A group of moderate California Republicans that wants the party to rebrand itself as both pro-business and pro-environment and show a willingness to work with Democrats on some issues is back in the news this week. Led by Assemblyman Chad Mayes (pictured), R-Yucca Valley, and supported by former Republican Gov. Arnold Schwarzenegger, the New Way California group announced the launching of a website devoted to transforming the state GOP.

“There isn’t an overnight fix,” former Assembly GOP Leader Kristin Olsen of Modesto, a New Way board member, told the Sacramento Bee. “This is a slow journey that requires us to get out into communities.”

New Way officials cited the recent news that the GOP had fallen to third in state political registration behind Democrats and decline-to-state voters as evidence of the need for a new approach.

But Mayes, Olsen and their allies may have an even more uphill challenge than they think. A prototypical “New Way California” deal that Mayes cut last year when he was Assembly GOP leader arguably hasn’t yielded any dividends. He helped Democratic Gov. Jerry Brown round up eight Republican state lawmakers so an extension of the state’s cap-and-trade program until 2030 could receive the two-thirds support it needed – in keeping with Mayes’ thesis about the party needing to alter its direction.

But Mayes’ move triggered a firestorm among Republican activists who cited a state Legislative Analyst’s Office letter from March 2017 forecasting that cap-and-trade could lead to a 63-cents-per-gallon increase in gas prices by 2021. He was deposed as Assembly GOP leader within weeks after cutting the deal with Brown.

Meanwhile, the big concession Mayes secured in return for lining up Republican votes for cap-and-trade flopped with voters. That concession: the Legislature’s vote to place what would become Proposition 70 on the June 5 primary election ballot. The complex measure could have given state GOP lawmakers a chance to kill new funding for the embattled state bullet-train project in 2024 by requiring that the use of cap-and-trade pollution emission fees be approved with two-thirds votes of both the Assembly and the Senate.

Gov. Brown joined the state Chamber of Commerce in backing the ballot measure. But after it was savaged by other Democrats as a stealth effort to protect polluters, Proposition 70 lost 65 percent to 35 percent.

Recall showed anger over approval of higher fuel taxes

Further undercutting Mayes’ push for a rebranded GOP was another June 5 development: the recall of state Sen. Josh Newman, D-Fullerton, by a 59 percent to 41 percent landslide. The recall effort was triggered by Newman’s vote last year for a 10-year, $52 billion increase in vehicle fuel taxes and fees to fund road and transit projects and improvements.

This is widely seen by political analysts as evidence that the California Republicans’ most traditional policy position – a sharp opposition to higher taxes – continues to be potent.

This is also evident in the ease with which a Republican-led effort to repeal the tax hikes gathered enough signatures to make the November ballot.

Some Democrats depict the campaign as benefitting from a coincidental rise in gasoline prices during signature gathering in the winter and spring. But Republicans point to a recent poll showing a majority of state voters are ready to scrap the tax hike and say Californians are as inclined as ever to oppose higher taxes that affect everyone – as opposed to Proposition 55, the successful 2016 ballot measure that renewed “temporary” income tax hikes on the very wealthy.

The stakes are particularly high for Assembly Speaker Anthony Rendon, D-Paramount, who has already gotten on the bad side of the “Bernie-crats” who may soon dominate the Capitol. Last year, he shelved Senate Bill 562 – a Senate-backed measure that would commit California to single-payer health care without a blueprint on how to overcome cost and legal obstacles – saying it was much too incomplete to approve.

Now, however, Rendon has decided to assert his bona fides on another foundational issue for progressives – fighting global warming – in a way that eventually could put him at odds with another progressive cause: the #MeToo anti-sexual harassment campaign.

Rendon’s maneuvering relates to Assemblywoman Cristina Garcia (pictured), D-Bell Gardens, who was an outspoken leader of the Capitol’s #MeToo movement after allegations emerged against several lawmakers last fall. In early February – after the Legislature passed an unprecedented whistleblower-protection measure to help root out lawmakers responsible for sexual harassment – Garcia was celebrated as a hero in the Associated Press story about the law’s enactment.

But within days, Garcia – a single, 40-year-old former high school teacher – found herself accused of groping a former aide, Daniel Fierro, who is now a Los Angeles County political consultant. Garcia denied the allegations and is now taking unpaid leave while she is the subject of a formal investigation by the Assembly Rules Committee.

