July 16, 2017
Gov. Jerry Brown is asking the Legislature to extend the state’s cap-and-trade program by voting Monday on two bills that he said he will sign only if both are passed. But lawmakers should say no to that deal.
In his argument to this editorial board, Brown cited statistics on childhood asthma and projections of rising sea levels due to climate change. The solution to the first ought not to be held hostage to the renewal of a program that aims to prevent the second.
The health effects of air pollution in disproportionately affected communities is a problem that deserves attention. Assembly Bill 617 would begin a program of neighborhood air quality monitoring in pollution “hot spots,” in addition to the current system of monitoring multi-county regions. The bill needs a majority vote to pass.
But Brown will sign AB617 only if the Legislature also passes AB398, which needs a two-thirds vote because it has been designated an urgency bill, and also to avoid future litigation challenging it as an illegally passed tax. AB398 extends the state’s cap-and-trade program, currently set to expire in 2020, until 2030. The bill also includes some side deals, including the abolition of a controversial fire tax.
This is all much too rushed. The package, unveiled only Monday after being assembled behind closed doors, originally was to be voted on Thursday night. The vote was delayed by Senate President Pro Tem Kevin de León and Assembly Speaker Anthony Rendon, according to their joint statement, to “allow our discussion on long-term housing affordability solutions in California to catch up to the climate effort.” By Monday, major legislation on affordable housing could be tacked onto this package. That kind of sudden governance is not good governance.
California’s cap-and-trade program was created under AB32, the Global Warming Solutions Act of 2006. It mandated the reduction of greenhouse gas emissions to 1990 levels by 2020, since tightened to a target of 40 percent below 1990 levels by 2030.
State air regulators created a cap-and-trade system to reach the targets, putting a limit on total statewide greenhouse gas emissions and requiring businesses to obtain allowances for each ton of GHG emitted. Some allowances are given to businesses at no charge, and companies may also buy them on the open market or from the state. California regulators chose to allocate 50 percent of all allowances to the state itself in order to auction them for revenue.
The billions of dollars that have been raised have gone into a Greenhouse Gas Reduction Fund, and the revenue can be spent by the Legislature on virtually anything, because all human activity is responsible to some extent for greenhouse gas emissions. A significant portion of the money has been continuously appropriated for the bullet train. Funds have also been directed to affordable housing and transit projects.
Whether cap-and-trade is the best way to fight climate change is the subject of intense dispute. Some environmentalists favor a tax on carbon or a command-and-control regime that would have regulators set limits on emissions and levy penalties on violators. Some business groups support cap-and-trade as a less costly, more flexible method of compliance with emissions targets.
But the cost of the cap-and-trade program remains a concern. It adds something to the price of electricity, gasoline and diesel fuel, though the governor’s office says it doesn’t know how much.
AB398 and AB617 emerged as gut-and-amend bills less than a week ago following intense backroom negotiations. Now lawmakers are racing to add more sweeteners before a vote on Monday. This rushed process is the wrong way to pass laws that will have significant, long-term effects on Californians. We urge a no vote.