Gov. Jerry Brown and other politicians celebrated last week when the Legislature passed two bills that require deeper reductions in California’s carbon emissions.
As symbolically significant as the bills may be – including their effect on Brown’s political legacy – how the state achieves the 2030 goal, if it can, is a complex legal and political chess game.
To date, the state, primarily via the Air Resources Board, has pursued several concurrent strategies, including requiring utilities to shift to “renewable” wind and solar power, pushing “low-carbon fuel” for vehicles, fostering electric car sales, and compelling industries to buy a slowly declining number of carbon emission allowances.
The latter, called “cap-and-trade,” has been particularly contentious. It’s never been popular with environmental groups, and business, originally supportive, turned against it when the ARB decreed that most emission allowances would be sold, rather than distributed freely.
A business-backed lawsuit challenging cap-and-trade as an illegal tax is pending in a state appellate court with most observers believing it has a good chance of succeeding, and recent auctions have produced paltry results because of its uncertain future.
The dismal auction results undermine big plans of Brown and legislators to spend billions of cap-and-trade dollars, including a big chunk that would shore up his pet, but financially shaky, bullet train project.
Brown wants authorization to continue cap-and-trade beyond 2020, but the Legislature balked at including it in the two bills. It’s very uncertain the Air Resources Board could do it on its own, particularly in light of a 2010 ballot measure that tightly defines taxes that need a two-thirds legislative vote or voter approval to be imposed.
One brief section of AB 197, ordering the ARB to “prioritize” orders for “direct emission reductions” implies that Brown and the agency hope that the other 2030 strategies will be so onerous that business itself will seek reauthorization of cap-and-trade.
“They’re going to get commands to do things,” Brown said, “and they’re going to plead for a market system called cap-and-trade so they can respond in a way that’s more beneficial to their bottom line.”
Business lobbyists singled out “prioritize” during a brief committee hearing on the bill prior to passage, one saying it has “too much ambiguity.”
A draft ARB “scoping plan” suggests four strategies for 2030, only one of which includes cap-and-trade, saying that without it, the direct crackdowns on industrial and automotive emissions would have to be more severe.
The latter is also in play. Brown wanted a 50 percent reduction in the carbon content of auto fuel by 2030. Oil industry lobbying has kept it out of legislation, and there are hints that the industry would be more amenable to cap-and-trade, even with auctions, were the low-carbon fuel mandate to shrink or disappear.