Editorial: For the sake of the planet and our state, extend California’s cap-and-trade program

The stacks from the Valero Benicia Refinery are seen as a pedestrian walks in a nearby neighborhood,
A pedestrian walks in front of the Valero Benicia Refinery in Benicia, Calif. on July 12.
(Rich Pedroncelli / Associated Press)

California is the nation’s leader in the effort to cut greenhouse gas emissions and an increasingly influential player on the world stage. That was made all the more evident last week in Hamburg, Germany. While President Trump was getting the cold shoulder from other world leaders at the G-20 confab for pulling out of the Paris accord, a video of Gov. Jerry Brown was beamed to cheering crowds across town as he announced that California would host a global summit on climate change.

“Yes, I know President Trump is trying to get out of the Paris agreement, but he doesn’t speak for the rest of America,” Brown said in the video. “We in California and in states all across America believe it’s time to act.”

Yet for all their environmental bravado, Brown and state lawmakers know they are walking a tightrope when it comes to climate change policy. California is so far ahead of other states and many nations in adopting aggressive greenhouse gas reduction policies that there is no guidebook, no model for how to decarbonize one of the world’s largest economies. And because others are watching how California does it, failure would have repercussions for both the state’s and the world’s efforts to combat global warming.

That’s why Brown has been pushing so hard to extend the state’s cap-and-trade program, which is set to expire in 2020. The program is a market-based system that gives companies an incentive to cut emissions without dictating how they meet the state limits, which tighten over time. And it’s among the cheapest options for California to reduce greenhouse gases, which helps keep down the costs for companies and consumers.


What will happen if key industries close shop and move to states with fewer regulations and no commitment to slowing climate change?

After months of negotiations, Brown and legislative leaders unveiled a deal this week with two bills: One would extend cap and trade through 2030; the other would launch a new program to step up efforts to clean the air in the most polluted communities. The package strikes the right balance: tackling dirty air at home while continuing a proven program to cut global greenhouse gases without slowing economic growth.

So far, California has demonstrated that a state can aggressively cut carbon and not slow economic growth. But even some of the most pro-climate lawmakers privately worry whether that success can continue in light of the more ambitious goals adopted last year in Senate Bill 32, which obligated the state to reduce emissions 40% below the 1990 level by 2030.

What will happen, for example, if compliance costs are higher than expected and Californians face price spikes at the gas pump or on their utility bills? Will voters turn against the climate change program and force lawmakers to undo SB 32? This is no idle worry — just ask recalled Gov. Gray Davis what happened after the electricity crisis in the early 2000s. Californians have a history of ballot-box revolutions.


What will happen if key industries close shop and move to states with fewer regulations and no commitment to slowing climate change? Could that deter developing nations from joining the fight against global warming for fear of stalling their growing economies? That fear of doing too much, too fast and triggering a backlash has cast a shadow over the state’s climate change goals. It’s why Brown wants the more business-friendly cap-and-trade program instead of strict, direct regulations on every source of pollution, as some environmentalists have sought. It’s also why the proposed extension would cap the price of the credits that businesses can buy in lieu of meeting the carbon-reduction targets, which should hold down compliance costs.

Some environmentalists — particularly those representing the most polluted communities — argue that in pursuing a cap-and-trade extension, Brown made too many concessions to the oil industry. The deal, for example, shelves a rule recommended by the California Air Resources Board that would have forced refineries to install equipment to cut greenhouse gas emissions, which could have the added the benefit of reducing air pollution in the surrounding communities. Instead, the bill would allow refineries to buy pollution credits or pay for emissions reductions elsewhere in the country to meet their mandates.

True, that’s an immediate win for the oil industry. But the companion air quality bill would require refineries and other major polluters to modernize their emissions control equipment by 2023. That mandate, plus new monitoring requirements, increased penalties for polluters and community-specific air quality plans should, over time, be a win for residents living with dirty air.

Lawmakers from both parties are balking at some of the deals Brown made to muster a two-thirds majority — the threshold for tax bills, as some critics claim the cap-and-trade legislation is. But, ultimately, Brown was right to compromise in pursuit of the larger goal. California has stepped up to help lead to fight to slow global warming, and the state must have a workable, affordable program to fulfill its ambitious yet much-needed climate goals.

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