Corporate pirates gaming CA cap-and-trade system

Pirates of the Caribbean

Fictional pirate Jack Sparrow seems to be taking his tricky ways outside the lucrative “Pirates of the Caribbean” Disney movie franchise and into real life.

The Walt Disney Company joined forces on July 17 with Pacific Gas and Electric Co., Southern California Edison, and the Wildlife Conservation Society to endorse a clever plan to avoid costly hostage prices for buying California Cap and Trade emission credits.

Cap and trade is a system set up by AB 32, the Global Warming Solutions Act of 2006. Administered by the California Air Resources Board in quarterly auctions, it “caps” emissions in California, but allows companies to “trade” emissions “credits.”

Part of the cap and trade idea was to use the money raised to fund green projects in California. But a new, piratical proposal would permit California industries to use the credits from cheaper forestry preservation projects in other states, and even foreign countries, to comply with the cap-and-trade requirements.  Disney even wants to buy pollution credits in Jack’s backyard in the Caribbean. ran an article, “PG&E, Wildlife Group Unite to Back Foreign Offsets in California.” It found the proposal would allow private industries to find cheaper ways to offset pollution than only from in-state mitigation projects. The proposal would mitigate pollution “at the lowest possible cost,” said Michael Hertel, Edison’s director of corporate policy.

Reportedly, San Diego Gas and Electric is already being allowed to buy cap-and-trade pollution credits in a wind farm in Canada.  And a Federal Court of Appeals judge has recently ruled that mandating the purchase of only in-state green power in unconstitutional. That’s because, under the U.S. Constitution, only the federal government can regulate interstate trade and foreign trade, not the several states themselves.

Forced to come up with ways to cut costs under AB 32, these companies seem to have been inspired by Jack Sparrow’s words, “It’s funny what a man will do to forestall his final judgment.”

Better REDD than dead

Edison, PG&E, the Climate Markets and Investment Association, and the Disney Company have already endorsed a United Nations forestry preservation program called REDD, for Reducing Emissions from Deforestation and Forest Degradation.

In response, there is already a massive anti-REDD propaganda effort online by environmentalists in California.

And ironically, those Tea Party members paranoid about a globalist U.N. Agenda 21 imposing environmental regulations on U.S. communities have it backward.  It is California that might export environmental regulations to foreign countries.

The opponents of the REDD program seem to be inspired by “Pirates” movie villain Captain Barbossa, who said, “Perhaps you’ll conjure up another miraculous escape, but I doubt it. Off you go.”

But like their character Jack Sparrow, we know Disney likely will escape. Allowing foreign pollution credits would end run California’s plan to restrict the allowances to monopoly-like in-state projects where hostage prices can be exacted from industries, and green jobs created here.

Opposition living in Fantasyland

Opposing this proposal by private industry and public utilities are democratic legislators in low-income areas who were hoping to divert all pollution credits to projects within their jurisdictions inside the California.

State Senate Bill 535, the Greenhouse Gas Reduction Fund, is sponsored by state Sen. Kevin de Leon, D-Los Angeles. It limits the use of pollution credits to benefit mostly “disadvantaged communities.” Critics have accused SB 535 of turning pollution into “political pork.”

The justification for limiting pollution credit projects to in-state areas is that low-income areas are mostly impacted by air pollution and should get the benefit of green policies.

But that justification is pure fantasy. Low-income communities such as Oxnard, Oakland, Alameda and National City are located along the coastline and have relatively better air quality.  Conversely, wealthy foothill communities like Pasadena, San Marino, Bradbury and Claremont in Southern California have poorer air quality.

As to the corporate pirates gaming the cap-and-trade system, as Jack Sparrow advised, “The only rules that really matter are these: What a man can do and what a man can’t do.”

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