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California Seeks to Limit Greenhouse Gases - Critics Warn of Economic Backlash

The state of California could become the first to impose emission caps on businesses to limit greenhouse gases. California Governor Arnold Schwarzenegger says his state is taking the lead to reduce the consequences of global warming but critics say it will only help other countries that do not have similar environmental laws.

Many scientists say the dangers posed by our changing climate are real: drier conditions will lead to more forest fires, melting snow packs will threaten our water supplies, and emissions will continue to affect the quality of the air we breathe.

Lawmakers in California are hoping to scale back the potential damage by forcing businesses to roll back emissions of greenhouse gases to 1990 levels, by the year 2020.

If the bill passes, state legislator Fran Pavley says it would be the toughest in the nation. "You have to send a signal to the marketplace that we're serious here."

Pavley says there's good reason to. California, the most populous state in the U.S., is the world's 12th largest source of greenhouse gases. Industrial plants and power stations account for 43 percent of that, while about 40 percent comes from automobile exhaust.

Although scientists agree the world is getting warmer, meteorologist Jan Null says the cause remains the subject of debate. "The question still remains as far as what percentage of the problem is natural variation and which is caused by man."

Critics say one state regulating greenhouse gases will not significantly reduce global temperatures and will make the U.S. less competitive. Others say the most immediate results will be higher energy prices, and lower returns on investments in California.

Allan Zaremberg, at the California Chamber of Commerce, says the bill will hurt businesses, which will be forced to pass the costs to consumers or move their companies elsewhere. "You can't just make arbitrary caps without regard to jobs, without regard to costs."

A California study pegs the cost of implementing the bill at $7.9 billion. Environmental groups applaud California's efforts, but mining and manufacturing industries say the benefit will go to countries with less stringent controls, such as India and China.

The plan is similar to the Kyoto Protocol, which calls for substantial reductions to the world's greenhouse emissions by 2010. President Bush, who declined to take part in the 1997 agreement, has said nationwide compliance would cost at least 5 million jobs in the U.S.