“This is the most important vote of your life,” Governor Jerry Brown told lawmakers at the Senate Environmental Quality Committee hearing last month. “Maybe not of my life—I’ll be dead in five or 10 years.”
Shortly after, the cap-and-trade extension bill (AB 398) that Brown had pushed for so long passed with a two-thirds majority vote in both houses.
The cap-and-trade bill of 2013, though groundbreaking at the time, was riddled with loopholes, and did little to further its stated purpose of reducing emissions in California. The new law requires companies to purchase permits to release greenhouse gas emissions, a financial incentive to pollute less while driving revenue to fund state projects like affordable housing and the bullet train project. It also allows larger companies to purchase pollution allotments.
As a continuation of a pioneering bill, it’s a big step forward for environmental protection, and flanked by both Republican and Democrats, Brown celebrated its passage. But for a few assemblymembers, AB 398 marked a pyrrhic victory.
“I was hoping that we would get it done better, in a stronger deal that was better for the environment without so many giveaways to the oil companies,” Assemblymember Mark Stone says. “I didn’t think it would pass that easily.”
Given the way that Brown described the stakes, it may sound surprising that Stone—a staunch environmentalist, who’s introduced bills to improve the California Coastal Commission’s transparency and ban cigarette filters—would vote against his own party on climate change. But the cap-and-trade bill has upended the political climate of the state, and the contention surrounding the bill is reflective of the ultra-progressive nature of the central coast. The bill has come under fire from some progressives for not outright restricting greenhouse gas emissions. While Republican Senator Tom Berryhill and Assemblywoman Cristina Garcia were in favor of AB 398, Stone, along with mostly conservative Democrats and Republican lawmakers, voted against it—putting him in unexpected company among his fellow lawmakers, although for different reasons.
“California has been leading the country and, really the world, in climate policy, and this is definitely part of that strategy to continue the conversations,” Stone allows. But in his opinion, the bill was pushed too quickly. “I think that’s why there was some desperation around this passing—to show that California is still leading the way. That’s fine, but at what cost?”
Stone says he had thought that more Democrats would have similar reservations, allowing more time to refine the bill.
A cornerstone of the discussion around cap and trade is State Senator Bill Monning, who has long supported cap-and-trade extension and its economic opportunities. As veteran liberal Democrats representing the interests of Santa Cruz County, Monning and Stone rarely disagree on bills. Though both acknowledge that there is always more to be done, they differ on how much should be done now.
“Many of these cap-and-trade bills historically have been the result of negotiation and compromise, and this is no different,” Monning says. “What is significant about the extension through 2030 is that it brings predictability to the energy market, and will continue to have California lead the nation in terms of the development of renewable energy.”
Though the renewal was passed in late July, the cap-and-trade program isn’t new. The Global Warming Act of 2006 authorized the California Air Resources Board to implement a market-based system of greenhouse gas reduction. In 2013, the board introduced the multi-sector cap-and-trade agreement seen today. The current bill extends the expiration date to 2030 with the goal of ensuring that greenhouse emissions are reduced to 40 percent below 1990 levels.
“The question is would we be better off if we had failed to pass this extension with no targets for reduction of CO2 emissions, and no requirements on polluting industries,” Monning says. Furthermore, he says, “we use cap and trade revenues to invest in marginalized communities and low-income communities.”
The bill was a result of weeks of meetings, intense negotiations, concessions, and acquisitions. To sweeten an otherwise bitter pill for Republican voters, Brown added the suspension of fire prevention fees, which will provide some fiscal relief for rural property owners. To appease Democrats, he added an air quality measure (AB 617) and housing benefits to support low-income families.
If the bill had not passed, the cap-and-trade laws weren’t going to expire immediately. “If it weren’t for the promises on housing, there would have been some other Democrats really concerned about what this deal meant,” Stone says. “Sometimes having a little bit more time to understand implications would be helpful.”
But Brown urgently pushed for the bill to pass to renew California’s commitment to environmentalism, and possibly to re-establish the state as an environmental protection powerhouse, given the nature of the current federal administration. President Trump announced in June that the U.S. will withdraw from the Paris climate agreement, and his administration has quietly rolled back numerous other environmental protections.
“If we had failed in passing this, we would have been back to square one and we would have been no different than the current administration in Washington D.C. in refusing to acknowledge climate change, and refusing to take any action to protect our planet,” Monning says.
Alternatives to the cap-and-trade measure include a carbon tax, which taxes fossil fuels to incentivize emission reductions; some environmentalists say it is a better option because it is much more strict on companies, and taxes all pollution, rather than just that emitted after a company has reached its “cap.”
“If California sets the caps low enough, [cap and trade] can still be a help to the environment as far as air pollution, but a carbon tax would be vastly more effective since there is a cost for every ton of pollution emitted, not just after a cap is reached,” says Cabrillo College Astronomy Chair Richard Nolthenius. “A carbon tax, which rebates the money to the citizens, would then incentivize citizens to spend on less carbon-intensive power and goods, as it should be.”
Nolthenius would like to see the cap-and-trade measure repealed, though he doubts it is likely.
“In the end, civilization will have to decide if it wants economic growth, or if it wants a global climate compatible with the civilization and species alive today,” Nolthenius says. “Growing evidence is that it cannot have both.”
Two bad “cost” choices to reduce emissions. Even though the extension of cap and trade with AB398 that places the emissions crusade through the free market auctions is projected to be more cost effective than SB32 command and control to meet emission goals of 40% below 1990 levels by 2030 through CARB’s regulatory authority, the public will be seeing increases in their costs for energy and products for the foreseeable future.