                              BEFORE THE

                             UNITED STATES

                    ENVIRONMENTAL PROTECTION AGENCY

     In the Matter of              )

                                   )

     CALIFORNIA STATE MOTOR        )    Docket No.

     VEHICLE POLLUTION CONTROL     )    EPA-HQ-OAR-2006-0173

     STANDARDS; REQUEST FOR        )

     WAIVER OF FEDERAL PREEMPTION. )

                                   )

                                   )

                            PUBLIC HEARING

              JOE SERNA JR. CAL/EPA HEADQUARTERS BUILDING

                 BYRON SHER AUDITORIUM - SECOND FLOOR

                             1001 I STREET

                        SACRAMENTO, CALIFORNIA

                        WEDNESDAY, MAY 30, 2007

                               9:00 A.M.

     Reported by:

     John Cota

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                              APPEARANCES

     UNITED STATES ENVIRONMENTAL PROTECTION AGENCY PANEL

     Christopher Grundler, Presiding Officer

     David Dickinson

     Robert Doyle

     Michael Horowitz

     Karl J. Simon

     Amy Zimpfer

     PANEL TESTIMONY

     Susan Kennedy, Chief of Staff, Office of the Governor, State

     of California

     Jerry Brown, Attorney General, State of California

     The Honorable Fabian Nu¤ez, Speaker, California Assembly

     Fran Pavley, Former Assembly Member

     Robert F. Sawyer, PhD, Board Chair, California Air Resources

     Board

     Catherine Witherspoon, Executive Director, California Air

     Resources Board

     Christine Kehoe, California State Senator

     Ira Ruskin, California Assembly Member

     Heather Fargo, Mayor, City of Sacramento

     Rocky Anderson, Mayor, City of Salt Lake City

     Christopher Cabaldon, Mayor, City of West Sacramento

     Steven P. Douglas, Alliance of Automobile Manufacturers

     Andrew Clubok, Alliance of Automobile Manufacturers

     Michael J. Murray, Sempra Energy

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     PANEL TESTIMONY

     John Busterud, Pacific Gas & Electric Company

     Bob Epstein, PhD, Environmental Entrepreneurs

     Mary Nichols, University of California, Los Angeles,

     Institute of the Environment

     Henry Hogo, South Coast Air Quality Management District

     Henry Hilken, Bay Area Air Quality Management District

     Barbara Lee, Northern Sonoma County Air Pollution Control

     District

     Mel Zeldin, California Air Pollution Control Officers

     Association

     Vandana Bali, Department of the Environment, City and County

     of San Francisco

     Henry T. Perea, Council President, City of Fresno and

     Governing Board Member, San Joaquin Valley Air Pollution

     Control District

     Brigette Tollstrup, Sacramento Metropolitan Air Quality

     Management District

     Ron Curry, Secretary, New Mexico Environment Department

     Erik Skelton, North East States for Coordinated Air Use

     Management

     Larry Greene, National Association of Clean Air Agencies and

     Sacramento Metropolitan Air Quality Management District

     Dr. Peter H. Gleick, Pacific Institute

     Dr. Roger Bales, University of California, Merced

     Dr. Margaret Torn, Lawrence Berkeley National Laboratory

     Dr. Mike Kleeman, University of California, Davis

     Dr. Louise Jackson, University of California, Davis

     Dr. Larry Dale, Lawrence Berkeley National Laboratory

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     PANEL TESTIMONY

     Russell Long, Bluewater Network & Friends of the Earth

     Tim Carmichael, Coalition for Clean Air

     Patricia Monahan, Union of Concerned Scientists

     Roland Hwang, Natural Resources Defense Council

     Derek Walker, Environmental Defense

     Michael Brune, Rainforest Action Network

     Bonnie Holmes-Gen, American Lung Association of California

     Donna Dorsey Fox, California Nurses Association

     Alex Kelter, MD, Volunteer, American Lung Association

     Kris Rosa, Silicon Valley Leadership Group

     Michael D. Jackson, TIAX LLC

     Bob Roberts, California Ski Industry Association

     Carl Zichella, Sierra Club

     Jason Barbose, Environment California Research & Policy

     Center

     Christopher B. Busch, PhD, Union of Concerned Scientists

     Mike Somers, Arizona PIRG Education Fund

     Buddy Burke, Republicans for Environmental Protection

     Matt Vander Sluis, Planning and Conservation League

     Thomas Cackette, Chief Deputy Executive Officer, California

     Air Resources Board

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                                 INDEX

                                                             Page

     Proceedings                                                1

     Introduction

     Introductory Remarks by Chris Grundler                     1

     Panel 1

          Susan Kennedy, Chief of Staff,

          Office of the Governor, State of California           4

          Jerry Brown, Attorney General, State of California    8

          Fabian Nu¤ez, Speaker, California Assembly           15

          Fran Pavley, Former Assembly Member                  17

          Dr. Robert Sawyer, Board Chair,

          California Air Resources Board                       22

          Catherine Witherspoon, Executive Director,

          California Air Resources Board                       22

     Panel 2

          Christine Kehoe, California State Senator            41

          Ira Ruskin, California Assembly Member               43

          Heather Fargo, Mayor, City of Sacramento             45

          Rocky Anderson, Mayor, City of Salt Lake City        48

          Christopher Cabaldon, Mayor,

          City of West Sacramento                              54

     Panel 3

          Steven Douglas,

          Alliance of Automobile Manufacturers                 56

          Andrew Clubok,

          Alliance of Automobile Manufacturers                 61

          Michael Murray, Sempra Energy                        81

          John Busterud, Pacific Gas & Electric Company        84

          Dr. Bob Epstein, Environmental Entrepreneurs         87

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                                 INDEX

                                                             Page

     Panel 4

          Mary Nichols,

          UCLA, Institute of the Environment                   92

          Henry Hogo,

          South Coast Air Quality Management District          96

          Henry Hilken,

          Bay Area Air Quality Management District            101

     Panel 5

          Barbara Lee,

          Northern Sonoma County

          Air Pollution Control District                      107

          Mel Zeldin,

          California Air Pollution

          Control Officers Association                        109

          Vandana Bali,

          Department of the Environment,

          City and County of San Francisco                    111

          Henry Perea, Council President,

          City of Fresno                                      115

          Brigette Tollstrup,

          Sacramento Metropolitan

          Air Quality Management District                     119

     Panel 6

          Ron Curry, Secretary,

          New Mexico Environment Department                   122

          Erik Skelton,

          North East States for

          Coordinated Air Use Management                      127

          Larry Greene,

          National Association of Clean Air Agencies          132

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                                 INDEX

                                                             Page

     Afternoon Session                                        139

     Panel 7

          Dr. Peter Gleick, Pacific Institute                 139

          Dr. Roger Bales, UC Merced                          145

          Dr. Margaret Torn, Lawrence Berkeley National Lab   149

          Dr. Mike Kleeman, UC Davis                          154

          Dr. Louise Jackson, UC Davis                        160

          Dr. Larry Dale, Lawrence Berkeley National Lab      166

     Panel 8

          Patricia Monahan, Union of Concerned Scientists     171

          Russell Long,

          Bluewater Network & Friends of the Earth            175

          Tim Carmichael, Coalition for Clean Air             179

          Roland Hwang, Natural Resources Defense Council     182

          Derek Walker, Environmental Defense                 189

          Michael Brune, Rainforest Action Network            199

     Panel 9

          Bonnie Holmes-Gen,

          American Lung Association of California             204

          Donna Dorsey Fox, California Nurses Association     209

          Alex Kelter, MD, Volunteer,

          American Lung Association                           210

     Panel 10

          Kris Rosa, Silicon Valley Leadership Group          214

          Michael Jackson, TIAX LLC                           217

          Bob Roberts, California Ski Industry Association    223

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                                 INDEX

                                                             Page

     Panel 11

          Carl Zichella, Sierra Club                          228

          Jason Barbose,

          Environment California Research & Policy Center     233

          Christopher B. Busch, PhD,

          Union of Concerned Scientists                       237

          Mike Somers, Arizona PIRG Education Fund            241

          Buddy Burke,

          Republicans for Environmental Protection            245

          Matt Vander Sluis, Planning and Conservation League 247

     Opportunity for Public Comment                           248

     Final Comments by the State of California

          Thomas Cackette, Chief Deputy Executive Officer,

          California Air Resources Board                      248

          Dr. Robert Sawyer, Chair,

          California Air Resources Board                      254

     Concluding Remarks by Chris Grundler                     255

     Adjournment                                              256

     Certificate of Reporter                                  257

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 1                            PROCEEDINGS

 2             ASSOCIATE DIRECTOR ZIMPFER:  Good morning.  My

 3   name is Amy Zimpfer, I am an associate director of the US

 4   EPA's office in San Francisco, the Region 9 Southwestern US

 5   EPA, and that covers Arizona, California, Nevada, Hawaii and

 6   the Pacific Islands.

 7             It is my honor today to welcome you all to the

 8   hearing and to welcome our colleagues from our headquarters

 9   Office of Transportation and Air Quality.

10             Before we get started I do want to say thank you

11   very much to the Air Resources Board and to Cal/EPA for

12   providing the hearing room today and all of the tremendous

13   logistical support.  It certainly makes our job easier to

14   have the support of our state colleagues.

15             So without further adieu I would like to introduce

16   Christopher Grundler.  He is the Deputy Director of the

17   Office of Transportation and Air Quality, he works out of

18   Ann Arbor.  And with him today are a number of folks from

19   our headquarters office in Washington DC.  And we are very

20   much looking forward to all the testimony and we will be

21   taking it all into consideration as we deliberate on the

22   waiver request.  Chris.

23             PRESIDING OFFICER GRUNDLER:  Let me add my welcome

24   to all of you to this public hearing on the California Air

25   Resources Board's request for a waiver of preemption for its

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 1   greenhouse gas emissions regulations.

 2             As Amy mentioned I am Chris Grundler, I will be

 3   the presiding officer for today's hearing.

 4             I want to just express at the outset how much we

 5   appreciate very much all of you taking the time out of your

 6   days to present testimony today.  I know many of you have

 7   traveled many miles to participate today.  My staff and I

 8   certainly recognize the significance of this request for the

 9   state of California.  In fact it has been many, many years

10   since we have actually convened a waiver hearing in the

11   state of California and that speaks to the significance that

12   we attach to this request.

13             We also recognize the importance of this

14   proceeding and this request by other states, by the general

15   public, by the environmental community, by the industry.

16   This is certainly a very serious undertaking and so I am

17   very pleased that we have such a wide representation from

18   the public today.

19             Joining me on the panel today are to my right,

20   Karl Simon.  He is our Executive Division Director of the

21   organization that will be evaluating all the information

22   that we are gathering through these proceedings.  To my left

23   is David Dickinson, an Attorney-Advisor in Karl's division,

24   and Michael Horowitz from our Office of General Counsel.

25             Today's hearing allows for interested parties to

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 1   provide comments in person.  However, there is also an

 2   opportunity for anyone to send in additional written

 3   comments.  The written comment period will close on June 15.

 4   Although I do want to add that we have a request for an

 5   extension of this comment period and that extension is

 6   currently still under review.

 7             We have a list of people who have signed up

 8   previously to provide testimony today.  That list is outside

 9   at the table.  If any other members of the audience who have

10   not signed up and do wish to provide testimony, I urge you

11   to go and add your name to that list.  We are prepared to

12   stay here as long as it takes so that everyone has an

13   opportunity to provide testimony.

14             Let me just describe how we will hold today's

15   hearing.  As noted in our April 30, 2007 and May 10, 2007

16   Federal Register Notices announcing this hearing we are

17   being guided by Section 209(b) of the Clean Air Act and we

18   are seeking comments on the questions raised in he April 30,

19   2007 Notice.

20             We are conducting this hearing informally and on

21   the record.  As presiding officer I am authorized to strike

22   from the record statements which are deemed to be irrelevant

23   or repetitious and to enforce reasonable limits on the

24   duration of statements of any witnesses.

25             Witnesses must state their name and affiliation

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 1   prior to making their statement.  And when a witness has

 2   finished his or her presentation, if you are using slides or

 3   other materials, please provide them to our court reporter

 4   here today.  And witnesses are reminded that any false

 5   statements or false responses to questions may be a

 6   violation of law.

 7             Finally, a court reporter is recording these

 8   proceedings.  If you would like a transcript of today's

 9   public hearing please see the court reporter to make those

10   arrangements.  We will place a copy of the transcript from

11   today's hearing in the docket for the rulemaking.  Also

12   California is webcasting today's proceedings and I'll be

13   reminding everyone periodically of that.

14             With that I would like to introduce our first

15   panel of witnesses.  From the State of California they are

16   Susan Kennedy, Chief of Staff to Governor Schwarzenegger;

17   Attorney General Jerry Brown; the Honorable Fabian Nu¤ez,

18   Speaker from the California Assembly; Former Assembly Member

19   Fran Pavley; and representatives from the California Air

20   Resources Board, Dr. Bob Sawyer, the Chair, and Catherine

21   Witherspoon, Executive Officer.

22             Welcome, everybody.  Ms. Kennedy, please proceed.

23             CHIEF OF STAFF KENNEDY:  Thank you very much.  On

24   behalf of Governor Schwarzenegger I want to thank you for

25   coming to California to conduct this hearing today.

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 1             We believe the EPA is legally obligated to grant

 2   our request under the Clean Air Act and the agency must take

 3   action without further delay.  It's the right thing to do,

 4   it's urgent and it's the law.

 5             EPA's obligation to approve California's waiver is

 6   unambiguous and specified in the Clean Air Act itself.

 7             From the inception of the Clean Air Act

 8   congressional authors recognized California's pioneering

 9   leadership on environmental issues.  In fact, Congress

10   specifically anticipated that California's standards would

11   be more stringent than federal standards.

12             When Congress adopted the 1977 amendments it

13   expressly ratified and strengthened California's waiver

14   provision, affirming the underlying intent of that provision

15   which was, and I quote, to afford California the broadest

16   possible discretion in selecting the best means to protect

17   the health of its citizens and the public welfare.

18             This provision of one of our nation's most

19   environmental protection laws sets in stone the central

20   tenet of our constitutional system, that when the federal

21   government fails to act the right of states to lead is

22   unequivocal.

23             Twelve states, including California, have already

24   adopted tailpipe emissions standards that would cut

25   greenhouse gas emissions from cars, light trucks and sport

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 1   utility vehicles by almost 400 million metric tons by the

 2   year 2020, the equivalent of taking 74 million cars off the

 3   road for an entire year.

 4             Seven other states have already committed or are

 5   considering to enacting the same standards upon approval of

 6   California's waiver by the EPA.

 7             That represents 143 million American citizens, or

 8   nearly half of the US population, taking matters into their

 9   own hands.

10             Yet for 16 months the EPA has failed to act on our

11   waiver.

12             With all due respect: The federal government has

13   failed to lead.  For the past 16 months it has refused to

14   follow and it is time now to get out of the way.

15             The Governor, the Legislature and the people of

16   California recognize the profound importance of addressing

17   climate change and the growing threat that it poses to our

18   environment and our economy.

19             The threat to our public health and safety from

20   climate change is now omnipresent: Scientists predict

21   California will lose up to 40 percent of its snowpack over

22   the next few decades, some say much higher, the primary

23   source of drinking water for two-thirds of Californians.

24   This is not theoretical science, it is already happening.

25             Higher snow lines and early runoff are causing

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 1   flood flows in our rivers earlier in the year that are now

 2   beginning to collide with more powerful winter storms,

 3   threatening our levees and flood barriers that were never

 4   designed for this level of battering.

 5             The heat wave last year that killed 150 people is

 6   predicted to be just the beginning of the hottest and driest

 7   years on record in the Western United States.

 8             Continued drought in the West threatens not only

 9   our water supply but our energy supplies from

10   hydroelectricity.

11             Warmer temperatures lead to concentrations of

12   ground level ozone, increasing smog and pollution that cause

13   asthma and heart disease.  For which, I might add, the

14   federal government is threatening to cut off federal

15   transportation dollars for failing to meet air quality

16   improvement goals.

17             There is no question that the need to address

18   climate change is compelling and extraordinary.

19             That is why the Governor signed historic

20   legislation authored by Assembly Speaker Fabian Nu¤ez to cap

21   carbon emissions and roll back California's greenhouse gas

22   emissions to 1990 levels by 2020 and another 80 percent

23   below 1990 levels by 2050.

24             But with 40 percent of greenhouse gas emissions

25   coming from the transportation sector, the only way to meet

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 1   these targets is to address auto emissions.  And to do so

 2   requires the EPA to approve our request for a waiver that is

 3   the subject of today's hearing.

 4             More than 40 similar waivers have been approved

 5   over the past three decades.

 6             In delaying this latest request as long as it has

 7   the federal government is blocking the will of 100 million

 8   Americans who are not willing to wait any longer for the

 9   federal government to act.

10             California supports a strong federal program that

11   aggressively reduces greenhouse gas emissions from motor

12   vehicles, and we will work with the EPA when it takes on

13   this task and the tasks announced by the White House.  But

14   the EPA must grant California's waiver.  There is simply no

15   legal justification to do anything else.  Thank you very

16   much.

17             PRESIDING OFFICER GRUNDLER:  Thank you,

18   Ms. Kennedy.

19             Mr. Attorney General.

20             ATTORNEY GENERAL BROWN:  Thank you.  I want to

21   address just a couple of very specific points.  First of all

22   the automobile companies and the opponents of what we are

23   trying to do here are saying that EPCA, the Energy Policy

24   Conservation Act, preempts California from this waiver

25   request.  I want to address myself to that.

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 1             That is completely false and has no justification

 2   in the law.  EPCA includes by it's very terms the provision

 3   that says in setting fuel efficiency standards, the CAFE

 4   standards, the Secretary of Transportation must consider

 5   other standards of government.  Other standards of

 6   government.  If a waiver is granted by EPA a standard of

 7   government is the emission standard that we are asking to be

 8   validated in this proceeding.

 9             So it is very clear that EPCA envisioned the

10   actions under the Clean Air Act.  The Clean Air Act

11   envisions California taking their own separate program and

12   putting it under effect.  The argument that EPCA preempts

13   California cannot be true because, number one, the language

14   envisions a consideration of the California standard, any

15   government standard, and preemption destroys the standard,

16   eliminates it, it becomes a nullity.  So just by the text

17   alone that argument has to fail.

18             Secondly, in the case of Massachusetts v. EPA the

19   Supreme Court expressly held that the two statutes, the

20   Clean Air Act and EPCA, need to be harmonized.  You

21   harmonize them not by destroying one but by giving both

22   their full operation.

23             The Clean Air Act aims at reducing pollutants,

24   emissions of substances that cause harm.  That cannot be

25   stopped by EPCA.  The fact that fuel efficiency is a

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 1   byproduct or a consequence does not negate the authority

 2   under the Clean Air Act.

 3             Under EPCA there is a balancing and EPCA can be

 4   fully realized and implemented by weighing and balancing

 5   many factors, one of which is the Clean Air Act standards

 6   themselves.  So the Supreme Court itself and the text both

 7   call for a harmonization and giving full effect to the Clean

 8   Air Act.  And in this case California has its own piece of

 9   that Clean Air Act under the law.

10             Now the second point I want to talk about is the

11   waiver itself.  Expressly in legislative history the word is

12   narrow grounds for EPA to deny the waiver.  It has to be

13   very extraordinary.  There has been talk about, are there

14   really compelling and extraordinary conditions.  The auto

15   companies want to say, well, California is no different than

16   the rest of the country, of the world.  That issue has

17   already been decided.  The fact that similar conditions

18   exist elsewhere does not negate California's authority under

19   the law.

20             If you go back to the legislative history I think

21   it's pretty interesting.  Right in the legislative history

22   itself it made this quote: "Senator Murphy convinced the

23   committee that California's unique problems and pioneering

24   efforts justified a waiver."  Now Senator Murphy was the

25   California senator.  He got into a legislative battle with

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 1   John Dingell.  Dingell was trying to restrict the ability of

 2   EPA to grant a waiver.  Senator Murphy wanted the broadest

 3   interpretation to make it as easy as possible for California

 4   to get a waiver.  He won.  It says so right here.

 5             Two points have to be, should be acknowledged.

 6   One is the unique conditions in California, compelling

 7   conditions.  The geography, the topology, the mountain

 8   ranges in Los Angeles that build up smog, the concentration

 9   of vehicles, the number of vehicles.  All those conditions

10   exist today.

11             The other aspect, number two because there's two

12   prongs here, pioneering efforts.  California is the pioneer,

13   was and is.  Legislative history talks about California

14   leading the way, setting the pace and thereby helping the

15   rest of the nation.  To me it is impossible to conclude that

16   a waiver can be denied under the legislative history, the

17   Supreme Court rulings and EPA's own decisions.

18             I want to make one final point.  It's kind of a

19   subtle one, I've had a bit of trouble grasping it myself.

20   The compelling and extraordinary condition does not refer to

21   the particular standard.  It doesn't refer to California's

22   emission greenhouse gas standards that are at issue in this

23   waiver.

24             In the key decision in 1984 on diesel particulates

25   Ruckelshaus, the administrator, said very clearly what is

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 1   required to be compelling and unique are the conditions in

 2   California that once found justify the program that is

 3   different and separate and more stringent.  So it is not --

 4             The findings here are not about the specific

 5   greenhouse gas standards, it's rather, does California

 6   continue in the state of its unique topology, its number of

 7   cars, their concentration.  Is that true?  And it certainly

 8   is true.  Is California still in the pioneering, the

 9   extraordinary role of pioneering new standards?  Yes.  If

10   you say yes to both of those then you've satisfied the

11   compelling and extraordinary circumstance.  And of course

12   the idea that this affects other people doesn't in any way

13   negate or undermine that it's affecting California.

14             One final point in support of this.  In 1977, two

15   years after EPCA was passed, Congress added the provision

16   that other states could follow California's law,

17   California's standard.  Once you grant that waiver because

18   of the continuing, compelling and extraordinary circumstance

19   then not only California can impose the regulation but all

20   the other states.  Which in this case are already 11 signed

21   up.  Those 11 states don't have to show you any

22   extraordinary, any compelling need. They don't have to show

23   you anything, it's automatic.

24             And that really goes to the point that what is at

25   issue in the law here is the unique historic situation in

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 1   California.  Which once established continues to justify the

 2   waiver unless there is some radical change in circumstances,

 3   which hasn't happened.  It's just continuing exacerbation of

 4   the problem.  And even to get specific, global warming will

 5   make worse all the criteria of pollutants.  So on every

 6   ground California is justified.  And as Susan Kennedy has

 7   said, this is a legally required waiver.

 8             And I would just end by general statement.  We

 9   have been told in the press that the national government

10   will stand alone and reject all the other nations, the G8

11   countries, all the major developed countries of the world

12   gathered in Germany next week.  America will stand alone

13   fighting any timetable or target.

14             I think in that context it is particularly

15   compelling, if not extraordinary, for the EPA following the

16   law, not the politics, not the person who appoints the

17   administrator, but rather the law serving the people, to

18   allow California and the 11 other states and many more to

19   follow actually to join the other nations of the G8

20   countries and take a stand for timetables and targets.

21             It's well thought out, it's scientifically and

22   technologically based.  This is a great opportunity for the

23   EPA to reinvigorate its role as a champion in the protection

24   of our environment.  Thank you.

25             PANELIST DICKINSON:  Attorney General Jerry Brown,

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 1   appreciate your testimony today.  You did take part of it to

 2   discuss the EPCA statute and I invite you or your Air

 3   Resources Board colleagues to, in your written comments

 4   perhaps to provide a clarification as to whether you think

 5   EPCA is relevant to EPA's waiver review or not.  And then if

 6   it were relevant how that would play out.

 7             ATTORNEY GENERAL BROWN:  Well I have to say,

 8   again, that it is not relevant.  Number one because that is

 9   a judicial decision.  And by the precedence of EPA you are

10   not allowed to consider issues like preemption from another

11   statute.  You can only consider your precedence.

12             Number two, in fact it is not preempted because

13   EPCA itself envisions taking into account regulations that

14   are standards of the government.  If you grant the waiver

15   then these are standards of the government.  Therefore by

16   the very language of the 1975 EPCA Act you have to take it

17   into consideration, not ignore it, which preemption would

18   require.

19             I'll be glad to commit that to writing but to me

20   it's crystal clear.

21             PANELIST DICKINSON:  Thank you.

22             PRESIDING OFFICER GRUNDLER:  Thank you for your

23   testimony, Mr. Brown.

24             Mr. Speaker, welcome.

25             ASSEMBLY SPEAKER NU¥EZ:  Thank you very much,

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 1   Mr. Grundler and ladies and gentlemen of the committee.  We

 2   want to thank you first of all for making the pilgrimage to

 3   Sacramento to consider this waiver.

 4             As you know climate change that has been brought

 5   upon by manmade emissions of greenhouse gases has become the

 6   environmental crisis of our time.  Climate change is a very

 7   serious threat to our sustainability.  And as you know, here

 8   in California you have the opportunity to help make our

 9   state take a vital step in showing this crisis and

10   combatting this crisis by granting us a waiver that would

11   allow for tailpipe emission standards of global warming

12   causing greenhouse gases to be stopped.

13             A little background on this issue.  In 2002

14   Assembly Member Fran Pavley, who sits to my right, authored

15   Assembly Bill 1493.  Landmark legislation that requires

16   tailpipe emission standards to reduce greenhouse gas

17   emissions.

18             Last year I joined Ms. Pavley in authoring

19   Assembly Bill 32, the Global Warming Solutions Act of 2006.

20   Yet another California first, which requires California to

21   reduce greenhouse gas emissions by 25 percent by the year

22   2020.  With the transportation sector as California's

23   largest emitter of greenhouse gases reductions in this

24   sector are absolutely critical.  AB 32 will not succeed

25   without major reductions from the transportation sector.

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 1             The regulations being considered here at today's

 2   hearing will achieve about 17 percent of the reductions we

 3   want to achieve through Assembly Bill 32.  In order to meet

 4   our goal and address the leading environmental issue facing

 5   our state and our country today California needs to be

 6   granted a waiver by the United States Environmental

 7   Protection Agency.  A waiver, I might add, that was

 8   requested 18 months ago.  We think that it's time for the

 9   Environmental Protection Agency to act to allow California

10   to move forward.

11             I know that the Environmental Protection Agency

12   has granted many requests.  In fact in California alone we

13   have seen over 50 requests that have been granted in the

14   last four decades.  Each time the EPA has found that

15   California has met the requirements under the Clean Air Act.

16   We believe there is no basis for the EPA to treat this

17   request any differently.

