SB 375 (Chapter 728, Statutes of 2008) directs the California Air Resources Board to set regional targets for reducing greenhouse gas emissions. The new law establishes a “bottom up” approach to ensure that cities and counties are involved in the development of regional plans to achieve those targets.

SB 375 builds on the existing framework of regional planning to tie together the regional allocation of housing needs and regional transportation planning in an effort to reduce greenhouse gas (GHG) emissions from motor vehicle trips.

San Diego County has become the first major county to file its SB 375 compliance plan. So far, there have 德州扑克 been two ongoing court fights over whether the county’s long-term infrastructure-improvement planning does enough to push the region to reduce greenhouse-gas emissions, as mandated by Steinberg’s law.

The county had to file its plan at the same time it was formulating its long-term approach to traffic congestion. Recent improvements to Interstate 15 have paid huge dividends. This made San Diego Association of Government officials even more committed to an expansion of Interstate 5 from the Del Mar area north to Camp Pendleton. Work is supposed to begin next year. Traffic engineers concluded there was no single project that would do anything close to relieving the congestion that would be accomplished with the I-5 improvements.

But that upgrade is now imperiled because greens have won at the appeals court level in both of the legal fights over the adequacy of San Diego County’s long-term plans.

What should 57% of infrastructure $ go to?

So what is one of the key fights in the legal battles over the county’s plan?

The contention of one side that spending on mass transit should start at 38 percent of infrastructure spending and reach 57 percent from 2040-2050.

There is no history of mass transit being popular anywhere but in packed-in cities like Tokyo and New York. California is not Tokyo or New York.

So how could those insane tree-huggers propose that 57 percent of future infrastructure spending in the San Diego region go to mass transit?

Bulletin: That isn’t what the Sierra Club supported. It’s what the county proposed and the Sierra Club and many other environmental groups rejected as unacceptable.

This is crazy enough on its face. But when you think about it more deeply, it becomes absolutely ridiculous. A state law is pushing local governments to assume mass transit will be the most logical way to move people around in a spread-out state — in 2040! This is happening even though there are so many promising energy-technology initiatives in the works — and even though there have been plenty of concrete gains since 2008.

Cars get cleaner as freeways de-emphasized

I had more on this issue in a Tuesday U-T San Diego editorial.

California is not the boroughs of New York City writ large. It is a sprawling state, and that is never going to [embrace mass transit] so long as housing is cheaper on the edges of the state’s population centers. Cars are infinitely more convenient for a typical day’s requirements — commuting to work; running errands on lunch breaks; getting kids to school, music classes, sports practice or jobs.

But instead of acknowledging this immense convenience factor, greens seek policies that would create mass inconvenience. The Interstate 5 experience in North County is already often bad; if the freeway upgrade is blocked, it will become routinely horrible. For people who hate cars, this amounts to a desired result.

They think this way even as we see rapid progress in developing far cleaner cars — and not just the Prius. As The New York Times reported Sunday, the “once-distant promise of clean, affordable hydrogen-powered cars is starting to become a reality,” with very positive implications for global warming. Pragmatic environmentalists will see this as good news. But not those who view cars and freeways the same way that most people think about bubonic plague.

Here’s a link to the NYT story on hydrogen-powered cars.

]]> https://calwatchdog.com/2014/12/02/nutty-sb-375-about-to-become-ongoing-nightmare-for-ca/feed/ 6 70961 https://calwatchdog.com/2012/09/11/legislature-passes-illegal-green-slush-fund/ https://calwatchdog.com/2012/09/11/legislature-passes-illegal-green-slush-fund/#comments Tue, 11 Sep 2012 14:47:31 +0000 http://www.calwatchdog.com/?p=31969 Sept. 11, 2012

By Dave Roberts

When California enacted AB 32, the California Global Warming Solutions Act of 2006, the bill was touted as a way to make California environmentally friendly. But it’s also turning into a billion dollar slush fund for Democratic pet projects, which the California Chamber of Commerce has labeled an “illegal tax.”

