It’s a big day for cap-and-trade. First, the good news: SB 32, which would extend the state’s CO2 reduction mandate to 2030, finally passed the assembly. Unfortunately, the legislature did not agree to include specific language extending cap-and-trade:
After an intense floor debate, a bill extending California’s greenhouse gas emission targets squeaked by in the Assembly on Tuesday.
Senate Bill 32 was seen as a crucial step for reauthorizing the state’s cap-and-trade program. Gov. Jerry Brown attempted to include an amendment specifically extending cap-and-trade authority but was rebuffed by lawmakers.
The bill now requires a 40 percent reduction from 1990 levels by 2030. The current climate law, AB 32, required the state to reach 1990 levels by 2020.
“With SB 32 we continue California’s leadership on climate change,” said Assembly Speaker Anthony Rendon, D-Paramount. Rendon acknowledged that the bill does not expressly extend the cap-and-trade program, but said it was “a piece of the puzzle” and that he is committed to continuing the program.
Basically, moderate Assembly Democrats, who are bought and paid for by the oil industry, refused to support the bill if it specifically extended cap-and-trade. However, that part of the story isn’t over yet. There’s still a possibility that the legislature will reach a deal to specifically authorize an extension of cap-and-trade.
But there’s also a school of thought in Sacramento that argues the California Air Resources Board has the ability to extend cap-and-trade anyway, without new legislative action. So that gives Governor Brown some important leverage.
The bad news is that today’s auction of cap-and-trade credits did even more poorly than the May auction:
A little more than 1% of state permits available were sold in the latest cap-and-trade auction, according to the California Air Resources Board, which runs the program….
Although final financial details won’t be available until next month, it’s expected that revenue will be less than $10 million. The numbers show an even weaker auction than the previous round in May, when only 2% of state permits were sold.
This isn’t a surprise. As long as the legislature leaves cap-and-trade in limbo like this, it doesn’t make sense for people to buy new credits that could become worthless in just four years. Let’s hope the legislature sides with the environment, the climate, and California’s future rather than with the oil companies.