Hold Climate Change Policy-Makers Accountable for Economic Consequences

Global WarmingIn reaction to the election of Donald Trump, California’s governor, state Legislature and Air Resources Board have made clear their intention to double down on our state’s already strictest-in-the-nation climate change policies.

Making such claims is easy when ignoring the current cost burden of the state’s climate policies on consumers and businesses, and how much more the costs will skyrocket under increasingly high greenhouse gas reduction targets.

Unelected bureaucrats at the California Air Resources Board have resisted any legitimate attempt at conducting a comprehensive economic analysis of AB 32, the state’s landmark 1996 global warming law– either during the rulemaking process or once the regulations took effect. CARB is attempting more of the same with the newly established 2030 40 percent emissions reduction target.

The significant consequences of this one-sided approach are being ignored as part of the policy and regulation development process. These rules will have real-life cost impacts on every major industry in California and every resident, who will see higher prices for food, electricity, gasoline, housing and just about all the necessities of life.

Higher costs, in addition to increasing consumer prices across the board, make California businesses less competitive with out-of-state companies. These have already resulted in a sharp decline in jobs, notably well-paying blue-collar jobs in the manufacturing, oil and gas and construction sectors, and a concurrent loss of tax revenues that support education, public safety, and social service programs.

It doesn’t have to be this way.  Sacramento lawmakers should demand that state agencies like CARB conduct objective economic analyses in order to craft balanced climate change regulations that will not exponentially increase costs on California’s businesses and families — especially those in lower income communities, which pay a larger share of their income in energy and transportation costs. Any increases created by new regulations will disproportionately impact those families who can least afford it.

Independent studies and subject matter experts have waved a warning flag about the economic impact and its burden on families and businesses. A recent study has shown that our climate change agenda will increase costs by $3,000 per year for every family in California. The Director of Stanford University’s Precourt Energy Efficiency Center has cautioned that achieving the new 2030 goal would likely entail “large economic costs,” and lead to a “less diversified and more fragile state economy.”

CARB has initially estimated that its new regulations could cost 100,000 jobs and result in the loss of up to $14 billion in gross economic output, which the agency brushes off as relatively immaterial in the context of the state’s overall economy.

Among regulatory initiatives being considered in CARB’s recently updated AB 32 Scoping Plan are: forcing higher density of commercial and residential developments; developing “pricing mechanisms” such as road user/vehicle miles traveled-based pricing, congestion prices and parking pricing strategies; creating expensive multiple “incentives” to make electric vehicles artificially more affordable than conventional vehicles and imposing arbitrary and unrealistic quotas for market penetration; and forcing decreases in the use of affordable, widely available fossil natural gas. These and other proposed mandates will significantly increase the cost and availability of housing, electricity, gasoline and diesel fuel and the cost of manufacturing and transporting goods produced in California with a chilling effect on jobs and revenues.

California can do better. Sacramento legislators have an opportunity to provide essential oversight over a regulatory body to ensure their constituents and the businesses they represent are not unduly burdened. It’s important to note that because California generates less than one percent of worldwide greenhouse gas emissions, which know no boundaries, the hardships our state’s climate policies impose on its people and economy have little more than symbolic value.  This is why CARB must conduct a comprehensive economic analysis now, to weigh how aggressively we should get ahead of other states or nations with regard to climate policies.

Executive Director of the Industrial Association of Contra Costa County

This piece was originally published by Fox and Hounds Daily

Carbon tax program sputters again

As reported by the Sacramento Bee:

When California launched its cap-and-trade program four years ago, the unspoken fear was that the price of carbon emissions credits would soar out of sight and bankrupt manufacturers and other industries forced to buy them.

Now cap and trade, a crucial piece in California’s war on climate change, finds itself with exactly the opposite problem: an excess of credits and insufficient demand. The result is a program that’s stumbling badly and facing an increasingly hazy future in the Legislature.

The cap-and-trade market had another bad day Tuesday, with hundreds of millions of dollars worth of unsold carbon credits left over following the latest state-run auction. Only about 30.8 million credits were sold, each one representing a ton of carbon emissions, out of approximately 96 million credits that went on sale. The auction was held last week, but results weren’t released until Tuesday by the California Air Resources Board.

It was the second straight quarterly auction in which scores of carbon credits failed to attract buyers, although there was higher demand this time around. Last spring’s auction ended with roughly 90 percent of the credits unsold. …

Click here to read the full story

Controversial Carbon Tax Faces Strong Opposition

carbon-tax-1Despite years of success in doing what it was supposed to do — cut emission levels — California’s controversial cap-and-trade system has run up against opposition that could be strong enough to sink it. But with nothing to lose and everything to gain, Gov. Jerry Brown has shifted into political overdrive to save it instead.