AB 32’s goal is to reduce greenhouse gas emissions to 1990 levels by 2020 — a total reduction of 25 percent, or 80 million metric tons. Most of the reduction is planned to come from regulatory crackdowns on businesses. The remainder, about 18 million metric tons, would come via a Cap and Trade program on heavy manufacturers and energy-intensive businesses. A cap is placed on the emissions allowed by a business, which can be exceeded by purchasing an allowance. Each allowance is equivalent to one metric ton of CO2.

Periodic auctions of allowances (the first is scheduled for Nov. 14) will be conducted by the California Air Resources Board; $1 billion is expected to be raised from the auctions in the 2012-13 budget year, according to Gov. Jerry Brown. His budget creates a Greenhouse Gas Reduction Account, in which $500 million is planned to be spent for greenhouse gas mitigation activities. The other $500 million could go for “investments” in clean energy, low-carbon transportation, natural resource protection and sustainable infrastructure development.

Billion-Dollar Green Pie

Naturally, everyone wants a piece of that billion-dollar green pie. The Chamber is most concerned about three bills passed on the last day of the legislative session — SB 535, AB 1186 and AB 1532 — that slice up the pie.

SB 535 dishes a quarter of it to “disadvantaged” communities.

AB 1532 allows the money to be thrown at a smorgasbord of projects, including biofuels, electric vehicles, land conservation, public transportation, sustainable housing and recycling.

AB 1186 slates money for energy efficiency projects in public schools; but a late amendment removed the connection to Cap and Trade funds, according to the bill’s author. Assemblywoman Nancy Skinner, D-Berkeley.

The Chamber is urging its members to call on Brown to veto the bills, which, it says on its website, “will increase energy costs, including fuel prices, on consumers and businesses.” On the question of legality, the Chamber argues that “the California Air Resources Board lacks authority and has been unable to justify the need to raise billions of dollars in revenue for the purposes anticipated in the bills. AB 32 was not intended to be a revenue source.

“If the state moves forward with a billion-dollar auction, the impacts on the state’s economy would be devastating. Entities subject to the illegal tax include manufacturers, public agencies, universities, refineries, food processors and others. The impact on these entities will be severe and on top of the higher fuel and energy costs due to other climate change regulations. Not only is an auction unnecessary for a successful cap-and-trade program, but the planned collection and distribution of auction revenues raises legal uncertainties.”

The California Taxpayers Association also questions the legality of the green slush fund, sending a letter to legislators asserting, “AB 1532 is … inconsistent with the constitutional definitions of taxes and fees.”

That was echoed by Republicans in the debate over SB 535 on the Assembly floor on Aug. 31. Assembly Speaker John Pérez, D-Los Angeles, introduced the California Communities Healthy Air Revitalization Trust, which was authored by Sen. Kevin de Leon, D-Los Angeles.

As de Leon wrote, “SB 535 ensures that, as California takes steps to address climate change, we invest in the neighborhoods that continue to suffer from higher levels of pollution and are least able to confront the expected impacts of environmental reality. The bill directs the California Environmental Protection Agency to develop a methodology to identify disadvantaged communities based on socioeconomic and environmental criteria. It then directs that no less than 25 percent of all available funds from cap-and-trade auctions annually are invested in such a way that they provide benefits to those identified communities, and that no less than 10 percent are invested in projects directly within these communities.”

Cap-and-Trade Conspiracy

Assemblyman Curt Hagman, R-Chino Hills, led the opposition: “We talk about conspiracy theories with Cap and Trade. This is why. This bill arbitrarily takes off 10 percent of the Cap and Trade auction revenues to projects in disadvantaged or disproportionately impacted communities — and does so when there’s no evidence that cap-and-trade will harm those communities. So it’s a way to gain revenue at a time when we trying to impose taxes on these businesses. It is a fee for a program — this is not a pool of money and funds to spend on pet projects. You wonder why voters are not in favor of us passing more taxes. They don’t believe we manage them correctly. We tell them we’re doing one thing with a bunch of fees. And here’s evidence again that we’ve got this pool of money, so let’s go have fun with it.”

Asked Assemblyman Tim Donnelly, R-Twin Peaks, “Do we really need another unelected, unaccountable bureaucracy? And how are we going to know there’s no conflict of interest with the board members on this? This is money that we are confiscating and extorting from businesses right now that hire people. There are food processors, there are all kinds of manufacturers, anybody who has anything to do with cement, and that’s a big industry in my district. These guys are paying exorbitant fees right now just to exist. And now we’re going to take this money and siphon it off for some community revitalization air trust?

