Climate change is an urgent challenge for our state and nation. We are already seeing the effects in rising sea levels, warming oceans, record-breaking heat waves and other extreme weather events. Averting the threat these trends pose to our future requires real action to dramatically cut emissions of greenhouse gases.
As the world’s sixth-largest economy, California’s leadership in this fight is crucial. Yet one of the state’s key programs for reducing emissions – known as cap and trade – may disappear in 2020 unless it is renewed. The Legislature should do so immediately.
Now is not the time for California to abandon one of its most successful and cost-effective strategies for making progress on climate change.
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California’s cap-and-trade program has reduced emissions and put the state on track to achieve its climate targets. And it has done so in a way that saves energy customers billions of dollars in costs and protects lower-income Californians, while creating much-needed funding for clean-energy programs.
Cap and trade sets a limit – a cap – on greenhouse gas emissions from facilities covered by the program. Companies can cut their emissions, or they can trade or buy emissions permits through an auction. Each year, the cap and the number of available permits are lowered, driving down total emissions.
Importantly, to buffer energy consumers against higher costs, the program grants electric and natural gas providers emissions allowances that are sold in the market, generating proceeds that are returned back to our customers. Our customers see this benefit on their bills in the California Climate Credit.
Money raised through the program also goes to fund clean-energy projects. According to the California Air Resources Board, these proceeds have funded more than 140,000 projects, such as installing energy efficiency measures in homes, rebates for zero-emission and plug-in hybrid vehicles and planting trees in urban areas. More than $600 million in benefits have gone to disadvantaged communities.
The nonpartisan Legislative Analyst’s Office recently recommended that the Legislature authorize cap and trade beyond 2020 because it’s the most cost-effective approach to meeting the state’s 2030 carbon reduction goals. The LAO further recommended that legislators approve the program by a two-thirds vote to provide greater legal certainty for the future.
We couldn’t agree more.
California’s cap-and-trade program remains the most economical measure to meet the state’s climate goals and provide a clean-energy future for generations to come. It is helping our state meet its target of reducing greenhouse gas emissions to 1990 levels by 2020. And, it will put us on a path to reach the additional target of at least 40 percent below 1990 levels by 2030.
For the benefit of tens of million California customers – and to our state’s climate leadership at a pivotal moment – we urge legislators to approve Assembly Bill 398 and extend the cap-and-trade program as soon as possible.
Geisha J. Williams is CEO and president of PG&E Corp. and can be contacted at CorporateRelations@pge.com.
Pedro J. Pizarro is president and CEO of Edison International and can be contacted at firstname.lastname@example.org. Steven D. Davis is corporate group president of utilities of Sempra Energy and can be contacted at SDGECommunications@semprautilities.com.