Lawmaker allegedly used gay slurs, ripped Asians

Yet her headaches have only intensified in recent weeks due to two new allegations. The first asserted that in 2014 she used homophobic insults to describe then-Assembly Speaker John Perez. The second, made by Perez, was that he had formally admonished her for saying in a closed Assembly Democratic Caucus meeting that she wanted to “punch the next Asian person” she encountered over Asian-American lawmakers’ opposition to efforts to overturn the 1996 state law banning affirmative action in college admissions.

Now, however, Rendon is coming to Garcia’s defense against efforts by other Democrats and Democratic allies to unseat Garcia in her bid for a fourth term in the June primary – with the speaker citing her history as a defender of the state’s cap-and-trade program against more business-friendly lawmakers.

On April 20, the State Building & Construction Trades Council of California opened an independent expenditure committee targeting Garcia after twice having previously endorsed her. The labor group’s beef with Garcia stemmed from her support last year of cap-and-trade and other pollution control programs; construction unions are much closer to oil-and-gas interests than other factions in the California Democratic coalition. Two credible challengers to Garcia have emerged – Commerce Councilman Ivan Altamirano and Bell Gardens Councilman Pedro Aceituno.

Rendon responded as if setting up the committee was an attack on him. According to a Sacramento Bee report, he called the targeting of Garcia “a thinly veiled attempt by Big Oil and polluters to intimidate me and my members” and “an affront to my speakership.” The Assembly speaker also vowed to “vigorously defend the members of our caucus from any ill-advised political attack.”

But a spokeswoman for the independent expenditure committee backing Garcia’s defeat told the Bee that no one should buy any characterization of Garcia as a victim.
“It wasn’t politics that forced her to do the things of which she’s been accused,” said Erin Lehane.

Rendon’s decision to defend Garcia could grow even more problematic if the Rules Committee returns with a report corroborating the harassment allegations against her. At that point, even Garcia’s close allies in the Sacramento #MeToo movement may be inclined to cut her loose. There is no firm timetable for when that report will be released.

New Assembly GOP Leader Brian Dahle.

Chad Mayes of Yucca Valley is out as Assembly Republican leader, replaced last week by Assemblyman Brian Dahle of Bieber. But the fallout may continue over the decision of Mayes and six other GOP Assembly members to provide Gov. Jerry Brown and Assembly Speaker Anthony Rendon, D-Lakewood, with the votes necessary to save the state’s cap-and-trade program on July 17.

Mayes touted the GOP support as helpful in rebranding the party with young voters worried about climate change and emphasized the concession he won from Brown and Rendon, which could make it possible for the Legislature to effectively scrap the state’s troubled high-speed rail project in 2024. But the votes infuriated many Republicans for betraying the party’s core anti-tax, anti-regulation beliefs and for allowing a handful of Assembly Democrats in swing seats to avoid having to vote to extend cap and trade until 2030.

Under the program, businesses buy permits for emission rights. Because of fears that courts would find the permit fees were tantamount to taxes, Brown wanted two-thirds votes in the Legislature to ensure cap and trade’s extension would be on solid legal ground under Proposition 13. Thanks to the votes of Assembly Republicans Mayes, Catharine Baker of San Ramon, Rocky Chavez of Oceanside, Jordan Cunningham of San Luis Obispo, Heath Flora of Ripon, Devin Mathis of Visalia and Marc Steinorth of Rancho Cucamonga, Brown got 55 votes for the extension, one more than he needed.

Harmeet K. Dhillon, a San Francisco lawyer who is one of the state’s members on the Republican National Committee, told the Los Angeles Times that Mayes shouldn’t be the only one held accountable for preserving cap and trade.

“Now, given the fact that six of these [Republican lawmakers] did vote for a massive tax increase, Republicans are going to be very vigilant about these issues,” she said. The state GOP voted earlier this month to ask Mayes to step down at Dhillon’s behest.

Another RNC state delegate – former state GOP chair Shawn Steel – also blasted Republicans who sided with Brown on cap-and-trade.

Mayes, Baker, Chavez, Cunningham, Flora, Mathis, Steinorth and state Sen. Tom Berryhill, R-Modesto – the only GOP Senate vote to extend cap and trade – are likely to face heat from conservatives in their re-election bids or in seeking other elective posts. Conversely, they could also attract support from moderate and independent voters, given the popularity of environmental causes among state voters.

New GOP leader wants no more cap-and-trade recriminations

But new Assembly GOP leader Dahle – a 51-year-old seed business owner and farmer and former Lassen County supervisor – wants to the put the cap-and-trade flap behind.

