Dan Walters

Jerry Brown will try end run to extend state’s war on carbon

Gov. Jerry Brown, stymied in the Legislature, will attempt to extend the state’s crackdown on carbon emissions into the next decade by decree.

Late Friday, Brown’s Air Resources Board dispatched a memo declaring that it would unveil a draft of new regulations next Tuesday, extending its troubled cap-and-trade program and other elements of the campaign beyond 2020.

It will ignite what could be a protracted political and legal battle over whether the ARB has the authority to act, or must obtain legislative authorization.

The 2006 legislation that authorized the war on carbon, Assembly Bill 32, specifically aims to reduce emissions to 1990 levels by 2020. But the administration contends that AB 32 authorizes action beyond that date, relying on its stated intention to “maintain and continue reductions in emissions of greenhouse gases beyond 2020.”

However, the next sentence in the law says the ARB “shall make recommendations to the governor and the Legislature on how to continue reductions of greenhouse gas emissions beyond 2020,” which implies that it needs reauthorization.

Senate Republican leader Jean Fuller obtained an opinion from the Legislature’s legal counsel that the law “does not authorize (the ARB) or the governor to set an emission limit after 2020 that is lower than” AB 32’s 1990 target level.

Legal and political uncertainty about the program beyond 2020 has been, analysts say, a major factor in the implosion of the quarterly auction of cap-and-trade emission allowances as speculators dump allowances that could become worthless.

May’s auction generated just 2 percent of expected sales of state-owned allowances, undermining Brown’s $3.1 billion spending plan, including $500 million for his financially strapped bullet train project.

Last Friday’s notice said that the ARB plans not only to extend cap-and-trade beyond 2020 but to “revise the requirements for unsold allowances and vintages available in the current auction” – rule changes apparently aimed at shoring up future auctions.

The political angst over the carbon war arose last year when the state Assembly refused to approve Brown-backed legislation that would have required a 50 percent reduction in petroleum use in automobile fuel by 2030.

The Assembly also rejected Senate Bill 32, which would have set new, and much lower, carbon emission standards for 2030 and 2050.

Afterward, an obviously angry Brown vowed to push on without legislation, and Fuller obtained her legislative counsel’s opinion in response.

Meanwhile, business groups have challenged the legality of cap-and-trade, saying it’s a tax that must be approved by a two-thirds legislative vote. That case is on appeal, but the new ARB rule-making is likely to face legal challenges as well, in light of the legislative counsel’s opinion.

Another legal hurdle may be Proposition 26, which voters passed in 2010. It tightens up the legal definition of taxes and fees and could make reauthorization of cap and trade even more difficult.

Thus the political and legal war over carbon emissions will continue indefinitely.

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