Gino DiCaro

Cap-and-trade auction arrives

By Gino DiCaro, VP, Communications

Capitol Update, Nov. 16, 2012 Share this on FacebookTweet thisEmail this to a friend

This week, California's carbon auction arrived. Unfortunately the California Air Resources Board (CARB) went forward as planned without committing to allocate more free allowances in the years to come. This will mean billions in new costs over time.

While CARB is providing 90 percent free allowances in 2013, those free allowances decline precipitously in the following six years for more than half of the facilities under the cap. CMTA and others have long argued that California will still meet its greenhouse gas goals if CARB provides free allowances up to the "1990 levels" cap. There is no reason to do so otherwise. In fact we don't think withholding allowances to raise revenue for the state is even legal. This was the basis for a lawsuit filed (pdf) by the California Chamber of Commerce the day before the auction went live.

We support the litigation and CMTA President Jack Steward offered the following statement to the media:

"Assembly Bill 32 explicitly prohibited CARB from raising revenue beyond the administrative costs of the program. There is a distinct difference between a good cap and trade program that helps reduce greenhouse gases with minimal costs and an auction that is designed to extract billions from industry. We don't challenge the authority of AB 32 or CARB's authority to implement a cap and trade program. We have always worked with CARB toward effective implementation, but they have clearly decided to turn the auction into a money raiser. We support any legal action to ensure that California gets what it was promised -- a cost effective, technologically feasible, and legal regulatory plan to reach our emission goals."

CMTA will continue to work with CARB to try and fix this costly auction and hope that the lawsuit succeeds as well.

Here are some media clips regarding the auction

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