“There are 24 other members of this caucus and they all have different views,” he told reporters Thursday after Mayes stepped down. “There are people in our caucus who voted their conscience for their district, and I support those who did that. In my case it didn’t work in my district, so I was opposed to that.”

Mayes, 40, was first elected to the Assembly in 2014 and began as GOP leader in January 2016. While now under fire from conservatives, he could someday be remembered as the man who killed the bullet train – the state project that’s as unpopular among California Republicans as cap and trade.

As part of the cap-and-trade deal, Mayes got Democrats to agree to put a constitutional amendment he wrote before state voters in June 2018. Under the unusual measure, if voters gave the go-ahead, there would be a vote in 2024 by the Legislature on whether to continue to allow cap-and-trade revenue to fund the $68 billion project – with two-thirds support necessary to continue funding.

Brown and bullet-train backers are counting on cap-and-trade fees to increase in coming years and to keep the project viable. So far, the California High-Speed Rail Agency has been unable to attract outside investors to help pay for a statewide system, and federal funding dried up after Republicans took control of the House in 2010.

Assembly Republican Leader Chad Mayes, R-Yucca Valley, survived

Nevertheless, anger over Mayes’ decision to work with Gov. Jerry Brown last month and lobby fellow Republicans to help secure an extension of the cap-and-trade program established by AB32 – the state’s landmark 2006 anti-climate change law – remains intense among some lawmakers and many conservative activists. Another challenge to Mayes’ leadership is expected at an Aug. 29 caucus at which an election will be held to determine who leads the Assembly GOP.

Assemblywoman Melissa Melendez, R-Lake Elsinore, perhaps Mayes’ most critical colleague over his decision to help Brown round up seven Republican votes for AB398, is running. Assemblyman Jay Obernolte, R-Big Bear Lake, is considered likely to run as well. There’s also been speculation about Assemblyman Vince Fong, R-Bakersfield.

Mayes’ decision to vote for the cap-and-trade renewal, and to work to bring several GOP lawmakers with him, came after weeks of negotiations with the governor. He believed he had won a major concession from Brown and Democratic legislative leaders that could eventually throttle the state’s costly, problem-plagued bullet-train project. Here’s a description from CalWatchdog coverage last month:

The concession ….  places a constitutional amendment drafted by Mayes before state voters in June 2018. If passed, it would lead to a one-time up-and-down vote in the Legislature in 2024 on whether to continue allowing the use of cap-and-trade revenue to fund the project. But the threshold wouldn’t be a simple majority. A two-thirds vote would be required to allow continued use of the funds – presumably giving GOP lawmakers a prime chance to pull the plug.

But the complexity of the concession and its distant possible payoff didn’t enthrall many Republican lawmakers, whose opposition to AB32 is a core element of their political platform. There was also fury that Mayes rounded up so many Republicans that Democrats didn’t have to pressure two of their Assembly members in swing districts to vote for a cap-and-trade extension that is unpopular with their constituents. AB398 passed 55-25, with one vote more than necessary to meet the two-thirds threshold for adoption.

Meanwhile, an argument that Mayes has increasingly made in recent weeks – that AB398 provided state GOPers with a chance to rebrand themselves and broaden their appeal – has faced ridicule from those who say the party’s core values are opposition to higher taxes and overregulation.

State GOP board issues harsh rebuke

Mayes’ rough month continued last Friday, when the board of the state Republican Party voted to urge Mayes to step down. The vote was 13-7, with one abstention. State GOP chair Jim Brulte was among the yes votes.

More than 20 local Republican organizations have also issued formal denunciations of Mayes.

Mayes, 40, has worked as a financial planner. He entered politics on the Yucca Valley Town Council and also worked as a top aide to a San Bernardino County supervisor. He was first elected to the Assembly in 2014.

In 2011, after his seven-year run as governor, Arnold Schwarzenegger had plenty of reasons to worry about how his time in elected office might be remembered. It wasn’t just that he was widely viewed as an under-performing leader who never lived up to his early promise as a brash outsider who would tackle unaddressed state problems. An ugly scandal broke in his final days in office, triggering a political firestorm, and an even more embarrassing scandal emerged soon afterward.

