Gov. Jerry Brown and the Legislature got a reprieve when the California Court of Appeal upheld the legality of the cap-and-trade program, the complicated mechanism that seeks to curb greenhouse gas emissions by placing a price on carbon.
Cap-and-trade certainly has generated revenue for the state, $4.4 billion and counting. The April 6 decision upholds the current program, but lawmakers should not breathe easily.
The 2-1 decision is hardly a sweeping victory, and corporate interests and conservative nonprofits on the losing end have the wherewithal to press an appeal to the highest courts.
If lawmakers do nothing, the cap-and-trade program addressed by the appellate court will expire in 2020. That’s certainly an option. It is a complex program, and its impact on greenhouse gas emissions won’t be fully felt for years.
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But while we have been skeptical, the experiment probably is worth extending, though not as it currently operates. To be certain that a new cap-and-trade program would weather a new legal challenge, Brown has urged legislators to approve it by a two-thirds vote, the requirement under state law for authorizing tax and fee increases. That would be wise.
Wise but not easy, not after legislators agreed earlier this month for the first time in two decades to raise gasoline taxes 12 cents a gallon and other fees to generate $5 billion a year to pay for road maintenance and transit. The costs of cap-and-trade ultimately fall on us all.
Assemblywomen Cristina Garcia, D-Bell Gardens, and Autumn Burke, D-Marina Del Rey, have introduced separate bills to extend the program. Brown is hoping to get it done as part of the budget, to be voted on in June.
In his budget for the coming fiscal year, the governor proposes to generate $2.2 billion in revenue from refineries, food processors, factories, gas- and diesel-burning vehicles and other greenhouse gas emitters.
He and legislators would use the money for various programs related to the fight against climate change: high-speed rail construction, intercity rail, bio-digesters at dairies, housing close to where people work, bike and pedestrian paths, wetlands restoration, energy efficiency and more.
Cap and trade has support, and not solely from politicians, environmentalists and those businesses that seek a slice of the billions it has generated. Seeing political realities in a state that long has sought to take the lead in the fight against climate change, many businesses, including the influential oil industry, support market-based aspects of the program.
As it is, cap and trade accounts for about 11 cents of the cost of a gallon of gasoline. In a letter to Assemblyman Vince Fong, R-Bakersfield, the Legislative Analyst’s Office last month estimated cap and trade could raise pump prices by 15 cents to 63 cents per gallon by 2021, depending on how it’s configured.
The LAO suggests a price ceiling. That certainly makes sense, especially for anyone who remembers the run-up in electricity prices in 2000 and 2001 following electricity deregulation. Any new legislation also should include some sort of mechanism for helping offset the higher cost of gasoline for people who can least afford it.
Call them quixotic, but no one can seriously accuse California lawmakers of aiming low when it comes to their environmentalist votes.
Brown and his predecessors and legislators have passed and signed bills requiring that utilities increase solar and wind power; manufacturers make more efficient appliances; and automakers produce cars that emit less exhaust. All that has helped clean our air and reduce carbon emissions.
Last year, Brown signed legislation calling for greenhouse gas emissions to be cut to 40 percent below 1990 levels by 2030. That’s an especially a tall order, one that will require ever tighter emission controls, more mass transit and still fewer gas-gulping vehicles.
The air resources board has set a goal of 4 million-plus zero-emission vehicles to be on the road by 2030. Even Fremont-based Tesla Motors, the leading electric vehicle maker, says that will be tough to meet given current incentives. Raising the cost of carbon will limit its use, or so the theory goes.
Lawmakers’ resolve will be tested again soon when they decide whether to extend cap and trade and how to alter it. When and if they cast that vote, they would do well to keep in mind that they cannot keep piling costs on motorists, particularly lower-income people who depend on their cars and trucks to make ends meet.