Will Democrats Undermine Cap-and-Trade?
California Democrats just adopted a budget that includes ambitious spending plans for cap-and-trade revenues. That’s as it should be. But you’d think Democrats would be a bit more cautious before they go undercutting the source of those funds.
That is what 16 Democrats are proposing to do. They recently wrote to the California Air Resources Board to demand that CARB delay the rule requiring energy retailers – including gas stations – to buy carbon permits.
Now Assemblymember Henry T. Perea of Fresno is proposing a bill that would delay the rule by three years:
Assembly Bill 69 by Assemblyman Henry Perea, D-Fresno, would delay for three years a rule requiring the energy industry to purchase permits for transportation fuels. Lawmakers and critics have been warning for months about a resulting price bump….
But the coming inclusion of transportation fuel into the program is threatening to push gas prices up, prompting alarm from moderate Democrats. In a show of broad discontent, 16 Democrats last week sent a letter to the Air Resources Board urging the air quality regulator to delay implementing the new rule. Despite the complaint, all but one of them voted to spend the money the rule is expected to generate.
Perea said he still supports AB 32’s overarching goal of reducing emissions but does not believe consumers have been adequately prepared.
“What we’re really trying to do on this is create a public discussion, because I’m not sure the public is aware of cap and trade and what it’s going to do to their pocketbooks,” Perea said.
Perea is a strong supporter of high speed rail, so I’m surprised to see him take this position. If fuels are excluded from cap-and-trade, that means less money for HSR and other crucial transportation projects.
I understand that these Democrats believe there is political risk in letting this rule go forward, that Republicans will blame them for a gas price increase. There are two responses to this.
First, Republicans will blame Democrats for breathing. Democrats never win when they let Republicans dictate their behavior. Democrats do win when they refuse to worry about what the GOP will say about them and instead move ahead with good policies that benefit a lot of people.
Second, gas prices rise and fall a lot these days. They’re spiky. Right now gas prices are about $4.13 a gallon, which is below the $4.50 range that we saw in 2008. Those numbers will fall as the summer wears on, all the way to winter, when they’ll start rising again. The public won’t notice a cap-and-trade related increase.
Yes, some members of the public who listen to right-wing talk radio and watch Fox News will attribute a spring increase to cap-and-trade. But they weren’t voting for Democrats anyway. The Democratic base won’t reward politicians who try to weaken AB 32, especially after voters in 2010 resoundingly rejected both a ballot proposition and a gubernatorial candidate that pledged to delay the entire cap-and-trade system.
There’s no good reason to undermine cap-and-trade, and certainly no reason to freak out about its effect on gas prices. If anything cap-and-trade and the projects it funds are the best way to help people deal with rising gas prices, by funding the alternatives they will need to get around affordably.