On his last night as governor, Schwarzenegger commuted the prison sentence of Esteban Nuñez – the son of former Assembly Speaker Fabian Nuñez, his friend and occasional political ally – from 16 years to 7 years for his manslaughter conviction in the killing of a San Diego college student. Schwarzenegger initially characterized the sentence as extreme, given that the student died after being knifed by another man. But in an interview with Newsweek three months later, he said he commuted the sentence because “of course you help a friend.” The younger Nuñez is now a free man as a result.

In May 2011, as his celebrity marriage to Maria Shriver collapsed amid intense gossip, Schwarzenegger admitted to fathering a 13-year-old boy with Mildred Baena, long a maid at his Brentwood estate. The revelation triggered headlines around the world.

Los Angeles Times columnist Steve Lopez cited both scandals in a scathing column that saw them as evidence that Schwarzenegger “has always seemed to live in his own celebrity world by his own twisted rules of privilege and entitlement, his life an orgy of self-glory.”

Legacy play pays off in big way

But six summers later, such harsh rebukes are hard to find. Instead, Schwarzenegger’s image has been resurrected to a considerable degree. His 2006 legacy play – shepherding Assembly Bill 32 to passage to make a California a pioneer in targeting and reducing the greenhouse gases believed to help cause global warming – has paid immense dividends.

This was on display last week when Gov. Jerry Brown featured Schwarzenegger at the signing ceremony for legislation extending the state’s cap-and-trade program for emissions that was established by AB32, with the men swapping praise for being leaders on what they called the world’s most pressing issue.

Last October, on the 10th anniversary of AB32’s signing, Schwarzenegger was also featured at an event organized by the governor’s office.

This was nothing new for the Austrian-born movie star, who’s been feted around the world for his environmental leadership. The praise is usually unstinting, and doesn’t note interesting nuances about AB32’s actual record – starting with the fact that the main reason for declining emissions in California in recent years is not the landmark law but the increased use of cheap, relatively clean natural gas, a fossil fuel of the sort the law targets. In 2015, Forbes said natural gas – not renewable energy – was “easily California’s most important source of energy.”

But now Schwarzenegger finds himself winning praise for another reason: His history offers an easy way for journalists to make the point that President Donald Trump doesn’t speak for all Republicans when he either questions whether climate change is real or opposes ameliorative efforts by the government to reduce its effects. A Nexis news database search shows major publications from Los Angeles to New York to London to Singapore have regularly made this point since Trump’s inauguration.

Schwarzenegger directly sought to promote this narrative with his late June visit to Paris to meet with French President Emmanuel Macron and jointly criticize Trump for his decision to pull the U.S. out of the Paris climate accord signed by President Obama in December 2015. Schwarzenegger used social media – including the image shown above – to publicize his meeting with Macron.

“One man cannot destroy our progress,” said Schwarzenegger, who turned 70 on Sunday. “One man can’t stop our clean energy revolution. And one man can’t go back in time.” He laughed heartily at Macron’s mocking Trump for not wanting to “make the planet great again.”

His new cause: redistricting reform

Now Schwarzenegger is trying to build on another of his accomplishments while governor. He led the successful push for Proposition 11 in 2008 and Proposition 20 in 2010 to assign redistricting duties for state and congressional districts to a nonpartisan commission and intends to lobby for similar reforms in other states. His official website declares “let’s shine a light on gerrymandering,” which has been blamed for increasing partisanship and discouraging moderates of both parties by packing voters with similar views into uncompetitive districts.

Schwarzenegger “has a Terminate Gerrymandering Crowdpac that he’s pledged to match dollar-for-dollar,” Politico reported last week. “He’ll be appearing at events, meeting with lawyers, having his team jump in to rewrite incomprehensible charts of the ‘efficiency gap’ and other technicalities ahead of Gill v. Whitford, the Wisconsin gerrymandering challenge that Justice Ruth Bader Ginsburg … called ‘the most important’ case of the Supreme Court’s next term.”

Real-estate prices have gotten so high that they stretch family budgets and are a root cause of California’s highest-in-the-nation poverty rates, based on the Census Bureau’s new cost-of-living-adjusted poverty measure.

The situation is so acute it’s drawn the attention of the national media. “A full-fledged housing crisis has gripped California, marked by a severe lack of affordable homes and apartments for middle-class families,” according to a recent New York Times article. Median home prices have hit a “staggering $500,000, twice the national cost.”

The problem is particularly bad in the state’s major metropolitan areas. The median single-family home price in the nine-county San Francisco Bay Area, for instance, has topped $750,000. Public-opinion surveys suggest soaring home prices – rather than job opportunities or the state’s business climate – are the key reason many people are moving to other states.

