Ever since the weak May auction for California’s cap-and-trade permits, the discussion in Sacramento about how to save and extend the program has gone into overdrive.
First, a quick refresher. There is some debate about whether the cap-and-trade system needs new legislation to continue operating beyond 2020 – and whether that new legislation requires a 2/3 vote, given the passage of Proposition 26 in 2010. High speed rail in particular needs cap-and-trade to survive, as the program is currently the only long-term source of funds needed to build the system.
Today, the California Air Resources Board issued its draft regulations to extend the cap-and-trade program beyond 2020. It would include various technical changes, including closer links to Ontario cap-and-trade system.
That’s an important step. But ultimately the program’s fate will likely be decided at the Capitol, where Governor Jerry Brown is – brace yourselves – negotiating with oil companies about how to extend cap-and-trade:
Gov. Jerry Brown’s administration has been talking directly with oil companies in hopes of reaching a consensus on extending California’s landmark climate programs, opening a back channel with an industry the governor has harshly criticized as a barrier to addressing global warming.
The dialogue was described by sources who requested anonymity to talk about private discussions and later confirmed by the Western States Petroleum Assn., which represents oil companies in Sacramento.
The organization’s president, Catherine Reheis-Boyd, told the Los Angeles Times that the industry is engaged in “ongoing talks with the administration to improve the state’s current climate change programs.”
If you recall last year’s battle over SB 350, you know Gov. Brown was dealt a rare defeat by the WSPA as they convinced moderate Assembly Democrats to torpedo the proposed new regulations designed to fight climate change. It may have been a major turning point in state politics around climate and carbon issues, and not in a good way.
WSPA surely believes it has leverage now, as Gov. Brown will have a harder time getting the Legislature to side with him against oil companies. Here’s what they appear to want:
Each camp has reasons to come to the table. Brown wants to avoid having his agenda thwarted by an industry that has proved adept at rallying lawmakers to its defense. Meanwhile, oil companies are seeking an opportunity to influence state policy rather than risk more aggressive efforts from Brown, who has vowed to use regulations to keep reducing California’s dependence on oil — whether or not he gets new legislation.
A key issue in the talks has been the state’s low-carbon fuel standard, which requires the production of cleaner gasoline. Oil companies claim the regulation — which is scheduled to require a 10% reduction in the carbon content of fuels by 2020, up from the current 2% — sets an unobtainable target that will raise costs for consumers.
WSPA also fought a low carbon fuel standard in Oregon (they lost) and in Washington State (they won, for now). If they can block it in California they’d win a big victory, at the expense of the future of the planet.
The moderate Assembly Democrats, bought and owned by the oil companies and WSPA, have already begun to speak out against cap-and-trade – which makes you wonder why they’re Democrats in the first place:
“It’s going to have a tough time,” said Assemblyman Jim Cooper (D-Elk Grove), who said he would like to see revenue from the program more evenly distributed around the state. Cooper is the co-chairman of an informal but powerful caucus of business-friendly Democrats in the Assembly, where climate legislation has faced a tougher audience than in the state Senate.
“We all want clean air,” he said. “I’m not sure if cap-and-trade is the best system to get us there.”
Jim Cooper, friend of oil companies, enemy of California’s future.