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California Chamber of Commerce leans into fight to preserve cap-and-trade program

 (Ken James / Bloomberg)
(Ken James / Bloomberg)

When it comes to climate change, the California Chamber of Commerce is best known for suing over the state's cap-and-trade program, a cornerstone of the state's efforts to reduce greenhouse gases.

But the lawsuit has faltered, and the powerful business group now wants to work with lawmakers to extend the program, which requires companies to buy permits to release emissions into the atmosphere. The chamber also wants to strike a deal in the next month, a deadline pushed for by Gov. Jerry Brown.

"Now is the time,” Allan Zaremberg, the organization’s president, said in an interview. “Not a year or two from now. It gets harder, not easier.”

The stance is further evidence of the shifting political landscape on climate change since Brown signed legislation last year setting a tough new target for reducing emissions by 2030. Business groups, including the Western States Petroleum Assn. and the California Business Roundtable, want to preserve cap-and-trade to prevent the state from turning to more onerous regulations.

They also want to prevent lawmakers from tying the program to air quality goals or making it function more like a tax, two proposals that have been introduced this year. Zaremberg fears the higher costs for companies that could result, saying that would send the wrong signal to other states.

“If you start out with the most expensive [policies], the naysayers are going to have ammunition to say, why would we want to be like California?” he said. “We want them to say, let’s be like California.”

The chamber may still appeal last month’s court decision rejecting its argument that cap-and-trade has functioned as an unconstitutional tax. Zaremberg said the lawsuit resulted from the chamber’s concern that the program wasn’t approved by the two-thirds vote of the Legislature necessary to raise new revenue, not because it opposed the idea of cap-and-trade.

As lawmakers debate cap-and-trade, the chamber hopes extending the program will be done with a two-thirds vote, “allowing revenues to be raised for projects that are important to communities and constituencies around the state,” according to a letter sent to lawmakers on Wednesday.

“California’s economy, our residents and consumers deserve our best efforts to keep costs down while meeting this ambitious goal,” the letter said.

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