New reports shine light on opaque carbon tax program

MIAMI - JULY 11: Exhaust flows out of the tailpipe of a vehicle at , "Mufflers 4 Less", July 11, 2007 in Miami, Florida. Florida Governor Charlie Crist plans on adopting California's tough car-pollution standards for reducing greenhouse gases under executive orders he plans to sign Friday in Miami. (Photo by Joe Raedle/Getty Images)

(Photo by Joe Raedle/Getty Images)

As fast as California drivers will spend an extra $2 billion at the pump this year to fund the controversial cap-and-trade program, state lawmakers are finding ways to use it, according to two reports released Thursday.

Cap and trade was implemented by a state regulatory board to try to reduce greenhouse gas emissions to 1990 levels by 2020, as required by law.

One of several additional costs tacked on an estimated 11 cents to each gallon of gas and 13 cents per gallon of diesel, according to the Legislative Analyst’s Office, driving average prices to some of the highest in the nation.

“Most drivers have no idea that this is costing them $2 billion per year because it has been largely hidden from them,” said Asm. Tom Lackey, R-Palmdale. “It’s clear that we need to improve transparency for consumers about cap and trade’s costs.”

Where does the money go?

Cap-and-trade money is currently appropriated as follows: 40 percent is unallocated, 25 percent is for high-speed rail, 20 percent is for affordable housing and sustainable communities grants, 10 percent is for intercity rail capital projects and 5 percent is for low-carbon transit projects.

Waiting to spend the money are 36 pending proposals in the Legislature totaling $7.5 billion, which is more than double what was proposed in Gov. Jerry Brown’s draft budget, according to a study by the California Tax Foundation.

The most expensive proposal is SBX1 2, sponsored by Sen. Bob Huff, R-San Dimas. This bill would divert $1.9 billion annually to street and highway construction projects and block further cap-and-trade funds from going to high-speed rail.

In addition to barring further funds from going to high-speed rail (a recurring theme for Huff), the Huff bill is too vague to show whether it will reduce GHGs or not and may “leave itself open to litigation,” according to the legislative analysis.

Another bill, sponsored by Asm. Jimmy Gomez, D-Los Angeles, would fund nearly $1 billion worth of projects, including up to $100 million on new toilets. According to the report, many of the initiatives would likely reduce GHG emissions, while other parts of the bill might not.

Other bills include synchronizing traffic lights, implementing a car buyback program, promoting recycled glass and preventing forest fires. And while its unclear what effect most of the proposals would have on GHG emissions, the report was issued to help voters and legislators make that determination.

“This report identifies the auction revenue spending proposals that are active in the Legislature, so they can be given proper scrutiny,” California Tax Foundation Director Robert Gutierrez said in a statement.


Opponents of the program argue that by collecting revenue from drivers and businesses (those with large GHG emissions) it amounts to an illegal tax, which would have needed to be approved by a two-thirds legislative majority to be legal. A previous court ruling — which is now being challenged — found that the revenue is OK as a regulatory fee and thereby not subject to a two-third’s vote.

In 2006, the Legislature passed AB32, which tasked the state ARB to implement the GHG reduction. Proponents say this mandate gave the ARB the legal authority to auction off emission allowances (there’s a “cap” on emissions and business can “trade” them at auction).

In January, the non-partisan Legislative Analyst’s Office recommended lawmakers either narrowly tailor their proposals to unquestionably reduce GHGs or approve the program with a two-thirds majority to avoid legal complications.


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  1. Ronald
    Ronald 8 April, 2016, 06:07

    When will the AQMD provide “transparency” of the results of the emissions crusade?

    California’s flagship climate change policy Assembly Bill 32, the Global Warming Initiative was signed into law in 2006 when California was contributing 1% to the worlds green hose gases. And now, 10 years later, by AVOIDING transparency of the results of the California emissions crusade, the state can focus on how to spend the cap and trade funds they receive.

    Now, a decade later, California still contributes a miniscule 1 percent ( 1%) and has had little to no impact on the reduction of global greenhouse gas emissions. With many of the businesses the emit now departed from California, the contributions to the worlds greenhouse gases has actually INCREASED as no other state or country comes close to California which has the most stringent environmental laws and regulations in the world.

    Yet, the state, by avoiding transparency of the results of the California emissions crusade remains on a go-it-alone crusade to micro manage the California emissions that generates billions of dollars for the government at the expense of businesses and the financially challenged. With numerous state government agencies there is a feeding frenzy on getting a piece of the lucrative cap and trade tax revenue, yet there remains no progress in California reducing its contribution to the Worlds Greenhouse gasses.

    The public, especially the homeless and poor, that are paying dearly for the emissions crusade efforts of the AQMD, deserves to know if there is any progress over the last decade in reducing California’s 1% contribution to the world’s greenhouse gases.

    Reply this comment
  2. bob
    bob 8 April, 2016, 11:39

    Where does the money go?

    I will tell you. It is a bottomless pit of money for countless special interests. The money taken from us will go into countless boondoggles where politicians reward their friends, punish their enemies and increase their power and their control over us. And of course they will line their own pockets.

    Reply this comment
  3. Rex the Wonder Dog!
    Rex the Wonder Dog! 8 April, 2016, 16:11

    Where does the money go?
    I will tell you. It is a bottomless pit of money for countless special interests. The money taken from us will go into countless boondoggles where politicians reward their friends, punish their enemies and increase their power and their control over us. And of course they will line their own pockets.

    You nailed it straight on bob!!!!!!!!!!!!!

    Reply this comment
  4. Queeg
    Queeg 8 April, 2016, 16:23

    Comrades worry about possessions. Bury or give away…..then no worries.

    Reply this comment
  5. Spurwing Plover
    Spurwing Plover 11 April, 2016, 07:42

    We need a Hot Air Tax and making Al Gore Moonbeam,Greenpeace Sierra Club pay taxes on their Hot Air they produce when ever they open their pieholes and produce the Hot Air

    Reply this comment
  6. Novaks47
    Novaks47 12 April, 2016, 05:20

    They left out how much the crooks and frauds over at CARB are pocketing. Mary Nichols is laughing all the way to the bank.

    Reply this comment
  7. Ron
    Ron 28 July, 2016, 05:52

    Governor Brown may need “real” tax dollars to continue to fund his high speed rail as those “fees” from cap &trade are diminishing. Maybe it’s karma that the cash cow of the cap& trade “fees” may be dying, as CARB avoids the transparency that the program has done little in 10 years to reduce California’s 1% contribution to the World’s Green House gases.

    In 2015, Britain’s energy and climate change secretary Amber Rudd set priority to ensure energy bills for hard working families and businesses to be kept as low as possible, announced sweeping CUTS to renewable energy subsidies.

    In Australia, after almost a decade of heated political debate, became the world’s first developed nation to repeal carbon laws that put a price on greenhouse-gas emissions. In 2015, Australian voters turned against climate laws, blaming them for lost jobs, rising energy bills, higher production costs, and living costs. J.P. Morgan, estimated the removal of the carbon tax would boost its valuation on several companies as much as 6%.

    Reply this comment

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