Big plans

Through the California Air Resources Board, Brown’s administration has tried to restore confidence among big California businesses that the state’s carbon-trading regime is here to stay. Amendments to the cap-and-trade rules proposed by CARB “envision a carbon market through 2050 with increasing allowance prices,” according to Scientific American. But legal uncertainty has clouded CARB’s ability to promulgate such regulations beyond the year 2020, “thanks to a combination of potentially limiting language in the original climate law, AB32, and a lawsuit challenging the legality of cap-and-trade auctions under a law requiring a two-thirds legislative majority to approve taxes,” the magazine added.

“The amendments released [last month] would establish decreasing emissions caps for covered entities through 2031, to reach 40 percent below 1990 levels, and would include preliminary caps through 2050 ‘to signal the long-term trajectory of the program to inform investment decisions.’ Other proposed amendments would provide for compliance with U.S. EPA’s Clean Power Plan for existing power plants, allocate allowances to businesses in order to prevent emissions from escaping state borders, and streamline how emitters register and participate in auctions.”

Backrooms to ballots

Despite broad support for an extended cap-and-trade system among influential Democrats, whose grip on Sacramento is virtually unchallenged, California’s legislative counsel has sided against CARB on the extension plan. “Meanwhile, a lawsuit from the California Chamber of Commerce charges that the permit fees are a tax and should have required a two-thirds vote in the Legislature to take effect,” as the San Francisco Chronicle reported. “Although the suit has dragged on for nearly four years, questions raised by an appeals court judge in April suggested that he might side with the chamber.”

The ordeal has presented Gov. Jerry Brown with a potentially devastating threat to one of his keystone policies. Although the governor “has been trying to muster support from at least two-thirds of the Legislature, in case the Chamber of Commerce wins its suit, […] convincing Republicans and business-friendly Democrats hasn’t been easy,” the paper added. “And the current legislative session ends Aug. 31.” Beyond the obvious challenge of securing Republican support, Brown must contend with members of his own party, who have split awkwardly on cap-and-trade since before its inception.

“When the law enabling cap and trade was being argued over, the whole progressive left-of-the-left were pretty suspicious of carbon trading,” as Stanford Law energy expert Michael Wara told Wired. “So the law’s authors offered a compromise: the state Legislature would re-evaluate cap and trade in 2020,” the magazine noted. “It didn’t seem like a big gamble at the time.” But Brown’s determination to use revenues from the program to fund his cherished high-speed rail project — according to environmentalists, not the greenest expenditure to choose from — added another political wrinkle.

Now, the prospect of a drawn-out loss in the Legislature has raised speculation that Brown will respond, in a manner somewhat reminiscent of former Gov. Arnold Schwarzenegger, by taking his plans directly to the voters. Preparing for a showdown, Brown has launched — perhaps for the last time as governor — back into campaign mode. “Mr. Brown last week created a PAC, Californians for a Clean Environment, signaling he may turn to voters for support to extend cap and trade and the state’s emissions-reduction goals through a ballot initiative,” the Wall Street Journal recalled. “The program is particularly important to Mr. Brown, as profits help fund the state’s planned bullet train, among other goals by the state’s Democrats.”

Within the Brown camp, however, the official line has remained more optimistic than the ballot preparations might suggest. “There is no state or nation in the Western Hemisphere doing more to curb carbon pollution and our dangerous addiction to oil than California,” said Brown’s executive secretary, Nancy McFadden, in a statement noted by the Journal. “The governor will continue working with the legislature to get this done this year, next year or on the ballot in 2018.”

This piece was originally published by CalWatchdog.com

CARB’s Ironic Quest to Save the Rainforest

RainforestThe California Air Resources Board recently announced plans to dedicate a portion of its hidden gas tax to saving the tropical rainforest. This is ironic because CARB’s own policies actually contribute to rainforest deforestation.

The agency is a strong advocate of a “low carbon fuel standard,” or LCFS. The LCFS is a food-for-fuel program that, along with similar mandates in the European Union and the United Kingdom, is wreaking havoc in the rainforest.

Unlike the national ethanol mandate, which relies heavily on domestically-produced corn-based ethanol, CARB’s LCFS places a much greater emphasis on sugar and soybean-based fuels – crops often produced in tropical nations where rainforests are endangered.

