Trade in cap-and-trade for real climate solutions

California’s cap-and-trade program is in peril – but that’s a good thing.

The centerpiece of the state’s global climate change policy is plagued by challenges to its very legality, along with a glut of emissions allowances that continues to grow because polluters aren’t buying them.

This precariousness gives leaders an opportunity to stop wasting time and resources on an approach that does little to curb greenhouse gases – but does much to entrench pollution by protecting industries’ imaginary “right” to emit greenhouse gases by insidiously turning those emissions into revenue streams.

It’s time to replace cap-and-trade with the type of time-tested command-and-control regulations that can eliminate the emissions that threaten our survival.

The state’s latest greenhouse gas inventory shows that emissions are down from their 2004 peak, but there isn’t good evidence to prove that cap-and-trade is having any positive impact on current trends. Further, the state’s past experience indicates that cap-and-trade will only hinder efforts to avert climate catastrophe.

In the 1990s, Los Angeles’ Rule 1610 allowed oil refineries to purchase Volatile Organic Compound credits from scrap-yard operators that removed older, highly polluting cars from roads. The program failed as scrap yards removed the engines from vehicles before demolishing them, then sold the engines and the emission credits. Refineries continued to pump those compounds and many other co-pollutants, including the carcinogen benzene, into the surrounding communities of color.

That same decade, Los Angeles introduced the Regional Clean Air Incentives Market, or RECLAIM, to try to reduce smog. Regulatory approaches in effect at the time had dramatically reduced many smog-related pollutants but stopped abruptly with the implementation of the new market system. Emissions actually increased the first two years of RECLAIM, with only minor reductions in subsequent years before the ineffective program was scrapped in 2001.

Rule 1610 and RECLAIM lost the state a decade on making any significant inroads on L.A.’s air problems. With cap-and-trade, we’re repeating that mistake: accommodating polluters that don’t want to reduce their emissions at the expense of achieving significant, permanent reductions.

One of the most troubling aspects of California’s cap-and-trade program is the use of offsets in lieu of source reductions. This mechanism allows emitters to keep polluting with impunity as long as they pay for “offsets” that ostensibly reduce emissions elsewhere in California – or in other states.

Alarmingly, the Air Resources Board continues to consider an ill-advised and poorly timed expansion of cap-and-trade to include international offsets under a controversial United Nations program to reduce emissions from tropical deforestation – while pollution continues in California communities.

In contrast to the failure of these market-based schemes is the relative success of simple, faithfully enforced regulatory approaches. The 40-year-old Clean Air Act lays out a clear path to clean air that requires each polluter to meet its own technologically achievable level of emissions. As technology improves, those emissions limits are ratcheted down. When sources violate their limits, they are fined and forced into compliance. The result: reduced emissions, healthier and safer communities and – in the case of greenhouse gas emissions – a chance at protecting the planet’s ability to support our species.

This is no time for Gov. Jerry Brown, legislators and even cap-and-trade’s supporters in the nonprofit sector to try to save face. The urgent need to implement effective solutions to climate change demands that leaders and advocates resist clinging to the sinking ship of market-based approaches.

It’s beyond time to stop protecting polluters: ensuring a livable future on this planet means regulating away greenhouse gas emissions and leaving fossil fuels in the ground, while simultaneously investing in the robust, renewable energy economy we already have the technology to realize.

Wenonah Hauter is the executive director of Food & Water Watch. Contact her at