.

 5             The Sierra Nevada snowpack currently stores about

 6   14 million acre-feet of water.  I hope people are familiar

 7   with that term.  But let's just look at the relative

 8   numbers.  Thirteen-and-a-half million acre-feet in the

 9   terminal reservoir, the big foothill reservoirs in the

10   Sacramento Valley, 11 million acre-feet.  It's of comparable

11   magnitude.  Snowpack storage is not something that we can --

12   our reservoirs -- All this change in snowpack storage is not

13   something our reservoirs are built to handle and it is of

14   comparable magnitude to the reservoir storage in the

15   Sacramento or San Joaquin Valley.  Now let me go back if I

16   can.  Thank you.

17             Looking at the flooding issue.  One of the

18   consequences associated with changes in snowpack, the range

19   of snow transition, the earlier melting, will be more severe

20   flooding.  Particularly in the central and southern Sierra

21   Nevada where historically precipitation falls largely as

22   snow.  In some of these southern Sierra basins almost over

23   90 percent of the precipitation is snowpack.

24             With this -- Again, with this three degree

25   increase in temperature nearly half of the larger storms in

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 1   the central and southern Sierra that are currently

 2   snowstorms, these big snowstorms will become rainstorms.

 3   And they could well be rain on snow storms, which is our

 4   worst type of flooding event associated with snow.

 5             So California's dams and reservoirs are not

 6   designed to contain this increase in severe floods.  In

 7   fact, they are already taxed by the occasional severe rain

 8   on snow storms, storms that will become more prevalent under

 9   a warmer climate.

10             Looking downstream, dams and levees that were

11   built to contain these historical 100 year floods won't

12   provide the same level of protection in a warmer climate,

13   with real and severe consequences for the Sacramento-San

14   Joaquin Delta, Central Valley cities, agriculture and the

15   statewide economy.

16             So consequences for the reliability of

17   California's water supply, the health of forests in a warmer

18   and drier climate.  If the water runs off earlier you get a

19   drier climate in the summer and you get more severe fires.

20   The sustainability of the Sierra Nevada communities subject

21   to increased fire danger is also severe.

22             Now the geography, the geology and the engineering

23   constraints limit California's ability to provide structural

24   solutions to mitigate these changes in the snowpack.  Our

25   Sierra Nevada snowpack is critical but an especially

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 1   vulnerable resource, very sensitive to temperature

 2   increases.  Thank you.

 3             PRESIDING OFFICER GRUNDLER:  Thank you very much.

 4             Dr. Torn.

 5             DR. TORN:  Thank you.  Is this on?

 6             PRESIDING OFFICER GRUNDLER:  Yes.

 7             DR. TORN:  Okay, thank you.  My name is Margaret

 8   Torn.  Thank you very much for the opportunity to speak to

 9   you today.  I am a staff scientist at Lawrence Berkeley

10   National Laboratory where I am head of the Climate Change

11   and Carbon Management Program and I am an adjunct professor

12   in the energy resources group at UC Berkeley.

13             I have been conducting research on climate change

14   for about 20 years, much of it on wildfire, and I have

15   published several scientific papers on the effect of climate

16   change on wildfire severity in California.  And I contribute

17   to the National Interagency Climate Change Science Program

18   as a member of the science steering group for the North

19   American Carbon Program and as a member of the ecosystems

20   group.

21             And I want to make three points today, they are

22   fairly simple.  One is that wildfires are one of the major

23   natural disasters in California.  Two, that wildfire

24   severity is a function of climate and the kinds of changes

25   that are predicted in climate will make wildfire severity

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 1   worse in California.  Third, that the way the amount of

 2   damage, the amount of risk depends on how much climate

 3   change we have and therefore a safer future depends on

 4   reducing emissions and reducing climate change.

 5             So as I said, fire is a major natural disaster

 6   regime for California.  Every year we have a lot of large

 7   fires.  The average total area burned in large fires is

 8   400,000 acres a year but in a bad year that can be two or

 9   three times that number so one percent of the state's area.

10   And if you look at average annual damages and suppression,

11   especially -- in an average year you're at something like

12   $800 million.  One single fire like the fire in Southern

13   California in 2003 in October had $2 billion worth of

14   damage.

15             And there are other losses as well of course

16   besides property losses and suppression costs, casualties

17   and injury.  Fires are a major source of air pollutants.

18   They lead to erosions and landslides.  During periods of

19   high fire danger, even without fire, logging and other

20   economic activities are restricted in high fire danger

21   areas.

22             And then fire is also a defining part of

23   California's ecosystems.  Fire is a major source of

24   mortality but it is also a major source of regeneration.  So

25   it can be a very positive force but it helps define

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 1   ecosystem structure and function for the state.

 2             In the last three decades wildfire frequency in

 3   the west has increased four-fold.  And that was documented

 4   very nicely in a paper in Science published last year by

 5   Tony Westerling.  And he looked at what this increase was

 6   attributed to and it was attributed to climate trends.  He

 7   looked at other possible causes such as land use history but

 8   that does not increase this increase.  What does explain the

 9   increase is warmer summers and earlier snowmelt that leads

10   to drier conditions and more flammable forests like we heard

11   earlier.  And I would note that also as we heard, those are

12   exactly the kind of conditions that are predicted to become

13   more common, more prevalent in California.

14             I'll talk a little bit about severity, I mentioned

15   that word.  I just want to say what it means.  We use it to

16   mean how much area burns or how hard it is to suppress

17   fires.  How much time the state spends in a period of very

18   high fire alert, which as I said restricts activities and

19   costs some money in its own right.  And how much property or

20   ecosystem damage is done by fires.  And those are all

21   outcomes of great concern to California.

22             So as I said, climate has a big effect on wildfire

23   severity.  It affects the ease of fire starts, how easy it

24   is to start a fire.  Although starts in California are

25   mainly anthropogenic.  But whether a fire takes off.  How

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 1   hot fires burn and how fast fires spread and that depends on

 2   temperature, precipitation, wind and humidity.  And we look

 3   at predictions.  Those are all predicted to change in most

 4   of the state in ways that will make wildfire conditions

 5   worse.  And if fires start make fires spread faster and

 6   harder to suppress.

 7             So it's as if we are looking at this wildfire

 8   danger sign.  You have probably seen things like that so you

 9   are intuitively familiar with the importance of conditions,

10   weather conditions for fire.  Say we were in medium.  We can

11   be pushed up to the next higher level.  If we would have

12   been in -- now I can't read this anymore.  But from high

13   danger to extreme danger.  And that is the risk that we face

14   if climate change is unabated.

15             Now it is very difficult to predict the exact

16   future fire damages because the outcome in any given year

17   depends on when and where fires start combined with the

18   variability of climate in any given day and place.  But what

19   we do is look at statistics and say that continued climate

20   change is going to increase the number of days with severe

21   fire danger and increase the length of the fire season.

22             But we can go farther than that and we have.  For