Market-based system is best way to reduce greenhouse gas emissions

By CMTA Staff

Capitol Update, Aug. 3, 2007 Share this on FacebookTweet thisEmail this to a friend

The AB 32 Implementation Group, a coalition of more than 130 organizations and Businesses (CMTA is an executive member), submitted comments recently supporting the findings of the California Environmental Protection Agency’s Market Advisory Committee (MAC) on the design of a market-based program to reduce California’s greenhouse gas (GHG) emissions, calling the report a valuable base from which to build a workable cap-and-trade system.

The MAC report, entitled "Recommendations for Designing a Greenhouse Gas Cap-and-Trade System for California," was submitted to the California Air Resources Board (CARB), the agency responsible for implementing the Global Warming Solutions Act of 2006.

"We must be thorough and watchful during the current regulatory process," said Dorothy Rothrock, CMTA Vice President and coalition co-chair "so that we reduce emissions while also keeping California’s economy strong."

The AB 32 Implementation Group supports the goals of the landmark climate change law but wants to ensure that emission reductions and economic growth work in tandem.  

The coalition’s comments to the ARB strongly disagree with MAC members who "favor a 100 percent auction from the outset" as well as others who favor a "full auction over time."  An auction penalizes companies that chose to invest, operate and create jobs in
California, and give facilities outside the state an immediate cost advantage over California companies. An auction would also divert capital away from beneficial uses, such as efficient growth opportunities or projects that reduce GHG emissions at the facility.  Ultimately, an auction is a carbon tax with a price tag of nearly $10 billion.  
This tax, again, is a cost only California companies would pay, making them less
competitive with their counterparts in other states and countries.

The coalition also stated a successful cap-and-trade system should include a mechanism that caps emission credit costs, essentially bringing certainty to what could be the highest cost of compliance.

The complete comments are available at:

http://ab32ig.com/documents/CommentsOnMACReport7-24-07.pdf

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