18             The standards we are proposing are workable with

19   technology already in the market, which will save vehicle

20   owners in lower maintenance and operating costs over the

21   lifetime of the vehicle.  The standards give auto makers the

22   flexibility to apply any technology they choose to reduce

23   the vehicles' emissions of greenhouse gases, including

24   production of vehicles that use lower carbon fuels.  The

25   standards were developed over four years.  Four years

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 1   through careful and measured technical review, and I might

 2   add, vast public input.

 3             We here in California are working very hard to

 4   protect our children from a changing environment.  The Bush

 5   Administration has a choice.  Will it support that right

 6   that the Clean Air Act gives us or will it continue to slow

 7   or stop any real action to global warming.

 8             On December 1, 2005 the Air Resources Board

 9   officially requested this waiver.  It is now 18 months

10   almost to the day.  The later -- We are finally getting our

11   chance here today to show the Board the national base of

12   support that we have for California's waiver.  And we would

13   respectfully ask you on behalf, not only of California, but

14   the mission of the Environmental Protection Agency, which in

15   its very core by its own definition is to protect the

16   environment.  We want to ask for your help to help us here

17   in California protect our environment.  Thank you very much.

18             PRESIDING OFFICER GRUNDLER:  Thank you,

19   Mr. Speaker.

20             Ms. Pavley, welcome.

21             FORMER ASSEMBLY MEMBER PAVLEY:  Good morning.

22   Thank you very much for coming to California.  A few of you

23   I saw just last week in Washington DC.  It's a pleasure for

24   me to be here today as the author of this bill and sitting

25   alongside Speaker Nu¤ez as the author of AB 32 because this

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 1   is a very important component in our broader, more

 2   comprehensive policy to do our fair share here in California

 3   to reduce greenhouse gas emissions.

 4             Forty-one percent of California's greenhouse gas

 5   emissions come from automobiles and light duty trucks.  We

 6   have 25 million cars and light duty trucks on the road in

 7   California today.  It's important that we attack this very

 8   critical problem.

 9             The Clean Air Act, as you know, allows California

10   to adopt more stringent air emissions standards and over the

11   last three to four decades, as Speaker Nu¤ez said, the EPA

12   has approved nearly 50 waivers in a row, none denied.

13             The arguments I heard last week in Washington DC

14   and just a little while ago at a press conference in the

15   room adjacent to this by the automobile manufacturers

16   sounded vaguely familiar to me, not only through our hearing

17   processes here in California but the same arguments that

18   came up when California passed laws relating to unleaded gas

19   that the EPA approved, laws relating to catalytic

20   converters, which the EPA approved through the waiver

21   process, and most recently a law I authored which allowed

22   single occupant hybrid drivers to access HOV lanes, also

23   opposed in California by the automobile manufacturing

24   associations.

25             The recent Supreme Court decision said that the

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 1   Environmental Protection Agency indeed has the authority

 2   under the Clean Air Act to regulate greenhouse gas emissions

 3   as air pollutants.

 4             We have demonstrated unequivocally, compelling and

 5   extraordinary reasons for this waiver.  Our topography,

 6   dwindling snowpack, the availability and supply to our

 7   agricultural and urban water users.

 8             In particular I am very concerned about air

 9   quality impacts.  Warmer temperatures will make ozone levels

10   worse, a prime ingredient of smog.  We have asthma and

11   respiratory problems in the LA area and a growing number in

12   our Central Valley with children.

13             We're having continuous problems now with weather

14   extremes, particularly in relation to wildfires.  Where our

15   wildfire season is not just September and October anymore

16   but is year-round and that has health implications in

17   particulate matter affecting respiratory problems, fire

18   fighters as well as our citizens here in California.

19             There is a long list of compelling and

20   extraordinary reasons to grant this, also in regards to our

21   1100 miles of coastline and sea level rise.  And one of our

22   largest insurance carriers, Allstate, is talking about not

23   granting any more new homeowner policies because of weather

24   extremes, weather patterns and rising costs associated with

25   climate change.

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 1             One of the arguments made by the automobile

 2   manufacturers last week in Washington DC is, what's the

 3   point, California is just one state, one state out of 50.

 4   Well they brought that argument to our attention when we

 5   passed the bill back in 2001 and 2002.

 6             Now as you know California under the Clean Air Act

 7   can pass more stringent air emission standards and other

 8   states have two options and only two options only.  Adopt

 9   California standards or federal government standards.

10   California standards only if they are more stringent than

11   the federal government standards.  Well that's not really a

12   patchwork quilt, that's two choices.

13             Well 11 other states have now adopted California

14   clean car standards.  The governors of New Mexico and

15   Arizona have indicated through executive order they will

16   also add to this.  We know, like in the case of unleaded gas

17   or catalytic convertors that other states across the country

18   will soon become places where cleaner, more efficient cars

19   will be sold.  That's the pattern that's been demonstrated

20   time and time again.

21             And I have also seen on a firsthand level that

22   when California sets a standard, whether it is unleaded gas

23   or catalytic converters, it is not just limited here, it

24   spreads to other states and indeed other countries.

25             Several years ago I went to Canada and they have

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 1   adopted a voluntary memorandum of understanding with the

 2   Canadian automobile manufacturers.  Interestingly enough the

 3   same automobile manufacturers that are represented here in

 4   this room, Ford, GM and Chrysler, et cetera, and the

 5   international alliance.  They adopted a voluntary MOU

 6   standard to reduce tailpipe emissions through almost the

 7   identical strategies that our Air Resources Board envisioned

 8   when they adopted the regulations required in 1493.

 9             That's cost-effective, maximum feasible,

10   technologies that are readily available on cars today.

11   Canada has done that.  They just issued and they sent to me

12   just yesterday a regulatory framework for air emissions and

13   they talk about there's currently a memorandum of

14   understanding between the auto industry and the government

15   with a target of 5.3 megatons of greenhouse gas emission

16   reductions by 2010.

17             We're talking about the automobile market in the

18   United States now with the 11 states plus Arizona and New

19   Mexico plus Canada.  We're tipping over 40 percent of all

20   the automobiles sold.  That is not a patchwork quilt, that

21   is responsible legislation in response to the most

22   threatening global and economic problem of the 21st century.

23   I ask for your waiver.  Thank you.

24             PRESIDING OFFICER GRUNDLER:  Thank you very much,

25   Ms. Pavley.

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 1             Dr. Sawyer from the Air Resources Board, nice to

 2   see you again.

 3             AIR RESOURCES BOARD CHAIR SAWYER:  Thank you.

 4             PRESIDING OFFICER GRUNDLER:  Please proceed.

 5             AIR RESOURCES BOARD CHAIR SAWYER:  Thank you and

 6   welcome to California.

 7             PRESIDING OFFICER GRUNDLER:  It's great to be

 8   here.

 9             AIR RESOURCES BOARD CHAIR SAWYER:  Our

10   presentation will be much shorter than last week's in

11   Washington DC.  We will focus on issues that were of

12   interest to last week's hearing panel.  We will also attempt

13   to bring some clarity to the rather vague issues raised by

14   the single automotive manufacturer representative who last

15   week presented industry concerns to the panel and audience.

16             This week Catherine Witherspoon, the Air Resources

17   Board Executive Officer will make the primary presentation.

18   She is joined by Tom Cackette, Chief Deputy Executive

19   Officer, Steve Albu and Paul Hughes of our Mobile Source

20   Control Division, Bart Croes, chief of our Research

21   Division, Reza Mahdavi of our Economics Branch, and Tom

22   Jennings and Aron Livingston of our Legal Office.

23   Catherine.

24             AIR RESOURCES BOARD EXECUTIVE OFFICER WITHERSPOON:

25   Thank you Dr. Sawyer, and good morning.

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 1             I am going to start with a very brief review of

 2   the motor vehicle greenhouse gas emission standards that are

 3   the subject of this proceeding.  While you may hear again

 4   today from manufacturers that this is a CO2-only regulation,

 5   the simple fact is that the regulations control all of the

 6   pollutants shown here and provide substantial credit to

 7   those manufacturers reducing highly potent refrigerant

 8   emissions and to those introducing alternatively-fueled

 9   vehicles.

10             As in our EPA-approved LEV II regulations, the

11   greenhouse gas regulations establish two categories, one for

12   passenger cars and smaller light trucks, another for larger

13   trucks, SUVs and medium-duty vehicles.  Pure commercial work

14   trucks are exempt.

15             We used the results of a technical study initiated

16   by the Northeast States Center for a Clean Air Future and

17   applied staff's expertise and engineering judgment to arrive

18   at packages of potential technologies that could be applied

19   in the 2009 to 2016 time period.  The standards flowed from

20   that projection, setting increasingly stringent fleet-

21   average greenhouse gas emissions standards in grams per

22   mile.

23             As you can see the near-term standards start with

24   the 2009 model year and achieve a 22 percent reduction in

25   2012.  The mid-term standards start with the 2013 model year

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 1   and will achieve a 30 percent reduction in 2016.

 2             The regulation also provides flexibility,

 3   including a delay of regulatory requirements until 2016 for

 4   small and intermediate volume manufacturers.

 5             Now just to remind everyone of the three key

 6   principles in waiver proceedings.  The first is that EPA's

 7   review is limited in scope to three issues: protectiveness,

 8   California conditions justifying our motor vehicle emissions

 9   standards, and consistency with the technological

10   feasibility and lead time provisions in the Clean Air Act.

11             Second, and contrary to what the manufacturers'

12   representative asserted last week, the burden is on waiver

13   opponents to demonstrate why California's waiver should not

14   be granted; the regulations come to you with a presumption

15   of regularity.  This burden will be difficult indeed, and we

16   think insurmountable, though to date in this proceeding we

17   and the public have had little opportunity to evaluate the

18   waiver opponents' arguments and evidence, despite the burden

19   that they have.  Finally, waiver law and history counsels

20   EPA to give substantial deference to California's judgments.

21             This slide covers the finding regarding the

22   protectiveness determination the Board made in its September

23   2004 Resolution approving these regulations.  The Board

24   reached its  determination in a public process, and easily

25   found that the standards were more protective in the

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 1   aggregate than federal standards because our program remains

 2   more protective for other pollutants and also addresses

 3   greenhouse gases.

 4             Last week the auto manufacturers' representative

 5   hinted that California was obligated to do more.  That is,

 6   to compare our greenhouse gas standards to other federal

 7   standards not adopted by EPA.  The text of Section 209(b) is

 8   not amenable to such contortions.  It states that we must

 9   determine that our standards will be, in the aggregate, at

10   least as protective of public health and welfare as

11   applicable federal standards.  Clearly this simple language

12   is no license for EPA to look beyond its own, and in this

13   case non-existent, standards.

14             EPA has never required California to compare its

15   standards to any other standard other than EPA's own, and

16   for good reason.  The repetition of the phrase applicable

17   standards in Section 209(b) clearly applies in each case to

18   just one set of federal standards, EPA's.  One reason for

19   the protectiveness requirement is that once the waiver is

20   granted, compliance with California's standards is treated

21   as compliance with EPA's standards, something that would be

22   inappropriate if EPA standards were more protective.  Any

23   vehicle standards of other federal agencies will apply

24   alongside California's.

25             Even if EPA unwisely chooses to go beyond the text

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 1   of 209(b) to consider standards like those under EPCA or

 2   CAFE, it's clear that our standards were more protective at

 3   adoption and remain so today.  As Mr. Doniger pointed out

 4   last week, it is likely our standards will remain more

 5   protective into the future given potential federal

 6   rulemaking timetables.

 7             Obviously, if our standards weren't more

 8   protective and required lower greenhouse gas emissions than

 9   under EPCA/CAFE, the manufacturers would not have hired a

10   legion of lawyers to challenge them across this country.

11   Plaintiffs in those actions have taken great pains to argue

12   how much more difficult it will be as a technological matter

13   to meet our standards than to meet EPCA/CAFE.  In effect

14   they have demonstrated for us the greater protectiveness of

15   California's standards.

16             The second issue before EPA is whether California

17   needs its state motor vehicle standards to address

18   extraordinary and compelling conditions in our state.  As

19   you heard last week, California easily meets this test.  In

20   fact, the only question for EPA to address is whether the

21   conditions in California are such that we still need our

22   motor vehicle program as a whole to address air pollution in

23   our state.

24             Again this slide shows how nothing has changed in

25   these conditions.  California continues to truly stand alone

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 1   in its ozone problem.  That is the end of the story as a

 2   legal matter.

 3             But last week we heard questions that sounded like

 4   EPA was considering rejecting established waiver law and

 5   history on this point.  Should EPA choose this path it would

 6   still arrive at the same destination, as California clearly

 7   does need our greenhouse gas standards to meet extraordinary

 8   and compelling conditions.  This was demonstrated by the

 9   overwhelming evidence presented by Dr. Schneider, ARB, and

10   others last week.  I will briefly recap that evidence here.

11             It is beyond question that California continues to

12   need ozone reduction strategies to address extraordinary and

13   compelling conditions in our state.  This chart shows how

14   higher temperatures that we can expect from global warming

15   will increase ozone concentrations.

16             Even at the low to mid-range projections for

17   global warming temperature increases California faces dozens

18   of extra unhealthy days conducive to ozone formation, shown

19   here for the South Coast and San Joaquin Valley.  Since

20   greenhouse gas emissions indirectly exacerbate ozone

21   concentrations, California's need to regulate emissions of

22   hydrocarbons and oxides of nitrogen in order to address

23   ozone concentrations also applies here to regulating

24   greenhouse gases.

25             We also spoke last week about the current higher

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 1   wildfire incidence and the projections as shown here.

 2   Again, if increased wildfires weren't an extraordinary

 3   condition in their own right, particulates and other

 4   emissions from increasing wildfires will further exacerbate

 5   the health impacts from increased smog projected from higher

 6   temperatures.

 7             We also mentioned these projected impacts from

 8   global warming that should likewise be considered

 9   extraordinary and compelling conditions.  We identified

10   eight experts whose reports on the particular effects of

11   global warming in California will be entered in the record.

12   Some of those we listed are here today to speak on separate

13   panels and will be joined by other experts in their

14   respective fields.

15             Last week a question was raised as to whether

16   California must show a temperature impact in California

17   resulting solely from its greenhouse gas reduction

18   regulations.  The answer is no, for three reasons.  First,

19   EPA cannot second-guess California's judgment on the

20   effectiveness or need for any particular California

21   standard.

22             Administrator Train addressed this point when he

23   stated that neither costly controls nor marginal

24   improvements in air quality were pertinent to his decision.

25   EPA has accepted this principle numerous times since.  So

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 1   the manufacturers' argument last week that ARB cannot prove

 2   a temperature change and air quality benefit from these

 3   regulations is not pertinent to this proceeding.  It is

 4   enough that such standards address the problem in some way.

 5             Second, the manufacturers' argument that we must

 6   show modeled temperature decreases proves too much.  As we

 7   pointed out in our December 2005 waiver submittal, an

 8   appropriate analogy here is to ozone attainment

 9   demonstrations.  We cannot demonstrate that a particular

10   emission standard requiring small ozone precursor emission

11   reductions directly causes a specific parts per million

12   ambient ozone reduction in a particular air basin.  Yet EPA

13   has in the past approved waiver requests for marginal

14   adjustments to our motor vehicle emission standards even

15   though we presented no modeling demonstrating a measurable

16   reduction in ozone.

17             Similarly, no regional climate change models can

18   show a temperature impact in a particular area from measures

19   of this magnitude.  In fact, it takes the accumulation of

20   several countries' emission reductions to show a change in

21   temperature, or a temperature change avoided.  For global

22   climate change, the relevant modeling exercise is the IPPC

23   scenarios.

24             Yet as Dr. James Hansen's expert report in the

25   Central Valley case makes clear, and as Dr. Schneider

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 1   pointed out last week, there is a direct relationship

 2   between incremental reductions in greenhouse gas emissions

 3   and reduced radiative forcing.  The Hansen report is one of

 4   the reports we will be submitting for the record.

 5             Last week Mr. Tripp described the measures that

 6   automobile manufacturers and others are taking to rein in

 7   their greenhouse gas emissions.  GM is to be commended for

 8   recently joining the United States Climate Action

 9   Partnership, but EPA should not countenance its trade

10   group's attempts to minimize those emission reductions or

11   these --

12             Finally, this argument runs counter to the

13   rationale the Supreme Court gave in rejecting one of EPA's

14   reasons not to regulate.  That is, that regulating won't

15   make much difference given other sectors' and nations'

16   emissions.  In fact, that is precisely why both California

17   and EPA must regulate, because global warming must be

18   attacked incrementally, with many measures.  The

19   Massachusetts decision counsels us not to cower in despair

20   as worldwide emissions continue to go up but to attack that

21   increase in every possible way.

22             The third reason we need not show a temperature

23   impact is because the manufacturers' argument misreads the

24   text of 209(b)(1)(B).  The statute asks only whether

25   California needs such state standards to meet extraordinary

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 1   and compelling conditions in California.  The answer is

 2   clearly yes.  We need these standards.  We need other

 3   standards to be established under our AB 32, the Global

 4   Warming Solutions Act.

 5             We need the federal government to act.  We need

 6   other nations to act.  Because we need all these things to

 7   occur to even have a chance at avoiding some of the worst

 8   extraordinary and compelling impacts that have been

 9   identified.  Each particular regulation in isolation is by

10   definition needed.

11             To further illustrate, as Dr. Schneider conveyed

12   last week, the difference between the potentially

13   devastating high or medium-high scenarios and the lower

14   emissions scenario pictured here will reflect a combination

15   of many greenhouse gas reduction measures.  In the context

16   of all these measures our AB 1493 motor vehicle standards

17   will undoubtedly be among the more important.  What kind of

18   signal would EPA be sending if it concludes that California

19   does not need these major greenhouse gas emission standards

20   to meet extraordinary and compelling conditions?

21             Due to rapid global warming over the past 30 years

22   the earth's temperature is reaching levels not experienced

23   in 10,000 years.  An increase in just one degree centigrade

24   will lead to temperatures not seen in a million years.  And

25   if emissions of CO2 continue with the business as usual

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 1   scenario, increasing by two percent per year, we can expect

 2   an additional warming of two to three degrees centigrade

 3   this century.  If that happens we and our children and

 4   grandchildren will all be living on a different planet.

 5             Research conducted by Hansen, et al, has estimated

 6   that to avoid this two degree centigrade increase, heat

 7   trapping gases need to be stabilized so that their net

 8   climate change effect is less than 450 parts per million CO2

 9   equivalent.

10             If the United States and other industrial nations

11   would cut current emissions by 60 to 80 percent this goal

12   would be achievable.  Governor Schwarzenegger's Executive

13   Order S-3-05 calls for an 80 percent reduction of greenhouse

14   gas emissions from 1990 levels by 2050.  If the

15   industrialized world were to follow in California's

16   footsteps the most severe climate change impacts could be

17   avoided.

18             Again, showing projected end of century

19   temperature increases it matters whether California takes

20   this step, with others, towards reining in greenhouse gas

21   emissions.

22             The groundbreaking report by Pacala and Socolow in

23   2004 showed how incremental emissions reductions matter.

24   This slide graphically demonstrates how actions in a variety

25   of sectors can in combination have a profound effect.  The

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 1   US can immediately begin to make very significant reductions

 2   in carbon emissions with the implementation of existing

 3   technologies and strategies such as end-use efficiency,

 4   passenger vehicle efficiency, renewable resources, and

 5   carbon capture and storage.

 6             This green wedge shown here represents the

 7   cumulative reductions needed from the US transportation

 8   sector to stabilize atmospheric greenhouse gas

 9   concentrations below 550 parts per million.  EPA estimates

10   that a cumulative 21,500 million metric tons of CO2

11   equivalent gases is needed from light-duty vehicles to

12   achieve this goal.  Greenhouse gas reductions from

13   California and the 177 states that have adopted our

14   standards achieves 3800 million metric tons, 18 percent of

15   the estimated reductions needed from light-duty vehicles.

16              It's clear that we have only begun to address

17   reducing greenhouse gas emissions from motor vehicles if we

18   are to avoid the consequences of global warming.

19             This slide shows why it is critical to achieve the

20   wedges from the previous slide as soon as possible and not

21   wait for a federal solution to reducing motor vehicle

22   greenhouse gases.  Heat-trapping emissions are cumulative

23   and have a very long lifetime in the atmosphere.  The

24   emissions already in the atmosphere mean that the world will

25   continue to see increased warming over the next century.  We

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 1   need to take strong and immediate action to prevent that

 2   warming from becoming catastrophic.  Delaying the decision

 3   to reduce emissions will only make the task of solving it

 4   that much more difficult.

 5             As the blue curve in this graph shows, if national

 6   emission reductions start soon we can stay on the

 7   stabilizing heat-trapping gases path at 450 parts per

 8   million with an annual emission reduction rate that

 9   gradually ramps to 3.2 percent per year.  But if we delay a

10   serious start and allow continued emissions growth at nearly

11   the business as usual rate, the annual mission reduction

12   rate required to stay on the path jumps to 8.2 percent per

13   year, as shown on the red curve.

14             Finally, we have heard arguments that the impacts

15   to California from global warming must be worse or unique in

16   order for California to address them.  This becomes relevant

17   only if EPA repudiates the principle it has followed for the

18   last 23 years that the pertinent question is California's

19   need for its own motor vehicle emissions program, not for

20   the specific standards under review.

21             But focusing on greenhouse gases alone, if

22   Congress in 1967 had known what we know now about the

23   potentially catastrophic impacts of global warming, would it

24   have said that the compelling and extraordinary threat to

25   California only justifies California standards if the threat

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 1   is more compelling and extraordinary in California than in

 2   any other state?  We think not.  At the existence of Clean

 3   Air Act Section 177, allowing other states to adopt

 4   California's standards as their own, shows that conditions

 5   in more than just our state may justify the California

 6   standards we adopt.

 7             Although our impacts may not be unique or more

 8   severe, impacts in California are arguably unique and more

 9   severe.  We are uniquely positioned to feel the brunt of

10   global warming's exacerbation of existing ozone problems.

11   We are uniquely positioned for wildfire impacts to make air

12   quality impacts even worse.  Our dependence on the Sierra

13   snowpack to provide year-round water in the nation's most

14   populous state, seasonal irrigation in the nation's number

15   one agricultural production area, and to mitigate the

16   dangers of flooding is unique.

17             Global warming could cause this snowpack to shrink

18   as much as 80 percent.  As Dr. Schneider put it, we are not

19   happy to be in this vulnerable position but the fact is that

20   we are.  Again, you will hear more about the severity of

21   these impacts vis-…-vis other states later today from

22   science panelists.

23             And now to briefly discuss the technological

24   feasibility of our regulations -- Excuse me, a little script

25   correction.

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 1             The third issue before EPA is the consistency of

 2   the standards with Clean Air Act Section 202(a).  Previous

 3   waiver decisions make it clear that this issue primarily

 4   relates to whether the standards are feasible in the lead

 5   time provided, giving appropriate consideration to the cost

 6   of compliance in that time period.  We have demonstrated the

 7   technologies that can be used to comply with our greenhouse

 8   gas standards, and most are commercially available right

 9   now.  For those that are not, ample lead time is provided.

10             In addition, the state and federal test procedures

11   need to be sufficiently consistent that one set of tests can

12   be used to determine compliance with both the state and

13   federal standards.  We don't expect this to be an issue

14   since there can be no conflict with non-existent EPA

15   greenhouse gas test procedures.

16             We made a comprehensive demonstration of the

17   technological feasibility of our standards at the May 22

18   hearing in Washington DC so I will only touch on a few

19   elements here.

20             This is a list of the technology packages ARB

21   selected to set the near-term greenhouse gas emission

22   standards, which requires an overall 22 percent reduction in

23   greenhouse gases by 2012.  All of the technologies listed

24   here have already been commercialized by one or more vehicle

25   manufacturers.  Note we did not consider diesels or hybrids

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 1   in setting the near-term greenhouse gas standards, even

 2   though these technologies will be sold in California during

 3   the near-term standard phase-in.

 4             It's important to note here that the greenhouse

 5   gas emissions standards are performance standards that do

 6   not require manufacturers to use these particular

 7   technologies or packages so long as they ultimately meet the

 8   requirements on a fleet-wide basis.  Clearly we were, as any

 9   agency would be, constrained in evaluating all possible

10   technology combinations available to the manufacturers.  The

11   manufacturers have demonstrated innovative approaches to

12   meeting the requirements of the LEV program.  We expect them

13   to do the same in meeting the greenhouse gas requirements.

14             The mid-term technology packages include three

15   emerging technologies.  The integrated starter/generator has

16   already been commercialized.  Homogenous charge compression

17   ignition, HCCI, is now close to commercialization, and

18   camless valve actuation, which one supplier has said will be

19   in vehicles by 2009 or, excuse me, 2010.

20             What you don't see in either the near-term and

21   mid-term packages are hybrid electric vehicles or HEVs.

22   There is a growing market for HEVs and manufacturers have

23   announced plans to introduce HEV technology across all

24   vehicle classes.  To the extent that manufacturers include

25   hybrids in their vehicle mix, then the burden of compliance

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 1   with the standards will be less.

 2             This slide presents our conclusions on

 3   technological feasibility.  The technologies we projected

 4   would be available to meet the near-term standards are being

 5   used by more manufacturers.  Other technologies, such as

 6   E85, are also being introduced in greater numbers.  Today

 7   the technology choices to reduce greenhouse gas emissions

 8   are greater than they were in 2004.

 9             The industry's criticism of our modeling is

10   rapidly becoming irrelevant as the technologies they raise

11   doubt about are used in cars being sold today.  Our cost

12   estimates remain sound.  Lead time is adequate and the

13   safety issues industry raises remain specious.

14             We conclude with great certainty that the

15   regulations remain feasible, cost-effective and are

16   necessary to address global warming.

17             Before I conclude I want to further address one of

18   the three supplemental questions raised in the Notice, the

19   question of whether the Energy Policy and Conservation Act,

20   or EPCA, fuel economy provisions are relevant to EPA's

21   consideration of this petition or to CARB's authority to

22   implement its vehicle greenhouse gas regulations.

23             Regarding whether the EPCA/CAFE provisions are

24   relevant to our authority, as we explained last week, those

25   provisions do not preempt our standards.  Emission controls

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 1   and fuel efficiency have always overlapped but emissions

 2   standards come first, as NHTSA decisions, EPCA itself, and

 3   now the Supreme Court have all determined.  EPCA/CAFE is no

 4   barrier to California exercising Clean Air Act authority.

