Ten years ago, California adopted Assembly Bill 32 to require greenhouse gas emissions to be reduced to 1990 levels by 2020, an important milestone in the fight against climate change.
The state Air Resources Board was granted nearly unlimited power to impose regulations to achieve the goal, and regulations such as the low-carbon fuel standard were passed. Now lawmakers are debating Senate Bill 32 to extend the board’s authority to 2030 and achieve more stringent emission reductions.
Unfortunately, SB 32 is not drafted based on lessons from AB 32. Without rigorous analysis or aggressive legislative oversight, it assumes all is well with the current program. Climate change laws are costing California businesses and residents billions of dollars. By passing SB 32, we would be charging ahead to extend the current programs without knowing what’s working and what isn’t.
The reality is that California’s climate program is beset with litigation, market uncertainty and rising costs. These all need to be addressed before moving forward with a new emission-reduction target.
As a result of AB 32, consumers and businesses are paying more for electricity, gasoline and natural gas. Utility-rate hikes are burdening the economy, and the California Energy Commission has reported fuel prices are increasing as a result of the low-carbon fuel standard and cap and trade. The 2030 target will be even more stringent, putting upward pressure on costs.
Another regulation forces gasoline sellers to blend more renewable fuels into the mix. But there aren’t enough commercially available renewable fuels and no new plants are being built. The goal is unlikely to be met by 2020 and if forced on sellers would cause higher fuel costs.
Cap and trade is another regulation that requires companies to buy permits for their excess emissions. But the Air Resources Board is being sued for imposing an illegal tax through the sale of these permits. The uncertainty from the litigation is one reason that permit revenue has gone from $500 million to $10 million. The independent Legislative Analyst’s Office says that “future auction revenue – especially revenue beyond the next couple of years – is subject to substantial uncertainty.”
You might assume that SB 32 would go after every one of these problems to ensure successful reductions of greenhouse gases in the future. Instead, the legislation continues to authorize a blank check to unelected Air Resources Board officials, who would continue to make decisions that have resulted in the current litigation, market uncertainty and rising costs.
A good first step would be for legislators to increase their oversight of climate policy, to analyze the impact on jobs and consumers, and to ensure that current programs are reducing emissions and providing affordable and reliable energy. Californians should demand no less from their representatives on this important environmental and economic policy.
Dorothy Rothrock is president of the California Manufacturers and Technology Association and can be contacted at firstname.lastname@example.org. Rob Lapsley is president of the California Business Roundtable and can be contacted at email@example.com.