But while there’s broad agreement that housing affordability is in crisis, there are two schools of thought on how to address it. Democrats are primarily trying to raise taxes and fees to pay for more government-subsidized affordable housing, whereas Republicans want the state to chip away at local governmental barriers to home construction.

Legislators and the governor have made little progress in crafting a detailed housing plan for this legislative session. But there are a handful of bills moving their way through the Capitol that encapsulate their approach. Their high-priority measure, when legislators return to the Capitol late next month, is Senate Bill 2, which would impose fees of $75 to $225 on every real-estate transaction to provide $225 million in annual funding to subsidize developers of low-income housing.

“With a sustainable source of funding in place, more affordable housing developers will take on the risk that comes with development and, in the process, create a reliable pipeline of well-paying construction jobs,” according to the Senate bill analysis.

Senate Bill 3 also takes a similar approach toward building affordable housing. The measure authorizes $3 billion in general-obligation bonds to pay for low-income and transit-oriented housing. It would need to be approved by voters in the November 2018 election. There’s also talk about using proceeds from the cap-and-trade auctions to fund such programs.

One major bill embraces some of the concerns expressed by those who want to encourage market-oriented solutions to the problem. Senate Bill 35, by Sen. Scott Wiener, D-San Francisco, “creates a streamlined, ministerial approval process for development proponents of multi-family housing if the development meets specified requirements and the local government in which the development is located has not produced enough housing units to meet its regional housing needs assessment,” according to the bill summary. The streamlined process would apply where a project meets “objective zoning, affordability, and environmental criteria, and if the projects meet rigorous labor standards,” according to Wiener.

The bill circumvents local planning decisions, but New Urbanists and others say such pre-emption is needed because “not in my back yard” (NIMBY) sentiments among residents and city officials have impeded developers’ ability to add high-density housing in urban areas. The latter point – the requirement that workers receive union wage rates – has been a major sticking point for some conservatives, who believe the mandate could drive up the cost of home construction.

The building industry has neutralized another measure, Assembly Bill 199, which could have required such above-market wage rates for a wide range of privately funded housing projects. AB199 originally would have required “prevailing wage” for any project that involved an agreement with a “state or a political subdivision.”

The building industry argued that “the language was purposely ambiguous and could mean simple tasks, like a new porch, would require union labor,” according to a San Diego Union-Tribune report. The amended version removes that language and now applies only to projects that receive public subsidies.

There’s wide disagreement about whether additional mandates for affordable housing will substantially boost the supply of lower-priced homes. Even if the new subsidies pass, those dollars are a drop in the bucket, given the overall size of the state’s housing market, critics say. And government mandates that builders provide a set number of affordable units as part of their new subdivisions may ramp up the overall costs for market-based units.

The Union-Tribune’s Dan McSwain compared the process to something out of a Kafka novel: “Raise the overall price of market units, thus ensuring that fewer get built, in order to subsidize a handful of poor families … who win a lottery administered by local government agencies, with staffs funded by housing fees that inflate prices.” McSwain blamed high costs partially on city-imposed fees that inflate housing prices by 20 percent or more.

The Legislature isn’t about to tackle that broader problem. Legislators have yet to reform the California Environmental Quality Act and other environmental rules that drag out the approval process for major new developments. For instance, Southern California Public Radio recently reported that the Newhall Ranch development in Los Angeles County finally “is moving forward after recently winning key approvals.”

That Santa Clarita Valley project, which will house 60,000 people, has been in the works since the 1980s and still is a long way from a ground-breaking. It’s been delayed by environmental lawsuits and legal challenges related to its possible impact on climate change.

Southern California Public Radio quoted real-estate experts who say the project will only make a small dent in the region’s housing shortage. But is that the fault of the developer or of policymakers who have ignored the problem so long that adding tens of thousands of new housing units only amounts to adding a few drops in the housing bucket?

The good news is the Legislature and governor are paying attention to a serious problem that has been percolating for years. The question, as always, is whether state officials can craft legislation that will make a real dent in the problem.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

Will news about the California bullet train’s cost overruns and

These are the key questions prompted by a concession that some Republican state lawmakers gained in return for helping Gov. Jerry Brown keep alive the state’s greenhouse-gas emissions cap-and-trade program until 2030. The provision could eventually end the state’s high-speed rail project, leaving a massive white elephant in the agricultural fields of the Central Valley. Or the concession could end up yielding a second vote validating a project first approved by state voters in 2008.