 5             Is the potential effect of the EPCA/CAFE fuel

 6   economy provisions on California's authority at least

 7   relevant to EPA's consideration of the California waiver

 8   request?  The answer is clearly, no.  The effect of

 9   EPCA/CAFE on California's authority, like constitutional and

10   other statutory questions not identified in Section 209(b),

11   is not relevant to EPA's waiver decision.  The waiver

12   decision must be made solely on criteria in Section 209(b),

13   as reinforced by the Massachusetts decision.  The authority

14   issue is relevant to this proceeding only in the sense that

15   EPA asked the question and ARB has accordingly responded.

16             The EPCA/CAFE fuel economy provisions can,

17   however, be relevant to the question of technological

18   feasibility since it is one of the issues identified in

19   Section 209(b).  We believe that compliance with the

20   President's proposed annual four percent fuel economy

21   improvement would make compliance with California's

22   greenhouse gas emissions standards, which come first,

23   relatively simple.

24             In conclusion, AB 1493 vehicles will look, cost

25   and perform like today's vehicles.  California's request

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 1   meets the three permissible prongs of EPA's waiver analysis.

 2   Neither the Supplemental Issues EPA noticed nor

 3   Constitutional concerns change that analysis.  The

 4   Massachusetts v. EPA decision strengthens California's

 5   position and provides no excuse for EPA to delay acting on

 6   this request.  Waiver law and policy require more, not less,

 7   defence to California to regulate vehicle climate change

 8   emissions.  Therefore, US EPA must grant California's

 9   request, and must do so by October 25, 2007.

10             One final note.  In separate letters the Alliance

11   requested both a 30 day extension of the written comment

12   deadline and afterwards a second 45 day period to respond to

13   comments submitted.  ARB wrote opposing these extensions for

14   numerous reasons, most notably that the opponents, who have

15   the burden of proof in this proceeding, are not entitled to

16   hide the ball as they did in our 2004 rulemaking and await

17   others' comments.  The supporting materials ARB is relying

18   on in this proceeding are for the most part publicly

19   available, and like waiver opponents, ARB is not precluded

20   from entering new information into the docket by the June

21   20, excuse me, June 15 deadline.

22             We are happy to answer the panel's questions at

23   this time and at any time throughout the day, and we welcome

24   the opportunity later today to briefly address principal

25   opposition arguments you may hear.  Thank you.

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 1             PRESIDING OFFICER GRUNDLER:  Thank you,

 2   Ms. Witherspoon, and thank you for addressing some of the

 3   questions that came up at our first hearing.

 4             Any further questions from the panel?  Thank you

 5   again for your time.

 6             Our next panel is comprised of public officials

 7   from the state of California and the state of Utah.  Senator

 8   Christine Kehoe from California, Assembly Member Ira Ruskin

 9   from the state of California, Mayor Heather Fargo from

10   Sacramento and Mayor Rocky Anderson from Salt Lake City.  I

11   would also like to invite or ask if there are any other

12   public officials in the audience who would like to present

13   testimony at this time?  If so please join the panel.

14             Thank you very much.  Senator Kehoe, please

15   proceed.

16             SENATOR KEHOE:  Good morning.  Good morning.  Is

17   that better?  Thank you for the opportunity to testify

18   today.  I am Christine Kehoe.  I represent most of the city

19   of San Diego and I chair the Senate Energy Utilities and

20   Communication Committee.

21             And I'm here to express my strong support for

22   California's request for a waiver of the federal Clean Air

23   Act preemption provisions so that California can implement

24   and enforce its greenhouse gas tailpipe standards for new

25   cars and light duty trucks.

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 1             Even with the cleanest cars and the toughest clean

 2   air standards in the country, California still suffers from

 3   some of the worst air pollution and largest greenhouse gas

 4   emissions of any state.

 5             Over 41 percent of the climate emissions produced

 6   in the state come from transportation sources such as cars

 7   and trucks.  California wants to exercise its option under

 8   the Clean Air Act to adopt its own motor vehicle greenhouse

 9   gas emission standards.  As the largest state in the country

10   by population and vehicle fleet, California has a vital

11   interest in reducing global warming emissions from vehicles

12   and other sources.

13             To put the extent of the emissions problem in

14   perspective, there are over 36 million people living in

15   California.  Los Angeles County, with some of the worst air

16   quality in the nation, has a population of at least 10

17   million people.  Compared to the rest of the nation, there

18   are about 40 other states with less population than one

19   county here in California, that is Los Angeles.

20             Our Governor, the State Legislature and the

21   citizens stand united in their commitment to reduce

22   greenhouse gas emissions from the largest single source of

23   those emissions, automobiles.

24             The need for action is no longer in dispute.  Both

25   the world's scientific community, and now the US Supreme

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 1   Court, have confirmed the perils caused by global warming

 2   and the legal authority of the US EPA to act to reduce

 3   greenhouse gases.

 4             The request has been pending for over 17 months.

 5   It was originally filed on December 21, 2005 along with a

 6   solid demonstration that the state's greenhouse gas emission

 7   standards meet relevant criteria, waiver criteria.

 8             Therefore, in addition to supporting California's

 9   waiver request I strongly support the Air Resources Board's

10   recent letter notifying the US EPA of its intent to file an

11   unreasonable delay lawsuit if US EPA fails to take final

12   agency action during that time period.

13             I hope that the agency will see that the law,

14   science and sound environmental policy all argue strongly

15   for the immediate adoption of this waiver, and urge your

16   agency to do so as soon as possible.

17             Thank you very much for the opportunity to testify

18   this morning.

19             PRESIDING OFFICER GRUNDLER:  Thank you, Senator.

20             Assembly Member Ruskin, please.

21             ASSEMBLY MEMBER RUSKIN:  Thank you.  Thank you to

22   all for being here and the opportunity to testify on this

23   critical issue.  I represent in the California State

24   Assembly a portion of Silicon Valley and I am Chair of the

25   Budget Subcommittee on Natural Resources.

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 1             AB 1493 is landmark legislation and has been held

 2   up for much too long.

 3             Today you will hear from some people that these

 4   regulations, for example, are too expensive.  The auto

 5   industry says they can't meet these standards because they

 6   don't have the technology or because the technology is cost

 7   prohibitive.  They do have the technology.  And existing

 8   research clearly indicates that technology which can reduce

 9   vehicular emissions is available and is cost-effective.

10             Opponents say these regulations shouldn't be

11   implemented because they are federally preempted by CAFE

12   standards under the Energy Policy and Conservation Act.  But

13   AB 1493 states clearly that fuel standards are not an option

14   available to the California Air Resources Board in order to

15   meet the requirements of the bill.  These regulations and

16   the spirit of the law are not in conflict with the concept

17   of CAFE.

18             Some may say it is unwise to have a California-

19   only standard.  But in fact 12 other states are waiting to

20   adopt these standards.  We are at a critical juncture, as I

21   think you will be able to sense from all of the testimony

22   requesting the waiver today.  And every year implementation

23   is delayed is a year that we lose the chance to reduce

24   emissions.  The regulations are supported by research that

25   is feasible to implement.

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 1             Much is in your hands.  Your decision is quite

 2   vital to us and to the nation and I urge the EPA to give us

 3   this opportunity.  I believe that it is fair and within the

 4   law and a vital necessity to our constituents.  Thank you

 5   for the opportunity to meet with you today.

 6             PRESIDING OFFICER GRUNDLER:  Thank you,

 7   Mr. Ruskin.

 8             Mayor Fargo.  Your Honor, welcome.

 9             MAYOR FARGO:  Thank you and good morning and

10   welcome to you.  Welcome to Sacramento as well as to

11   California.

12             We have a very simple request for you today and

13   that is that we are asking for a waiver and you are the

14   people who can grant it.  We are asking for the waiver

15   because we in California would like to do more.  We are

16   willing to pay for it, we are willing to do it, we are

17   willing to make it happen.

18             There is no disagreement in this state about

19   global warming and about our need to step up and deal with

20   the emissions from vehicles.  It is very clear in our state

21   that that is one of the major causes not only of greenhouse

22   gas emissions but of air quality.  In Sacramento we are in

23   the top ten in the nation for bad air quality.  It is not

24   the kind of list we want to be on and it is not the kind of

25   list we want to stay on.

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 1             People in my city take this very seriously.  They

 2   would like the state to do more and they would like the

 3   federal government to do more.  We as a city are joined by

 4   many other cities around California and around the nation in

 5   taking global warming seriously, in developing our

 6   sustainability plans, in changing our fleets and doing

 7   anything that we can do to be better environmental stewards.

 8             But dealing with the emissions from vehicles is

 9   not something that cities can do.  We might be doing it if

10   we could.  But we are -- That is not one of our jobs, it's

11   one of your jobs.  And we in California have a long history

12   of asking and receiving waivers such as this so that we can

13   step up and do more, not only for ourselves but for the rest

14   of the nation.  After all our air flows across the rest of

15   the nation after we're done with it.  So we think there is a

16   compelling reason for the waiver to be granted.

17             We are joined by many other cities, as I say,

18   throughout California and throughout the nation.  Last year

19   for the first time ever we had to open up warming centers

20   during our winter because we had such a long stretch of

21   below-freezing weather here in Sacramento.  And last summer

22   we had to open up cooling centers because we had over a two

23   week stretch of temperatures that didn't drop below 85

24   degrees at night.  So it is very real to us and it is very

25   compelling to us and it is very urgent to us.

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 1             So what we are asking you to do is to allow us to

 2   help ourselves to do more, to clean up our air, to reduce

 3   our flood risks, to improve the health of our communities.

 4   We have an inordinate number of asthma cases and people who

 5   are dealing with respiratory problems, not only in

 6   Sacramento and the rest of the Valley but throughout

 7   California.

 8             So I am joined by the US Conference of Mayors,

 9   which is very involved in climate change and in a number of

10   efforts to try to reduce greenhouse gas emissions and slow

11   global warming and by the California League of Cities as

12   well as the National League of Cities as we try to step

13   forward and do what we can do as mayors and as cities.  And

14   people are willing to do that.  And you will hear from Rocky

15   Anderson next about all that they are doing.

16             But we need the federal government to give us this

17   waiver.  And that is what the request is really all about

18   today, it's really very simple.  And if you could agree

19   sooner in the day than later we could probably all stop

20   talking at you.  But we really urge you to take this request

21   seriously.

22             And I hope that you get a break at some point

23   during the day.  Kitty-corner across the street is Cesar

24   Chavez Plaza.  Every Wednesday we have Farmers Market in the

25   Plaza and today is Wednesday and you're welcome to join us

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 1   there.  I hope you go and look at the fresh fruits and

 2   vegetables that are grown in this region that are at risk

 3   because of global warming.

 4             But thank you for coming to Sacramento and for

 5   taking this issue seriously and I urge you to grant the

 6   waiver that the Air Resources Board has requested.  Thank

 7   you.

 8             PRESIDING OFFICER GRUNDLER:  Thank you, Mayor.

 9             Mayor Anderson, proceed.

10             MAYOR ANDERSON:  Thank you.  It's a pleasure to be

11   with you today.

12             As a nation we face serious challenges from the

13   alarming warming of our planet, due in large part to the

14   burning of fossil fuels.  Droughts, heat waves, hurricanes,

15   floods and other extreme weather events are projected, in

16   fact virtually certain, to become more frequent and severe

17   due to global warming.  Rising sea levels will threaten

18   major coastal populations around the world, creating

19   millions of environmental refugees.

20             Sir Nicholas Stern, the former chief economist at

21   the World Bank, concluded in a 2006 report that inaction on

22   climate change would lead to a 20 percent reduction in

23   global gross domestic product.  According to a 2004 Pentagon

24   report, abrupt climate change will exacerbate tensions

25   between nations as supplies of food and water dwindle.  And

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 1   refusing to enhance fuel-efficiency standards will deepen

 2   our nation's abject reliance on dangerous, authoritarian

 3   petro-states and subject our economy to continued de-

 4   stabilizing fuel price fluctuations.

 5             Continuing our present level of fossil fuel

 6   dependence and failing to combat the effects of global

 7   warming will engender economic and social de-stabilization

 8   on a colossal scale, in the United Stats and especially in

 9   many poorer countries throughout the world that are far less

10   able to adapt to changing climate patterns.  The challenges

11   we face compel us to take rapid, decisive action, at all

12   levels of government, in the private sector and in our

13   individual lives to enhance efficiencies and curb global

14   warming pollution.  Efforts to reduce global warming

15   pollution are particularly compelled in the US

16   transportation sector, which by itself is responsible for

17   more greenhouse gas emissions than the entire economies of

18   all other nations except China.

19             Unfortunately, Americans have learned that we

20   cannot fully depend on federal regulation to meet our

21   pressing energy and sustainability needs.  Fuel economy

22   standards for cars have not risen since 1990, and the

23   average fuel economy for new passenger vehicles is lower

24   today than it was in 1987, 20 years ago.

25             Although we know that many on the EPA staff,

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 1   especially long-time staff members, recognize how vital it

 2   is that we act urgently and effectively to combat global

 3   warming, as evidenced by the fact that I was honored a few

 4   years ago to receive the EPA climate protection award, to

 5   even have the EPA consider regulation of global warming

 6   pollution now required a lengthy legal battle and a ruling

 7   by the United States Supreme Court.

 8             Efforts by California and 11 other states, and I

 9   suspect there would be more on board if the EPA took the

10   correct action that's requested today, these efforts by

11   these states to regulate global warming pollution to a

12   stricter standard than those required now by the federal

13   government deserve praise and celebration.  Not, as has been

14   the case, obstruction, condemnation, and more legal action.

15             The 12 states attempting to implement the standard

16   under the Clean Cars Program collectively represent 40

17   percent of the United States automobile market.  The EPA

18   should allow these states to improve sustainability, air

19   quality and reduce global warming pollution within their

20   borders, which will have a salutary effect on fuel

21   efficiency standards nationwide and help our nation meet the

22   tremendous challenges posed by global warming.

23             We have heard before about supposed deleterious

24   effects projected to occur in implementing stricter

25   regulations on auto emissions.  History has judged these

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 1   claims as unfounded.  When the catalytic converter was

 2   introduced in the late 1970s, many in the auto industry

 3   predicted that mandating the inclusion of a catalytic

 4   converter would significantly reduce the performance and

 5   increase the price of automobiles.  Today, every car sold in

 6   the United States has a catalytic converter, reducing

 7   nitrogen dioxide and carbon monoxide emissions by more than

 8   half per vehicle mile traveled.  Meanwhile, vehicle

 9   performance has increased.

10             States and cities serve as important laboratories

11   for innovation.  In Salt Lake City we have turned the

12   challenges of global warming and sustainability into

13   enormous opportunities.  In 2002 I committed Salt Lake City,

14   in its municipal operations, to abide by at least the Kyoto

15   goals in reducing carbon dioxide emissions by at least 21

16   percent below our 2001 baseline by 2012.  By 2005, three

17   years later, we had far surpassed that goal, reducing global

18   warming pollution by 31 percent several years before the

19   2012 target date, with significant cost savings to

20   taxpayers.

21             There are hundreds of mayors across this country

22   in large cities and small alike, tremendous geographic

23   diversity, that have joined together in working with

24   organizations like ICLEI, the International Council for

25   Local Environmental Initiatives, the US Conference of

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 1   Mayors.  Mayor Fargo came and joined us.  In two years we

 2   have had about 70 mayors from around the country join us at

 3   Sundance Summit to learn the science, learn best practices,

 4   take the kind of measures we can at a local level.  We know

 5   what an enormous difference can be made if local and state

 6   officials are given the freedom to enact these effective

 7   measures.

 8             Utah Governor Jon Huntsman, Jr., has also

 9   recognized the importance of and opportunities attendant

10   upon combatting global warming.  The State of Utah recently

11   became a charter member of the Climate Registry, a multi-

12   state and tribe collaboration designed to establish a common

13   greenhouse gas emissions reporting system.

14             Utah also just over a week ago signed on with the

15   Western Regional Climate Action Initiative with six other

16   states including California, and much of this is due

17   certainly to Governor Schwarzenegger's leadership and

18   leadership of the Legislature here in California, to develop

19   a regional market-based program to achieve significant

20   reductions in global warming pollution.  But to meet these

21   goals we need to be able to implement these standards that

22   are being sought today.

23             Salt Lake City and the State of Utah recognize the

24   need for proactive efforts to achieve significant reductions

25   in global warming pollution, including the regulation of

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 1   emissions from automobiles, which are responsible for 50

 2   percent of our local air pollution.

 3             In the next 100 years, average temperatures in

 4   Utah could increase by three to four degrees Fahrenheit in

 5   summer and five to six degrees Fahrenheit in winter.

 6   Precipitation in summer is projected to decrease by ten

 7   percent.  Since 90 percent of water use in our region comes

 8   from surface water, 75 percent of which is produced by

 9   melting snow, reduced snow pack resulting from higher

10   temperatures will lower stream flows and lake levels,

11   effects we are already beginning to observe.  The ski

12   industry, which contributes enormously to the economy of our

13   state, would also be dramatically impacted as ski seasons

14   are shortened and base villages are cut off from ski runs.

15             To avoid the disastrous consequences projected to

16   occur from global warming, and to protect the health and

17   welfare of their citizens, Utah, California and other states

18   must be allowed to pursue the effective standards on

19   greenhouse gas emissions laid out in the Clean Car Program.

20   Fostering local and state efforts to meet our sustainability

21   and energy challenges will improve quality of life, have

22   tremendous economic benefits, and pave the way to a much

23   brighter energy future.  Thank you.

24             PRESIDING OFFICER GRUNDLER:  Thank you, Mayor.

25   And thank you for traveling all the way here to present your

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 1   views.

 2             MAYOR ANDERSON:  My pleasure, thank you.

 3             PRESIDING OFFICER GRUNDLER:  Sir, could you

 4   present your name and your constituency.

 5             MAYOR CABALDON:  I'm Christopher Cabaldon, I am

 6   the Mayor of the City of West Sacramento.  I wanted to join

 7   my big city colleagues.  We have been much in the news

 8   because we were just visited by two humpback whales who were

 9   scouting future territory in the Central Valley in areas

10   where they know, with sea level rise, there will be

11   additional habitat opening up which today is occupied by

12   people and infrastructure in California's great valley.

13             You know, I am from a small town, not a big city,

14   but I do know that the impacts are going to be extraordinary

15   on our little town.  Whether it's more severe and

16   extraordinary than it will be in Boise, I don't know.  I do

17   know that our levees are not designed to withstand the

18   changes in the variability of the snowpack and that we would

19   be under 20 feet of water if those levees were to fail.

20             We are, along with Sacramento, the most endangered

21   region in the country in our levee system.  And all of the

22   effects, the combined effects of sea level rise and the

23   snowpack change, make that an impossible situation for us to

24   manage.  No amount of levee investment can protect us from

25   the combined effects of sea level rise and snowpack

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 1   variation.  So the effects here are going to be severe and

 2   extraordinary and we will feel them directly.

 3             And I can tell my constituents that we can

 4   regulate leaf blowers for PM10 and for PM2.5 but we cannot

 5   protect them against the greatest potential catastrophe that

 6   could wipe out our entire community.

 7             I'm from an ag county, not from the big coastal

 8   regions or from the giant metropolis here across the river.

 9   But all we're asking is if you can't help get the heck out

10   of the way and let us do our part, do what we can to protect

11   the lives and livelihood of the people of our communities

12   and this state.  Thank you.

13             PRESIDING OFFICER GRUNDLER:  Thank you.  I'm glad

14   to see your visitors have found their way back to the bay at

15   least.  Thank you, ladies and gentlemen for your testimony

16   and your time today.

17             I would like to invite Panel number 3 up,

18   representatives from the Alliance of Automobile

19   Manufacturers, Sempra Energy, Pacific Gas and Electric and

20   Energy and Transportation Technologies.

21             Also Mr. Bob Epstein from Environmental Enterprise

22   from Panel 10 can join this panel so you can catch your

23   flight.  Environmental Entrepreneurs.

24             Mr. Douglas, when you're ready.

25             MR. DOUGLAS:  Okay, thank you.  I'm Steven

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 1   Douglas, I am with the Alliance of Automobile Manufacturers.

 2   And we had a PowerPoint presentation, I think they are

 3   trying to put that up now.  But let me get started just with

 4   a brief introduction.  There it is.

 5             Again, I am Steven Douglas, I am the Director of

 6   Environmental Affairs for the Alliance of Automobile

 7   Manufacturers.  The Alliance is a trade association

 8   representing BMW, DaimlerChrysler, Ford, General Motors,

 9   Mazda, Mitsubishi, Porsche, Toyota and Volkswagen.

10             And I'd like to thank you for the opportunity to

11   testify again today.  Last week I talked about the advances

12   that manufacturers have made both in emissions and in fuel

13   efficiency and we stated our support for improving fuel

14   efficiency to the maximum feasible level.

15             Today I'd like to just take a couple of minutes to

16   point out some of the technologies that manufacturers are

17   developing and investigating.  These are more than just

18   concepts too.  These technologies are in the dealerships and

19   they're on the roads.  In, in fact, 10.5 million of these

20   vehicles to be exact.

21             Turning now -- Just to be clear, there is really

22   no organization on the planet, not the state of California,

23   not even the federal government, who is pursuing

24   alternatives to the gasoline internal combustion engine with

25   more zeal, more enthusiasm or more resources than the

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 1   automobile manufacturers.

 2             Just looking at the technologies briefly.

 3   Hydrogen.  Manufacturers see great promise in a hydrogen

 4   future.  Some manufacturers are working on hydrogen fuel

 5   cell vehicles, others are working on the hydrogen internal

 6   combustion engines that are virtually zero emitting.  And

 7   still others are working on both.

 8             Biofuels.  Again, most manufacturers are pursuing

 9   some form of renewable biofuel and they see a lot of promise

10   in that.  All vehicles today operate on E10 and many models

11   are available that operate on both E85 and gasoline or on

12   biodiesel.

13             Turning to hybrids.  Many large manufacturers, in

14   fact most of them, have introduced hybrid technology and

15   some are developing plug-in hybrid vehicles and electric

16   vehicles that pull energy from the electric grid.

17             And finally manufacturers will introduce a number

18   of light duty, highly efficient clean diesel vehicles this

19   coming year or this year.

20             In every single case manufacturers, and each

21   manufacturer, is working on a diverse array of technologies.

22   They're working on more than just one of these.  However,

23   the fundamental change to personal transportation is going

24   to require more than just auto makers, it requires a

25   partnership.  A partnership between auto makers, government,

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 1   energy suppliers, and most importantly, consumers.

 2             As I said last week, a patchwork quilt of state

 3   regulations, as California is now proposing, is entirely

 4   inappropriate and it is patently counterproductive.

 5             With that I would like to turn now to California's

 6   waiver request.  Our position last week and our position

 7   today is that EPA should deny the waiver.  In at least two

 8   critical areas California has failed to meet its obligations

 9   under the Clean Air Act.  And specifically California has

10   failed to demonstrate that one, its standards in the

11   aggregate are as protective of human health as the federal

12   standard.  In fact, California hasn't even submitted or

13   analyzed, to my knowledge, let alone demonstrated whether

14   their standards in the aggregate are as protective of human

15   health as the federal standards.

16             Two, they have failed to demonstrate that it needs

17   these standards to meet compelling and extraordinary

18   conditions.  In fact, these regulations have no impact on

19   any of the conditions that have been identified by the Air

20   Resources Board or that have been identified today.

21             So I'll talk briefly about the protectiveness

22   claim and I'll ask my colleague, Andrew Clubok, to address

23   the extraordinary and compelling issue.

24             California's program, its vehicle emission program

25   can be divided into three categories.  Those being the

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 1   emissions, these are the LEV II standards, the ZEV mandate.

 2   These two combine to effect smog or ozone.  And then the

 3   last one is the CO2 or the fuel economy standards.  And I'll

 4   just quickly look at each one of these in turn.

 5             Looking first at the emission standard and

 6   comparing federal with California.  The federal program was

 7   adopted in 2000, it's the Tier 2 program, and the California

 8   program was adopted in 1998, the LEV II program.  They both

 9   apply the same standards to cars and to trucks, they began

10   in 2004, they're both fully implemented at around 2007.

11   They both rely on a fleet average to reduce overall

12   emissions.  Where the federal uses a NOx the California

13   standard uses a hydrocarbon average.

14             And finally the federal program and the California

15   program have different emission certification categories.

16   The federal has nine and the California has four.  The

17   actual standards and the emission reductions associated with

18   each are about the same.  And I'll show you -- this next

19   slide shows the emission reductions associated with the

20   federal program and the California program.  And as you can

21   see there is very little difference between the two

22   programs.  And this is if California implemented the federal

23   program beginning in 2009.

24             Turning now to the ZEV mandate.  The ZEV mandate

25   provides minimal air quality benefit.  It does so at an

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 1   extraordinary cost.  The values you see show a range of

 2   costs associated with each one of the ZEV mandate

 3   technologies, PZEVs, which are partial zero emission

 4   vehicles, advanced technology PZEVs, and then finally LEV.

 5   I've used the latest information from the ARB's expert panel

 6   report on that and this is generally with high volume

 7   production.

 8             Finally there is the CO2 element.  The CO2

 9   requirements, they don't even have a theoretical health-

10   based benefit.  And to be fair, they are not intended to

11   have any smog/ozone health-based benefit.  However, again

12   this regulation comes at a great cost.

13             So just to summarize each of the programs in

14   California.  You have the emissions, similar benefit,

15   similar cost to the federal and California.  The ZEV

16   mandate, it has very high cost and small and negligible

17   benefits.  And then the CO2 mandate, which has extraordinary

18   costs and no benefits.

19             So what does all this mean?  There are really two

20   problems with California's program.  The first is what we

21   termed the jalopy effect and that's that as you increase the

22   cost, as you continue to pile costly regulation on top of

23   costly regulation you increase the cost of vehicles and it

24   causes people to keep their vehicles longer.  And these are

25   older, higher emitting vehicles.

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 1             Second, the CO2 mandate aims to, in part at least,

 2   to reduce the cost of driving.  And that will result in

 3   consumers driving more and this is something that the Air

 4   Resources Board has acknowledged as well.  But since the

 5   emissions are on a per mile basis more driving means more

 6   pollution.  The result, the combination of these is that the

 7   California program results in higher, not lower, emissions.

 8             Just to conclude, we do not believe that

 9   California has even analyzed, let alone demonstrated that

10   their program in the aggregate is more protective of human

11   health.  And on that basis EPA should deny the waiver.

12             With that I would like to turn it over to my

13   colleague, Andrew Clubok.  Thank you.

14             MR. CLUBOK:  Thank you.  My name is Andrew Clubok

15   and I am also here on behalf of the Alliance of Automobile

16   Manufacturers.  And we do appreciate the opportunity to

17   present evidence in this proceeding.

18             Now some of the participants in these hearings,

19   both here in Sacramento and in Washington, including the

20   representatives of the State of California, have claimed

21   that the EPA should simply approve this waiver request

22   without allowing enough time for public comment.  They have

23   also claimed that the scope of the EPA's waiver -- I'm

24   sorry, the scope of the EPA's review of the waiver request

25   should be extremely narrow.

