Michael Shaw

Cap-and-Trade extension debate still under way

By Michael Shaw, VP, Government Relations

Capitol Update, June 9, 2017 Share this on FacebookTweet thisEmail this to a friend



With Governor Jerry Brown indicating that the Legislature needs to pass legislation to extend the Cap-and-Trade program by the end of June, the time is running short to get a deal in print. California’s goal to reduce greenhouse gas (GHG) emissions 40 percent below 1990 levels by 2030 will require more cost-effective options and tools, including a well-designed Cap-and-Trade program, to minimize the impact to consumers and businesses in terms of higher costs for energy and goods.

The failure of AB 378 (Cristina Garcia, D-Downey) to pass the Assembly last week and the stalling of SB 775 (Bob Wieckowski, D-Fremont) in the Senate earlier in May opened the door wider for a ‘new’ player to enter the field of debate. The New Democrats, a group of moderate Democrats, released their outline of key points last week that they believe the program extension must include to ensure the state’s continued environmental and economic leadership in climate policy. The key points include:

  • Cap-and-Trade must be the primary greenhouse gas reduction method for California to meet its 2030 goals;
  • Cap-and-Trade needs to be a cost-effective mechanism to fight climate change and, therefore, must include cost containment tools like carbon offsets and free allowances that reduce the direct burden on consumers and limit emissions leakage to other states;
  • Any Cap-and-Trade extension should sunset in 2025 to ensure continued legislative oversight. Furthermore, an analysis by the Legislative Analyst’s Office is crucial to evaluating the performance of the program in its entirety;
  • Workforce development and job training for the green economy are fundamental to achieving our climate goals and transitioning California’s workforce;
  • Program revenues should prioritize addressing localized air pollution, particularly in non-attainment zones; and
  • Rural California and impacted industries – like agriculture and goods movement – should benefit from equipment upgrade incentive programs to allow them to be more competitive in the marketplace, while reducing their emissions.

This group has played a major role in legislation over the years helping to amend or kill anti-manufacturing bills. The New Democrats have been clear they will work with colleagues on both sides of the aisle in the Assembly and Senate, as well as with the Governor, to ensure that any legislative proposal that moves forward includes these crucial principles for the benefit of California communities, the environment, and the economy.

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