The concession – secured by Assembly Republican leader Chad Mayes of Yucca Valley – places a constitutional amendment drafted by Mayes before state voters in June 2018. If passed, it would lead to a one-time up-and-down vote in the Legislature in 2024 on whether to continue allowing the use of cap-and-trade revenue to fund the project. But the threshold wouldn’t be a simple majority. A two-thirds vote would be required to allow continued use of the funds – presumably giving GOP lawmakers a prime chance to pull the plug.

So far, the funding has been substantial in one sense but marginal in the big picture of trying to pay for a $64 billion project. After the fifth year of cap-and-trade distributions, about $1 billion has gone to the California High-Speed Rail Authority, with another $500 million expected this fiscal year. But it is considered crucial because it is the only new funding source Brown has found for the project, which has been unable to gain outside investors because of rules banning public subsidies for bullet-train operations.

Rail authority chair Dan Richard says he isn’t worried about a public veto in seven years: “By 2024, we’re going to be deep into construction. We’re going to be on the verge of opening the first service. We’ll be seeing Google and others making massive investments in areas around high-speed-rail stations. The case will be there for the importance of continued funding,” he told the San Francisco Chronicle.

The authority’s 2016 business plan said the state expected to have $21 billion in hand from state bonds, federal grants and cap-and-trade funds to build a segment from San Jose heading south.

Feds expect cost overrun of 48% or more on first segment

But Mayes and other GOP lawmakers are betting that from here until 2024, the bad news about the project will never stop.

Lawyers for the Central Valley farmers and the government and civic officials they represent in lawsuits against the state government like to point out that – apart from court victories allowing the project to continue to spend public monies – there has been no substantial encouraging news about the project in years.

In January, the Los Angeles Times reported that it had obtained a confidential Federal Railroad Administration risk analysis that predicted a cost overrun of 48 percent or more on the initial 118-mile segment in the Central Valley. What the Brown administration has been saying would cost $6.4 billion is instead likely to be $9.5 billion to $10 billion, federal officials warned.

The idea that voters will be pleased with what they see in 2024 could be difficult to square with what rail authority officials told a visiting congressional delegation in August 2016: that construction is expected to stop in the middle of an almond orchard 30 miles northwest of Bakersfield when the money runs out.

This is contrary to promises made to voters in 2008 to get them to provide $9.95 billion in bond seed money for the project. They were guaranteed no construction would begin until the state could guarantee its initial segment would have financial viability without any more train tracks being laid.

The Senate was less of a question, given that Democrats have a full supermajority in the upper house. As it turned out, the Senate passed the measure – and a companion bill that strengthens air-pollution reporting requirements – with all Democrats in support, as well as one Republican, Tom Berryhill of Modesto, who gained a concession (reduction of a firefighting fee for rural areas) he had sought.

But the Assembly vote wasn’t even close, as seven Republicans – including Republican Leader Chad Mayes of Yucca Valley – voted in favor of the extension. The other six Republicans were Catharine Baker of Walnut Creek, Rocky Chávez of Oceanside, Jordan Cunningham of San Luis Obispo, Heath Flora of Modesto, Devin Mathis of Visalia and Marc Steinorth of Rancho Cucamonga.

Mayes defended his vote, first by expressing how tired he is of partisanship, then noting that he supports cap and trade because “we believe markets are better than Soviet-style regulations.” He also posted on Twitter a large photo of Ronald Reagan with a recent quotation from former Reagan Secretary of State George Schultz: “Passing this bill on a bipartisan basis … is something Ronald Reagan … would be proud.” But despite his appeal to conservative icons, conservative activists and commentators were furious at the vote.

In a column Tuesday, Jon Fleischman, publisher of the Republican website Flashreport, ridiculed Mayes’ contention that the cap-and-trade system is a free-market approach to climate change: “Apparently Mayes believes that when the government creates Soviet-style limits on resources but leaves people with the freedom to exist in a world of artificial scarcity on their own terms, that is not command and control.”

Conservative former Assemblyman Tim Donnelly noted in an email blast that eight GOP legislators “voted for a (63 cents) per gallon gas tax, handing Gov. Jerry Brown another victory and a massive slush fund to spend on things like high-speed rail.” That number comes from the nonpartisan Legislative Analyst’s Office, which concluded that the cap-and-trade system could add 63 cents to a gallon of gasoline by 2021 if carbon credits sell for a high price.

