Now that cap and trade is approved, here’s what Jerry Brown and legislators must do

Gov. Jerry Brown could rightly take a bow. Speaker Anthony Rendon and Senate President Pro Tem Kevin de León ought to pat themselves on the back and give high-fives to Assembly Republican Leader Chad Mayes.

They all deserve accolades. They had important parts in approving the far reaching cap-and-trade package of bills that will shape California’s energy policy long after they’ve left their current offices.

The legislation sent a message across the country and world. No state has done more than California to curtail greenhouse gas emissions. Now that all the huzzahs are dispensed with, however, they all need to turn to the work at hand. There’s plenty of it ahead.

Already, the market is turning bullish for permits to pollute, otherwise known as carbon allowances. California cap-and-trade allowances sold for less than $13 per ton last year, and would have been like Monopoly money if the cap-and-trade extension failed.

On Tuesday, after the Legislature approved Assembly Bill 398 extending cap and trade through 2030, the allowances were selling for above $15.

If the ascent continues, California’s next cap-and-trade auction in August, at which carbon allowances will be bought and sold like so many pork belly futures, could provide a windfall to the state.

Say that auction raises $500 million, or maybe $1 billion. Whatever the number, it will be in addition to $842 million in unallocated cap-and-trade revenue already in the state treasury. That will seem like Christmas in August. It shouldn’t be.

Brown and legislators must not dole out money to every glittery environmental project, no matter how persuasive the lobbyists may be. The trade in cap and trade is not a synonym for corporate welfare.

Instead, lawmakers should invest the money where it would have the greatest impact, on projects to reduce pollution that affects people who must breathe bad air and who ultimately pay for cap and trade in higher prices for various goods.

Mitigation ought to be different in Wilmington, Martinez and Richmond, where there are refineries and heavy use of diesel trucks, than in Sacramento or Fresno, where there are few smoke stacks, but where the air too often is unhealthy.

California policy makers should consider providing greater incentives to help lower the cost for working Californians to buy zero-emission vehicles, especially if, as seems likely, congressional Republicans and President Donald Trump cut federal tax breaks to buy electric vehicles.

So far, cap and trade has had minimal impact on greenhouse gas emissions. California needs to show gains in the fight against emissions or the program will simply be seen as another tax. The California Air Resources Board has significant power over capping emissions and carbon pricing.

For all the acclaim Brown and the others receive now, they will be goats if the market careens out of control. The air board must remain vigilant against price spikes and market manipulation while ensuring polluters reduce what they spew.

The legislation limits greenhouse gas emitters from offsetting emissions by paying to preserve, say, forests in other states. Carbon offsets make sense, if they are used primarily in California. It makes little sense for California to use Californians’ money to pay for preservation in states other than California.

Recall the saying: Think globally, act locally. It applies. The real work continues. What matters now is that California can show real gains.

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