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 1             Because time is limited here today I am going to

 2   focus our presentation on evidence we have gathered that

 3   goes right to the heart of what even the Air Resources Board

 4   acknowledges must be considered under Section 209(b) and

 5   therefore is indisputably at issue here and that is whether

 6   or not the proposed regulation is needed to meet compelling

 7   and extraordinary conditions of this state.

 8             If we focus on that question, and even if we

 9   consider the potential impact of this regulation if adopted

10   nationwide or worldwide, what we quickly find is that this

11   regulation will never have any measurable impact whatsoever

12   on global climate change.  Let me repeat that so I am clear.

13   This regulation will never have any measurable impact

14   whatsoever on global climate change, even if adopted

15   nationwide or worldwide, thus it cannot possibly be

16   necessary to meet compelling and extraordinary conditions of

17   the state.

18             Now what is very important about what I just said

19   is that the basis for that factual statement does not come

20   from the automobile industry but rather it comes from the

21   sworn testimony of the regulators themselves who devised

22   this regulation and the experts they hired or retained.

23             When the regulators and their experts testified

24   under oath in the ongoing federal court proceedings they

25   admitted that they do not predict the regulation will have

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 1   any measurable impact whatsoever on global warming or on any

 2   consequence of global warming such as increased sea level,

 3   reduced snowpack, delayed spring blooms, et cetera.

 4             They admitted that they have not identified any

 5   such effect even if this regulation were adopted nationwide

 6   or worldwide, even if it were adopted tomorrow, and even if

 7   the effects were measured through the year 2100.  I daresay

 8   this is different from any other regulation that has

 9   probably ever been presented to the EPA.  That even if

10   adopted nationwide and ultimately worldwide, projecting 100

11   years into the future it will never have a measurable

12   impact.

13             Now contrary to those facts one of California's

14   representatives at last week's hearing before the EPA in

15   Arlington, Virginia stated as follows, quote:

16                  "Although opponents may argue that

17             California cannot show a temperature

18             decrease in California due to these

19             regulations, waiver opponents are unable

20             to produce any evidence that these

21             regulations are not one of the many

22             measures nationwide and worldwide that

23             are needed to meet extraordinary and

24             compelling conditions global warming

25             poses for California."

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 1   That was the EPA transcript at page 70, lines 10 through 16.

 2             Now first of all it's important to note that this

 3   statement effectively concedes that California cannot show

 4   that its regulations will cause any temperature decrease

 5   within its own state. But more importantly what it shows is

 6   that, and what we will show today, is that California

 7   regulators and their experts themselves have conceded

 8   elsewhere that the regulations will never have any

 9   measurable impact even if adopted nationwide or worldwide.

10             As you listen to the regulators' own words on the

11   subject, and I'm hopeful that the technology we have here

12   will allow that, we have video clips from the sworn

13   testimony of the regulators who testified under oath.  When

14   you listen to their own words on the subject it is important

15   to listen not only to he explanation of what they did but

16   perhaps more importantly what they did not do in connection

17   with this regulation.  That is, they did not even try to

18   identify any positive environmental benefit that flows from

19   this regulation, again, even if adopted nationwide or

20   worldwide.

21             Their top experts, they did bring in top experts

22   and they do have top experts who talk about negative

23   consequences from global warming, things you've heard about

24   like the snowpack and sea level et cetera.

25             And one of those experts I believe referred to

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 1   earlier today, Dr. James Hansen, he said that it would be

 2   relatively easy to calculate the impact of this particular

 3   regulation, even if adopted nationwide or worldwide.  And

 4   when he was required to do so during his deposition he was

 5   able to do it in about ten minutes, sort of a back of the

 6   envelope calculation, that confirmed the regulation will

 7   never have any meaningful impact.  Basically in his words,

 8   it was so low that it could never be measured without use of

 9   a microscope.

10             But he said that he has never performed the formal

11   analysis that would confirm this result, even though he says

12   he has one of the best computer models in the world and he

13   could do so fairly easily.  What he says, and you'll see his

14   words in a moment, is that it wasn't worth his computer time

15   to even bother to model the impact of this regulation even

16   if adopted on a nationwide or worldwide scale.  Now think

17   about that and put that into context.  The regulation is not

18   worth a couple hours of his computer time because the

19   impacts are so, predicted to be so low.

20             Now this answer that is readily apparent to anyone

21   who considers the regulation with the models available for a

22   short period of time, that probably explains why the state

23   regulators here have not engaged in this exercise either.

24   Because to do so, to actually calculate the projected impact

25   of this regulation, would prove what, if we're honest,

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 1   everyone already knows.

 2             And that is that this regulation, unfortunately,

 3   will never have any beneficial impact on any living organism

 4   on this planet, whether human, plant or animal, even if

 5   adopted nationwide or worldwide.  Again, those are not my

 6   words.  You will hear those are the words of the staff of

 7   the Air Resources Board who were asked to testify about it

 8   under oath.

 9             What is perhaps even more important, however, is

10   not just that this regulation will have no beneficial impact

11   on global warming.  But in fact it will certainly have a

12   negative impact on health-based pollution.  That is, smog-

13   forming pollution will increase as a direct result of this

14   regulation due to the predicted increase in vehicle miles

15   traveled and the slower rate of fleet turnover.

16             Now ironically the regulators have dismissed those

17   health-based pollution increases as being relatively small.

18   A few percentage points they say.  But regardless of how

19   small those health-based pollution increases may be, that

20   predicted increase in smog-forming pollution will dwarf the

21   immeasurably microscopic predicted of this regulation on

22   global warming.

23             As a result California is turning on its head its

24   appropriate and traditional mission under the Clean Air Act,

25   which is to regulate motor vehicle emissions as needed to

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 1   address compelling and extraordinary conditions of this

 2   state.  To fulfill that mission California has been

 3   entrusted with a special role in regulating air quality.

 4   And as you will see from the testimony, they have now

 5   sacrificed that mission and that trust in favor of a purely

 6   symbolic gesture, unfortunately with no regard for the

 7   harmful consequences.

 8             Now I'd like to just turn to, as I said, and

 9   hopefully we'll see if this technology works, the words of

10   the regulators that we asked under oath whether or not there

11   would be any impact of this regulation, even if adopted

12   worldwide.

13             (A video clip of Thomas Cackette was

14             played.)

15             MR. CLUBOK:  We have the text of Mr. Cackette's

16   comments also here, they just repeat what he just said.

17             We asked other regulators from other states who

18   have adopted the regulation, for example the chief regulator

19   responsible for Vermont's adoption of the AB 1493 regulation

20   if he had any different information.  This is what he said:

21             (A video clip of Thomas Moye was

22             played.)

23             MR. CLUBOK:  That was Thomas Moye from the Vermont

24   ANR.

25             We asked the same question to the regulator from

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 1   New York.  Let's see.  Well, we'll get a few technical

 2   glitches here.  Mr. Flint from New York said essentially the

 3   same thing, no estimate of any measurable impact on the

 4   temperature even if adopted, even if all the states that

 5   adopted it were measured.

 6             By the way, we also asked the NRDC, the Sierra

 7   Club and the Environmental Defense, all who have intervened

 8   into the litigation that's pending.  We asked them under a

 9   process called Request for Admission, in which you are

10   obligated to respond truthfully if possible.  In response to

11   one of the requests the environmental organizations said, or

12   admitted that, quote:

13                  "Defendants are not aware of any

14             credible scientific evidence to support

15             the theory that CO2 emissions reductions

16             resulting from the adoption of the

17             Regulation in all 50 states in the

18             United States would change average

19             ambient temperatures in any place by a

20             measurable amount."

21   That was in response to RFA 111 in the pending matter in

22   federal court in Vermont.

23             One thing you could say is, well gee, they just

24   haven't done the work yet, they haven't done the studies.

25   Maybe if they did the work the studies would show something

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 1   different.  So again we turned to Dr. Hansen who testified

 2   that he had one of the best computer models in the world

 3   that could do this analysis.  So we asked him:

 4             "Q   Have you modeled the CO2 emission

 5             savings that would result if Vermont and

 6             New York --"

 7   They were the two defendants in that particular matter.

 8                  "-- were to implement the AB 1493

 9             regulation?"

10             "A   I haven't modeled that.  It would

11             not be difficult to do it."

12   So we said, well why didn't you do it then?  And he said:

13                  "Well, I wouldn't run a model with

14             such a very small change, because then

15             you're wasting computer time, because

16             you do have the problem of finding a

17             signal when compared to the natural

18             variability of the climate."

19   In other words, the effect is so small it can't even be

20   detected from the normal fluctuations day to day of the

21   temperature.

22             We said to Dr. Hansen, well okay.

23                  "Let's move past Vermont and New

24             York.  Let's say that it's all 11

25             states.  Have you modeled that?  Have

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 1             you found the computer time or the time

 2             to model the total CO2 emission savings

 3             in all the states that adopted the

 4             regulation --"

 5   This was actually trial testimony.  That's why we don't have

 6   a video, because this is Dr. Hansen's testimony in federal

 7   court.  He said:

 8                  "No.  Because we try to do useful

 9             things."

10             We talked a little bit further and he explained,

11   well, the difference in temperature between 2.8 degrees,

12   which is the current prediction of the United Nations, the

13   IPCC, the best estimate of the temperature increase by the

14   year 2100, as contrasted with their previous estimate of 3

15   degrees.  He said, well that difference is insignificant.

16   In other words, two-tenths of a degree change is

17   insignificant.

18             He said: "The uncertainties are larger than .2."

19   In other words, on a day to day basis fluctuations of two-

20   or three- or four-tenths of degree make trying to measure

21   even two-tenths of a degree over 100 years really fruitless

22   because the uncertainties are larger.  Now keep in mind

23   that's two-tenths of a degree that Dr. Hansen said would be

24   insignificant and not worth even measuring.

25             This is the predicted impact of the regulation

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 1   when you actually run the computer model.  It only took a

 2   couple of hours I think of computer time to do it.  Our

 3   expert did it instead of theirs but everyone agreed.  He

 4   used the Wigley equation, the common tool that's used by the

 5   United Nations, the IPCC.  And using the commonly accepted

 6   method he concluded, or it was concluded, that the effect of

 7   the temperature --

 8             If you assume that motor vehicles continue to

 9   operate for 100 years and you assume this regulation were

10   adopted in the entire country tomorrow, and you assumed that

11   all of the effects possible of potential benefits from this

12   regulation, which of course assumes we keep driving the

13   kinds of vehicles we drive today with just better fuel

14   economy, the predicted impact of the regulation by the year

15   2100 would be about one-hundredth of a degree.  This was

16   about the same amount that Dr. Hansen got with his back of

17   the envelope calculation that he performed in deposition.

18             Now to put that in context, this chart here shows

19   the current, quote, best estimate of the predicted increase

20   in temperature due to global warming as set forth by the

21   IPCC in their 2007 recent publication.  This is the so-

22   called A1B scenario, one of the business-as-usual scenarios.

23   And the best estimate is that the temperature is going to

24   increase by 2.8 degrees absent some very drastic change.  So

25   the question is, what should the change be?

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 1             And the issue is, well, this particular

 2   regulation, if this were to go into effect and it were just

 3   to be, if we were focusing just on California, this is the

 4   difference.  This is what the world looks like with the

 5   California regulation as compared with what the United

 6   Nations says is their best estimate in the absence of the

 7   regulation.  Now both of those lines are on the screen at

 8   the same time.  You can't see the difference because it is

 9   too small to measure.  This is what Dr. Hansen said would be

10   microscopic.  The red line that you can no longer see is the

11   world without the regulation, the orange line is the world

12   with California's regulation.

13             Well what if we add the Northeast?  We still there

14   is still no measurable change.  What if we add the whole

15   country?  Again no measurable change.  The lines all

16   basically look alike.  And again, if you assume the world

17   looks as it does today 100 years from now, which of course

18   doesn't make much sense, there's got to be a different,

19   better path to get onto to address global warming.  It's

20   clearly not this regulation according to their experts.

21             So we asked Dr. Hansen if he accepted these

22   numbers and agreed.  And we said well gee, if these are

23   accurate then what does that mean about the impact of the

24   regulation.  And he said:

25                  "[The impact] would be smaller than

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 1             the -- than the unforced variability of

 2             the system."

 3             "Q   You would need a microscope to see

 4             the impact put into that context; isn't

 5             that true, sir?

 6             "A   Yes.  Put into that context, yes."

 7   That's what we have to take into account when considering

 8   this regulation.  Now that's the impact on temperature.

 9             You've heard both in Arlington, Virginia and a

10   little bit today and I'm sure more today about things like

11   -- that everyone cares about.  Everyone cares about the sea

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

23   example in a recent analysis we actually used models of fire

24   spread and fire suppression to look at predicted changes in

25   climate in different regions of California.  And what we see

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 1   is that because fires are predicted to burn hotter and

 2   spread faster they are much harder to suppress.  They escape

 3   initial attack suppression.  And fires that escape are the

 4   fires that can go on to become catastrophic fires.  Those

 5   are the large fires that do all the damage.

 6             What we found was that with continued high

 7   emissions the number of potentially catastrophic fires in

 8   California, and this was for Northern California, will

 9   double.  We've redone the exercise also for Southern

10   California and again see very high rates of increase in

11   what's predicted to occur for escape.  So those are the

12   number of fires that could become large fires.  And I will

13   say that that increase occurs even though we let fire

14   suppression be ramped up in those scenarios.

15             So how bad will it be?  It certainly depends on

16   how much climate changes and how fast.  So as you can see

17   from this graph, what you also saw earlier in the morning,

18   the increase in the number of large fires depends on the

19   emission scenarios.  That yellow bar is lower warming range,

20   the blue bar is medium warming range.  And since more

21   emissions will give more warming we can see that the higher

22   warming or higher emissions have much higher increase in

23   fires.

24             The other thing to notice here, it was probably

25   already mentioned, is that the fire in the photo in the

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 1   background there is that Southern California fire in 2003,

 2   October, that I mentioned.  Those are pollution plumes.

 3   Those are aerosols, CO, other species that help form smog in

 4   the state.  And they happen to be going offshore here but

 5   you can see how big an effect wildfires can have on air

 6   quality over a very large area.

 7             So this is the question, I think.  In California

 8   we spend a lot of time and a lot of area of the state in

 9   very high fire danger.  We have a long fire season.  And the

10   question is, where will climate change put us on this graph.

11   Thank you.

12             PRESIDING OFFICER GRUNDLER:  Thank you very much.

13             Dr. Mike Kleeman.

14             DR. KLEEMAN:  Thank you for the opportunity to

15   present testimony here today.  I'll begin as others did with

16   a quick summary of my qualifications in this matter.  I'm a

17   professor of civil and environmental engineering at the

18   University of California at Davis where I teach

19   undergraduate and graduate classes.  I've earned a

20   bachelor's degree in mechanical engineering and then

21   master's and PhD in environmental engineering science from

22   the California Institute of Technology.

23             I have published more than 40 papers on urban and

24   regional air pollution problems with a focus on ozone and

25   airborne particles in California.  I'm a principal

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 1   investigator for three current projects funded by the US EPA

 2   and the California Air Resources Board dealing with climate

 3   and air quality in California and I am an expert in those

 4   areas.

 5             There's two main components of photochemical smog,

 6   those being ozone and airborne particles.  And the health

 7   effects I'm sure are well known to you at this point from

 8   both of those pollutants and so I won't deal with them other

 9   than to say that California routinely exceeds the accepted

10   health-based standards for these pollutants and we have to

11   do something to protect public health.

12             I am going to focus my comments on ozone today

13   because I believe that the weight of scientific evidence,

14   even at this early stage, supports robust conclusions in

15   that matter related to climate change.

16             California has the world's sixth largest economy,

17   depending on the year that you measure it, and all of this

18   activity is taking place in some very confined air basins.

19   The South Coast Air Basin labeled on this map is home to Los

20   Angeles with a population of around 15 million people.  That

21   means that approximately 1 in every 20 people in the United

22   States lives in Los Angeles.  So it's a very significant

23   number of people living in that air basin.  It has arguably

24   the worst air quality in the United States as well.  The San

25   Joaquin Valley, a slightly larger air basin, is home to 3

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 1   million people.  It is one of the most rapidly growing areas

 2   in California right now.

 3             And no other place in the United States has the

 4   level of economic activity, the level of population, in such

 5   confined air basins.  So there's a reason that California

 6   has such severe air quality problems, because we have all

 7   this economic activity in such well-confined air basins.

 8             So how will climate change affect air quality in

 9   California?  Well, the confined air basins are only one part

10   of the problem.  When the weather patterns produce stable

11   atmospheric conditions we have a very stagnant atmosphere

12   and we trap all of those emissions close to the earth's

13   surface where we will breathe them.

14             By definition then it means that climate change

15   will have an effect on air quality in California.  There's

16   temperature and relative humidity effects to consider, cloud

17   cover.  All of these things related to climate change will

18   influence the air quality system.  In order to try to

19   understand what the dominant effects are we try to use model

20   calculations and we try to look at the historical

21   measurement record to try to understand in which direction

22   climate change will push those things.

23             What I am showing you here is one example of a

24   study where we predicted ozone concentrations for Los

25   Angeles.  And this is a typical episode, a severe

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 1   photochemical episode in Los Angeles.  We're looking at the

 2   predicted one-hour concentrations of ozone in the region.

 3   And the health-based standard, one health-based standard

 4   that one could look at would be 90 parts per billion as an

 5   acceptable level and we can see that we're almost three

 6   times that level.  I show this to you to emphasize that this

 7   is a well-studied episode.  It has been the focus of many

 8   publications.  And we think that we understand the dynamics

 9   that produce ozone formation in this episode.

10             The question then would be, what would happen if

11   we would increase the temperature in that episode by five

12   degrees?  What would we see?  And just due to the chemical

13   reactions speeding up and the thermal decomposition of some

14   chemical reservoir species we get an additional 60 parts per

15   billion of ozone in this episode due to that increased

16   temperature.

17             Now there are other things that happen at the same

18   time.  It's not just the effect of climate on chemistry that

19   matters, there is also an effect on increased emissions.  We

20   know that biogenic emissions from plants increase at hotter

21   temperatures.  We know that evaporative emissions from

22   mobile sources increase at hotter temperatures.  And we

23   expect that power plant emissions of oxides of nitrogen will

24   also increase at hotter temperatures due to increased

25   electrical demand.  And those higher emissions will

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 1   generally then lead to higher concentrations of ozone.

 2             It's actually worse than that because the

 3   background ozone levels are also increasing over time.  If

 4   we look at the record, the measured record of ozone

 5   concentrations that are blowing into California from upwind

 6   sources, just sort of background ozone concentrations, those

 7   are going up over time due to various effects, emissions

 8   worldwide.  And we expect that trend to continue.

 9             Any ozone that blows into California adds to the

10   ozone that we produce locally.  The majority of our ozone

11   currently is produced locally but every increase in the

12   background ozone concentration reduces the amount that we

13   can afford to produce before we impact public health.  And

14   so the status quo isn't enough.  We really have to address

15   this problem, it's changing over time.

16             This is a study performed by Harley and coworkers

17   at the University of California at Berkeley where they

18   looked at the combined effect of these different changes

19   that will happen in the future related to climate and

20   emissions controls and tried to see what the dominant

21   effects were.  And I want to point out several things on

22   this plot.  The first one is the effect just of temperature,

23   here shown in this first cluster, on the ozone

24   concentrations in Central California for Fresno, Sacramento

25   and the Bay Area.  And we're looking at the percentage

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 1   change of ozone.  Increased temperatures in the future are

 2   expected to increase ozone concentrations and that's

 3   consistent with what other studies have shown.

 4             The emissions effect of biogenic VOCs is also

 5   present.  You can see that the effect of increased

 6   temperatures in the year 2050 on emissions from plants will

 7   increase ozone concentrations.  And the boundary conditions

 8   will also go up over time and that increases ozone

 9   concentrations as well.

10             California is combatting this problem with

11   emissions controls and so you see here the fourth column

12   shows a large negative change in the ozone concentrations

13   and that is due to the anticipated effect of the emissions

14   controls that California is going to apply.

15             What I want to show though, I want to contrast the

16   magnitude of that change in the concentrations that's driven

17   by the emissions controls to the change that climate would

18   mitigate onto that system.  And so the final cluster here

19   shows the combined effect of simultaneous changes in

20   emissions controls and then the climate penalty that is

21   imposed.  And what you can see is that the climate changes

22   that we see happening in the future are of sufficient

23   magnitude to completely offset all of the emissions benefits

24   that we gained in the Bay Area.  And to reduce significantly

25   the benefits to ozone concentrations in the other areas, in

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 1   Fresno and Sacramento in Central California.

 2             And so that means that California will have to

 3   work harder.  California will have to implement additional

 4   emissions controls in order to offset the climate penalty

 5   that we see coming from climate change.

 6             So just in conclusion, California's air basins

 7   currently exceed the health-based standards, we have to do

 8   something.  Background ozone concentrations are going up

 9   over time and the status quo is not enough.  The weight of

10   scientific evidence suggests that temperature will increase

11   in California and this will have impacts on ozone

12   concentrations and it will impose a climate impact on

13   California, or a climate penalty on California, where we

14   have to reduce emissions even further in order to achieve

15   the same level of ozone control in the state.

16             With that I'll thank you.

17             PRESIDING OFFICER GRUNDLER:  Thank you for your

18   testimony.

19             Next I'd like to invite Dr. Louise Jackson to

20   present.  Welcome.

21             DR. JACKSON:  Thanks for inviting me here and

22   thanks for the opportunity to speak.  My name is Louise

23   Jackson.  I am a professor and extension specialist at the

24   Department of Land, Air and Water Resources at University of

25   California at Davis.  I am also the Orr Chair in Plant

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 1   Environmental Sciences.  For most of my career I have worked

 2   on ecosystem processes in agricultural and grassland systems

 3   in California and I'd like to speak today about the impacts

 4   that I believe are very serious for California agriculture.

 5             Agriculture in California only produces less than

 6   eight percent of the greenhouse gas emissions at present.

 7   But agriculture will suffer a disproportionately large

 8   impact from any results of climate change.  That has a big

 9   impact on the United States as a whole.

10             California has the most productive area in the

11   United States in terms of agriculture.  It produces half of

12   the nation's fruits and vegetables, 19 percent of the dairy.

13   And about 85 percent of California agricultural products are

14   used within the United States.

15             We have many diverse commodities with very unique

16   growing conditions.  You can see from the top ten that many

17   are specialty crops.  Crops that have special requirements

18   for temperature and moisture that are hard to satisfy.

19             California agriculture supports a lot of

20   employment, especially in the Central Valley, and many

21   farms.  So if there are impacts on agriculture from climate

22   change California will definitely feel the pinch.

23             Some people have hypothesized, well maybe higher

24   CO2 will increase plant growth, a benefit for agriculture.

25   In reality the new studies that are coming out are showing

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 1   that we won't under most actual growing conditions see more

 2   than about a five to eight percent increase in vegetative

 3   growth due to CO2 enrichment.  That's because other factors

 4   such as water are limiting.

 5             The other big issue, especially for specialty

 6   crops, is that crop developmental responses are much more

 7   complex than a simple increase in growth from enriched CO2.

 8   One example is fruit trees.  Fruit trees have winter

 9   chilling requirements.  For example, fruit trees, we count

10   those in chill hours, the number of hours per year that are

11   less than 45 degrees, for example.

12             Already in the last century there has been a

13   reduction of 50 to 500 hours per year in different growing

14   regions in California.  And you can see that that's a

15   significant proportion of the hours required by fruit trees

16   to flower and we're already seeing events such as in 2004

17   for peaches where low chilling requirements have prevented a

18   good harvest of crops.

19             On the other side of the slide I've listed a

20   number of factors that will affect California's specialty

21   crops.  For example tomatoes have reduced fruit number at

22   temperatures of above about 100 degrees.  For lettuce we

23   might see higher growth rates in some of our cool season

24   times of the year but bolting, which is the onset of

25   flowering, can increase above about 70 degrees and there is

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 1   increased tip burn as well.  So some of our coastal areas,

 2   even if they experience slight increases in climate change,

 3   may see problems for lettuce, which is one of our main crops

 4   in California.

 5             For rice at higher temperatures we see reduced

 6   yields.  I've already spoken a little bit about stone

 7   fruits.  Chilling requirements, decreased fruit size and

 8   quality.  Citrus is one of the crops that may actually

 9   benefit from climate change.  What we might expect with

10   citrus is to see the citrus production move further north

11   because there's reduced frost losses during the winter.  For

12   grapes the speculations and models seem to suggest that we

13   get premature ripening and reductions in quality and yield

14   variability at higher temperatures.

15             There's a lot of unknown challenges as well.  The

16   newest research that is coming out is suggesting that water

17   use will increase but that there is a unique response for

18   each commodity.  So even though there is some CO2 enrichment

19   that might reduce -- that might increase water use

20   efficiency the results of higher evaporation will increase

21   water use.

22             As we just heard about ozone, it is likely to

23   increase.  And ozone affects not only humans but plants.

24   Already we are seeing probably about a five to ten percent

25   decrease in yields due to ozone as it stands today in the

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 1   Central Valley.

 2             Crop pests are our biggest unknowns.  Some

 3   diseases are likely to increase with warm, wet scenarios

 4   compared to warm, dry scenarios.  For example, downy mildew

 5   in lettuce, which is a major pest.  Insect pests are likely

 6   to be more likely to survive during winter but then leaf

 7   quality due to lower nitrogen, which is typical of plants

 8   growing under high CO2, might deter some of the damage.

 9   There might be some new C4 species, weeds that can grow

10   under higher temperatures arriving in California.  These are

11   things we just don't know but have to plan for.

12             There is also in the cattle and dairy cows a

13   likelihood of lower milk yield at higher temperatures of

14   above 100 degrees.

15             This is an example of some modeling that was done

16   for the Pink Bollworm in cotton showing that this insect

17   pest, which is now just in the southern desert areas, if the

18   winter temperatures were to rise to about 2.7 degrees

19   Fahrenheit in the winter we'd see increased prevalence of

20   that pest in the southern growing regions.  If it increases

21   to 4.5 degrees Fahrenheit we'll start seeing the pest in the

22   Southern San Joaquin Valley where now it is not present due

23   to the winter frosts that exist in the northern area.

24             So to sum up what I'd like to do is emphasize the

25   fact that as global warming increases so do the impacts on

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 1   California agriculture.  Agriculture is very sensitive to

 2   temperature change so that even small changes can have a big

 3   effect.  Right now we are already seeing heat waves that

 4   cause crop damage, especially to specialty crops.  But under

 5   high emission scenarios we'd expect to see double the heat

 6   waves that we will at lower emission scenarios.  We would

 7   expect to see eventual loss of important commodities,

 8   especially at high emissions.