Under cap and trade, established in 2012 by the California Air Resources Board and authorized by the Global Warming Solutions Act of 2006, the state caps allowable greenhouse-gas emissions by manufacturers. That cap then is reduced by 3 percent a year. Manufacturers who cannot reduce their carbon emissions immediately bid for “credits” in an auction system. The goal is to force companies to invest in low-carbon technologies, but the costs of the credits and those investments are expected to drive up costs in the meantime.

Some business groups backed the program, viewing it as a less-onerous means to achieve climate-change goals than the heavy-handed regulatory alternative. Some environmental and social-justice groups opposed the plan, which they view as going too easy on corporations. But few doubt that its passage will increase gas, food and electricity prices.

The issue is a hot button now, given that Republicans are targeting Democratic Sen. Josh Newman, D-Fullerton, because of his vote in favor of Senate Bill 1, a recently passed law that increases gasoline taxes by 12 cents or more a gallon and which also increased vehicle-license fees to pay for transportation projects. Most Republican legislators objected to a cap-and-trade driven gas-price hike so soon after this tax increase.

Because of the relatively large number of Republican votes for the cap-and-trade extension, the Democratic Assembly speaker “was able to let three of his targeted members, who are occupying seats the GOP would like to pick back up, either not vote at all or vote no,” added Fleischman. He called it a “a big strategic blunder” for the Assembly GOP.

It’s unclear whether the GOP legislators will suffer a political price for their vote. Berryhill is termed out of his Senate seat. “Because of the manner in which the party is currently run and funded, those legislators who voted for the bill will not be punished in any way by the party,” said Tom Del Beccaro, former California Republican Party chairman. “However, as (former Assemblyman) Eric Linder proved with his liberal voting record and loss due to low Republican turnout, Republican voters will be less likely to turn out for Republicans next fall.”

The Republicans who voted for the bill seem undeterred. Some of them joined Gov. Jerry Brown at a celebratory press conference after the bill’s passage. “We didn’t come here to Sacramento to just be Republicans and to hate on Democrats,” said Mayes. “We came here to Sacramento to make people’s lives better.”

Chávez noted that “we’re a very small component of the world on this but that doesn’t mean we shouldn’t be leaders on something that’s threatening the world.”

It remains to be seen whether the GOP, which was making political hay out of the recent gas-tax vote, can keep up its political momentum now that so many of its members voted for bill that may raise gas prices by far more than 12 cents a gallon.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

Joining a would-be trend that includes lawmakers in deep blue Massachusetts, Senate majority leader Kevin de León, D-Los Angeles, has unveiled a new proposal that could become California Democrats’ answer to the limits of cap-and-trade. 

“The California Senate leader has introduced legislation that would require the Golden State to get 100 percent of its electricity from climate-friendly energy sources by 2045,” the Desert Sun reported. “That’s a big step up from the state’s current renewable energy mandate, 50 percent by 2030 — a target that’s only been on the books for a year and a half, and that California is still a long way from meeting.”

“De León’s bill would require California to hit 50 percent renewable energy by 2025, five years sooner than under current law, and phase out fossil fuels entirely by 2045. It’s not yet clear whether the Senate leader will move forward the proposal, which he introduced before the state’s bill-filing deadline on Friday, almost certainly to serve as a placeholder for more detailed legislation that could be fleshed out later. Still, clean energy advocates celebrated the proposal.”

Big goals

Massachusetts lawmakers recently made a bid to make their state the first in the country to draw all its power from renewables. “Lawmakers recently introduced a bill that would require an economy-wide transition to obtaining power via clean sources like wind and solar, and 53 state legislators from both the House and the Senate have shown support for the measure,” Inhabitat observed. “The bill, SD. 1932, also known as the 100 Percent Renewable Energy Act, would set targets of electricity generation via 100 percent renewables by 2035; other sectors like transportation and heating would have until 2050 to make the switch.” 

A few other states have begun to gravitate toward the principle of mostly or totally renewable power. New York “wants 50 percent renewable energy by 2030,” according to the Los Angeles Times, “which is seeking 100 percent renewable energy by 2045.” De León first floated the idea of going full renewable to the Times in January. “Two years ago, California Senate leader Kevin de León pushed through a law requiring the state to generate half of its electricity from renewable sources by 2030,” the paper recalled.