When CARB initially considered adoption of the LCFS in 2008, 27 scientists and researchers submitted a letter indicating the policy could have serious unintended consequences on land use.

Holly Gibbs, a researcher at Stanford University’s Woods Institute for the Environmentstated: “If we run our cars on biofuels produced in the tropics, chances will be good that we are effectively burning rainforests in our gas tanks.”

Noted primatologist Jane Goodall has also spoken out, stating: “We’re cutting down forests now to grow sugarcane and palm oil for biofuels and our forests are being hacked into by so many interests that it makes them more and more important to save now.”

Just a few days ago CARB collected hundreds of millions in hidden gas taxes in an opaque carbon credit auction. However, instead of raising gas prices to save the rainforest CARB could do much more by reevaluating its LCFS program instead.

Eric Eisenhammer is the founder of the Coalition of Energy Users, a nonprofit grassroots organization for access to affordable energy and quality jobs.

Originally published by Fox and Hounds Daily

Brown fuels incentives for alternative-energy cars

Convinced carbon emissions pose an “existential threat” to the human race, Gov. Jerry Brown just signed a set of bills designed to push ahead an environmental agenda dependent on automobiles that don’t run on gas. Among other new rules, regulations and programs, the new legislation set three changes in motion.

Assembly Bill 2013, by Assemblyman Al Muratsuchi, D-Torrance, expanded the sticker program that authorizes drivers of low-emissions vehicles to use High Occupancy Vehicle lanes regardless of whether they carry any passengers. The bill raised the total number of stickers authorized for DMV issuance from 55,000 to 75,000.440px-Electric_car_charging_Amsterdam

Aware of the symbolic political value of statistics, Gov. Brown has sought to use memorable numbers to capture the environmental imagination of elites and the public alike. That approach was evident in an additional bill signed by Brown, Senate Bill 1275, by state Sen. Kevin de Leon, D-Los Angeles; on Oct. 15 he will become the Senate’s president pro tempore.

It officially set a goal of one million zero- or near-zero emissions vehicles on California roads by 2023. In addition to ordering the California Air Resources Board to create a plan to meet the objective, SB1275 required the board to create new incentives for lower-income residents, who are less likely to purchase or lease alternative energy cars or trucks.

To do that, CARB was tasked to expand California’s electric and hybrid car rebate program. First used in 2010, over 75,000 rebates have gone out to Golden State motorists. As the Los Angeles Times reported, CARB will beef up that program by offering extra credit to qualifying “low-income drivers” who choose an electric vehicle.

Moreover, CARB will oversee the installation of new charging stations in selected low-income residential buildings and bolster car-sharing programs in targeted neighborhoods. “Low-income residents who agree to scrap older, more polluting cars will also get clean-vehicle rebates on top of existing payments for junking smog-producing vehicles,” according to the Times.

Beyond cars

Finally, Brown signed off on legislation using CARB to push alternate fuel use for heavier vehicles. That bill, SB1204, was introduced by state Sen. Ricardo Lara, D-Bell Gardens. Its aim is to subsidize the development, purchase and leasing of zero- and near-zero emission buses and trucks, dramatizing Brown’s vision of an overhauled transportation infrastructure for California.

To do that, however, SB1204 authorized $200 million in cap-and-trade fee revenue to be allocated to various incentives for alternate-fuel buses and trucks. In the recent past, Brown came under fire, even from environmentalists, for diverting cap-and-trade funds to his prized but costly high-speed rail project. Although critics have not rallied against the new allocation of funds, Brown’s rival in this year’s gubernatorial race did not hesitate to jump on the move.

“If he was serious about climate change,” Neel Kashkari told the Sacramento Bee, “he would be taking the cap-and-trade revenue and funding basic research at Stanford, at Berkeley, at Caltech, so we develop cleaner technologies that are also cheaper, and we export them around the world.”

A final mission

With Brown’s tenure in Sacramento coming to an end either this year or in four years, his idiosyncratic but dogged approach to environmental issues has taken on the air of a capstone personal project. At this week’s United Nations summit on climate issues, Brown told world leaders that within six months he planned to set new, lower carbon emissions goals for 2030.

AB32, the Global Warming Solutions Act of 2006, mandated reducing carbon emissions by 25 percent by 2020, just six years away.

Realizing his ambitions, Brown said, will take more ambition and more technology, “and will also require heightened political will.”

James Polous is a contributor to Calwatchdog. This piece was originally posted on Calwatchdog.com