 9             We are going to have to invest quite a bit of

10   money into crop and livestock breeding for heat tolerance

11   and possibly drought tolerance as well.  One very likely

12   issue is that land use will change.  Specialty crops will

13   move north and south and that is a big cost to industries

14   that have whole production systems arranged in specific

15   areas.  And there is also some speculation that urbanization

16   may increase if there is precariousness of different kinds

17   of specialty crop production.

18             As we've already heard, dry scenarios are very

19   likely to bring high economic costs in crop failure to

20   agriculture.  And the likelihood is we'll see some of our

21   mainstay agronomic crops, such as alfalfa, cotton, rice,

22   irrigated pasture that uses a lot of water, be replaced with

23   either crops with lower water demand or other land uses.

24             We're going to need a lot of technological

25   improvement for water conservation.  And even more

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 1   expensive, as you just heard about, is the fact that there

 2   is going to be needs for levees and water storage to keep

 3   the deliveries going to California agricultural areas.  Even

 4   if we have more water in the lowland areas we still need to

 5   deliver it.

 6             So the conclusion that I would like to present is

 7   that when we are looking at high emission scenarios over the

 8   next 50 to 100 years for California agriculture they are

 9   likely to bring economic hardship, loss of livelihoods and

10   instability of rural communities to California.  Thank you.

11             PRESIDING OFFICER GRUNDLER:  Thank you,

12   Dr. Jackson.

13             Dr. Dale.

14             DR. DALE:  Thank you.  My name is Larry Dale, I

15   work at Lawrence Berkeley National Laboratory.  I have been

16   Associate Director at the California Climate Change Center

17   for the last couple of years.  And I'll report on some of

18   the results of that work here largely related to water and

19   to some degree energy use and the impacts of climate change

20   on those production activities.  I keep publishing all these

21   papers and climate change studies but my mother will never

22   be impressed with me, I think.  (Laughter)

23             PRESIDING OFFICER GRUNDLER:  Will you make sure

24   your mic is on, please.

25             DR. DALE:  Is it on?

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 1             As you have heard, water is essential to

 2   California's development.  We are a semiarid state.  We've

 3   got 35 million people here and none of us would be here if

 4   in one way or another we couldn't get some water either to

 5   agriculture or to the urban areas where we live.  This

 6   development has been made possible by overcoming a

 7   fundamental mismatch in the timing of when water comes in

 8   the form of winter precipitation and snow and when we need

 9   it.  We use about 75 percent of the water in the summer,

10   largely for agriculture.

11             This mismatch has been resolved or is resolved by

12   an elaborate system and a mix of both manmade storage,

13   that's our reservoirs, and natural storage, which is the

14   snow about which you've heard so much already.

15             Now climate change threatens half of that storage,

16   which carries over the water when it comes and when we need

17   it.  If emissions continue unabated, as you saw  the

18   predictions are we're going to lose most of the snowpack.

19   If we manage to curb emissions we can keep most of the

20   snowpack.  This is important.  If we lose the snowpack we

21   lose half the effective water storage used to bridge this

22   time gap that I talked about.

23             This can have many adverse effects on the state,

24   some of which you've heard.  There's higher flood risk.

25   Instead of that water falling and staying up in the

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 1   mountains as snow it can all come down in one big rush.

 2   This place could be underwater some day.

 3             There will be more droughts.  Under the climate

 4   scenario predictions that we've looked at using the climate

 5   models and the state models for water supply we see that

 6   over half the years would be classified as dry or critically

 7   dry years.  That would mean lower divergence to farmers.  In

 8   critically dry years now many farmers, many parts of the

 9   Central Valley that produce these crops that Louise was

10   talking about would get no surface water supply.

11             Now the cost to the state of all these things, I'm

12   an economist, I'm supposed to come up with a number.  But

13   the cost is likely to depend on what we do as a state.  And

14   the first reaction, in my opinion, is going to be an ironic

15   one but we're going to increase the amount of electricity we

16   use.  Here we are trying to curb emissions, climate change

17   is going to force us to increase electricity use unless

18   we're careful.

19             This would happen because first farmers would do

20   as they have always done in the past.  When they don't get

21   surface water they start pumping ground water.  Enough years

22   elapse and the studies we have done show ground water levels

23   could be falling permanently 200, 300 feet down.  That means

24   a big increase in electricity use to get the water.

25             Similarly in urban areas the reaction will likely

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 1   be to increase desalination plants, recycling plants, both

 2   of which require large amounts of electricity.  So do long

 3   distance transfers of water to the state.

 4             Again, this is an ironic feature of what can

 5   happen because we'll be doing large efforts to curb our

 6   emissions but at the same time our demand is going to be

 7   growing.

 8             In my opinion this reaction is not going to be

 9   sustained because I think we'll also do what we have done in

10   order to avoid this for farmers and that is build new

11   storage reservoirs.  These are expensive but there is

12   potential to do this.  And if you want a number to hang on

13   to as a notion of what the climate change can cost the state

14   think of what it costs to build new storage in this state.

15             The estimates from the latest federal and state

16   studies suggest the costs range between $700 and $4,000 an

17   acre-foot of storage.  The snowpack losses we've talking

18   about average about eight million acre-feet of storage.  So

19   that's a number like $11 billion.  That's a rough estimate

20   of what it can cost the state due to climate change.  If we

21   curb emissions we can cut those costs in half.

22             So to sum up, water is essential to the economy.

23   The snowpack is needed to bridge the timing of when water

24   come and when we need it.  Climate change can eliminate a

25   lot of that bridge, a lot of that storage.  And while the

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 1   economic impacts are hard to quantify, if we assume we're

 2   going to be building storage to make up for the loss of

 3   snowpack the costs can range up to $11 billion.

 4             PRESIDING OFFICER GRUNDLER:  Thank you very much.

 5   Any questions from the panel?

 6             PANELIST HOROWITZ:  I have a question for the

 7   entire panel.  Earlier today we heard testimony from the

 8   auto manufacturers that there is no evidence that the

 9   greenhouse gas standards that we are talking about today,

10   even if they were applied nationwide, would have any effect

11   on the consequences of climate change that you have been

12   talking about on the panel.  Does anyone on the panel have

13   any comment about that?

14             DR. GLEICK:  I'll make a short one.  It's wrong.

15             PANELIST HOROWITZ:  Okay.  Anything you can say to

16   back that up or put in your written comments would be --

17             DR. GLEICK:  Well sure.  Other people have already

18   testified with specific numbers but the transportation

19   sector alone accounts for a very substantial fraction of

20   national greenhouse gas emissions and a larger fraction of

21   California's emissions.  It is obvious these standards would

22   have an enormous effect in the long run on reducing our

23   emissions.  You have also heard testimony from the other

24   states that there are a number of other states willing to

25   adopt California's standards as we move forward.  It's one

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 1   piece of a large strategy to reduce emissions, it is not a

 2   silver bullet, but it's an important component of an overall

 3   strategy.

 4             DR. BALES:  There is no silver bullet but if you

 5   want to reduce greenhouse gases you look for sources of CO2

 6   emissions that can be reduced and the transportation sector

 7   has to be part of that mix.

 8             PRESIDING OFFICER GRUNDLER:  Thank you again for

 9   taking the time to present such thoughtful testimony.

10             I'd like to invite the next panel, which is

11   comprised of a number of non-governmental organizations.

12   Please come up.

13             I'd like to remind everyone that these proceedings

14   are being webcast so hopefully you've told your family

15   members the website so that they can watch you.  (Laughter)

16             I'd like to invite Mr. Russell Long to present the

17   first testimony.

18             MR. LONG:  If it's okay with all you I'd like to

19   defer to Patricia Monahan at Union of Concerned Scientists

20   who has, she has a previous obligation to leave.

21             PRESIDING OFFICER GRUNDLER:  That would be fine.

22             MS. MONAHAN:  To pick up my children so thanks for

23   your accommodation.  My name is Patricia Monahan.  I am the

24   Deputy Director of Clean Vehicles for the Union of Concerned

25   Scientists and I am also the California Office Director.  My

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 1   comments today are on behalf of UCS and our over 240,000

 2   members and activists.  UCS is a leading science-based

 3   nonprofit working on solutions to major environmental

 4   challenges like global warming.  UCS's transportation

 5   program was born in California in 1991 and we have been

 6   working here for 15 years on policies and regulations to

 7   strengthen California's vehicle emission standards.

 8             We urge EPA to allow California and the 11 other

 9   states to implement tailpipe emissions standards for global

10   warming pollution from cars and trucks.  Global warming is

11   the gravest environmental challenge humankind has faced and

12   you have heard from a number of reputable scientists on the

13   impacts here in California, which are significant.  By

14   allowing states to act now we make it easier to avoid the

15   most catastrophic impacts of climate change.

16             California's greenhouse gas standards for vehicles

17   are achievable through fuels and technologies available

18   today.  California's standards require a 34 percent

19   reduction in global warming pollution for cars and light

20   trucks and a 25 percent reduction for larger trucks and SUVs

21   within the next ten years.  Auto makers can build affordable

22   vehicles with existing technology that would meet or exceed

23   California's global warming pollution standards.  At UCS we

24   have created a minivan design that shows how auto makers

25   could meet the standards using a combination of vehicle

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 1   technology and low carbon fuels available today.

 2             Our minivan, which we have dubbed the UCS

 3   Vanguard, runs on E85 fuel and features engine, transmission

 4   and vehicle designs available today.  The Vanguard reduces

 5   global warming pollution by more than 40 percent, which

 6   exceeds California's emissions standards.  This technology

 7   package would cost only $300 and would save the consumer

 8   over $1300 in reduced fuel costs.

 9             All of the technologies in the Vanguard are in

10   vehicles on the road today but auto makers have yet to

11   combine them in a single package.  We have a UCS Vanguard

12   brochure that on the back, which I'll be submitting, has a

13   list of all the vehicles that are available today with the

14   package of technologies that we employed on the Vanguard.

15             This package can be achieved with no sacrifice in

16   performance or size.  And wince we're using off-the-shelf

17   technologies we're not talking pie in the sky, we're not

18   even talking hybrid.  If you want to see more you can check

19   out our website which has more detail on the features but

20   I'll be discussing some of the more prominent ones on the

21   Vanguard.

22             The Vanguard minivan design's key components can

23   be found piecemeal in more than 100 vehicle models on the

24   road today.  The Vanguard uses conventional technology to

25   achieve significant reductions in global warming pollution.

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 1   Here are some of the technologies that we employed:

 2             Variable valve and timing on engines, such as the

 3   Honda VTEC.  Cylinder deactivation, or as GM calls it,

 4   Active Fuel Management, which actives the cylinders when you

 5   need them.  Automated manual transmission, which is in the

 6   Audi A3 and in several VW models like the Jetta.  that

 7   blends the performance of a manual with the ease and

 8   convenience of an automatic.  Six speed transmissions, which

 9   are in Ford Explorers and almost all BMWs.  Air conditioning

10   with better hoses and more efficient compressors.  Improved

11   aerodynamics and tires that reduce the load on vehicles.

12   Electrification of components such as the steering on

13   Acura's NSX.  And flex-fuel capability to allow the vehicle

14   to use E85.  The technology package on the Vanguard can be

15   used on the smallest cars to the largest trucks.

16             The Vanguard shows that global warming pollution

17   reduction is possible with technologies and fuels used in

18   cars today with no sacrifice required of the consumer.

19   Vehicles meeting the standards have the same size, same

20   acceleration, and same safety characteristics of higher

21   polluting vehicles.  And the consumer actually saves money.

22             We urge EPA to grant the waiver to allow

23   California and the 11 other states who have adopted the

24   standards to move forward immediately.  By using technology

25   already in vehicles on the market today the auto industry

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 1   can build no compromises cars and trucks that meet

 2   California's standards and the consumer's passenger-

 3   carrying, load-hauling and performance needs.

 4             Historically auto makers have opposed basic safety

 5   and emission standards, making exaggerated claims about the

 6   cost of seat belts or catalytic converters.  Auto companies

 7   need to look forward to a future with cleaner vehicles,

 8   rather than always looking into the rear view mirror at the

 9   past.  It's time to make auto companies put their talented

10   engineers to work on designing cleaner vehicles.  Thank you.

11             PRESIDING OFFICER GRUNDLER:  Thank you.

12             Mr. Long.

13             MR. LONG:  I'm Russell Long and I am speaking on

14   behalf of the 80,000 members of Bluewater Network and

15   Friends of the Earth today.

16             In January 2001 our organization developed a

17   relatively simple legislative solution for reducing

18   greenhouse gas emissions from automobiles.  With

19   Assemblywoman Pavley we introduced a bill that would reduce

20   such emissions to the maximum, feasible and constant effect

21   of extent possible.  The goal was to prevent global warming

22   by holistically targeting all of a cars' greenhouse gas

23   emissions rather than focusing simply on tailpipe emissions

24   as had been the practice with criteria pollutants.  Our goal

25   was also to provide continuing authority for the state to

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 1   make further improvements in the future.

 2             And in deference to the auto industry's analyst's

 3   concerns about the need for regulatory flexibility there

 4   would be no specific mandates on how the industry should

 5   meet the targets.  This approach would for the first time

 6   open the door to reductions in nitrous oxide emissions from

 7   catalysts, HCFCs from AC units, the carbon content of the

 8   fuels themselves, something that we're very pleased the

 9   Governor decided to act on last year, in addition permitting

10   fuel efficiency measures such as engine and drive-train

11   performance to meet any new standards set by the state.

12             Since we were pessimistic about federal action at

13   the time we asked the state to use its unique authority to

14   move this effort forward.  And our hope was that if we

15   succeeded other states would follow and this would

16   eventually lead to the federal government -- lead the

17   federal government to create a national standard quite

18   similar to California's.

19             With so many states having now adopted the

20   California regulations, and with Congress considering

21   similar measures, we are very pleased that our original

22   vision has been virtually borne out.  During this process we

23   pushed the Air Resources Board to consider all feasible

24   alternatives for greenhouse gas emissions reductions,

25   including the need to consider the use of plug-in electric

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 1   hybrids as well as alternative fuels as key elements towards

 2   creating a cleaner automotive sector.

 3             At modest cost increases plug-in hybrids have the

 4   ability to reduce greenhouse gas emissions by 50 percent or

 5   more and continue to represent the most important area for

 6   short- and medium-term improvements in emissions.

 7             And at this point I'd like address some previous

 8   comments by others.  Once again the auto industry comments

 9   demonstrate the same doom and gloom attitude they

10   demonstrated with seat belts as Patricia mentioned, with air

11   bags, catalytic converters, unleaded fuel.  They say, we

12   can't do it, it's not feasible, it'll cost too much, it

13   won't have any effect.

14             And today their pessimism has hit a new low with

15   their approach to climate change.  In essence their point is

16   that even if this regulation were extended globally it

17   wouldn't reduce global warming by any appreciable amount.

18   Well first I would like to point out that much of the

19   testimony and the comments by scientists and regulators that

20   they cited were taken very much out of context so these need

21   to be taken with a grain or perhaps a boulder of salt.  This

22   is true for Dr. Hansen's testimony as well as those by the

23   New York and Vermont regulators.

24             Second, the Alliance fails to mention anything

25   about climate tipping points.  As many climate scientists

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 1   have noted, we are fast approaching a time when the planet

 2   could be tipped into runaway global warming.  It is unclear

 3   exactly when that is but many respected researchers believe

 4   we are already dangerously close to that point.  If we

 5   arrive there, there will be nothing that anyone can do to

 6   stop global warming.  Every nation, every state, every

 7   industry, every citizen will have to do their share if we

 8   are to avert a catastrophe.  Will that be enough?  Nobody

 9   has that answer.

10             But unlike the auto industry, which seems to be

11   arguing today that we should simply put our heads in the

12   sands and hope the problem goes away by itself, we need to

13   act now to protect our homes, our citizens, our jobs, our

14   wildlife and our planet.

15             And the fact is that the projected amount of

16   greenhouse gas emissions reductions from this regulation in

17   California alone, let alone worldwide, is staggering.  This

18   is not a trivial reduction.  As the global auto fleet

19   approaches one billion cars, if this regulation were carried

20   over to all new vehicles, global greenhouse gas emissions

21   would fall dramatically from the baseline, representing

22   significant progress in our fight to avert this problem.

23   Plus the Air Resources Board does have continuing authority

24   to tighten these regulations, which would allow us to dig

25   even deeper.

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 1             Third, the Alliance has some explaining to do

 2   because in recent Congressional hearings they recognized

 3   that global warming is a problem.  And they acknowledged the

 4   need to do something about it and they said this needed to

 5   be done on a national basis.  How then can Mr. Clubok then

 6   claim today that there is nothing to be done.  The Alliance

 7   testimony this morning was not only deceptive but

 8   inconsistent with what they are telling our federal

 9   legislators in Washington DC.

10             EPA has a long history of successfully working in

11   conjunction with states, including California, to protect

12   our air and water quality.  Now is not an opportunity to

13   strangle states rights.  The EPA's job is to protect

14   citizens and future generations so that we are not left with

15   a Road Warrior future.  That might be good for Hollywood

16   films but it is not good for California citizens.  Thank

17   you.

18             PRESIDING OFFICER GRUNDLER:  Thank you Mr. Long.

19             Next I'd like to invite Tim Carmichael from the

20   Coalition for Clean Air.

21             MR. CARMICHAEL:  Good afternoon.  My name is Tim

22   Carmichael with the Coalition for Clean Air.  It is a

23   pleasure to be here.  A thank you to EPA for having this

24   hearing here in California and the one you had in DC and a

25   thank you to all the people that have today to testify in

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 1   support of the waiver.

 2             I had the privilege of working with Assembly

 3   Member Pavley and many of the people in the room in getting

 4   this bill that led to the regulation that we're talking

 5   about today through the California Legislature, signed by

 6   the Governor.  And it was not something that was done

 7   lightly, it was not something that was done quickly.

 8             And in fact there was a lot of participation by

 9   some of the auto makers.  I think that is important to

10   recognize in spite of the opposition today.  Both through

11   the legislative process and the regulatory process there was

12   a lot of input, a lot of deference given to their

13   perspective in how best to craft this program.

14             I have been thinking a lot about where this goes

15   after today.  EPA as an agency, this group and your

16   colleagues, obviously have work to do relative to the

17   scientific and legal questions.  But I feel that the

18   testimony has been very good in clarifying those points and

19   giving you a lot to bolster our support of waiver approval.

20             But ultimately there is going to be a summary

21   report that is going to go to the administrator and in all

22   likelihood some version that is going to go to the White

23   House.  And I know that it becomes a public policy question,

24   some would say a political question as to what the

25   Administration does about this question.

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 1             And I have been thinking about the headline or the

 2   abbreviated version of the report back that at some level

 3   they are only going to see the headline.  and to me what

 4   we've seen at the couple of hearings that you've had can be

 5   summarized in one line.  California climate waiver: auto

 6   alliance opposed, everyone else strongly supportive.  And I

 7   think that is really in a nutshell what you are going to get

 8   out of these two days and other correspondence that you're

 9   going to get.

10             And when I say, everyone else.  You've had not

11   just environmentalists that have been supportive of this for

12   many, many years.  You've had business leaders, including

13   two of the biggest companies in the country testify in

14   support.  You've had elected officials from this state,

15   you've had leaders from other states and you've had

16   scientists.  This is not a small subset of the population

17   that is way out in left field on this issue.

18             In fact, and I'll just share just a couple of

19   stats.  In California the Public Policy Institute based in

20   San Francisco is one of the most respected survey or polling

21   groups that we have and they regularly do surveys on

22   environmental questions.  And just a couple of things that I

23   think are insightful from their last year's survey.

24             They asked: How serious of a threat is global

25   warming to the economy and quality of life for California's

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 1   future?  And 79 percent of Californians said, very serious

 2   or somewhat serious.  They also asked, excuse me.  Would you

 3   be willing to see tougher air pollution standards on new

 4   cars, trucks and SUVs, even if this was more costly for the

 5   purchase or lease of your next vehicle?  Two-thirds of all

 6   Californians said yes, even with the cost implications.

 7             And lastly I want to share that they asked,

 8   because this is such a significant policy question and has

 9   been now for five or six years in California.  They continue

10   to ask about it periodically.  And they asked specifically:

11   What about the state law that requires all auto makers to

12   further reduce emissions of greenhouse gases from new cars

13   in California beginning in 2009?  Seventy-eight percent of

14   all Californians favor this law.

15             I encourage you to take back this message that you

16   had the automobile alliance in opposition and everyone else

17   strongly encouraging the EPA to grant this waiver.  And I

18   think that is the most important communication that can go

19   up the chain.  Thank you very much.

20             PRESIDING OFFICER GRUNDLER:  Thank you for your

21   testimony.

22             Next, from the Natural Resources Defense Counsel,

23   Roland Hwang.  Welcome.

24             MR. HWANG:  Good afternoon, thank you.  Thank you

25   for the opportunity to testify today in favor of

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 1   California's waiver request for it's motor vehicle emission

 2   control program under Section 209(b) of the Clean Air Act

 3   amendments.  I am the vehicles policy director for the

 4   Natural Resources Defense Counsel based here in San

 5   Francisco.  I represent NRDC and its 1.2 million members and

 6   activists in support of California's efforts to set

 7   standards for global warming pollution from new cars and

 8   light trucks.

 9             Mr. David Doniger, policy director and senior

10   attorney at the NRDC's Climate Center in Washington, DC

11   previously testified last week on May 22 at the waiver

12   hearing in Washington.  He primarily addressed the legal

13   standards that govern EPA's review of California's waiver

14   request under Section 209(b).  Our legal conclusion is

15   clear, and this is also supported by our technical analysis

16   to which I'll add more detail today.  EPA has only one

17   choice but to grant California it's waiver request.  It must

18   do so without delay.  Mr. Doniger spoke about that last

19   week.  He also informed EPA in order to prevent further

20   delay NRDC on May 21 joined with the Environmental Defense,

21   a colleague of mine is sitting here, and the Sierra Club in

22   notifying the agency of our intent to join with California

23   to legally compel EPA to act if it does not issue the waiver

24   by this fall.

25             In my testimony today I will supplement

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 1   Mr. Doniger's previous testimony by presenting our technical

 2   conclusions that support our legal conclusion.  It is our

 3   belief that the program is technically feasible and cost-

 4   effective and there is sufficient lead time.  Furthermore,

 5   events since the board's adoption in September 2004 serve to

 6   strongly reinforce this conclusion.  These events include

 7   persistently higher fuel prices, a rapid consumer shift away

 8   from truck-based SUVs, continued development of clean car

 9   technologies and stringent new CO2 vehicle standards that

10   are likely to be adopted in Europe.  For these reasons we

11   find there is no basis to deny the waiver under Section

12   209(b)(1)(C) as inconsistent with Section 202(a).

13             I'd like to start off my technical, the evidence

14   I'd like to present to EPA with a survey of previous cost

15   estimates or regulations on vehicle standards.

16             The auto makers claimed in 2004, back at the Air

17   Resources Board hearing, that the cost of compliance in 2016

18   would be $3,000, ARB staff estimated $1,000.  I think it is

19   important when you look at these different cost estimates to

20   review the past track record, if you will, of the various

21   organizations involved in making these estimates.

22             In fact the difference in the cost estimates,

23   based upon my survey of previous work including EPA's work

24   on cost of compliance predictions versus actual for vehicle

25   standards, my conclusion is that the $3,000 versus $1,000

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 1   estimates are consistent in actuality with what has happened

 2   in the past where that estimate in terms of the industry,

 3   auto industry estimates are two to ten times higher.

 4             Earlier it was discussed about the Zero Emission

 5   Vehicle program and some of the cost estimates there.  I do

 6   not believe that is a very good analogy for this program.

 7   The 1493 program, the California Greenhouse Gas Program, is

 8   about improvements to gasoline vehicle technology, it does

 9   not assume any kind of so-called advanced technologies.

10             As Ms. Monahan spoke of earlier, there is no need

11   to employ advanced vehicle technologies to reach the

12   standard that ARB has set for the 1493 program.  This

13   program in fact looks more like the Low Emission Vehicle

14   Program which the Air Resources Board adopted in 1990

15   because it is in actuality improvements, incremental

16   improvements to gasoline vehicle technologies.

17             And when you look at the past history of auto

18   maker estimates of what those costs look like versus the

19   actual cost the record has shown that the industry estimated

20   the cost of the LEV program compliance in 1994, they

21   estimated the cost to be almost $800.  The actual cost

22   turned out to be about $80, so in fact the auto industry

23   over-estimated the cost of compliance for the Low Emission

24   Vehicle Program by about a factor of ten.  This should come

25   as no surprise to folks who have worked in this field for

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 1   awhile.

 2             The second point I would like to make is that we

 3   believe that the ARB staff assessment of the technology was

 4   very sound, and we testified to that in front of the Air

 5   Resources Board's Board Members back in 2004.  And since

 6   2004 the world has changed, and the conditions that have

 7   changed have led to us to reinforce our opinion that in fact

 8   the technological feasibility cost-effectiveness and the

 9   lead time has all more been more than adequately

10   demonstrated by the Air Resources Board to comply with the

11   waiver criteria.

12             There are at least four factors which have led us

13   to conclude that since 2004 we have more evidence to believe

14   that this is going to be, this program will be technically

15   feasible, cost-effective and adequate lead time.  The first

16   is the higher fuel prices since 2004.  ARB used $1.74, today

17   we can see the prices around the country are about $3.20 a

18   gallon.  Even the Department of Energy's Energy Information

19   Administration concurs that there has been a long-term

20   structural shift in the oil price markets and their

21   forecasts have also gone up.  So clearly at $1.74 the

22   program was cost-effective.  At $3.20 nationwide and $3.50

23   here in California the program is even more cost-effective.

24             The second reason why we believe the program is

25   even more cost-effective and the lead time is adequate is

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 1   that the higher fuel prices and other shifts in consumer

 2   demand has led to a very rapid shift away from truck-based

 3   SUVs.  There has been a lot written about the rapid shift to

 4   so-called crossover vehicles and also to small cars,

 5   subcompact cars even.  All of these trends point to that the

 6   ability for the auto companies to meet the standards are in

 7   fact eased by this market shift to these crossover vehicles

 8   and smaller cars.

 9             The third reason is there has been quite a bit

10   since 2004, a lot of developments in clean car technologies.

11   ARB staff's presentation today noted that there are many of

12   these technologies that are emerging or have been announced

13   in the marketplace.  And these include variable valve

14   timing, cylinder deactivation, camless valve actuation, six

15   and seven speed transmissions, continuously variable

16   transmissions, gasoline direct injection engines with and

17   without turbocharging, electric power steering, homogenous

18   charge compression engines and advanced diesel engines.

