By Leanna Sweha
Yesterday, Governor Brown signed AB 398, the bill that extends Cap-and-Trade to 2030. Earlier this month, he made an impassioned plea to legislators to pass the bill, calling their vote “the most important vote in your lives.”
To translate, what it appears the governor meant was that the vote was the most important in his life.
First, losing the Cap-and-Trade extension would have been an embarrassment for the Governor.
Since President Trump decided to withdraw from the Paris Agreement, the Governor has stepped forward as what the LA Times calls “America’s unofficial ambassador on climate change.” In June, he travelled to China to promote the Under 2 Coalition and to sign a cooperation agreement with the Chinese government. He has announced a 2018 global climate summit in San Francisco. He is a special advisor for this year’s United Nations Climate Change Conference.
Second, losing the Cap-and-Trade extension would have meant more expensive command and control regulation of the state economy. This could have resulted in significant cost-of-living increases and job losses, causing voters to turn against the state’s climate policies.
Brown said it himself at that same hearing: “The ARB will regulate the food processing, the oil industry, the cement industry in a way that is not efficient, that will be three to five times more costly. Yes, that will be noticed by your constituents.”
Cap-and-Trade is the most cost-effective tool to reduce greenhouse gases, and it provides a backstop to other programs to ensure the state meets the SB 32 mandate – to reduce state greenhouse gas emissions to 40 percent below those measured in 1990.
The state’s plan to meet SB 32 – called the 2030 Scoping Plan – has been under consideration by the Air Resources Board for more than a year. Without Cap-and-Trade, the Air Resources Board would have to adopt more direct regulations.
Third, losing Cap-and-Trade would have been a huge blow to the governor’s High Speed Rail legacy. A full 25 percent of Cap-and-Trade auction revenues are continuously appropriated to High Speed Rail. Without it, the state funding dries up.
So, it’s no surprise that the Governor’s office worked furiously to get support from both democrats and republicans to meet the two-thirds vote threshold to allow the law to go into effect immediately and to protect it from tax challenges.
For democrats concerned about environmental justice, there were some new limits on free allowances and the requirement that half of all offset projects must have environmental benefits for the state. There was also the companion bill AB 617 to address local air quality.
For republicans concerned about costs to industry, there was a concession for agriculture and the oil industry. There was also an extension of the sales and use tax exemptions to manufacturers and for research and development. For rural legislators, there was suspension of the fire prevention fee.
In addition, there was Assembly Constitutional Amendment 1, which will go on the 2018 ballot. Voters will decide if the legislature should get one-time, two-thirds majority approval authority for an appropriation of Cap-and-Trade auction revenues.
Brown was confident about his legacy at today’s signing ceremony, where he said, “We are a nation-state in a globalizing world and we’re having an impact and you’re here witnessing one of the key milestones in turning around this carbonized world into a decarbonized, sustainable future.”