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California's greenhouse-gas law: Who will pay?

A skirmish last week over setup costs only foreshadows the battles ahead for the landmark bill that would slash emissions by 2020.

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Somebody, somewhere will have to pay for California's landmark law that would force dramatic cuts in greenhouse-gas emissions by 2020. Two years on, it's not much clearer who.

State lawmakers last week expressed frustration with a proposal by Gov. Arnold Schwarzenegger that would further defer that decision.

Businesses may ultimately have to shell out billions for permission to pump out carbon dioxide, but that's much further down the tailpipe. For now, a much smaller $55 million is needed to pay for the law's setup costs, including the hiring of dozens of bureaucrats.

The governor's plan would borrow that money from the state's recycling fund. Legislative leaders and watchdogs have cried foul, arguing it is time to put the program on stable financial footing through a "carbon fee" on known emitters. The agency tasked with implementing the law, the Air Resources Board, counters that it wants to avoid setting fees before fully drafting its regulations.

"This question of [levying] the fee is the rubber meeting the road. It's like everybody wants to do this [law], but nobody wants to pay," says Lenny Goldberg, a tax lobbyist supported by labor groups.

While this early skirmish over the $55 million doesn't jeopardize the law, the controversy foreshadows complex and contentious battles ahead over implementation, say experts.

For now, desire is strong in Sacramento to make the high-profile greenhouse-gas law work. "I believe that the whole world is watching us on this law, and the people of California want this law to succeed," says Assemblywoman Loni Hancock (D) who co-chaired an oversight hearing March 3. "But there are going to have to be hard choices, we have to hold each other's feet to the fire; otherwise it's too easy to borrow and shift for the funding."

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