19             Since 2004 these technologies have either been

20   introduced or auto makers -- introduced by auto makers and

21   suppliers or there have been major announcements about their

22   introductions over the next several years.  For example, GM

23   has stated that one in six, or about 17 percent of its

24   engines, will be gasoline direct injection by 2010.  Another

25   example of how fast evolving this technology is, late last

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 1   year Valeio, a French auto supplier, said that it expected

 2   to commercialize camless valve actuation technology by 2010

 3   or 2011.  And the final example would be GM, Ford, Nissan

 4   and i believe others all have announced their intentions to

 5   produce in the next several years HCCI engines.

 6             The final development since 2004, which reinforced

 7   the technical assessment by the Air Resources Board, is that

 8   the European Union has announced, and it looks like they are

 9   very close to finalizing an agreement for a mandatory CO2

10   standard for their automobile vehicle fleet.  That standard

11   will likely be about 130 grams per kilometer by 2012.

12   Though direct comparisons are difficult due to differences

13   in vehicle fleet size and drive cycles, the 2012 standard is

14   clearly more stringent that California's 2016 standard in

15   terms of the auto company's compliance job.

16             To meet he standard auto makers will need to

17   develop and commercialize for the European market many of

18   the same technologies needed for the California program.

19   Several years prior to when they will be needed for the

20   California Clean Car state -- This will ensure the success

21   of the technologies and also create larger economies of

22   scale.

23             In sum my colleague, David Doniger, has already

24   testified last week that our legal conclusion is clear.  EPA

25   has but one choice, that is to grant California's waiver

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 1   without delay.  This supplemental comments demonstrate there

 2   is no technical basis to deny the waiver under Section 209

 3   as inconsistent with section 202(a).  NRDC also intends to

 4   file written comments by June 15 to supplement our oral

 5   comments.  We appreciate this opportunity to present our

 6   perspective, thank you.

 7             PRESIDING OFFICER GRUNDLER:  Thank you, Mr. Hwang.

 8             Environmental Defense.

 9             MR. WALKER:  Good afternoon members of the panel.

10   It is a privilege to be here and we thank you for holding

11   this hearing.  I am Derek Walker, Deputy Director of state

12   Climate Initiatives for Environmental Defense.  As most of

13   you know we are a national nonprofit, non-partisan and

14   science-based environmental organization and we have offices

15   here in California in Oakland, Los Angeles and Sacramento.

16   I respectfully offer my comments today on behalf of not only

17   our numerous members in California who are deeply concerned

18   about global warming but our hundreds of thousands of

19   members across the country.

20             On December 21, 2005 the Air Resources Board

21   requested this waiver for vehicles beginning with the 2009

22   model year.  Californians entitled to such a waiver under

23   Section 209(b) of the Clean Air Act, which was enacted in

24   1967 in recognition of this state's leadership in motor

25   vehicle emissions control regulations.

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 1             209(b) compels the Administrator of EPA to grant

 2   California's request for a waiver unless he or she finds

 3   that one of the stated exceptions applies.  The legislative

 4   history of Section 209, EPA's prior decisions on waiver

 5   requests and the court review of these decisions, clearly

 6   establish that EPA must be highly deferential to California

 7   and that grounds for denial are very tightly constrained by

 8   these statutory factors.  As the DC Circuit Court found in

 9   1979:

10                  "Congress has decided to grant

11             California the broadest possible

12             discretion in adopting and enforcing

13             standards for the control of emissions

14             from new motor vehicles."

15             EPA's past decisions have been consistent with

16   this narrow scope of review, recognizing the tremendous

17   benefit that our country has derived from California's

18   expertise and efforts.  It was 32 years ago that EPA

19   administrator Russell Train explained that Congress

20   disallowed EPA from second-guessing California's policy

21   judgement.  Administrator Train said:

22                  "Congress meant to ensure by the

23             language it adopted that the Federal

24             government would not second-guess the

25             wisdom of state policy here."

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 1             EPA has similarly recognized that the phrase

 2   compelling and extraordinary conditions refers to general

 3   and fundamental circumstances including geography, climate

 4   and California's exceptional motor vehicle population, not,

 5   quote, "to levels of pollution directly."  Consequently the

 6   Agency has concluded that the preemption waiver extends not

 7   only to regulations directed at Southern California's

 8   notorious ozone problem but to California's particulate

 9   control problem as well.

10             In its decisions on recent waiver requests, any

11   suggestion that California did not need its own motor

12   vehicle pollution control program have been readily

13   dismissed.  In action on California's preemption waiver

14   request for the LEV II program, for example, EPA stated,

15   quote, that:

16                  "CARB has continually demonstrated

17             the existence of compelling and

18             extraordinary conditions justifying the

19             need for its own motor vehicle pollution

20             control program.  No information has

21             been submitted to demonstrate that

22             California no longer has a compelling

23             and extraordinary need for its own

24             program."

25             California unquestionably continues to face the

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 1   compelling and extraordinary conditions in its geography,

 2   climatic conditions, population and motor vehicle use.  Just

 3   as EPA had no basis for denying waivers that allowed

 4   California to extend the scope of its programs to include

 5   particulate matter, the Agency similarly has no basis for

 6   refusing to allow California to broaden its programs to

 7   include greenhouse gases, given the serious health and

 8   welfare threats they are now known to pose to California's

 9   resources and to her citizens.

10             California is home to one in seven Americans and

11   is the most populous state in our union.  The state's

12   population is growing rapidly and will increase by 60

13   percent by 2050.  Furthermore, in 2005 we had 32.5 million

14   registered vehicles, exceeding the number registered in any

15   other state by a margin of almost two to one.

16             As in 1967 when Congress enacted the waiver

17   protections for California, Californians also continue to

18   suffer from some of the worst air quality in our country,

19   and we heard some compelling testimony on that earlier.

20   Thirty-eight of California's 58 counties are currently

21   designated as non-attainment for the federal eight-hour

22   ozone standard.

23             California's circumstances are also exceptional in

24   the expertise and resources that our state devotes to air

25   quality management.  ARB's 2004 and 2005 budget was $130

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 1   million, with state and local agencies cumulatively pitching

 2   in an addition $550 million on air quality management

 3   activities.  To put that into context, EPA's air program is

 4   only about $660 million -- I say only -- about $660 million.

 5   But compared to California I think that is a particularly

 6   relevant point.

 7             Beyond these compelling and extraordinary

 8   demographic conditions, California is highly vulnerable t

 9   climate change.  Our economy relies heavily on agriculture.

10   The coasts are profoundly susceptible to sea level rise and

11   the state's water resources are critically vulnerable.

12   California, as we heard in the last panel, is extremely

13   prone to wildfires, the incidence of which is expected to

14   increase as climate change progress.

15             Moreover the challenge of reducing ozone levels in

16   California, both in its cities and in agricultural areas, is

17   expected to become harder as the climate crisis grows.  As

18   California laid out in the support document accompanying its

19   initial waiver request, quote:

20                  "California's high ozone levels --

21             clearly a condition that Congress

22             considered -- will be exacerbated by

23             higher temperatures from global

24             warming."

25   Thus, in addition to al the other compelling and

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 1   extraordinary conditions California is already facing this

 2   waiver request is intimately linked to the same, the very

 3   same air pollution problems that Californians were facing in

 4   the 1960s when Congress first considered and enacted this

 5   preemption waiver.

 6             For our globe as a whole the expectation that

 7   surface temperatures will increase as climate change

 8   progresses is firmly established.  California in particular

 9   is expected to experience warmer temperatures as climate

10   change progresses in the coming decades.

11             Recently a regional scale climate model was used

12   to downscale global climate simulations in order to examine

13   projections for climate variables likely to affect air

14   quality in the United states through the mid part of this

15   century.  Temperatures, solar radiation, rainfall, the

16   stagnation of pressure systems and boundary layer

17   ventilation were examined.

18             And the conclusion was reached that during the

19   fall all indicators consistently suggest increased ozone

20   concentrations will occur in the western part of the United

21   States.  The indicators of higher ozone pollution include

22   warmer temperatures, increased downward solar radiation,

23   lower amounts of rainfall, more frequent stagnation episodes

24   and reduced ventilation.  Summer temperatures are also

25   projected to increase.

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 1             Higher temperatures are robustly linked to higher

 2   ozone concentrations based on both observations and on

 3   theoretical understandings of atmospheric chemistry.  Recent

 4   global modeling studies that have investigated the impact of

 5   future climate change on surface level ozone concentrations

 6   concur in a basic conclusion that was stated by Murazaki and

 7   Hess in 2006, quote:

 8                  "In general the impact of climate

 9             change alone -- on future ozone levels

10             will be to decrease surface ozone in

11             remote regions but to increase it in

12             polluted regions."

13   In urban areas and in others with high levels of nitrogen

14   oxides ozone is expected to increase with a combination of

15   increased temperatures and an increase in water vapor.

16              Of course, no one expects climate change will

17   occur without contemporaneous changes in the emissions of

18   conventional air pollutants that directly impact local and

19   regional air quality  Without further intervention some of

20   these changes and emissions will themselves be driven by

21   climate change.  For example, the increased emissions of

22   NO2, carbon monoxide and fine particulate matter from the

23   wildfires we've discussed, and increased emissions of

24   volatile organic compounds from anthropogenic sources like

25   fuel and solvent evaporation that are highly responsive to

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 1   temperature.

 2             Other emissions changes could occur due to

 3   population and economic growth, regardless of what happens

 4   to the earth's climate.  In particular these drivers are

 5   expected to dramatically increase emissions in Asia.

 6   global atmospheric chemistry and transport studies that have

 7   examined the combined effects of climate change and future

 8   emissions concur in the expectation that without further

 9   regulatory intervention ozone concentrations in the Northern

10   Hemisphere will increase.  Under some scenarios the

11   projected increases in ozone concentrations are extremely

12   dramatic.

13             Focusing on California, Aw and Kleeman in 2003

14   applied a state-of-the-art atmospheric chemistry and

15   transport model to the South Coast Air Basin to examine the

16   influence of changes in temperature on air quality.  After

17   evaluating the model they examined how predicted ozone

18   concentrations would change if ambient temperatures were

19   increased with no other changes introduced.  Peak ozone

20   concentrations were predicted to rise substantially as

21   temperatures increased.

22             And Steiner recently, that's 2006, last year,

23   recently applied EPA's Community Multiscale Air Quality, the

24   CMAQ model, to examine the effect of climate change on the

25   severity of a five-day pollution episode in Central

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 1   California.  Their climate sensitivity cases were based on a

 2   regional climate study that predicted temperature increases

 3   ranging from one degree Celsius at the coast to about four

 4   degrees Celsius in the Sierra Nevada.  With emissions and

 5   inflow boundary conditions unchanged form the historical

 6   base case that they used, the expected meteorological

 7   changes caused by global warming were predicted to

 8   significantly increase ozone in the San Francisco Bay Area.

 9   They conclude, quote:

10                  "In the future, the San Francisco

11             bay area may be particularly sensitive

12             to climate change despite strong

13             reductions inn anthropogenic emissions.

14             In this region, the severity and

15             frequency of ozone episodes may

16             increase, causing more annual ozone

17             exceedences."

18             In summary, the circumstances that justified

19   Congress' adoption of the preemption waiver 30 years ago

20   still exist today.  Climate change poses a profound threat

21   to our state, with its reliance on agriculture, tourism and

22   precariously balanced water resources.  Climate change is

23   also expected to exacerbate the same smog problem that

24   California faced in the '60s, making it unmistakably clear

25   that California continues to need its own motor vehicle

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 1   programs to address compelling and extraordinary conditions.

 2             To comment on the earlier testimony of the

 3   automobile manufacturers, it is extremely disingenuous and

 4   dishonest to stand before this panel today and to claim that

 5   the impacts of AB 1493 will not be measurable either in the

 6   United States or around our world.  The truth of the matter,

 7   and the reason why those regulators and scientists nodded

 8   their heads and said that they had not studied the impacts

 9   of this bill are that climate change science and modeling

10   cannot accurately account for changes that are the result of

11   single policy measures that do not impact, that impact less

12   than ten percent of global emissions.

13             This bill is extremely significant.  But again,

14   the reason why those scientists and those regulators said

15   that nothing had been studied on this bill -- And the reason

16   why Dr. Hansen said he refused to waste computer time is

17   because Dr. Hansen would rather focus on the limitations of

18   current global warming science and modeling.

19             What Dr. Hansen does say, and I'm sure now wishes

20   he were here to say today, is that this bill is well within

21   the IPCC's low emissions scenario, which is intending to --

22   with a target of keeping the global increase in temperature

23   to within one degree Celsius in the next century.

24   Dr. Hansen also would say and has said that any increase in

25   carbon dioxide, increases radiative forcing, which also

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 1   increases warming.  That is a basic scientific fact.

 2             Making this change in California and in the 11

 3   other states that have passed this automobile emissions bill

 4   will make a tremendous impact in carbon dioxide.  As most of

 5   you know, cars and trucks represent a huge portion of

 6   California's emissions pie; 41 percent of California's

 7   emissions come from cars and trucks.  If California were a

 8   country it would be the eighth largest emitter of CO2.  And

 9   with the two states that are now considering this bill that

10   would take it up t 15.  There would be almost one-third or

11   over one-third of the US auto market would be covered by

12   this bill.

13             So California has been a leader in the past.

14   California's actions and expertise have generated action

15   both at the national and international stage.  And again on

16   behalf of hundreds of thousands of members of Environmental

17   Defense I and we strongly encourage you to, without further

18   delay, approve this waiver.  Thank you.

19             PRESIDING OFFICER GRUNDLER:  Thank you very much,

20   Mr. Walker.

21             Mr. Brune from Rainforest Action Network, the

22   floor is yours.

23             MR. BRUNE:  Good afternoon.  Michael Brune from

24   Rainforest Action Network.  Thank you all for the

25   opportunity to speak today.  I admire your stamina.

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 1             I come here with a very straightforward message.

 2   I hope that the EPA will grant this waiver and will do so

 3   without any further delay.

 4             One of the challenges of speaking later in the

 5   afternoon is that it is awfully difficult to offer much that

 6   is new so I'll just make three very quick points.

 7             The first is that one of the benefits of speaking

 8   later in the afternoon is that while listening to testimony

 9   I have had the opportunity to do a little bit of research.

10   I am happy to report that the wireless system here in this

11   office is very fast and very reliable.

12             Almost every news article that I read today

13   predicts that the EPA and the Bush Administration will

14   eventually side with the auto industry and the oil industry

15   and will deny the waiver.  I can only hope that this isn't

16   true.  I can only hope that the EPA will not side with the

17   auto industry and will not rule against everybody else.  I

18   picked up over 600 articles on this hearing and on the

19   hearing last week.  The world is watching and the stakes are

20   absolutely enormous.

21             The EPA has never turned down a waiver request

22   from the state of California and I really hope that you

23   don't start now.  We have heard powerful testimony today

24   about the impacts of climate change on human health,

25   California's snowpack, the state economy, ozone levels, the

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 1   federal economy and so on.

 2             My second point is to highlight the impacts of

 3   climate change on forests.  The prestigious journal Nature

 4   released a comprehensive study about a year ago documenting

 5   the impact of climate change on biodiversity around the

 6   world.  Up to 34 percent of all species around the world

 7   would be threatened with extinction.  Threatened with

 8   extinction due to climate change, even at conservative

 9   estimates, by 2050.  The study also showed that up to 85

10   percent, 85 percent of all species in the Amazon, will be

11   threatened with extinction by 2050 using conservative

12   estimates of climate change.

13             Again, scientists are documenting that species are

14   migrating towards higher altitudes, migrating towards

15   northern latitudes.  We're seeing the deepest, the warming

16   of the deepest oceans.  All of this is due to a warming of

17   about one degree so far.  Dr. Hansen tells us that there is

18   another degree of warming already baked into the atmosphere.

19   The time to act is now.

20             My final point is actually just to make a personal

21   request.  Like a lot of people who have spoken here today I

22   am also a parent.  My daughter is three years old, her name

23   is Olivia.  By the time she graduates high school scientists

24   predict that we may lose the glaciers at Glacier Mountain

25   National Park, we'll lose the snows of Kilimanjaro, and up

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 1   to 70 percent of coral reefs will be destroyed because of

 2   climate change.  This happens before my daughter graduates

 3   high school.

 4             By the time my daughter is 30 up to 500 million

 5   people throughout Asia and Africa will face severe and life-

 6   threatening water shortages.  Again, just because of climate

 7   change.  And by the time my daughter is in her mid-40s,

 8   again, up to 87 percent of all species in the Amazon will be

 9   threatened with extinction because of climate change.

10             How much more evidence do we need to take strong

11   action?  How much more evidence do we really need to take

12   strong action?  Please, I urge the EPA not to stand on the

13   wrong side of history, not to stand with the auto industry

14   and the oil industries.  Please grant this waiver.  Momentum

15   is building to fight climate change and here in California,

16   as you can sense, our determination is very strong.  Please,

17   don't stand in our way.  Please grant this waiver as soon as

18   possible.  Thank you.

19             PRESIDING OFFICER GRUNDLER:  Thank you very much,

20   Mr. Brune.  Any questions from the panel?  Michael.

21             PANELIST HOROWITZ:  A quick question for

22   Mr. Walker.  Your testimony indicates you believe that

23   climate change will exacerbate the smog problem in

24   California.  The earlier testimony from the auto industry

25   indicates that the standards might in fact increase smog-

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 1   causing emissions.  Do you have any comment on that?

 2             MR. WALKER:  My testimony actually says that smog

 3   will increase and decrease variably depending on the

 4   concentration of population and other factors in different

 5   areas.

 6             PANELIST HOROWITZ:  But you said that in areas

 7   where there was already a severe smog problem that it could

 8   exacerbate the smog problem; is that right?

 9             MR. WALKER:  Right.  I mean as temperature

10   increases to that degree it can trap more of the

11   particulates and cause a greater problem.  But again that

12   varies depending on population.

13             PANELIST HOROWITZ:  And do you have any comment on

14   the Alliance's testimony earlier that the standards will

15   increase the emissions of smog-producing pollutants?

16             MR. WALKER:  I think that that -- I would question

17   their calculation in that.  I think that they estimated that

18   by 2030 there would be approximately the equivalent of

19   approximately 1.9 million additional cars on the road.  It

20   is pretty clear based on the studies that have been done

21   surrounding this bill that the reduction in net automobiles

22   reduced -- net automobiles removed from the road would be

23   almost 100 million per year.  So I think that their, I think

24   that their estimates are incredibly self-serving, as with

25   the other statements that they made, eliminating about 95

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 1   percent of the facts available on any particular question

 2   considered.

 3             PANELIST HOROWITZ:  Thank you.

 4             PRESIDING OFFICER GRUNDLER:  Thank you all for

 5   your testimony.

 6             I'd like to invite up Panel number 9, the American

 7   Lung Association of California, the California Nurses

 8   Association and Dr. Kelter.  Ms. Holmes, would you like to

 9   begin?

10             MS. HOLMES-GEN:  Sure.  My name is Bonnie Holmes-

11   Gen and I am Assistant Vice President for Government

12   Relations with the American Lung Association of California

13   and I am very pleased to be here today.  We are pleased that

14   you are here in California to hear from us.  And we are

15   especially pleased to be part of such a prestigious group of

16   public officials, of community and business leaders, of

17   health and medical organizations and representatives and

18   scientists.  We think this is a wonderful showing of support

19   from all of our constituencies here in California for this

20   important law.

21             And we are here today to urge the federal

22   Environmental Protection Agency to grant the waiver to

23   California to implement our 2002 Clean Cars Law.  As a

24   public health organization we believe the California Clean

25   Cars Law is essential to promote improved air quality and

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 1   public health in California and to promote air quality and

 2   public health in the 11 other states that have adopted this

 3   important program.  Of course in addition to be an essential

 4   element of state and national efforts to slow global

 5   warming.

 6             The need for this waiver is clear and compelling

 7   and EPA has a clear obligation to grant the waiver. We are

 8   urging today that the federal EPA moves out of the way and

 9   allows California to move ahead and implement this important

10   law.  AB 1493 will reduce emissions from the largest source

11   of greenhouse gases in California.  As you have heard

12   several times over, passenger vehicles and light duty trucks

13   are responsible for a huge percentage of California's global

14   warming emissions, 41 percent.

15             And this legislation and our regulation provides a

16   feasible, cost-effective pathway to substantially reduce

17   emissions from these sources with technologies that are

18   proven and readily available.  Without AB 1493 vehicle

19   greenhouse gas emissions would just continue to rise as more

20   cars are on the road traveling longer distances.

21             Our state has been at the forefront of clean car

22   technologies for several decades and the innovations

23   developed in California have dramatically reduced smog and

24   benefitted the rest of the country.  The AB 1493

25   requirements to produce cars with lower levels of greenhouse

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 1   gas emissions continue this important history of leadership.

 2   And will not only help to slow the pace of global warming,

 3   but will also encourage the use of advanced technology

 4   vehicles including hybrid electric and plug-ins and natural

 5   gas and other technologies that have extremely low emissions

 6   of criteria pollutants.

 7             Since we are a public health organization I want

 8   to spend most of my time here today talking about our

 9   concerns about public health and how AB 1493 and the Clean

10   Car, the Clean Car regulation will help to address the

11   public health problems that we are experiencing here in

12   California.  The reductions in greenhouse gases will result

13   in important air quality and public health benefits.  It is

14   clear that greenhouse gas emissions -- It is clear that if

15   California does not reduce greenhouse gas emissions it will

16   be much more difficult for our state to achieve state and

17   federal clean air standards.

18             A California state-sponsored analysis of public

19   health impacts of global warming found that higher

20   temperatures could dramatically increase the number of days

21   favorable to ozone formation.  In this state study under a

22   medium-high emission scenario the number of days conducive

23   to ozone formation were found to potentially increase by 75

24   percent in Los Angeles and the San Joaquin Valley by the end

25   of this century.  And these two areas, of course, have some

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 1   of the worst, are experiencing some of the worst smog, worst

 2   air quality in the country and are listed in our American

 3   Lung Association State of the Air Report as some of the top

 4   polluted areas in the country.  And of course any increased

 5   pollution would cause severe public health consequences.

 6             California already is experiencing thousands of

 7   premature deaths and thousands of hospitalizations every

 8   year from air pollution and California has some of the

 9   highest asthma rates in the country.  And studies are even

10   showing that children growing up in our more polluted areas

11   have abnormal lung development.

12             All the many public health impacts of air

13   pollution add up to billions of dollars a year in costs,

14   medical costs and the cost of premature deaths.  And in fact

15   when an estimate from our State Air Resources Board

16   estimates over $50 billion a year in health costs related to

17   air pollution.  And that includes the cost of premature

18   deaths.

19             The longer we delay, the more emissions we are

20   spewing into the air, the more health impacts that we are

21   experiencing.  Study after study confirms that air pollution

22   has a direct impact on respiratory health.  I mentioned the

23   asthma attacks, consider also premature deaths,

24   hospitalizations.  Pollution also contributes to bronchitis,

25   chronic obstructive pulmonary disease, emphysema, lung

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 1   cancer and other lung and heart illnesses.  And children and

 2   the elderly are particularly vulnerable, with recent

 3   research indicating that exposure to heavy pollution may not

 4   only aggravate asthma or cause more severe asthma episodes

 5   but is also linked to the onset of new cases of asthma.

 6             In addition to greenhouse gases resulting in the

 7   potential for greater formation of ozone increased global

 8   warming gases in the atmosphere, of course as has been

 9   mentioned earlier, will result in increased emissions of

10   pollutants ranging from smog precursors to particulate

11   emissions from many different sources.  So we have a very

12   serious concern about the public health impacts that are

13   linked to greenhouse gas emissions and global warming from

14   motor vehicle and other sources.

15             The longer we delay, again, the more emissions we

16   spew.  It is critical that California reduce its greenhouse

17   gas emissions through the implementation of AB 1493.

18   California has, again, led the way for the nation by

19   adopting this important greenhouse gas regulation and

20   California clearly has the authority to adopt these

21   standards.  There are clear and compelling reasons for

22   California to move forward and the American Lung Association

23   urges you to grant this waiver without delay.  Thank you for

24   time to speak with you today.

25             PRESIDING OFFICER GRUNDLER:  Thank you,

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 1   Ms. Holmes.

 2             Ms. Donna Fox from the California Nurses

 3   Association, thank you for being here.

 4             MS. DORSEY FOX:  Thank you for the opportunity to

 5   be here.  I am a registered nurse and I am representing

 6   75,000 registered nurses of the California Nurses

 7   Association and we are asking you to support the waiver.  We

 8   are here to say that it is essential to improve air quality

 9   and the public's health in California.

10             Under the Clean Air Act California has a

11   compelling rationale to merit a waiver.  Individual states

12   or tribes may have stronger air pollution laws but they may

13   not have weaker pollution limits than those set by the EPA.

14   This is according to your website.

15             The California Air Resources Board reports that

16   more than 95 percent of Californians live in areas with

17   unhealthy air.  Passenger vehicles and light duty trucks are

18   responsible for approximately 40 percent of California's

19   total global warming emissions.

20             Every day the registered nurses of California

21   Nurses Association treat patients who suffer from lung

22   disease, heart disease and premature deaths.  Many of these

23   patients are sick and they're getting sicker from the auto

24   emissions and the resultant ozone and particulate pollution.

25   The hardest hit, as you have head before, are the young and

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 1   the elderly and those individuals who are already

 2   compromised with lung disease or heart disease.  The asthma

 3   rates are skyrocketing.  This burden of disease is

 4   preventable.  That's why we're here today.  Californians of

 5   all ages are suffering.

 6             What does this mean?  It means a loss of

 7   productivity, it means people having disability because they

 8   can't function in the work place.  It means they can't

 9   participate in raising their families.  It means children

10   can't play like children normally do.  This means a decline

11   in the quality of life for Californians of all ages.

12             The technology to substantially reduce emissions

13   is available.  It is a public health imperative for

14   Californians that you grant this waiver.  The registered

15   nurses of the California Nurses Association urge you to put

16   the public's health first.  Thank you for your attention to

17   this urgent, public health problem.

18             PRESIDING OFFICER GRUNDLER:  Thank you very much.

19             Dr. Kelter, welcome.

20             DR. KELTER:  Thank you very much.  I thank you for

21   the opportunity to be here.  I have actually been up there a

22   couple of times in my career and I know what you're going

23   through.  My keester is getting sore just thinking about it

24   so thank you for your perseverance.

25             My name is Alex Kelter.  I am a physician and an

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 1   epidemiologist.  I recently retired from the California

 2   Department of Health Services after 24 years of serving

 3   California's taxpayers.  Prior to that I worked at the

 4   Arizona Department of Health Service and the Centers for

 5   Disease Control.  I have spent fully half of my career in

 6   the area of environmental epidemiology and toxic substances,

 7   including working on both criteria and toxic air

 8   contaminants in Arizona and here in California.

