KEY POINTS:
It is individual states and not Washington that will lead the United States response to climate change, says Terry Tamminen, friend and adviser to California Governor Arnold Schwarzenegger.
"I couldn't agree more that the US has to step up. The good news - it is already happening," Tamminen said.
The former head of California's Environmental Protection Agency was in Wellington to give the keynote speech to a Chapman Tripp symposium on climate change, and to extend to Prime Minister Helen Clark an invitation for New Zealand to take part in a process he is spearheading - the creation of an emissions trading market centred in California.
"In June last year there were three states that had any kind of a comprehensive climate plan. Today there are 27 which have them or are developing them. Five have put them into law, which is extremely important because any politician can lay out a plan but if they are put into law you know what you are likely to get."
By 2009 when there was a new President in the White House and a Congress likely to take this issue seriously - "which the current President and Congress will not" - most Americans would live in a state with a world-class target for reducing greenhouse gases and a comprehensive and credible plan to achieve that, he said.
These states would also have put those plans into law and would be part of a regional carbon trading scheme.
'So a majority of the US population will already be doing what the rest of the world expects us to do."
The US makes up 5 per cent of the world's population but generates 25 per cent of its greenhouse gases, even more if you count indirect effects.
"Why is China building 1000MW a week of mainly coal-fired electricity generation? Partly it's so they they can provide Nike sneakers and plastic flamingos for the US.
"So with this direct and indirect impact on the rest of the world, it is clear that we have to make these moves if we hope to get them to follow."
Americans prided themselves on being inherently fair, he said.
"It's only fair that we solve the problem we created."
But there was also a huge economic opportunity in developing the technology the world is going to need to combat climate change.
"The alternative is to cede that opportunity to China and other places that could leapfrog us and sell those products back to us."
Three years ago California adopted that target of getting its greenhouse gas emissions back to 1990 levels by 2020, and to 80 per cent below that by the middle of the century.
The legislation enshrining those targets says the state may - not will - adopt an emissions trading scheme.
A scheme is in the process of being designed and consulted on and should be unveiled over the next six months.
To add scale to the market - even though California is one of the world's largest economies on its own - it has recruited five other western US states, two Canadian provinces and two Mexican states to join in a grouping called the Western Climate Initiative.
New Zealand is also invited to join "at some level".
There is a similar initiative among states in the northeastern US.
At this stage there is no Californian or western US market that New Zealand emitters could trade into. It is more a matter of arriving at world best practice.
A common concern among businesses about linking with carbon markets overseas is that the features of those markets which will drive prices are determined by the larger economies involved and reflect the structure of their economies, their level of ambition for reducing emissions and their options for doing so.
All the more reason, says Tamminen, to get in on the ground floor.
"Right now there is a vacuum on everything from defining offsets, designing markets, figuring out how to trade carbon emissions credits from one scheme into another. All of this is a blank slate," he said.
"Why not be part of designing it? If you are at that table and come up with the best ideas, while protecting NZ's unique economic interests, it is more likely to have a positive outcome than waiting to see what the big boys do and living with those results."
California tends to lead the US in environmental policy, providing templates for legislation on air and water quality, vehicle exhaust emission and the like, adopted first by other states and then nationally.
At the federal level the problem is not just the Bush Administration but what Tamminen calls a "breathtaking" level of ignorance in Washington among congressional staff both about climate science and climate policy.
"They just haven't had to think about these things.
"There was never a serious debate about joining Kyoto even under the Clinton Administration.
"So congressional staffers never had to get up to speed about what is going on in Europe or the differences between cap-and-trade and a carbon tax."
None of the 14 climate bills which have been introduced on Capitol Hill would pass, he said. But they served a valuable function in educating lawmakers and their advisers.
Tamminen expects relentlessly rising oil prices and energy security worries to reinforce public concern about climate change.
He is an enthusiast for hydrogen as an energy carrier, acting as a link between a diversity of primary energy sources on the one hand and the propulsion of vehicles on the other, whether through internal combustion engines or the more efficient technology of fuel cells.
"But there is a chicken and egg conundrum. Who's going to build fuelling stations if you don't have [hydrogen] vehicles? And who's going to build vehicles if there are no fuelling stations?"
So California launched a "hydrogen highway" programme in 2004 , with the goal of having 200 stations by 2010 around the state so people would have access to the fuel and to prime the pump from vehicle manufacturers, so to speak. So far there are 30.
The hydrogen is produced from a variety of local sources ranging from dairy wastes to the use of electricity from wind and solar sources to split water.
"Honda, which is a leader in developing hydrogen cars, don't think we will need a big fuelling infrastructure. They will sell a unit with the car to split water by electrolysis. You just need a power supply and a garden hose."
