In his effort to reverse climate change, Gov. Jerry Brown three years ago established the lofty goal of having 1.5 million zero-emission vehicles on California roads by 2025.
To achieve it, the state will need to intervene, and that costs money. And so the message on the California Air Resources Board’s clean vehicle rebate program website should be cause for alarm.
“Funding is currently exhausted,” the notice reads. “All applications submitted after June 10, 2016 will be placed on a rebate waitlist.”
As Georgia found, sales of electric vehicles plummeted last year when lawmakers there scrapped its rebate program. California isn’t abandoning rebates, and shouldn’t, at least for now. But Brown and the Legislature should fix the program in the coming months. In the process, they ought to focus on broader transportation issues.
The state promises up to $2,500 to people who buy electric cars and plug-in hybrid vehicles. That’s important to some buyers, though anyone who can afford a $100,000 Tesla probably could get by without a check from Sacramento.
In recent years, the state has used cap-and-trade revenue to fund the rebate program. But in part because of legislative inaction, cap-and-trade faces an uncertain future. Hence, rebates are on hold.
In the coming months, the 3rd District Court of Appeal in Sacramento is expected to hear the California Chamber of Commerce’s suit challenging the constitutionality of cap-and-trade, by which the state requires polluters to pay to offset greenhouse gas emissions.
The chamber contends the Democratic-controlled Legislature never expressly approved cap-and-trade and definitely didn’t bless it with a two-thirds vote required by the state constitution for a tax hike.
Rather, the California Air Resources Board created the program as it implemented Assembly Bill 32, the landmark 2006 legislation that requires polluters to cut greenhouse gas emissions.
In various ways, all Californians pay for the program. Most directly, cap-and-trade adds 11 cents to the cost of a gallon of gasoline. The governor, legislators and various interest groups have come to rely on the billions generated by cap-and-trade.
Perhaps because of legal uncertainty, or maybe the vagaries of the marketplace, the gravy train slowed. The most recent cap-and-trade auction generated $10 million, far less than expected.
Despite that warning sign, the Assembly optimistically approved $230 million for clean vehicle rebates in this year’s budget process. The Senate took a more cautious approach, earmarking $150 million. Unable to reach agreement, the Legislature and Brown placed funding on hold.
At some point, in five or maybe 10 years, the state will be able to abandon incentives to encourage people to buy green vehicles. We’re not there yet, however.
And so in the summer months, Brown and the Legislature will need to focus on cap-and-trade and the related issue of transportation funding and how to fairly raise gasoline taxes to pay for freeway repairs.
Democratic legislators should find common ground with Republicans and specifically authorize cap-and-trade by a two-thirds margin, or risk having the courts strike it down. All this will require compromise. That’s never easy, but in this instance, it’s vital.