 9             Parenthetically, I've spent the other half of my

10   career in injury prevention so I am very used to dealing

11   with the attitudes and practices of the automobile industry.

12   More on that later.

13             I also hope to be able to say something that

14   actually other people haven't said and make this late

15   afternoon worthwhile for you.  And I am here today as a

16   volunteer with the American Lung Association.

17             You have already heard about AB 1493.  I'm going

18   to try not to repeat all that.  But I want to emphasize the

19   point that by not approving this waiver you are denying

20   California the right to protect the public health as is

21   guaranteed by the Constitution, protecting health and

22   welfare is assigned to the states.  And as assured by the

23   Clean Air Act itself, when it permits states to adopt more

24   protective standards.

25             You have already heard why passing this law was

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 1   critical for California.  you have already heard why

 2   California clearly has the compelling and extraordinary

 3   circumstances that are needed to merit this waiver.  You

 4   have already heard that motor vehicles continue to be a

 5   major source of emissions in California and that 40 percent

 6   of our greenhouse gas emissions come from automobiles.  you

 7   have already heard that AB 1493 will provide a feasible and

 8   cost-effective way to reduce emissions with technologies

 9   that are proven and readily available today.

10             We have known for decades what the health effects

11   of air pollution are and how bad they can affect people with

12   their respiratory health, their cardiovascular health,

13   perhaps even their mental health through disease processes

14   including asthma, bronchitis, emphysema, chronic lung

15   disease and lung cancer.

16             As with all forms of environmental degradation it

17   is the poor, the young and the old who are affected the

18   most.  And now we know that not only does air pollution

19   exacerbate these conditions, but in the case of asthma can

20   actually cause it.

21             Now for something new.  Furthermore, in this day

22   and age with the accelerating epidemic of childhood obesity

23   upon us, all of us physicians are urging our patients to get

24   out and be active in the community.  How can we do that in

25   good conscience when we know the air quality that we're

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 1   sending people into?  It's almost abusive.

 2             We know that asthma is a disease that can rob a

 3   youngster of his childhood, make him afraid to be out in

 4   nature and to explore the world.  We know that children

 5   today have the free range that is about ten percent of that

 6   we had when we were kids, and how essential it is for a

 7   child to develop and grow normally to be able to explore and

 8   touch and sense the world without restriction.

 9             Perhaps lung disease is the cruelest way to die.

10   The constant air hunger.  The wondering when your next

11   breath will be your last.  The feeling, the sense that

12   you're moving just enough air to stay alive and no more.

13             You have already heard the findings about the

14   environmental damage that will be done to California through

15   global warming so let me cut to the chase.  One of the

16   things I value most about my training as a physician is the

17   training I received in recognizing when it is time to act

18   and stop waiting for more data.

19             We know that ultimately we cannot continue the

20   trend of ever-accelerating VMT and still avoid worsening

21   climate change.  But we are a long way from implementing the

22   compact urban development and new land use policies that

23   will bring about a reduction in VMT.  So right now is the

24   time to act.  Right now we need to be able to reduce auto

25   emissions to the rock bottom levels achievable with existing

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 1   technology to protect public health.

 2             It has been said that delay is the cruelest form

 3   of denial.  I strongly urge the EPA to grant this waiver

 4   now.  It is bad enough that the states have to go it alone.

 5   But for EPA to stand in the way is explicable and wrong for

 6   our children, wrong for our patients, wrong for all of

 7   California residents and the residents of the other 11

 8   states and the nation.  Please don't add more heat to the

 9   already accelerating skepticism of government that the

10   public has.

11             Unlike some other witnesses I am not worried about

12   the earth, I am just worried about the creatures that live

13   on it.  Thank you.

14             PRESIDING OFFICER GRUNDLER:  Thank you very much,

15   doctor.  Any questions for the panel?

16             Thank you for your time.

17             I'd like to invite the members of Panel 10 to come

18   forward.  Todd Campbell from Clean Energy, Laura Stuchinsky

19   from the Silicon Valley Leadership Group, Mike Jackson,

20   Transportation Technology, TIAX, and Bob Roberts from the

21   California Ski Industry Association.  Thank you very much.

22             We'll begin with Mr. Campbell.  He is not here.

23             Ms. Stuchinsky, you may begin.

24             MS. ROSA:  My name is Kris Rosa, representing

25   Laura Stuchinsky and the Silicon Valley Leadership Group.  I

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 1   am here to express the Leadership Group's support for the

 2   waiver.

 3             By way of background, the Silicon Valley

 4   Leadership Group is a public policy trade association

 5   founded 29 years ago by David Packard of Hewlett Packard.

 6   Today the Leadership Group has more than 210 members,

 7   including many of the nation's largest high tech and biotech

 8   firms.

 9             The Leadership Group's members have made reducing

10   the nation's greenhouse gas emissions and dependence on

11   imported fossil fuels a priority for their individual

12   organizations and the Leadership Group as a whole.  That is

13   why the organization was one of a handful of business groups

14   in the state that supported AB 32.  It is also why it

15   supports California's request for a rule waiver to implement

16   AB 1493.

17             We believe it is imperative that our nation take

18   swift and concerted action to avert the worst effects of

19   global warming.  We applaud the Governor and the Legislature

20   for exercising early and bold leadership on this issue.  It

21   is consistent with the state's long and proud history of

22   leadership on environmental policy.

23             Given that transportation is a major source of

24   greenhouse gases, 40 percent of all emissions in the state,

25   it makes sense for California to reduce emissions from this

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 1   section to the maximum extent feasible.  Reducing tailpipe

 2   emissions is one strategy to achieve that goal.

 3             To achieve the deep cuts in emissions that are

 4   needed ultimately we will need to take comprehensive action

 5   on a national level.  But until that occurs it is essential

 6   that the federal government encourages states willing to

 7   take steps into the vanguard to do so.  To pilot programs

 8   and policies that, if effective, could be replicated across

 9   the country.

10                  California is the ideal place to road test

11   these ideas.  Our leadership and residents support such

12   action.  California's size, the numbers of cars purchased

13   and driven in this state gives us the heft to make

14   significant change.  A number of the world's experts from

15   the public and private sector are already doing the cutting-

16   edge research to make the necessary to happen in order to

17   implement the state's motor vehicle greenhouse gas reduction

18   regulation as well as other related state policies and

19   programs.

20             In summation, the Silicon Valley Leadership Group

21   urges the granting of the waiver.  This is not only in the

22   best interest of California but for the nation.  Thank you

23   for this opportunity.

24             PRESIDING OFFICER GRUNDLER:  Thank you, Ms. Rosa.

25             Mr. Jackson.

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 1             MR. JACKSON:  Thank you.  My name is Mike Jackson.

 2   I am Senior Director of TIAX Corporation, LLC.  I head up

 3   our west coast office and I have focused my career for the

 4   last 30 years on transportation technology.  TIAX has been

 5   involved in a number of studies that touch upon many of the

 6   technical issues around reducing greenhouse gas emissions

 7   from light duty vehicles.

 8             So thank you for giving me the opportunity to

 9   provide comments and support of California's request for a

10   waiver of preemption under Clean Air Act Section 209(b).  In

11   my opinion, the California is needed to protect public

12   health in California.  This regulation will reduce damages

13   associated with climate change as well as criteria

14   pollutants and our over-reliance on petroleum-based fuels.

15             ARB's GHG emission standard coupled with Governor

16   Schwarzenegger's Executive Order S-01-07 requiring ARB to

17   establish a low carbon fuel standard, LCFS, will provide a

18   set of performance standards that will effectively control

19   overall emissions, be they greenhouse gas emissions or

20   criteria, and the economic impacts of our current fuel

21   vehicle system.

22             These performance standards will generate fuel and

23   vehicle innovations at reasonable costs and will provide

24   necessary emission reductions to protect public health.  For

25   these reasons I urge the US EPA to approve California's

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 1   waiver request.

 2             I have included a Figure 1 in my testimony that

 3   illustrates that as the light duty vehicle fleet approaches

 4   it gets cleaner with the -- towards the cleanest

 5   technologies, such as Partial Zero Emission Vehicles or

 6   PZEVs, that the greenhouse gas emissions and the economic

 7   damages that are associated not only with those from

 8   criteria pollutants but greenhouse gas emissions and our

 9   over-reliance, that all these become very, very important.

10   They are equal in their contribution to the damages that

11   will occur in California.  We need these kind of performance

12   regulations that address these combined issues of reducing

13   criteria pollutants, greenhouse gas emissions and economic

14   consequences of relying solely on petroleum fuel for our

15   transportation system.

16             In recent congressional testimony each of the CEOs

17   of General Motors, Ford and Chrysler expressed the need for

18   the auto industry to develop alternative sources of

19   propulsion systems on diverse sources of energy.  GM's

20   Wagoner indicated the need to combine solutions to reduce

21   gasoline use and oil imports to also to reduce CO2

22   emissions.  Ford's CEO said that:

23                  "Our analysis shows that the most

24             cost-effective solutions to lower the

25             CO2 emissions from vehicles must be a

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 1             combination of biofuels and vehicle

 2             technology advancements."

 3   An integrated systems approach considering the vehicle and

 4   the fuel is needed to provide combined benefits of reducing

 5   criteria emissions, GHG emissions, and reliance on petroleum

 6   based fuels.  Reformulating fuels in the early 1990s

 7   provided substantial advances in automotive emissions

 8   technology and was the first step to integrating the fuel-

 9   vehicle system for criteria pollutants.  The next step in

10   this process of controlling vehicle emissions is to optimize

11   the use of advanced engine technologies and low carbon fuels

12   to further reduce and possibly even remove the automobile

13   from the environmental equation.

14             ARB in their GHG emission standard and the

15   subsequent low carbon fuel standard are performance-based

16   standards from which the oil and auto industries can respond

17   with innovative, cost-effective solutions.  ARB's standard

18   incorporates not only advanced technologies but also the use

19   of alternative fuel technologies such as flexible fuel using

20   ethanol blends, compressed natural gas, plug-in hybrids.

21   Further, the regulation is written to not only include

22   tailpipe emissions but just as importantly the upstream

23   components of those emissions as well as vehicle air

24   conditioning impacts.

25             There are also direct upstream reductions of

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 1   criteria pollutants, contrary to what the Alliance suggested

 2   this morning, since less gasoline fuel is being produced and

 3   distributed.  Estimates that we have made at TIAX indicates

 4   that in 2020 that reduction in terms of NOx plus ROC,

 5   although not substantial, is on the order of five tons per

 6   day.  It's not insignificant either.  And when you're

 7   talking about PM emissions it's on the order of one ton per

 8   day.

 9             These emissions, as you can imagine, it's hard to

10   figure out exactly where they are all coming from and what

11   the emission factors are for each step along the

12   distribution chain.  Throwing in some higher estimates they

13   could be as high as 15 tons per day or 6 tons -- 15 tons per

14   day of ROC plus NOx or 6 tons per day of PM.  This is in

15   stark contrast to Mr. Clubok's presentation of where he's

16   going to increase, the emissions would increase by about

17   that magnitude.

18             I have also shown in my testimony here a figure 2

19   which illustrates the benefits of alternative fuels in

20   meeting greenhouse gas standards compared to engine

21   efficiency measures alone.  And this figure is illustrating

22   how low carbon fuels can achieve very, very substantial

23   reductions in GHG emissions.  Ethanol fuels produce, for

24   example, from cellulosic resources or from sugar cane,

25   provide extremely low GHG impacts.  Other alternatives such

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 1   as electric drive, including electric vehicles or plug-in

 2   hybrid electric vehicles, also provide significant

 3   reductions due to higher vehicle efficiencies, but also the

 4   fact that the electric generation mix is cleaner.

 5             The question is, will these technologies be

 6   accepted in the marketplace?  Recent announcements by all

 7   the OEMs suggest that they are serious about successfully

 8   bringing these vehicles to the marketplace.

 9             FFVs are already sold in California and the US.

10   Nationwide now six million are on our roads.  The CEOs from

11   GM, Ford and Chrysler have committed to provide 50 percent

12   of their productions as FFVs by 2012 in support of the

13   President's goal to reduce petroleum use by 20 percent by

14   2017.  Toyota has indicated they will be the first to market

15   with PHEVs.  GM has introduced the Chevrolet Bolt that they

16   expect to have in production by 2010.  DaimlerChrysler is

17   currently demonstrating PHEV architecture in their Sprinter

18   van.  All manufacturers continue to invest in developing

19   hydrogen fuel cell technologies.  Similarly, the energy

20   providers are also investing in new fuels that have lower

21   GHG impacts and can be effectively marketed using new or

22   existing infrastructure.

23             In conclusion, high oil prices and high oil and

24   gasoline prices, reliance on oil supplies from

25   geopolitically unstable regions, the growing consensus of

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 1   the impacts of global warming, what you've heard today, and

 2   California's continuing struggles to meet ambient air

 3   quality standards in the South Coast and San Joaquin regions

 4   has mobilized our Legislature to require far-reaching

 5   regulations.

 6             Protecting public health has always been a high

 7   priority for Californians, as has protecting our economy,

 8   industries and jobs.  ARB's greenhouse gas emission

 9   regulation for light duty vehicles and the proposed low

10   carbon fuel standard will, in my opinion, provide much

11   needed reductions not only in the GHG emissions but in ozone

12   precursors as well as direct and indirect particulate

13   emissions.  This will be accomplished with advanced engine

14   technologies, with lower carbon fuels and with electric

15   drive technologies with promises of zero tailpipe emissions.

16   All of these technologies will be needed in California to

17   protect our citizens.  Thank you.

18             PRESIDING OFFICER GRUNDLER:  Thank you,

19   Mr. Jackson.  You indicated some analyses you have done

20   estimating the air quality impacts of these standards.  Are

21   those part of your written testimony that you'll be

22   submitting?

23             MR. JACKSON:  I can do that.  It wasn't part of

24   the written testimony.

25             PRESIDING OFFICER GRUNDLER:  That would be useful

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 1   to us.

 2             MR. JACKSON:  And to be clear, it's the estimate

 3   of the upstream emission criteria pollutants?

 4             PRESIDING OFFICER GRUNDLER:  Correct.

 5             Mr. Roberts, please begin.

 6             MR. ROBERTS:  Thank you very much.  Are we on?

 7   Thank you very much.  Welcome to California and thank you

 8   very much for your patience in this long day.  It is very

 9   much appreciated.  My name is Bob Roberts.  I am the

10   Executive Director for the California Ski Industry

11   Association and I am here on behalf of our 37 resort members

12   and our Board of Directors.

13             The winter sports industry in California is in

14   fact the proverbial canary at the 7,000 foot mine shaft.

15   And quite honestly, we are not feeling too good these days.

16   For the last half century we have been providing

17   recreational opportunities on the snowpack and making our

18   living off of that.  With the demise of timber, cattle, the

19   extractive industries on our mountain communities, we have

20   become recreation and tourism.  The real economic engines

21   for the mountain communities in California.

22             Today our industry attracts about eight million

23   visitors, literally from all over the world, to ski and

24   snowboard on our slopes.  This is an infusion in the

25   mountain communities of California of a little over $2.5

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 1   billion each year.  And that really doesn't include the

 2   billions of private and public infrastructure dollars that

 3   are going in to make these communities continue to be able

 4   to attract and complete in the competitive industry that

 5   we're in, which is tourism and recreation.

 6             Thirty-five years ago snow making was a novelty.

 7   About a handful of areas in Southern California engaged in

 8   it and, quite honestly, the rest of us felt that it was

 9   really quite a folly.  The Sierra Nevada and the Siskiyou

10   Ranges, we pretty reliably got 30 to 40 feet of snow.  Our

11   season lasted six months.  The drought years were few and

12   they were far and few in-between.

13             At a personal level I have a very clear memory of

14   the spring of 1974.  On Mount Shasta I had to actually

15   trench lines so that skiers could work over our 40 foot

16   snowpack so that our chair lifts would operate.  It's a

17   memory that stays with me today because we really never

18   really worried about our snow quality.  In fact we needed

19   four feet of snow just to cover the rocks.

20             That's all changed.  Today our resorts statewide

21   have tens of millions invested in snow making and these are

22   large, sophisticated snow making systems throughout the

23   state, Southern California all the way through Tahoe,

24   Mammoth, up to Mount Shasta.

25             The reports that we got from Scripps in 1999 and

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 1   again from the National Academy of Sciences in 2004, and

 2   what we heard earlier today, really just confirmed for us

 3   what we have seen firsthand.  Over the last 50 years the

 4   springtime temperatures in the Sierra have increased two to

 5   three degrees Fahrenheit and it has been noticeable.  Our

 6   springtime runoffs are now about two weeks earlier.

 7             This particular season was a real punctuation

 8   mark.  Clearly it was a drought year.  Our snowpack was down

 9   40 percent.  Our season, quite frankly, ended a month early

10   and our visitation was off 18 percent.  Now it's a bit of an

11   anomaly but the fact of the matter is it does bring

12   attention very clearly to our dependence on weather and the

13   dynamic changes that are clearly happening for us.

14             We've looked at other studies, these same studies,

15   studies that have been done in Utah and Colorado and Europe

16   as well, and they have all pointed to the same thing.  If we

17   do nothing our snowpack, particularly here in the Sierra

18   Nevada, will disappear by the end of this next century.  It

19   will reduce by at least 80 percent.  And you heard similar

20   kinds of discussions and points made by our scientists

21   earlier.  This for us is just an extraordinarily concerning

22   and a very difficult situation to foresee for our industry.

23             Obviously we want to see mitigation and we'd like

24   to see it very quickly and handily here in California.  The

25   ski and snowboard industry in California, along with our

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 1   counterparts throughout the world, are really committed to

 2   this question of climate change.  How can we mitigate it?

 3   Frankly we are a very small industry.

 4             Our industry, the California ski industry, was an

 5   early and a very ardent supporter of AB 1439, equally for AB

 6   32.  We partner, for example, with the NRDC on a Keep Winter

 7   Cool campaign that is a national campaign that we have all

 8   participated in.

 9             Our resorts are on low carbon diets.  We buy green

10   tag energy, we use biodiesel in our fleets, we have

11   aggressive recycling programs.  We work very closely with

12   our transportation systems in our districts to try and

13   encourage public transportation as well as carpooling.  And

14   our construction, to the extent possible, all of our new

15   construction is as green as we can make it.  So that our

16   industry is doing what it can but we are a very, very, very

17   small industry.

18             So one of the things our Board has most recently

19   elected to do is to produce an IMAX.  And I think we have

20   all seen the award-winning production on the part of Ex-Vice

21   President Gore.  And if you can get an Oscar for a

22   PowerPoint presentation we think that an IMAX talking about

23   the greener way is going to be appropriate.  And we have

24   sponsored one before and we are going to sponsor this again

25   because our last one went on five continents.  It was

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 1   Adventures in Wild California.  And we feel that this is a

 2   way tog et messages out to people not only in the United

 3   States but broadly across the world that will resonate and

 4   will stay in communities and will attract schoolteachers

 5   leaders of communities.

 6             So as a small industry we're doing everything we

 7   can but we need this waiver.  We need these changes.  And we

 8   feel very strongly that this is the time, it's here and we

 9   have the grounds.  I think if you look at the compelling and

10   extraordinary language, which are the precise grounds in the

11   language, they merit this waiver.  And on behalf of our

12   industry, our mountain communities and our millions of

13   winter sports visitors we urge you and request that you

14   grant the waiver.  Thank you.

15             PRESIDING OFFICER GRUNDLER:  Thank you,

16   Mr. Roberts, thank you all.

17             It is typically our practice to --

18             Let me invite up Panel 11, some other non-

19   governmental organizations who are presenting testimony

20   today.  The Sierra Club, Environment California, The Union

21   of Concerned Scientists, Arizona PIRG, Global Exchange,

22   Republicans for Environmental Protection and the Planning

23   and Conservation League.  Thank you all for coming.

24   Mr. Zichella, why don't you lead off.

25             MR. ZICHELLA:  Good afternoon.  Several other

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 1   people have said it and I know it's been a long day so I am

 2   going to do the best I can not to repeat what other people

 3   have said.  Many good points have been made about the

 4   impacts on California by people who can do a far better job

 5   than I can at it.  Certainly I think that you get the idea.

 6   We have a lot at stake here.  A lot of the impacts our state

 7   are experiencing are not just impacts that are forecast,

 8   they are already observable.

 9             My name is Carl Zichella.  I am the Regional Staff

10   Director for the Sierra Club for California, Nevada and

11   Hawaii.  I am testifying today on behalf of our 210,000

12   Sierra Club members in these three states and our 1.3

13   million members and supporters nationwide.

14             As I mentioned, a lot has happened since 2004 that

15   we have talked about today.  We know about the IPCC reports

16   and what they've said, we know about the impacts that the

17   state's research has been about California.  We have seen

18   the Supreme Court decision clarifying the authority of EPA

19   to regulate CO2, which really should guide your actions in

20   this waiver.  If you have the authority to regulate CO2 as a

21   pollutant under the Clean Air Act so certainly does

22   California.  That Supreme Court ruling was a watershed.  It

23   really turns a corner I think in many ways politically in

24   this country.

25             And one of the developments that we have seen

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 1   since this law was enacted was a broad public consensus that

 2   is bipartisan now nationwide, to the 60th percentile

 3   nationwide.  You heard earlier, we're to the 80th percentile

 4   in support of immediate action here in California.  I think

 5   it's time to really move forward and not to allow any

 6   further delay.

 7             Skipping over a number of things that have already

 8   been said.  I do want to mention that I got kind of angry

 9   this morning listening to the auto makers.  And I know part

10   of it was sort of a sense of bad deja vu.  We've heard the

11   same kind of remarks from them over and over and over again

12   through the years.  You heard the representative this

13   morning say, someone is going to say, there they go again.

14   Well someone is going to say, there they go again.

15             As I listened to them this morning it brought to

16   mind the words of I. F. Stone who once wrote, in order to

17   understand this year's lies you have to remember last year's

18   lies.  This is an industry that told us it was too expensive

19   to put safety glass in cars.  It was too expensive to put

20   padded dashboards in cars.  That seatbelts were going to

21   bankrupt their industry.  That they couldn't put catalytic

22   converters on automobiles or they'd all go broke.

23             In 1973 one of my personal favorites was the Ford

24   Motor Company testifying before Congress on corporate

25   automobile fuel economy standards, that if we pass CAFE

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 1   standards at all everyone would be driving Pintos by now.

 2   One quick look out the window shows how wrong that was.  And

 3   in fact they have never been right.

 4             One of the examples they gave to try to mitigate

 5   this perception was that the zero emission vehicle mandate

 6   in California was a bit of a failure.  Well that's

 7   interesting, seeing as how they never tried to market an

 8   electric car and they bought up every single -- and they

 9   took back every single electric car that was leased in the

10   state and destroyed it.

11             Now it's quite amazing to me that they'll sit

12   there and argue for no action to be taken.  They will

13   criticize this particular law for which we're seeing a

14   waiver saying that it can't solve the global warming problem

15   on it's own.  It's not going to bring down global

16   temperatures.

17             Well, you know, as we've also heard scientists

18   tell you, there is no silver bullet.  But i would argue that

19   this piece of legislation that we're talking about today, AB

20   1493, is part of what I would characterize as silver

21   buckshot.  The kinds of things, the many kinds of things

22   we're going to need to do to get a handle on this problem.

23             I would characterize the industry's arguments this

24   morning as one being, let's not take the first step on a

25   journey, and then be surprised that we never get to the

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 1   destination.  That we shouldn't do anything.  That we should

 2   just hold off.

 3             Well I just think that these arguments are not

 4   only irresponsible, they are actually immoral.  Because

 5   knowing what we know right now about the problem of global

 6   warming and the delay that we have been forced to wait

 7   through for the last six years, it's just inexcusable that

 8   further delay would occur.

 9             There is zero doubt in the scientific community

10   any more, well I should say maybe there's ten percent of

11   those that still think that global warming isn't real.  With

12   90 percent certitude from the scientific community according

13   to the IPCC that this is a problem and that we are causing

14   it there is zero excuse to hold off on action any more.  To

15   do so actually threatens the future generations of Americans

16   and other people on this planet with diminished, and

17   probably even greatly diminished lives if we do not live up

18   to what we need to do.

19             The state of California acted when the federal

20   government would not.  It took the initiative to help

21   protect its citizens when the federal government would not.

22   And I think that to say that there is any excuse but a

23   political excuse to deny this waiver would be an abuse.

24             And frankly I just feel so strongly about this,

25   and so angry about what was said earlier today, that I need

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 1   to just exhort you to take back to the EPA that this is

 2   going to be a battle to the finish over this waiver.  States

 3   have the right to do this, they have the need to do this.

 4   If the 11 states and the five more that are considering it

 5   adopt this law, 40 percent of the US automobile market would

 6   be affected.

 7             US cars and trucks if you break them out by

 8   themselves as a separate category is the fifth leading

 9   source of greenhouse gas emissions in the world.  California

10   is the leading consumer of gasoline in the United States.

11   It's clear California needs to do this, we have a lot of

12   contribution to make, not only to direct greenhouse gas

13   reductions but to leading other states and other nations in

14   reducing greenhouse gas emissions.

15             We urge you to grant this waiver, we urge you to

16   grant this waiver now.  To accede to the industry's position

17   is to say we never take the first step on a journey that we

18   absolutely must reach our destination on.  Thank you.

19             PRESIDING OFFICER GRUNDLER:  Thank you,

20   Mr. Zichella.

21             MR. ZICHELLA:  You're welcome.

22             PRESIDING OFFICER GRUNDLER:  Next we have a

23   representative from Environment California, Jason Barbose.

24             MR. BARBOSE:  Thank you.  My name is Jason Barbose

25   and I'm a Global Warming Advocate with Environment

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 1   California Research and Policy Center.  Our organization is

 2   a statewide citizen-based environmental advocacy

 3   organization that represents approximately 70,000

 4   Californians.  And thank you, of course, for giving me the

 5   opportunity to speak today on this matter.  I hope my

 6   comments aren't overly duplicative of comments already made

 7   today, but to the extent that they are I believe they will

 8   be reinforcing important points.

 9             And basically the main thrust of my comments is

10   that the extraordinary and compelling risks that global

11   warming poses to California require immediate and well-

12   reasoned solutions and California officials are doing just

13   that.  It was with great purpose that California regulators

14   and officials adopted greenhouse gas standards for motor

15   vehicle and it is with a great urgency that we are asking

16   the EPA to grant us the waiver for those standards.