Notes of caution

But while the enthusiasm has largely been couched in terms of using politics to advance moral imperatives, not all green energy advocates have embraced the idea with open arms. “[T]here’s a lot of evidence that 100 percent renewable energy is not the optimal way to decarbonize the grid,” Greentech Media noted. “Let’s say climate change requires massive government investment in clean technologies. In that case, the question shifts to one of efficacy: Since climate change justifies extraordinary measures, what is the most effective extraordinary measure to fight it? That’s where 100 percent renewables plans fall short, for both structural and practical reasons.”

Some analysts have warned that the approach pushed by de León becomes less and less effective the more ambitious it becomes. “The main economic problem facing renewable electric power is that of diminishing returns,” wrote the Niskansen Center’s Edwin Dolan. “It is possible to install great numbers of solar panels and wind turbines, and even to achieve economies of scale, measured in terms of the cost per kilowatt-hour of capacity, as the installations get larger. However, the problem remains of getting the power to users where and when it is needed. The output of solar and wind installations is variable, and the timing of output does not always coincide with the timing of demand. As the number of renewable installations attached to the grid goes up, the percentage of the potential power output that can actually be used goes down and the cost per kWh rises.”

The result could lead businesses to push technology toward arbitrary goals. “Energy companies have traditionally shied away from installing battery systems at their plants because they’ve tended to be expensive,” Ars Technica noted. “But as prices for energy storage come down and states like California require more and more intermittent renewable energy on utilities’ grids, battery installations have been on an upswing.”

In an uncertain political landscape, cap and trade in California faced a fresh hurdle as hearings began before an appeals court over the constitutional legitimacy of the regime. 

“A long-running lawsuit filed by the California Chamber of Commerce seeks to have the system declared an illegal business tax that should have required a two-thirds vote of the legislature to take effect,” the San Francisco Chronicle reported. “Oral arguments in the case, first filed in 2012, are scheduled to begin in January.”

“Gov. Jerry Brown, who has made addressing climate change a central part of his legacy, spent much of the summer trying to convince legislators to explicitly extend the system past 2020. But he set a high bar, trying to line up the support of two thirds of legislators, in case the Chamber of Commerce won its suit. Republicans and business-friendly Democrats balked.”

That set the stage for the state Chamber of Commerce to bring a challenge. Rather than making a direct frontal attack on the provisions of California’s landmark emissions legislation, its lawsuit claims that California lacks an adequate legal ground to perform one of its central tasks, arguing “the state has no right to sell permits and generate revenue,” Reuters noted. 

A long road

The Chamber’s suit was accepted for hearings along with a separate filing, which could result in joint appeals if the court ends up siding with the California Air Resources Board. The plaintiff in the second lawsuit is Morning Star Packing Company, “the world’s largest tomato processor and a company that is required to buy carbon-emissions permits through the program,” as the Christian Science Monitor observed. “The case is expected to reach the state Supreme Court, as both sides have said they will appeal if they lose.”

Although, four years ago, the Sacramento Superior Court ruled that CARB “was given broad authority to design a program to meet emissions targets, including the sale of permits,” Reuters added, “CalChamber’s appeal of that ruling has kept the issue alive, casting a shadow over the emissions trading market, which has at times suffered a lack of participation due to uncertainty over its future. Despite the state’s earlier victory, the Third Appellate District Court’s request last year for supplemental information indicates they are taking a close look[.]”

The money factor

Still, this year, the market for carbon bounced back to a degree from previous lows. “For much of 2016, many companies appeared to be boycotting the state’s emissions-trading system,” the Chronicle noted, with buyers hesitant to commit if the system’s end might be in sight. “In May, when the state held its quarterly auction of greenhouse gas permits, only 11 percent sold.” This week, however, “state officials reported the results of the year’s last quarterly auction, held Nov. 15 — and they showed a dramatic rebound,” the paper reported. “This time, companies snapped up more than 88 percent of the current-year permits offered, the best performance of any quarterly auction since February.”

Critics of the lawsuit, including CARB, have warned that a defeat in court could wipe out a myriad of projects reliant on cap-and-trade revenues for funding. “Auction revenue is a key funding source for a high-speed rail project seeking to link Los Angeles and San Francisco by train,” the Associated Press recalled. “It also generates billions for transit construction, housing and energy conservation efforts.” But the state Chamber has countered that even a clear victory would leave a broad array of options open for the air authority. “If the auction is allowed to stand, there’s nothing to prevent the California Air Resources Board from inventing new ways to raise revenue, James Parrinello, a lawyer representing the Chamber of Commerce, told the judges.”