Cap-and-Trade Survives Attack From Oil Companies
Earlier this year oil companies began spinning up a new attack on AB 32 and the state’s wildly successful cap-and-trade system. They convinced a few moderate Democrats that applying cap-and-trade to fuels this coming January would ruin their political chances this November, as it would supposedly cause gas prices to soar. Those Democrats wrote a letter asking for the state to delay subjecting fuels to the cap-and-trade system.
Today the Legislature rejected those claims and killed a bill that would have delayed including the fuels in cap-and-trade auctions:
Assemblyman Henry Perea, D-Fresno, warned that the change would hurt residents of inland districts where unemployment hovers above the state average and long commutes are commonplace. His Assembly Bill 69 would have delayed bringing transportation fuels under the cap-and-trade program. Numerous moderate Democrats signed a letter supporting the concept.
Democratic leaders and environmentalist allies pushed back, saying California must stay the course if the law is to achieve its purpose of curtailing the emissions blamed for global warming. Now Senate President Pro Tem Darrell Steinberg, D-Sacramento, has all but ensured the change will proceed as planned, saying in a letter to Perea that AB 69 will not receive a hearing before the Aug. 31 end of the legislative session.
“I share your concern about the costs of combating carbon emissions. But the cost of doing nothing is much greater,” the letter reads.
Steinberg is absolutely right to point out that the cost of doing nothing is indeed much greater for the Central Valley and the state as a whole, especially as the drought continues to worsen. Kudos to him for killing this terrible bill.
The high speed rail project is one beneficiary of Steinberg’s move, as it and other sustainable transportation projects are counting on billions in cap-and-trade revenues. Had fuels been exempted, that would have meant even less money would be available for HSR and other important transit projects.
It’s possible that Perea will try again in 2015, but he will have far less leverage. Democrats won’t be quite as scared of their electoral prospects, as the November 2016 election would be nearly two years away and in a presidential cycle as well. Never say never, but I would be surprised if this threat ever materialized again.