“I mean, c’mon, I thought this was all about stopping the global warming and you were going to use that money to do something useful with it. And now I hear that there’s 15 other people that have lined up to try to get their hands in the pot. Really, what is Cap and Trade? What does it do? It’s real simple, it is a moving notice to companies that do business in California. It’s an invitation to leave the state, because you have to pay essentially blackmail or greenmail, or whatever color you want to call it, to the government.

“For us to be pushing a new government program to immediately gobble up these funds that we said are so necessary that we had to hit every business that produces any kind of energy, I think we lose credibility with the public. Because the public doesn’t believe we need a new agency at all. I don’t see that there’s any nexus between this agency, this board, this whatever you want to call it, and the tax that is being siphoned off of these businesses. I’ll tell you one thing this will do, and if this is about people that are in disadvantaged communities, they need jobs. And this will kill jobs.”

Steve Knight, R-Palmdale, questioned the criteria used to identify disadvantaged communities. “Areas disproportionately adversely impacted by environmental pollution and hazards — that could be anywhere in the state,” he said. “Areas with concentrations of residents with low income, high unemployment, low levels of home ownership, high rent burden and low levels of educational attainment. I don’t know about you, ladies and gentlemen, but I would think that that’s probably every district in the state. Every one of us could say we have an area, there was one comment here last week that said that they represented the armpit. Well, I think that there are bad areas in everyone’s district, and they are adversely affected.”

Another Nail in Business Coffin

Shannon Grove, R-Bakersfield, shared Donnelly’s concerns about adding more bureaucracy to this bureaucratized state.

“There’s no specifics in the bill about the new board that it creates, other than the California Air Resources Board will appoint a seven-member panel,” she said. “We know we can trust that: a rogue board appointing another rogue board that will do whatever they’re going to do. Keep in mind that the Air Resources Board is the same entity that said that AB 32 was not going to cost us any jobs. We can name company after company that have left this state because they are not going to compete with AB 32. Because they can go right across the border to Nevada, create the same jobs that they could create here and ship their products here on the back of a flatbed diesel truck. Voting for this bill would be just another nail in the coffin for our business owners.”

Pérez countered that the time for arguing against California’s efforts to curb global warming is long past.

“Much of the debate seems to revolve around the notion of whether we should move forward on reducing greenhouse gases — a decision made by a previous Legislature and governor in passing and adopting AB 32,” he said. “A question that members of this body were dissatisfied with the outcome of and then decided to go and referendize it in essence through Prop. 23. And the voters soundly rejected that and expressed their strong support for this greenhouse gas reduction effort.”

On the ballot in 2010, Proposition 23 would have suspended AB 32 until unemployment dropped. Voters rejected it.

The only question now is: Who should be making the decisions on how to spend the Cap and Trade auction money, Perez said.

“The reality is lack of action in this matter would result in a situation where the (Air Resources) Board wouldn’t have direction from the Legislature,” he said. “The Air Resources Board is moving forward with Cap and Trade. We want their decision on the expenditure of those monies to be informed by the interests expressed by the Legislature.”

It’s a near certainty that Brown, despite the veto pleas from the Chamber of Commerce, will sign the bills.

By Wayne Lusvardi

California voters may soon ask themselves: “Why vote for an $8.5 billion sales and income tax increase in November 2012 if Cap and Trade is going to raise $50 billion to $100 billion for state discretionary spending? That’s $6.25 billion to $12.5 billion per year from 2012 to 2020.

But will Cap and Trade generate enough revenues, and can those revenues be used to bailout the state general fund deficit? That is the proverbial $16 billion deficit question.

Cap and Trade is a program authorized in 2010 under Assembly Bill 32, the Global Warming Solutions Act of 2006.  AB 32 requires excessive air polluters to buy emission permits in an auction from those industries and utilities that pollute less than their pollution quota. The rules of Cap and Trade apply first to large industries; and by 2015 to utilities, including local municipal water and power departments. Eventually, 360 industries and utilities will be subject to Cap and Trade rules.  Where the proceeds of these auctioned permits are to be spent is still to be determined.

