By Miguel Bustillo
New York Times
The Schwarzenegger administration, working with business groups, legislators and environmentalists, is promoting an ambitious anti-smog initiative to eliminate the largest contributors to dirty air in California — heavy-polluting, older model cars, trucks, buses and farm vehicles.

The plan would cost $200 million to $400 million a year, and some lawmakers have proposed raising fees on gasoline and vehicle registration to pay for it. Rising gas prices threaten to scuttle that proposal, however.

Although the governor has yet to endorse a funding plan, administration officials are considering numerous options. They include raising fees, but also a proposal – similar to the check-off system to help finance elections – whereby consumers could voluntarily pay higher vehicle registration fees and their employers could provide matching funds.

Administration officials say the governor is committed to finding a way to pay for the initiative, which would significantly help fulfill a campaign promise to cut California's air pollution in half.

Roughly 5% of the state's cars and heavy-duty buses and trucks, typically older models, are responsible for half of the air pollution from motor vehicles, the leading cause of the state's chronically dirty air, according to air quality officials. The initiative would seek to remove those vehicles from California's roads by offering their owners financial incentives to junk them.

"We need to get the dirtiest cars off the roads and move to cleaner vehicles," said Terry Tamminen, Schwarzenegger's environmental protection secretary. The expansion is one of Schwarzenegger's main environmental priorities, along with reducing fuel consumption and creating a "hydrogen highway" of filling stations to help promote the alternative fuel, he said.

"Obviously, we want to generate serious money for this, but it can't be an economy-buster," Tamminen said. "We are trying to find some creative ways of doing this. We are bringing unusual suspects to the table."

Getting older cars off the road is one of the few ways that California can significantly address motor vehicle pollution, which is largely regulated by the federal government, environmentalists and air quality officials noted.

Last week, the U.S. Supreme Court ruled that Southern California air quality officials had overstepped their bounds by enacting rules that required operators of large vehicle fleets to buy low-polluting vehicles. The rules were part of an effort by the local air officials to expand their authority in light of what they see as an inadequate response to smog by federal authorities.

"Everyone seems to be coming to the understanding that mobile sources (such as cars and trucks) represent 70% of the smog problem, and we need to do something like this if we are ever going to deal with that in a real manner," said Barry Wallerstein, executive officer of the South Coast Air Quality Management District, who has taken part in the negotiations. "The business community is participating in a very progressive manner, and I am cautiously optimistic that we will be able to arrive at a consensus."

The recent spike in gas prices, however, could make a one-cent a gallon wholesale gasoline fee, advocated by some lawmakers, a tough sell. The Schwarzenegger administration has been involved in discussions for weeks, but has not declared support for fee increases proposed by lawmakers. The gasoline fee is opposed by truckers while car dealers are against a hike in registration fees.

"If we can reach something that all of society thinks is good, we have a good chance of moving this along," said K.C. Bishop, a lobbyist for ChevronTexaco Corp. "The big problem I see is trying to do this at a time when the price of gas, especially diesel, is so high. It's the biggest risk we have in all of this – bad timing."

The relatively small $2 vehicle license fee increase – which is important to oil industry representatives, who assert that consumers should share some of the costs – also could sink the proposal, given the volatility of the car registration issue in California politics.

"You are making everyone pay for the few who are driving clunkers," said Brian Maas, director of government affairs for the California Motor Car Dealers Assn., adding that the registration fee increase should be placed on the ballot for voters to consider. "Someone who buys a [hybrid Toyota] Prius would have to pay more to register their car under this proposal, which makes no sense.”

Groups active in the discussions of the initiative said it would take a decade to remove grossly polluting vehicles from the road or fix them. The funding would then be discontinued.

California already has cut harmful exhaust by more than 100,000 tons per year with programs to replace old diesel-powered school buses, farm equipment and other heavy-duty engines. But those programs are financed with bonds and will soon run out of money. The initiative would keep them running. Those programs have been shown to be a relatively cheap way to cut air pollution – from $6,000 to $15,000 per ton of unhealthful exhaust compared with $100,000 for similar reductions from smokestacks.

"We still have not reached a consensus on how to pay for all of this, or what is going to be in the mix, but the tone of the discussions right now suggests that this could be an investment of some magnitude," said Bob Lucas, a lobbyist for the California Council for Environmental and Economic Balance, a business group. "What we are talking about is a significantly expanded program that includes not only diesel but also older gasoline vehicles."

Several lawmakers already are carrying legislation to enact various pieces of the expansion.

Assemblywoman Fran Pavley (D-Agoura Hills) is sponsoring a bill that would allow local air district officials to raise vehicle license fees by $2 to help finance air programs, raising an estimated $45 million annually. A $4 portion of each registration fee is already allocated to fight air pollution.

Assemblyman Marco Firebaugh (D-Los Angeles) has written a measure that would raise gasoline prices at the wholesale level, not the pump, by at least a cent a gallon, which would generate more than $185 million a year. "Year in and year out, we have a discussion – sometimes a fight – about funding for air pollution programs," he said. "This time, we have tried to achieve a consensus position that would take us 10 years into the future.

"I think they have clearly gotten the message from the administration that this is one of the governor's priority areas," he said of business groups. "Rather than being dragged into a fight that they could lose, I think they are making a good-faith effort to be a part of the solution."