17             This year the United Nations Intergovernmental

18   Panel on Climate Change, the IPCC, is releasing the current

19   state of climate science after a rigorous, multi-year

20   process that included extensive review by scientists and

21   governments worldwide, including the United States.  And the

22   IPCC found that the evidence of global warming is, quote,

23   "unequivocal" and that with greater than 90 percent

24   probability it is very likely human activities, primarily

25   the burning of fossil fuels, are responsible for most of the

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 1   observed increase in global average temperature since the

 2   mind-20th century.

 3             And for years scientists and government officials

 4   have done extensive research in California as well about he

 5   particular threats global warming poses to our environment

 6   and our economy and our public health here in our state.

 7   And as has been expressed in greater detail already today,

 8   these threats and challenges are tremendous.  In California

 9   we are always at risk of drought, but studies show global

10   warming could nearly drain our Sierra snowpack, depleting

11   water supplies for both people and agriculture.

12             In California we already suffer from some of the

13   worst air quality in the nation but global warming could

14   increase by 75 percent the number of days conducive to smog

15   pollution in the Central Valley and in Los Angeles Air

16   Basin.  In California we are home to an amazing array of

17   natural environments unmatched in any other state but global

18   warming could dramatically alter these important ecologic

19   ecosystems.

20             And the good news is that the IPCC has also

21   concluded that we can avoid or delay many of these impacts

22   if we quickly and significantly reduce global warming

23   emissions by at least 15 to 20 percent by 2020, and then 80

24   percent by 2050.

25             Unfortunately, as you can imagine, the facts show

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 1   that we have been on an alternate trajectory.  Global

 2   warming emissions rose 17 percent nationwide between 1990

 3   and 2005, by nearly the same amount in California.  And a

 4   large part of this emissions increase, as you know, is

 5   attributable to cars and light trucks.  The transportation

 6   sector in California accounts for over 40 percent of our

 7   state's greenhouse gas emissions.  Carbon dioxide emissions

 8   from motor gasoline consumption in our state increased 15

 9   percent from 1990 to 2004 from 111 to 128 million metric

10   tons.

11             So in seeing the compelling need to cut global

12   warming pollution the extraordinary consequences of failing

13   to take action, and the major contribution that cars and

14   SUVs make to the problem, California decision-makers made a

15   rational response.  They undertook a multi-year process that

16   included careful and measured technical review and public

17   input to create first-in-the-nation standards to cut global

18   warming pollution from cars and light trucks.

19             And the standards, of course, can be met with

20   technology already in the market, they will give auto makers

21   flexibility to apply any technology they choose.

22             And since 2004, as you know, 11 states have

23   adopted the California tailpipe emission standards.

24   Together these states account for more than one-third of the

25   US auto market.  And according to Environment California's

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 1   analysis, by 2020 the cumulative emissions reductions

 2   achieved in these 12 states, including California, will be

 3   the equivalent to taking 74 million of today's cars off the

 4   road for an entire year.

 5             And unfortunately, without EPA's stamp of approval

 6   California and these 11 states will not be able to take this

 7   important step, which is of course why we are all here

 8   today.  Unfortunately though, California's standards were

 9   carefully crafted to meet he various criteria for a waiver

10   of preemption under the Clean Air Act.

11             And I'll defer to ARB's comment earlier today and

12   last week at the hearing in DC but let me just say this.

13   The standards are obviously as protective of public health

14   and welfare as federal standards because the federal

15   government has refused to set any global warming emission

16   standards for vehicles.  The standards address compelling

17   and extraordinary conditions California faces from climate

18   change and reflect California's pioneering role in reducing

19   pollution from tailpipes.

20             In all you could say the standards are consistent

21   with the Clean Air Act, given the wealth of evidence that

22   they are technologically feasible and that the required test

23   procedures are consistent with EPA's requirements.

24             And so in conclusion, global warming demands

25   immediate action at the local, at the state, at the federal

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 1   levels.  Given the risk, it is grossly irresponsible for the

 2   federal government to reject the limits on global warming.

 3   But more than that it is unconscionable for EPA to stand in

 4   the way of state action and leadership.  And so on behalf of

 5   Environment California I respectfully urge the EPA to grant

 6   California's waiver request and remove the current roadblock

 7   to clean cars.  Thank you.

 8             PRESIDING OFFICER GRUNDLER:  Thank you very much.

 9             Mr. Bosh.

10             DR. BUSCH:  Yes.  It's actually Busch, B-U-S-C-H.

11             PRESIDING OFFICER GRUNDLER:  Thank you.  Sorry

12   about that.

13             DR. BUSCH:  I've seen different spellings without

14   the C, that's a new one to me though.  I actually have a few

15   slides.  I don't think I can advance those from here.  Okay,

16   I will.  So thanks very much for the opportunity to say a

17   few words today.  I'm Chris Busch, I'm an economist in the

18   Union of Concerned Scientists California Climate Program.

19             A bit about my credentials: I have a PhD in

20   Agricultural and Resource Economics from the University of

21   California and a master's degree in public policy from

22   Berkeley as well.  Previously I worked as a Senior Research

23   Associate at Lawrence Berkeley National Laboratory.

24             Today I would like to address the compelling and

25   extraordinary conditions that exist in California regarding

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 1   the impacts of unabated global warming.  With respect to at

 2   least three key aspects, water supply, coastal impacts due

 3   to sea level rise and air quality and public health,

 4   California is especially vulnerable to global warming

 5   impacts.

 6             The economic cost of sea level rise could easily

 7   amount to billions of dollars.  Much attention has been

 8   given to he risk posed by inundation of low-lying land in

 9   the San Francisco bay Area.  An issue of at least equal

10   importance is the danger of erosion of cliffs and related

11   damage to property.  This will be particularly important in

12   Southern California.

13             I'd like to highlight some original research that

14   professor Michael Hanemann and I conducted for the state

15   last year.  This work sought to provide some information

16   about the economic impacts of sea level rise in Southern

17   California.

18             We found, based on the vulnerability of valuable

19   real estate and infrastructure that approximately 120 miles

20   of Southern California coastline can be expected to need

21   protection during the course of this century.  With sea

22   walls in California now averaging about $6,000 per linear

23   foot this suggests a cost estimate for the protection of

24   Southern California's coastline of about $3.8 billion in

25   today's prices.

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 1             This is in no way reflective of the total expected

 2   cost.  Maintenance costs for sea walls average about four to

 3   ten percent of installation costs annually.  Another

 4   somewhat hidden cost is the phenomena of passive erosion

 5   that occurs with installation of sea walls, which cause the

 6   beaches that lie in front of them to wash away, resulting in

 7   additional costs in the form of lost beach recreation or

 8   costly beach sand replenishment.

 9             The California Coastal Commission's report,

10   overview of Sea Level Rise and Some Implications for Coastal

11   California reinforces the view that the south coast faces

12   significant economic implications from sea level rise.

13             The figure on the screen now shows the expected

14   economic damage for different parts of the California coast,

15   if the coast were to be left unprotected, as a function of

16   physical vulnerabilities and the location of valuable

17   property along the coast.

18             The relative losses are ranked on a scale of one

19   to five with five being most severe.  The height of the

20   cross-hatched bars show the relative level of economic

21   damage projected for each of the coastal counties.  Again,

22   absent installation of sea walls.  With the exception of a

23   small slice of coastline at the former military base, Camp

24   Pendleton, the entire south coast receives the highest risk

25   rating of four or five.

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 1             Let me close with a few words on the issue of

 2   water supply and flood protection impacts, which can also be

 3   expected to impose very large costs.  Probably no other

 4   state has such an intricately woven and climate dependant

 5   water management system.  The projected decrease in Sierra

 6   snowpack will have serious water supply related impacts on

 7   both agricultural and urban water users, as Dr. Larry Dale

 8   testified to earlier.  These water supply impacts could be

 9   lessened by new investments in California's water management

10   system, but these new projects themselves will be costly

11   both monetarily and ecologically.

12             The increased risk of catastrophic flooding is

13   also particularly remarkable.  Sacramento's flood risk is

14   the greatest of any major US city.  This next slide gives

15   the relative flood risk as reported by the Sacramento Area

16   Flood Agency, Flood Control Agency, excuse me.  the height

17   of each bar represents the level of flood protection for a

18   particular city.  The figure shows that Sacramento has the

19   lowest, estimated flood protection with defenses thought to

20   be able to withstand a 77-year flood.

21             Global warming will further increase Sacramento's

22   flood risk.  The damages following Katrina have made clear

23   the immense economic damages associated with flooding of a

24   major metropolitan area.

25             In conclusion, California faces an extraordinary

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 1   and compelling array of economic impacts if global warming

 2   continues unabated.

 3             We urge approval of California's waiver without

 4   further delay so that we can move forward with global

 5   warming solutions.  Thank you very much.

 6             PRESIDING OFFICER GRUNDLER:  Thank you, Dr. Busch.

 7             Mr. Somers.

 8             MR. SOMERS:  Thanks for the opportunity to testify

 9   today.  My name is Mike Somers and I am a representative of

10   he Arizona PIRG Education Fund.  The Arizona PIRG Education

11   Fund conducts research and education on public interest

12   issues.  I am here today to urge the EPA to grant

13   California's waiver request and give Arizona and all the

14   states the power to cut global warming pollution from cars

15   and light trucks.

16             As you are likely aware, in February 2005 Governor

17   Napolitano established a Climate Change Advisory Group

18   comprised of 35 diverse stakeholders.  The Arizona PIRG

19   Education Fund was an active participant in the CCAG's

20   Transportation and Land Use Work Group.  Over the course of

21   the next year and half the CCAG and its working groups

22   discussed a variety of policies that could reduce global

23   warming pollution in Arizona.  The Clean Cars Program

24   emerged as one of the top policy options to reduce global

25   warming pollution in Arizona and received a unanimous

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 1   recommendation to the governor by the full CCAG.  So in

 2   Executive Order 2006-13 Governor Napolitano called for an

 3   adoption and implementation of the Clean Cars Program.  The

 4   rulemaking process has not yet begun.

 5             In part through the Governor's Executive Order and

 6   the CCAG process it was recognized that investing now in

 7   Arizona's growing infrastructure can make enormous

 8   differences down the road.  Arizona can significantly reduce

 9   its global warming pollution by creating and implementing

10   programs to achieve the greatest emission savings.  And

11   Arizona could make major strides towards reducing its share

12   of global warming pollution by ensuring our state has

13   cleaner cars.

14             The Arizona PIRG Education Fund's report, Cars and

15   Global Warming: Policy Options to Reduce Arizona's Global

16   Warming Pollution from Cars and Light Trucks documents how

17   Arizona could limit its contribution to global warming over

18   the next two decades by implementing policies to reduce

19   carbon dioxide emissions from cars and light trucks.

20   Furthermore the report states that controlling global

21   warming pollution from the transportation sector,

22   particularly cars and light trucks, is essential if Arizona

23   is going to reduce its emissions and its long-term impact on

24   the climate.

25             According to the report, transportation-related

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 1   emissions are responsible for approximately 39 percent of

 2   Arizona's global warming pollution.  Cars and light trucks

 3   such as pickups, SUVS and minivans, are the most important

 4   sources of global warming pollution within the

 5   transportation sector, responsible for approximately 60

 6   percent of all emissions from transportation an more than

 7   one-fifth of Arizona's total emissions of global warming

 8   pollution.

 9             The Arizona PIRG Education Fund's report documents

10   how carbon dioxide pollution from cars and light trucks in

11   Arizona could double from 1990 to 2020 unless action is

12   taken to reduce emissions.

13             According to the report, by implementing the Clean

14   Cars Program to take effect in model year 2011, calendar

15   year 2010, Arizona could reduce carbon dioxide pollution

16   from cars and light trucks by about 14 percent below

17   projected levels by 2020.  Once the program is fully

18   implemented in 2016, consumers are projected to save at

19   least $3 to $7 every month as the result of the standards,

20   and more if gasoline prices remain high.

21             Arizona, California, the other states that have

22   adopted the Clean Cars Program and other states that are

23   considering the adoption of the Clean Cars Program, deserve

24   the green light to establish limits on health-damaging

25   pollution and global warming pollution from automobiles.

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 1             California has acted based upon the facts, that

 2   cars and SUVs are a major contributor to global warming

 3   pollution, and rationally acted to reduce that pollution at

 4   the source.  Furthermore, California's standards are

 5   feasible.

 6             They can be met with technology already in the

 7   market and will save vehicle owners in lower maintenance and

 8   operating costs over the lifetime of the vehicles.  The

 9   standards give the auto makers the flexibility to apply any

10   technology they choose to reduce global warming emissions,

11   including production of vehicles that use lower carbon

12   fuels.

13             So in conclusion, California and the other states

14   that have adopted the California program account for more

15   than one-third of the US auto market.  By cutting global

16   warming pollution from tailpipes these states can help make

17   a big dent in the emission reductions that we need to avoid

18   the worst effects of global warming.  And it will save money

19   for consumers.

20             So on behalf of the Arizona PIRG Education Fund I

21   urge the EPA to grant California's waiver request and give

22   the states the power to cut global warming pollution from

23   cars and light trucks.

24             PRESIDING OFFICER GRUNDLER:  Thank you very much,

25   Mr. Somers and for traveling here to present your testimony.

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 1             Next we have Mr. Hudema from Global Exchange.

 2             Maybe not, okay.  How about Mr. Burke from

 3   Republicans for Environmental Protection.

 4             MR. BURKE:  Hi, my name is Buddy Burke with

 5   Republicans for Environmental Protection.  I am the State

 6   President of the California chapter of Republicans for

 7   Environmental Protection.  Good afternoon.  Thank you for

 8   coming out here to let us speak our mind here.

 9             I'm going to be right more to the point.  I'm

10   going to be very brief.  I don't want to repeat what has

11   been said earlier today, or at least not very much of it.

12   But I do want to mention a little bit to go along with what

13   Carl said.  You don't begin a long coast-to-coast journey by

14   waiting for all the lights to turn green.  The time to act

15   is now.  And what I'm here to say is I know I'm speaking for

16   the majority of the rank and file grassroots Republicans.

17   And what I found traveling throughout the country with the

18   organization is that I am speaking for the majority.

19             We are recognizing the rights of the individual

20   states.  Republicans for Environmental Protection gives only

21   the strongest support for the granting of a waiver for the

22   state of California to allow it to set its own more

23   restrictive standards.  And with minimum regulation, what we

24   do believe is that people will choose the better option.

25   Sometimes government has to interfere slightly.  That's

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 1   really what we're based upon.

 2             The state has chosen to regulate its air quality

 3   through proper legislative process, in a manner which it

 4   deems most effective.  As demonstrated dozens of times in

 5   recent history, California has taken a lead in conservation

 6   and is demonstrating that ongoing tradition yet again.  So

 7   why should this be interfered with from the federal level

 8   now at this time?

 9             We at Republicans for Environmental Protection see

10   it as our solemn duty to support legislation which continues

11   the tradition of conservation set forth by Presidents

12   Roosevelt, Grant and of course President Nixon.  What this

13   does is this places a value -- in placing this value above

14   all else.  And it is our legal obligation as well.

15             The ultimate charge of the EPA is to guard our

16   precious natural resources.  The air we breathe and live in

17   is clearly in that responsibility.

18             It was Senator Barry Goldwater who said:

19                  "While I am a great believer in the

20             free enterprise system and all that it

21             entails, I am an even stronger believer

22             in the right of our people to live in a

23             clean and pollution-free environment."

24             We at Republicans for Environmental Protection

25   say, let's help the free market do what's right.  And we

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 1   respectfully thank you for your time and for the opportunity

 2   and urge you to grant this waiver.  Thank you.

 3             PRESIDING OFFICER GRUNDLER:  Thank you, Mr. Burke.

 4             You must be the representative from the Planning

 5   and Conservation League.  State your name and present your

 6   testimony.

 7             MR. VANDER SLUIS:  Yes, my name is Matt Vander

 8   Sluis with the Planning and Conservation League.  I am the

 9   Program Manager for our Global Warming Program.  It is a

10   program that is a collaboration between the National

11   Wildlife Federation and the Planning and Conservation

12   League.  We are the state affiliate of the National Wildlife

13   Federation here in California.

14             I will be even more brief.  We need this waiver in

15   California.  It must happen.  We have no other options.

16   Global warming is here.  There were 164 people in California

17   who died last summer during a heat wave.  It was a two-week

18   heat wave, 164 people who died.  In Europe in 2003 people

19   went to the beach because it was hot and they came home and

20   their family members were dead.

21             Global warming is here.  It is affecting our lives

22   today.  This isn't a problem for 20 years from now or 30

23   years from now.  It's a problem today.  California is

24   filling a gap in leadership.  The EPA must step aside.

25   Please grant us this waiver, thank you.

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 1             PRESIDING OFFICER GRUNDLER:  Thank you very much,

 2   Mr. Vander Sluis.  Any questions for the panel?

 3             Thank you so much for your time.

 4             We invite the last panel up, citizens of

 5   California, and any other individuals who added their name.

 6   This will be our last panel of the day and then we're going

 7   to be inviting the State of California up to make some

 8   summary remarks.  So if any of these citizens are still

 9   here, Kelly Cuthbertson, Nicole Dickinson, Joanie Misrack,

10   Anna Marie Sanchez, Keith Gagomiros, John Sweet, please step

11   forward.

12             Is there anybody else in the audience that would

13   like to present testimony at this time?

14             Seeing no hands I would like to invite the State

15   of California back up to the podium to make some final

16   remarks.

17             AIR RESOURCES BOARD CHIEF DEPUTY EXECUTIVE

18   CACKETTE:  I'd like to thank the EPA for allowing us to make

19   some concluding remarks.  I think there are several things

20   that the Alliance brought up this morning in their testimony

21   that we would like to put on the record.

22             The Alliance made -- Did you need a name?  I'm

23   sorry.  Tom Cackette, Chief Deputy Executive Officer of the

24   Air Resources Board.

25             The Alliance made several points this morning for

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 1   which I think a response is appropriate.  These can be

 2   grouped into two areas.  The first one is that there was no

 3   measurable impact of our greenhouse gas regulations on

 4   global warming, even if adopted nationwide or even if

 5   adopted worldwide.

 6             And the second one was that ARB never made a

 7   protectiveness finding.  And included in that comment of

 8   theirs includes issues such as our LEV standards allegedly

 9   not being more stringent than EPA's and that our greenhouse

10   gas standards cause an increase in smog emissions.  So if I

11   could briefly address these issues I would appreciate it.

12   And we'll add some more in our written comments on the 15th.

13             The first issue is that there is no impact of our

14   regs on global warming.  I think Dr. Long responded better

15   than I can in his testimony this afternoon so I'd ask that

16   you reread his comments very carefully because they were

17   very articulate and to the point.  But I wanted to add a

18   couple more points.

19             First of all the IPCC has clearly articulated that

20   solutions to increasing global warming involved reductions

21   of emissions.  If we are going to have climate change

22   improvement it has got to be lower climate change emissions.

23   And that is exactly what our regulations do, they reduce the

24   emissions that cause global warming.  The Alliance claim

25   that our standards have no impact on global warming is

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 1   simply wrong and I think the scientists today add confirming

 2   testimony to that.

 3             Second, the Alliance seems to be speaking out of

 4   both sides of its mouth.  They tell you that reducing

 5   greenhouse gas emissions has no impact even if our standards

 6   were adopted worldwide, and yet in our testimony at the

 7   Washington DC hearing we presented this slide which shows

 8   several quotes from chief executive officers or very high

 9   officials of car companies.  And let me just read them for

10   you and the audience.  First of all there is Tom LaSorda,

11   who is the :President of DaimlerChrysler, or Chrysler now.

12                  "Every day our engineers are

13             working to reduce greenhouse gases and

14             petroleum consumption.  We absolutely

15             will be part of the solution and we will

16             accelerate our efforts."

17   And James Press, well-known Board of Director (sic) of

18   Toyota says;

19                  "Toyota is committed to continued

20             action to address climate change and

21             promote greater energy diversity.  I

22             believe the time is right to enlist the

23             immense talent and might of the auto

24             industry to help solve some of the key

25             issues of our time.  As an industry we

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 1             have an obligation to be part of the

 2             solution, not the problem."

 3             So the point is that why would they be spending

 4   all this effort trying to reduce greenhouse gas emissions if

 5   in fact the Alliance, who represents their position, was

 6   correct, that adopting these kind of emission standards to

 7   reduce greenhouse gases from cars would be completely

 8   ineffectual whether done on a state level, a national level

 9   or on a worldwide level.  There is clearly an inconsistency,

10   which I think speaks, I guess, for itself.

11             Finally, if you are to accept the Alliance's claim

12   of no impact of greenhouse gas standards on global warming I

13   think you have a dilemma, which is that you will not be able

14   to follow-through on the President's direction to you to

15   adopt greenhouse gas emission standards for the country.  I

16   mean, why would you do that if there was absolutely no

17   impact, no measurable impact on global climate change.

18             Let me skip to the second issue now, which is

19   protectiveness.  The Alliance claims that we never made a

20   protectiveness argument and that is simply not true.  All

21   you have to do is read our resolution adopting the

22   greenhouse gas standards -- and I think I've got it here

23   somewhere.  Maybe I don't.  Here it is.  "Be it further

24   resolved."  This is the resolution that was adopted in 2004

25   when we, when we adopted, the Board adopted these greenhouse

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 1   gas standards, the subject of this waiver hearing.  It says:

 2                  "Be it further resolved that the

 3             Board hereby determines that the

 4             regulations approved herein will not

 5             cause California motor vehicle emission

 6             standards in the aggregate to be less

 7             protective of public health and welfare

 8             than federal standards."

 9   That is the formal Board statement that we are meeting the

10   protectiveness claim.

11             Now there is a reason behind this, it's not just a

12   hollow statement.  This is a determination that we are

13   required to make.  And the only way that I think you can

14   reject it is if you find that it's arbitrary and capricious.

15   And let me give you the foundation for it.

16             First of all the Alliance claims that our smog

17   emission standards are no longer more stringent than EPA's

18   and that is simply not true.  Look at our standards.  Just

19   look at the numbers.  Half the cars in the state of

20   California have to meet the PZEV standards, which are

21   somewhere between 50 and 75 percent more stringent than the

22   comparable federal standards.

23             Look at our evaporative emission standards.  Those

24   same PZEV vehicles have to have zero evaporative emissions.

25   And our standard for the rest of the vehicles is more

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 1   stringent than EPA's.  Look at our warranty, it's longer.

 2   Nearly twice as long for half the vehicles than EPA's.  All

 3   these things show that our standards in fact are more

 4   stringent.  And then when you get to greenhouse gas

 5   emissions  I think the comparison is pretty straightforward.

 6   We have the standards you don't.  So obviously our standards

 7   are more stringent.

 8             They also made the claim that the greenhouse gas

 9   standards will increase smog-forming emissions and that is

10   also false.  All you have to do is look at page 189 of our

11   final statement of reasons -- our initial statement of

12   reasons, excuse me, our staff report supporting the

13   standards that we took to our Board, and it shows the

14   combined effects of all these things that they talked about

15   today.

16             It shows the combined effects of what the rebound

17   is in California, it's less than three percent based on a

18   peer-reviewed study that we sponsored at the University of

19   California.  It shows what the impact of the higher cost of

20   the vehicles is on fleet turnover.  The vehicles will

21   average 33 days older as a result of our standards.  That is

22   not going to exactly have a big impact.  We did quantify it,

23   however.  And then we look at the upstream emissions, which

24   are lower because of the effect of less fuel being used by

25   these vehicles.

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 1             And when you put it all together and it is all

 2   documented in this report here is a one ton per day decrease

 3   of HC and NOx emissions compared to the base case.  Not the

 4   30 ton per day increase that was shown by the alliance.  So

 5   I think that very clearly from both the smog standpoint and

 6   from a greenhouse gas standpoint and the formal statement of

 7   the Board there is a clear demonstration of protectiveness

 8   on the part of California.

 9             And I think even Mr. Jackson today said he would

10   submit additional information and more recent studies to

11   backup this claim.  So with that I thank you and I'd like to

12   turn it over to Dr. Sawyer for the final concluding remarks.

13             PRESIDING OFFICER GRUNDLER:  Thank you,

14   Mr. Cackette.  Dr. Sawyer.

15             AIR RESOURCES BOARD CHAIR SAWYER:  I'm Dr. Robert

16   Sawyer, Chair of the California Air Resources Board.  Thank

17   you, Mr. Grundler, and members of the EPA hearing panel for

18   coming to Sacramento to receive the testimony of our

19   political leaders, our business leaders, our air quality

20   management districts, our scientists, our medical community,

21   our environmental organizations and a broad range of leaders

22   and citizens from the western United States.  All in support

23   of granting our waiver request.

24             Since my appointment as Air Resources Board Chair

25   I have had the opportunity to visit most of the automobile

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 1   companies that provide the cars, light duty trucks, SUV and

 2   vans that Californians drive.  The message I received from

 3   the leaders and engineers of these companies was very

 4   different from what you heard today from the lobbyist and

 5   lawyer of the Alliance of Automotive Manufacturers.

 6             The engineers are productively working on the

 7   development and implementation of the next generation of

 8   clean, efficient, low greenhouse gas emitting vehicle.  The

 9   technology that Air Resources Board engineers have projected

10   to meet the requirements of our greenhouse gas emissions

11   standard exists and further improvements are on the way.

12             I invite the auto industry to join our efforts to

13   reduce greenhouse gases.  By granting our waiver request you

14   will send the auto industry a clear message that they need

15   to do their part to meet the threat of global warming.

16   Thank you.

17             PRESIDING OFFICER GRUNDLER:  Thank you,

18   Dr. Sawyer.

19             Let me close by thanking everyone who took the

20   time to present testimony today, to participate in this

21   important process.  I want to assure everyone that EPA

22   understands the significance of these proceedings, not just

23   here in California but across the United States.  This is a

24   major issue for us to deal with.

25             And I want to thank Cal/EPA and ARB for assisting

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 1   in all the logistics that went into putting into this --

 2   putting together this hearing.  I know a lot of work goes

 3   into this and it went very, very smoothly.  My staff is

 4   grateful.

 5             And finally, we are going to hold the record open

 6   until June 15 for anybody who would like to submit further

 7   comments.  We stand adjourned, thank you very much.

 8             (Whereupon, at 4:16 p.m., the hearing

 9             was adjourned.)

10                              --oOo--

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                        CERTIFICATE OF REPORTER

               I, JOHN COTA, do hereby certify that I am a

     disinterested person herein; that I recorded the foregoing

     hearing on a tape recorder; that thereafter the tape

     recording was transcribed into typewriting.

               I further certify that I am not of counsel or

     attorney for any of the parties to said hearing, or in any

     way interested in the outcome of said hearing.

               IN WITNESS WHEREOF, I have hereunto set my hand

     this 4th day of June, 2007.

