California’s Cap-and-Trade Problem

California Governor Jerry Brown plans to host a global climate summit next year, and there’s no better exhibit of the tension between the left’s environmental and social justice goals. Witness the Democratic rupture over reauthorizing cap and trade.

Democrats control a supermajority in both legislative chambers that lets them increase taxes without GOP support. Because the state raises revenues by auctioning emissions permits, a two-thirds vote is needed to extend cap and trade through 2030 (from 2020) and insulate the program from legal challenges.

The Governor says cap and trade is essential to meet the state’s statutory requirement to reduce greenhouse gas emissions to 40% below 1990 levels—the same goal that Europe committed to in Paris. His problem is that Democrats from low-income areas are reluctant to extend cap and trade after voting this spring to raise gas taxes and impose a new vehicle registration fee.

Manufacturers, oil refiners and food processors—major employers in low-income areas—will have to buy permits or expensive new equipment to comply with the state’s emissions cap. Cap and trade has raised the cost of gas by about 12 cents a gallon and this surcharge will increase as emissions controls tighten. Californians already pay about 65 cents more per gallon than the national average.

To win support from business and balky Democrats, Mr. Brown has offered to extend a partial sales tax exemption (3.94%) for manufacturing equipment that renewable companies could also exploit. So businesses will get a small discount on the millions of dollars they will have to spend to comply with the emissions restrictions while the renewables lobby gets another fillip. What a deal. Mr. Brown has also agreed to suspend a fee on rural residents for fire prevention—which may be struck down in court anyway—through 2031 and prohibit local air quality management districts from imposing more stringent emissions standards than those of the California Air Resources Board.

The California Chamber of Commerce and Business Roundtable suffer from Sacramento syndrome and have endorsed Mr. Brown’s green bargain. They fear a more liberal Governor like Gavin Newsom or Tom Steyer would impose more costly regulations. But there’s nothing to stop Democrats with a simple majority from doing the same as they have repeatedly ratcheted up the state’s renewable mandate….

Yet groups like the Sierra Club say the Governor’s deal gives businesses too much flexibility. Facing opposition from his party’s progressive and moderate factions, Mr. Brown wants Republicans to provide the votes he needs to extend cap and trade. GOP support would let Democrats in competitive districts off the hook and make it harder to break their supermajority in 2018.

Read more at WSJ (paywall)

Comments (8)

  • Avatar

    Spurwing Plover

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    Moonbeam is as bad as Gore is both are liberal demacrats both are for Big Goverment and both need returned to the nuthouse they came from

  • Avatar

    Amber

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    Brown is looking more and more like a dried up raisin who wants to talk about the cleanliness of the Titanic’s windows as it’s going down . If you didn’t have to have your business in California why
    would you ?
    The California Chamber of Commerce should be ashamed of themselves for being bullied by these idiots . Members who’s interests are being sold out should send them a message… walk .

    • Avatar

      rakooi

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      Just like these comments…ALT RIGHT CLIMATE MYTHS
      .
      Greenland gaining ice
      Re Greenland, a big clue is the study’s title:
      “Recent Ice-Sheet Growth in the Interior of Greenland”.

      The study finds increasing ice mass in the interior due to heavier snowfall
      – an expected side-effect of global warming
      – and doesn’t factor in all the melting that occurs at the edges of the ice sheet.
      Overall,
      Greenland is losing ice according to satellite measurements here, here and here.

      Climate Myth:
      Antarctica cooling and gaining ice
      Antarctic cooling is a uniquely regional phenomenon.
      The original study observed regional cooling in east Antarctica.
      The hole in the ozone layer above the Pole causes increased circular winds
      around the continent preventing warmer air from reaching
      eastern Antarctica and the Antarctic plateau.

      The flip side of this is the Antarctic Peninsula has “experienced some of the fastest warming on Earth,
      nearly 3°C over the last half-century”.
      While East Antarctica is gaining ice, Antarctica is overall losing ice.
      This is mostly due to melting in West Antarctica which recently had the largest melting observed by satellites in the last 30 years.

  • Avatar

    G

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    The rest of the country needs to tell California socialists that we’re cutting them lose WHEN (not if) they collapse under their own socialist malfeasance and ineptitude. The rest of the country can see this coming now… No bail-outs.

  • Avatar

    JayPee

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    It’s not anybody else’s problem that
    GOVERNOR MOONBEAM
    does not understand

    Basic Economics.

  • Avatar

    Spurwing Plover

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    I.m living here in what we call the State of Jefferson(Norhern California,Soutern Oregon and were both living with Stupid Demacrats who have lost touch with reality and are stuck if STUPIDLAND and the Dumb-O Crats

  • Avatar

    DGSchroder

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    Californians have elected large democratic majorities is 6 consecutive state legislative elections. Ontarians have elected Liberal provincial governments for 4 consecutive elections. Do the people of California, Ontario, etc, love bad government? Anyone can make a bad choice once (Alberta electing NDP for example) When it happens for the 4th or 6th time, they deserve the government they have. They knew exactly what they were voting for and still chose them.

  • Avatar

    Spurwing Plover

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    We said it before and we,ll say it again CALIFORNIA NEEDS A BROWN OUT

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