California legislators have already started floating up a flurry of bills to divvy up the estimated $50 to $100 billion windfall from 2012 to 2020 from Cap and Trade auctions. This is addition to Gov. Jerry Brown’s notion to fund the cost of the California High-Speed Rail Project with Cap and Trade funds. The California Legislative Analyst’s Office has recommended against this proposal because the funding is too speculative.

Cap and Trade Fund Distribution Bills

Assembly Bill 1532, sponsored by Assembly Speaker John Perez, D-Los Angeles, would deposit Cap and Trade pollution permit monies into a new Greenhouse Gas Reduction Account to be controlled by the California Air Resources Board.

Senate Bill 535, sponsored by State Sen. Kevin de Leon, D-Los Angeles, would divert some of the Cap and Trade auction funds to disadvantaged communities, affordable housing, hospitals and schools.

Senate Bill 1572, the AB 32 Revenue Investment Plan, sponsored by State Sen. Fran Pavley, D-Los Angeles, devises a strategic investment plant to distribute Cap and Trade proceeds.

AB 2404, the Local Emissions Reduction Fund, sponsored by Assemblyman Felipe Fuentes. D-Arleta, would delegate the award of Cap and Trade monies to the Strategic Growth Council — a six person cabinet level committee under the Governor’s Office.

What is the Strategic Growth Council? 

The Strategic Growth Council was authorized under Senate Bill 732 in 2008, sponsored by State Sen. Darrell Steinberg, D-Sacramento. It creates a cabinet-level committee to serve as a clearinghouse for the distribution of Cap and Trade funds.  According to the Strategic Growth Council website, a laundry list of activities can be funded: “to improve air quality, protect natural resources, increase the availability of affordable housing, promote public health, improve transportation, encourage greater infill and compact development, revitalize community and urban centers, and assist state and local entities in the planning of sustainable communities.”  But this may be a wish list more than what Cap and Trade auction proceeds can be legally spent on.

Who is on the Strategic Growth Council? 

The Strategic Growth Council is composed of six members. Five are the heads of state agencies and a sixth member is from the public.

Current Council members include:

Ken Alex, secretary of the Office of Planning and Research;
John Laird, secretary of California Natural Resources Agency;
Diana Dooley, secretaru of California Health and Human Services;
Brian Kelly, acting secretary of the Business, Transportation and Housing Agency;
Matt Rodriguez, secretary of the Department of Environmental Protection;
Bob Fisher, public member, president of the Mendocino Redwood Corporation and a member of the National Resources Defense Council, an environmentalist group.

The Strategic Plan of the Growth Council for 2012 can be found here.

Cap and Trade Auction Monies Hit Prop. 13 Snag

California’s Proposition 13, passed in 1978, mandates that any tax must be approved by two-thirds of the voters. Proposition 26, passed in 2010, added fees, charges, levies or tax revenue allocations as prohibited without a supermajority vote.

AB 32 authorized the California Air Resources Board to devise a Cap and Trade emission program. But it was only passed by the Legislature. It was never put to an election.  So we don’t know if all the bills for spending Cap and Trade proceeds are legal yet.

A number of liberal non-profit and advocacy organizations have leapt into the void and have issued quasi-legal opinions as to whether California can divert Cap and Trade funds to its operating budget, to fund the proposed bullet train project, and to a number of other programs.

Next10, a liberal non-profit public policy organization, has issued four reports on “Using the Allowance Value from California’s Carbon Trading System: Legal Risk Factors, Impacts to Ratepayers and the Economy.”

The liberal environmental policy think tank Resources for the Future has issued a report, “The Variability of Potential Revenue from a Carbon Tax.”

Both reports tend to concur that Cap and Trade auction revenues cannot be used for unrelated programs or reduced tax rates.  If California used Cap and Trade proceeds for ineligible activities. it would be vulnerable to a legal challenge under Prop. 13 and Prop. 26.

Some Cap and Trade proponents claim that pollution credits or allowances are not taxes, but a fee. But Prop. 26 forbids imposing fees without a supermajority vote.

