Cap & Trade parasite bill signals civil war on business

May 31, 2012

By Wayne Lusvardi

Speaker John A. Perez’s push of Assembly Bill 1532 through the State Assembly on Tuesday, May 29, signals a shift from regulation of air pollution to an outright civil war on business and industry in California.

AB 1532 is not content with just using pollution taxes collected under California’s Cap and Trade emissions trading program to lower water, power, and natural gas bills for ratepayers, due to the looming higher price of green power. Rather, AB 1532 will directly use Cap and Trade taxes to parasitically transfer jobs taken from the private sector, to political pork jobs in the public sector.  It could also end up circumventing the limitation of new taxes of Propositions 13 and 26.  The passage of AB 1532 is a provocative act that crosses the line between regulation and outright plunder of the private sector for public sector make work green jobs programs.

AB 1532 passed the State Assembly by a 47 to 26 vote. The record of who voted for or against AB 1532 was not available online as of the writing of this article.

AB 1532 is a parasitical public sector jobs grab

Cap and Trade is a set of regulations under California’s Global Warming Solutions Act of 2006 — AB 32 — to reduce air pollution by requiring industries and public utilities to buy pollution permits, also called pollution credits or allowances.

In reality, Cap and Trade is a program to socialize water, power, and natural gas rates to shift the coming burden of the high cost of green power onto the middle class.  Thus, the enormous taxes collected under the Cap and Trade program were to be rebated to utility ratepayers to socialize the “rate shock” of green power.  But AB 1532 takes this one step further by using Cap and Trade taxes to fund local governments and create parasitical green jobs programs.

AB 1532 will not backfill jobs lost in those industries directly affected by California’s Cap and Trade pollution permit trading law.  Instead, it will create another self-perpetuating bureaucracy of political patronage and jobs programs under the guise of “clean tech” industries and air pollution reduction programs.

AB 1532 will divert “investment towards the most disadvantaged communities in the state.” It will also fund “small businesses, schools, affordable housing associations, water agencies, local governments, and other community institutions (including public universities) to benefit from statewide efforts to reduce greenhouse gas emissions.”

In other words, AB 1532 is just another tax to fund government and public schools, and redistribute jobs in return for political patronage.  It is an end run around Prop 13 and Prop 26, both of which require a two-thirds vote for any tax, fee, levy, or tax allocation.

Price of pollution permits will go up even without gaming system

Once established, it will incentivize government gaming of the Cap and Trade system to inflate the price of pollution credits. According to energy consultant Robert Lucas of the California Council for Environmental and Economic Balance, government gaming of the Cap and Trade system will likely double the annual amount of taxes collected under Cap and Trade regulations. Cap and Trade taxes would be expected to rise from $6.25 to $12.5 billion per year — or from $50 to $100 billion over the next 8 years.

Even if government does not game the system to its taxing advantage, the program is supposed to reduce the number of pollution permits each year as air pollution is improved.  The fewer the permits, the higher the price for the pollution permits, and the greater the pollution taxes collected. By design, there will be about 15 percent fewer pollution permits available to trade by the year 2020. Thus, pollution permit prices will likely rise without any gaming of the system. What is made to look like the workings of the so-called pollution credit market will actually be a structured way to inflate the price of pollution permits.

Reduce production or ration public utilities?

If, however, there are no credits to buy because there is no more pollution that can be realistically reduced, then industries and utilities may offset their pollution by planting trees or burying carbon in the ground. More of a false economy will be created and expanded.

But this will do little to reduce air pollution as long as population policies under AB 375 — the anti-urban sprawl bill — continue to divert growth to urban air basins that trap pollution.  The solution to pollution is dilution, not concentration.

Or if all else fails, industries and utilities can simply reduce production or call for rationing of water, power, and natural gas. Clean air at any cost.

AB 1532 is point of no return — the “Pottery Barn Rule”

The next step with AB 1532 will be its review in the state senate. Under Senate President pro-tem Darrell Steinberg, this is likely to result in passage and forwarding to Gov. Brown for signature.  The legislature and governor are likely to pass AB 1532 before political redistricting may change the composition of the legislature.

