Cap-and-trade carbon tax showdown looms

 

Cap and tradeDespite years of success in doing what it was supposed to do — cut emission levels — California’s controversial cap-and-trade system has run up against opposition that could be strong enough to sink it. But with nothing to lose and everything to gain, Gov. Jerry Brown has shifted into political overdrive to save it instead.

Big plans

Through the California Air Resources Board, Brown’s administration has tried to restore confidence among big California businesses that the state’s carbon-trading regime is here to stay. Amendments to the cap-and-trade rules proposed by CARB “envision a carbon market through 2050 with increasing allowance prices,” according to Scientific American. But legal uncertainty has clouded CARB’s ability to promulgate such regulations beyond the year 2020, “thanks to a combination of potentially limiting language in the original climate law, AB32, and a lawsuit challenging the legality of cap-and-trade auctions under a law requiring a two-thirds legislative majority to approve taxes,” the magazine added.

“The amendments released [last month] would establish decreasing emissions caps for covered entities through 2031, to reach 40 percent below 1990 levels, and would include preliminary caps through 2050 ‘to signal the long-term trajectory of the program to inform investment decisions.’ Other proposed amendments would provide for compliance with U.S. EPA’s Clean Power Plan for existing power plants, allocate allowances to businesses in order to prevent emissions from escaping state borders, and streamline how emitters register and participate in auctions.”

Backrooms to ballots

Despite broad support for an extended cap-and-trade system among influential Democrats, whose grip on Sacramento is virtually unchallenged, California’s legislative counsel has sided against CARB on the extension plan. “Meanwhile, a lawsuit from the California Chamber of Commerce charges that the permit fees are a tax and should have required a two-thirds vote in the Legislature to take effect,” as the San Francisco Chronicle reported. “Although the suit has dragged on for nearly four years, questions raised by an appeals court judge in April suggested that he might side with the chamber.”

The ordeal has presented Gov. Jerry Brown with a potentially devastating threat to one of his keystone policies. Although the governor “has been trying to muster support from at least two-thirds of the Legislature, in case the Chamber of Commerce wins its suit, […] convincing Republicans and business-friendly Democrats hasn’t been easy,” the paper added. “And the current legislative session ends Aug. 31.” Beyond the obvious challenge of securing Republican support, Brown must contend with members of his own party, who have split awkwardly on cap-and-trade since before its inception.

 “When the law enabling cap and trade was being argued over, the whole progressive left-of-the-left were pretty suspicious of carbon trading,” as Stanford Law energy expert Michael Wara told Wired. “So the law’s authors offered a compromise: the state Legislature would re-evaluate cap and trade in 2020,” the magazine noted. “It didn’t seem like a big gamble at the time.” But Brown’s determination to use revenues from the program to fund his cherished high-speed rail project — according to environmentalists, not the greenest expenditure to choose from — added another political wrinkle.

Now, the prospect of a drawn-out loss in the Legislature has raised speculation that Brown will respond, in a manner somewhat reminiscent of former Gov. Arnold Schwarzenegger, by taking his plans directly to the voters. Preparing for a showdown, Brown has launched — perhaps for the last time as governor — back into campaign mode. “Mr. Brown last week created a PAC, Californians for a Clean Environment, signaling he may turn to voters for support to extend cap and trade and the state’s emissions-reduction goals through a ballot initiative,” the Wall Street Journal recalled. “The program is particularly important to Mr. Brown, as profits help fund the state’s planned bullet train, among other goals by the state’s Democrats.”

Within the Brown camp, however, the official line has remained more optimistic than the ballot preparations might suggest. “There is no state or nation in the Western Hemisphere doing more to curb carbon pollution and our dangerous addiction to oil than California,” said Brown’s executive secretary, Nancy McFadden, in a statement noted by the Journal. “The governor will continue working with the legislature to get this done this year, next year or on the ballot in 2018.”

4 comments

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  1. Ron
    Ron 12 August, 2016, 06:01

    AB32 was signed into law in 2006 at a time when CA was contributing 1% to the world’s greenhouse gases, now, a decade later, according to the California Energy Commission we still contribute a miniscule 1 per cent. The cap &trade program that has hit the citizens’ pocketbooks for more than $7 Billion dollars to fund a multitude of governmental pet projects, has had little to no impact on the reduction of California’s contributions to global greenhouse gas emissions.

    The environmental crusaders are also unaware that wind and solar are only able to provide intermittent electricity to the grid, but cannot provide the oil or the oil by-products that are the basis of every component of modern civilizations’ industries and infrastructures.
    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.

    Yet, the state, by avoiding transparency of the results of the California emissions crusade remains on ago-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 “fee” revenue.

    The public, especially the homeless and poor that are disproportionally bearing the burden 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.

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  2. Queeg
    Queeg 12 August, 2016, 09:34

    Comrades

    Promised free things charged like a flat tax on essentials needed by the masses. Publicans love it…..not for the kids…..for geezer government worker pensions.

    Reply this comment
  3. eck
    eck 12 August, 2016, 18:12

    The loonies reign! Brown’s gone off the reservation on this, so called “greenhouse gas emergency”. There is no, I repeat no, evidence that man-made CO2 emissions have any significant effect upon the small amount of warming of the earth. Jerry has “got the religion”, I guess.

    Reply this comment
  4. Spurwing Plover
    Spurwing Plover 16 August, 2016, 16:07

    Im in favor of a Hot Air Tax to be paid by the various ec-freak groups and hollywood idiots and politicians pushing this eco-wacko bull kaka on us all

    Reply this comment

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