The University of California Berkeley’s Center for Law, Energy and the Environment, which prepared one of the four reports for Next 10, concluded that channeling Cap and Trade funds to projects that reduce or lessen greenhouse gas emissions is the least legally risky option. The center made four conclusions: 1) re-directing Cap and Trade proceeds back to electricity ratepayers could offset all the costs imposed by Cap and Trade; 2) the way in which Cap and Trade proceeds are re-directed back to ratepayers will affect the efficiency of the program; 3) if electricity bills are reduced by Cap and Trade credits, that may affect the political perception of the program; and 4) electric rate increases will result from other AB 32 policies — namely, the 33 percent renewable power requirement — and these costs may be substantial and occur independently of the Cap and Trade portion of AB 32.

A flaw in this report is to assume that there will be no transaction costs for administrating and monitoring Cap and Trade.  Not all costs will be returned to ratepayers. And if they were, ratepayers might ask: Why implement the program in the first place?

In a 2009 report, David Roland-Holst, a professor of resource economics at the Berkeley center, said Cap and Trade revenues must be returned to utility customers either in the form of rebates or subsidized electricity bills.  Holst said that home energy efficiency projects generate more Gross Domestic Product and employment growth.

There are several problems with this proposal.  Newer homes have been built to Title 24 Building Energy Efficiency Standards and would likely not require any energy efficiency work.  And large numbers of older housing stock have been retrofitted with energy efficiency improvements either as a condition of home remodeling permits, or have been retrofitted with state, federal, and public utility energy efficiency programs that started around the mid-1970’s.  Another problem is that any subsidized home energy efficiency loans would likely end up creating another sub-prime loan and a financial bubble.

Anything that substantially deviates from reducing greenhouse gases will no doubt be tested by a legal challenge under Prop. 13 and Prop. 26.

Cap and Trade Prone to Government Gaming of System

The California Air Resources Boardhas been spending a lot of money on retaining consultants and monitors to prevent the gaming of the Cap and Trade auctions by third-party speculative traders.  But it may not be traders that would be of the most concern if the activities that can be funded under Cap and Trade are expanded beyond reducing pollution.

The California Public Utilities Commission and CARB have estimated that the proceeds from Cap and Trade auctions could total $50 billion from 2012 to 2020.  But Robert Lucas, a consultant with the California Council for Environmental and Economic Balance, is quoted in Forbes.com that if pollution allowances are held in reserve by CARB for any year, the unit price per ton of reduced carbon pollution could spike to $40 or $50 per ton.  Lucas said, “we could be talking about $100 billion between now and 2020.”

This would provide a perverse incentive for CARB to intentionally withhold pollution allowances to generate revenues for greedy bureaucratic agencies seeking to perpetuate themselves with Cap and Trade revenues. California could see a return to skyrocketing electricity prices, as experienced in the 2000-01 Electricity Crisis. And where would the check and balance be for voters and electricity ratepayers if the only referees to appeal to have a stake in the system?

If Cap and Trade were allowed to directly or indirectly plug the state operating fund budget deficit, gaming bureaucrats could hide behind a “veil of the carbon market” to jack up electricity rates and inflate the price of nearly all goods.

Cap and Trade Won’t Cure Budget Deficit

It is highly unlikely that proceeds from Cap and Trade auctions can be used to reduce or cure the state budget deficit.  Politicians may be queuing up with bills full of funding wish lists.  But any effort to liberalize the eligible funding activities under Cap and Trade will be met with lawsuits as well as a possible voter revolt.

A 2010 study by T2 Associates for the AB 32 Implementation Group raised concerns about Cap and Trade taking in eight years more than 120 percent of the single year 2009-10 state budget.

But the gnawing questions remain: Why impose Cap and Trade charges at all if they just have to be re-circulated back to electricity ratepayers?  If electricity ratepayers are given home energy efficiency rebates, isn’t this just another stimulus program? And hasn’t home energy efficiency been accomplished much more cost effectively by Title 24 Building Energy Efficiency Regulations and utility company rebates since the mid-1970’s?

Neither California politicians nor bureaucrats apparently know today what to spend Cap and Trade taxes on.  The transaction costs to implement the Cap and Trade program were estimated at $8 billion by the Congressional Budget Office.  And when you factor in the complexity that Cap and Trade will add to the economy, is a tax the best solution to reducing pollution?

The experience with the California Energy Crisis of 2001 is that things won’t turn out as expected and are often much worse than leaving them alone.