AB 1532 has fired the first symbolic shots in a civil war of what is permitted under the Global Warming Solutions Act — AB 32.  Several nonprofit liberal think tanks have rendered quasi-legal opinions that California’s Cap and Trade taxes cannot be used beyond providing utility ratepayers with rebates.  But Assembly Speaker John Perez has signaled he is going to push the legal limits of what can be funded with Cap and Trade taxes.

In the ancient Roman Empire, Julius Caesar crossed the Rubicon River with his army, thus signaling civil war with the Roman Senate.  At Fort Sumter, the South fired the first shots in the Civil War between the North and South states. California State Assembly Speaker John Perez has crossed the point of no return with AB 1532, signaling a war on California’s business, industry and the middle class.

Gen. Colin Powell once cited what is called the “Pottery Barn Rule” about starting an unpopular war: “if you break it — you buy it.”  And Assembly Speaker John Perez and the Democratic Party are about to buy themselves a civil war chock full of unforeseeable consequences.


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  1. Cacheguy
    Cacheguy 31 May, 2012, 14:38

    Ayes – 49 Alejo, Allen, Ammiano, Atkins, Beall, Block, Blumenfield, Bonilla, Bonnie Lowenthal, Bradford, Brownley, Buchanan, Butler, Campos, Carter, Charles Calderon, Chesbro, Davis, Dickinson, Eng, Feuer, Fong, Fuentes, Furutani, Galgiani, Gatto, Gordon, Hayashi, Hill, Huber, Hueso, Huffman, John A. Pérez, Lara, Ma, Mitchell, Monning, Pan, Perea, Portantino, Roger Hernández, Skinner, Solorio, Swanson, Torres, V. Manuel Pérez, Wieckowski, Williams, Yamada
    Noes – 27 Achadjian, Beth Gaines, Bill Berryhill, Conway, Cook, Donnelly, Garrick, Gorell, Grove, Hagman, Halderman, Harkey, Jeffries, Jones, Knight, Logue, Mansoor, Miller, Morrell, Nestande, Nielsen, Norby, Olsen, Silva, Smyth, Valadao, Wagner
    Absent, Abstention or Not Voting – 4 Cedillo, Fletcher, Hall, Mendoza

    Reply this comment
  2. Beelzebub
    Beelzebub 31 May, 2012, 14:47



    So don’t be afraid to let them show ….. your true colors! 😀

    Reply this comment
  3. Cacheguy
    Cacheguy 31 May, 2012, 15:03

    So don’t be afraid to let them show ….. your true colors!

    I am sure that you know what you mean but does anyone else?

    Reply this comment
  4. Beelzebub
    Beelzebub 31 May, 2012, 15:12

    Not really that hard to figure out, Cacheguy.

    I am not speaking in code here.

    Reply this comment
  5. Dyspeptic
    Dyspeptic 31 May, 2012, 15:23

    California is living proof that all news is bad news. As an aside Wayne I don’t think your article makes clear that the pollution your refering to is mostly carbon dioxide, which is after all a very minor and natural constituent of the atmosphere (aproximately 400 parts per million). My suggestion to save the planet is STOP THE CALIFORNIA LEGISLATORS FROM EXHALING.

    Reply this comment
  6. Bill
    Bill 31 May, 2012, 22:30

    When will CARB begin regulating water vapor since it makes up 90% of the greenhouse effect? Oh wait, taxing global warming…er…climate changing CO2, which comprises about 0.038% of the atmosphere, is the ideal expediency–heck you can‘t move without creating carbon dioxide (…and CO2 sounds scary to the uninitiated). Oh yes, Jerry and cabal are shuffling up to the taxpayer provided money trough for a bridge to nowhere:


    And “intended” disbursement of AB32 revenue is a dynamic beast…because, as we all know, defining fees are a living, breathing progression.

    “It is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder.” – Frederic Bastiat

    Reply this comment
  7. Cacheguy
    Cacheguy 31 May, 2012, 23:14

    “Not really that hard to figure out, Cacheguy.
    I am not speaking in code here.”

    Are you sure? I, being new to this web site, probably haven’t grasped your mental gymnastics as of yet. I hope to be able to soon. Of course I may not be as intelligent as some others think they are either.

    Reply this comment
  8. Ronald Stein
    Ronald Stein 1 June, 2012, 12:45

    CARB’s Fuels Policies are Throwing California’s Economy Under the Bus

    In the last 20 years, Southern California’s population has doubled, but the air quality has gotten BETTER, not worse. New rules by government bureaucrats, however, are coming into play that will increase the costs of electricity, gasoline, roads, homes, services, you name it, for literally no significant betterment of air quality.

    Californians already pay among already the steepest prices in the nation for gasoline. A good deal of this is due to the state’s mandatory unique gasoline formula and combined taxes at the pump which are the country’s second highest.

    Cap and Trade, a cornerstone of AB 32, the California Global Warming Solutions Act. Projections place the cost of cap and trade at anywhere from 50 cents to one dollar per gallon added to the retail price of gasoline here just for the 37 million in CA, for a go-it-alone State that contributes less than 1% of the GHG’s being emitted into the worlds atmosphere, and billions in increased general energy costs.

    Under cover of AB 32, CARB is forcing billions of dollars in higher costs on our struggling economy to reduce greenhouse gas emissions associated with global warming.

    The problem is that California and its 37 million citizens contribute less than 1% of the world’s greenhouse gases. Solving a world GHG problem is not the responsibility of the few that live in California. Maybe China and India with 2.4 BILLION contributors may be, but not California’s 37 million.

    CARB touts California’s “leadership” in the war on climate change. The “leadership” premise is similar to crossing the street within the confines of the crosswalk and getting hit by a bus – you’re right, but “DEAD RIGHT!”

    Those who feel that spending billions to reduce greenhouse gases in a State that contributes less than 1% of the world’s GHG’s may be right, but they are dead right as it accelerates the exodus of businesses and jobs from California, and an unemployment rate that consistently remains among the highest in the country.

    With California transportation fuels already among the country’s most expensive and our gas taxes the second highest in the USA, it’s impossible to justify the imposition of billions in higher fuel costs just to retain the title of “leader” in greenhouse gas reductions.

    CARB would do well to get out of the crosswalk and stop throwing California’s economy further under the bus.

    Reply this comment
  9. Hondo
    Hondo 1 June, 2012, 12:50

    Cap and tax may destroy the baking industry, which is highly dependent on hot ovens. Look to see huge increases in the price of bread, cookies and tortillas. Those are basically unequal taxes on the poor, for food costs are a much bigger portion of the their budget.
    The whole restaurant industry is at risk. Any restaurant that has a big oven/stove is looking at trouble. And it is the poor that are going to be hit the hardest.

    Reply this comment
  10. queeg
    queeg 1 June, 2012, 13:27

    Stop your worry. No one posting on this site is deprived, over taxed or in shackles…the incessant moaning is setting bad example…chin up…paying your fair share to our society and complying with life saving regulations are your reponsibilty!

    Reply this comment
  11. Cacheguy
    Cacheguy 1 June, 2012, 13:57

    Mr. queeg:

    Have the taxpayers of California solved the world’s acid rain problem yet? If not we better get to it! Or, how about the ozone hole? California taxpayers need to pay to fix that too! Replanting the rain forests! California taxpayers should pay for that. California taxpayers can do it all!

    Reply this comment
  12. queeg
    queeg 1 June, 2012, 14:46

    Queeg sees clean air in California. Many rivers and streams have gamefish instead of industrial pollutants. Acid rain is for real…utilities will clean up and foliage will grow again.

    Try China…..massive choking pollution…yuk!

    Reply this comment
  13. Cacheguy
    Cacheguy 1 June, 2012, 15:23

    That’s right! California taxpayers need to pay for cleaning up China! If they don’t do it who will? The new motto for California…..”California taxpayers can do it all!”

    Reply this comment
  14. Bill
    Bill 1 June, 2012, 19:22

    When you have overzealous bureaucrats that regulate per utopian agenda and useful dupes like Mr. queeg, you can rest assure that this state is quickly going to hell in a hand basket. Because as you know, “no one…posting is…over taxed.” Yes, we need the unelected technocracy to save us from our very own breath–CO2.

    God help us.

    Reply this comment
  15. Bill
    Bill 1 June, 2012, 19:35

    And when you begin to move beyond the quisling Mr. queeg stage–shhh…!!!—you need to dumb it down a bit.

    “A US government-funded survey has found that Americans with higher levels of scientific and mathematical knowledge are more skeptical regarding the dangers of climate change than their more poorly educated fellow citizens.”

    Register article:

    Reply this comment
  16. Bill
    Bill 1 June, 2012, 19:57

    Shipping our relatively clean industries to “Yuk” China via regulatory decree is a dupid means to solving the CO2 non-issue in this state. California outputs less than 1% of carbon dioxide gas in the world. But hey dumbasses, let’s ship it to China so the trade winds and jet stream can work their magic and blow a gazillion times the pollution right back to our shores. Yes, dearest Mother Gaia would agree with such imbecility.

    Queeg, put down the Rachel Carson…you’ve been propagandized.

    Reply this comment
  17. queeg
    queeg 1 June, 2012, 21:03

    Rachel Carson is a saint to enviros like Ann Rand is a hedge fund momma to bootstepping conservatives!!!

    Enviros would not have Earth Day and conservatives would not have Globalism!!!

    Reply this comment
  18. Ted Steele, toilet cleaner
    Ted Steele, toilet cleaner 1 June, 2012, 22:03

    …silent spring….sleepy mitt…..

    Reply this comment
  19. Bill
    Bill 1 June, 2012, 23:01

    You can thank Nixon in part for Earth Day and Blood & Gore types for Globalism. Remember, “…it’s a good deal Larry.” Conservatives? Oh, the statist that are heading over to Chantilly for Bilderberger attendance? No, your definition of left/right in this country–and the world for that matter–is a complete illusion. But hey, pay your carbon fees because the Rothschilds need their feudal global slave tax ( and the peons need to be excised an indulgence fee.

    You’re at, so obviously you’re reading between the lines. Now put it to use.

    Reply this comment
  20. queeg
    queeg 2 June, 2012, 07:12

    Odd. Don’t fight it.

    Your role or track in life as a capitalist producer includes assisting others…to give back to the helpless less fortunate humans without your talents.

    Again…you will have a more fulfilling life.

    Reply this comment
  21. Bill
    Bill 2 June, 2012, 16:52

    You’re moralizing queeg…. The road to tyrannical hell is paved with do-gooderism intentions. It’s the same mesmerizing trap that has ensnared you in the “Global Warming” spider web.

    Queeg…fighting on my feet, not cowering on my knees–that’s the more fulfilling life.

    Take care, queeg. Don’t let your good-intentions get in the way of doing actual good.

    Reply this comment
  22. Ted The Giant (tm)
    Ted The Giant (tm) 4 June, 2012, 08:34

    Billy– I guess you’re saying we should be bad?

    Reply this comment
  23. Bill
    Bill 4 June, 2012, 23:46

    Not at all. I’m saying good intentions, if not considered carefully and rationally, can ultimately result in something bad. Hence the proverb “The road to hell is paved with good intentions.”

    Bad in this case would be a feudal slave tax on the very air we breath (humans respire carbon dioxide). Yes, this is a gig corporatists can truly dig! But doesn’t sound like land of the free, home of the brave to me….

    Be good my friend, be good!

    Take care.

    Reply this comment
  24. FreeBird
    FreeBird 11 June, 2012, 23:06

    @Ted-The Giant – why is it that you twist what Bill says? He specifically says “Don’t let your good-intentions get in the way of doing actual good.” Queeg’s good-intentions and assumption about what will bring others a more fulfilling life. Worry about your own fulfillment Queeg on an individual level and leave others to worry about theirs as well.

    It is clear that the best results for all people occurs when we each take responsibility for ourselves and that right action is not ever increased by coercion or force. They just create black markets and resentment.

    Those like Queeg who feel they should be telling others what is right and wrong and how they should live are exemplifying the behaviors most damaging to peaceful co-existence. Queeg and such would use force to make people do as he think is right. A rather sick way of operating in the world: “Do it my way or else…”

    It seems to me that being responsible for oneself and not being a burden on society (aka MIDDLE CLASS) is actually quite admirable. Those that want more than that from other people usually want it due to their own avarice (crony capitalists) or laziness (the 49% that don’t have any skin in the game.)

    God help those of us who believe in the rule of law.

    Reply this comment

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