Cap and trade

Cap-and-Trade Math Not Adding Up

May 24, 2018 By Julie Cart 4 Comments

As California accelerates its efforts to reduce greenhouses gases over the next decade, experts are pointing to vulnerabilities in its celebrated cap-and-trade system, weaknesses that could make the state’s goals difficult — even impossible — to reach.

Cap and trade, featuring a market where permission to pollute is bought and sold, is a key mechanism California uses to lower the volume of harmful discharges by industries that are subject to state emissions caps. But as the California Air Resources Board ponders a major retrofitting of the highly complex program, state analysts say that in a little over a decade emissions could soar much higher than the legally binding level.

Checking the math on cap and trade has taken on urgency this year because the state is leaning more heavily on the system to reduce greenhouse-gas emissions. The air board projects the program will account for about 46 percent of annual reductions in coming years, a figure that has surprised many experts.

One calculation is out of California’s control: a possible political shift in Ontario, Canada, after provincial elections there next month. One leading candidate has vowed to dismantle the province’s cap-and-trade system, which participates in California’s emissions-trading market. A Canadian withdrawal could undermine California officials’ message about its stability and growth as they recruit other states and nations to join.

Far more troubling are red flags highlighted in reports from academia, the nonpartisan Legislative Analyst’s Office, independent market experts and other major carbon markets, all concluding that California has a serious problem with too many unused pollution credits.

In the cap-and-trade system, major polluters must either produce fewer greenhouse gases to comply with California’s emissions caps or buy credits to offset their excess emissions from companies that pollute less. Credits are traded at state-sanctioned auctions and on secondary markets. And the state gives some free to utilities, natural-gas suppliers and industries that are vulnerable to out-of-state competition.

Some companies have not yet needed to use up the allowances to stay within state emissions limits and probably won’t have to in the next couple of years, according to some analysts, who estimate there are hundreds of millions of unused credits in the system.

The result is a glut of credits that could allow businesses to keep polluting past state limits in later years, after the overall cap becomes more restrictive. Unless the oversupply is addressed, experts say, polluters will have no incentive to cut emissions to required levels by 2030; instead, industries could continue polluting and use banked allowances to offset their emissions and technically keep them under the cap.

The state Legislative Analyst’s Office foresees a reckoning, estimating that because of excess allowances, actual emissions could be as much as 30 percent over the statewide target by 2030.

One analyst likened the problem to a game of musical chairs that starts with too many chairs and allows participants to save seats for later. The issue has plagued both the European Union’s carbon-trading system and the Regional Greenhouse Gas Initiative, a consortium of nine eastern U.S. states that sells credits for the electricity sector. Both markets have put policies in place to limit surpluses.

In California, lawmakers instructed the air board to examine the issue last year, and the agency has steadfastly maintained that the surplus of credits will not imperil California’s fight against climate change.

Rajinder Sahota, who oversees much of the cap-and-trade program for the air board, has testified numerous times before the Legislature on this topic. On each occasion she has assured lawmakers that the system is working.

“We do not believe that there are unused allowances in the system that will hinder our goals for 2020,” she told CALmatters.

She didn’t address how allowances might play out in subsequent years. But the agency forecasts that the state will also meet its 2030 target, when emissions limits will tighten dramatically, the number of free allowances will come down and the cap-and-trade program will expire.

Among the skeptics is Ontario’s environmental oversight agency. The commission’s annual report in January stated flatly that California has an oversupply of allowances that could last for the life of the program.

“We understand that the board believes…they don’t have an oversupply problem,” said Dianne Saxe, the environmental commissioner of Ontario. “Frankly, we don’t understand it.”

The disconnect will be addressed this week in a hearing before the newly formed Joint Legislative Committee on Climate Change Policies. The committee chairman, Assemblyman Eduardo Garcia, a Democrat from Coachella, said the air board will be grilled on how it intends to manage allowances.

“Our numbers don’t pencil out to be the same numbers they propose,” Garcia said. “We will go back and reexamine the numbers they are projecting. We have some questions about how they got there.”

Danny Cullenward is an energy economist with the climate-change think tank Near Zero and teaches environmental law at Stanford University. He’s also a member of the newly established Independent Emissions Market Advisory Committee that is charged with reviewing the mechanics of cap and trade. He says the air board not only got its projections wrong but also used an incorrect model for its calculations. The board’s most recent estimates are off by 10 percent and used a model that the agency identified in 2010 as problematic, he said in an interview.

“I can’t emphasize enough, this is a basic question of scientific integrity,” Cullenward said. The board has been reluctant to engage outside experts on the issue of allowances, “in a rush to justify that this is not a problem,” he said.

Sahota said external studies have not taken into account that allowances are set aside if they have gone unsold for 24 months—a “self-ratcheting mechanism,” she said, that prevents a glut on the market. The Canadian study, she said, relied on a flawed analysis conducted by Chris Busch, research director at Energy Innovation, a San Francisco-based climate-change and clean-energy think tank.

Saxe, the environment commissioner, stood behind the report’s conclusions, saying, “We did our own analysis.”

Busch, who was among the first researchers to identify the oversupply problem, is a longtime supporter of California’s cap-and-trade system, which he calls the best designed in the world. Busch said he used the air board’s own data to reach his conclusions about allowances, which he said were conservative.

“I sought to engage the air board to evaluate what they thought of the numbers,” he said. “They didn’t want to engage.”

Sahota said she had not read all of the recent reports, but the air board is taking all the research and criticisms seriously.

Julie Cart is a reporter for CALmatters

Filed Under: Top Stories Tagged With: Cap and trade, CARB, Pollution

Cap and trade is looking more and more like a tax

February 10, 2018 By Susan Shelley 9 Comments

The veneer that keeps everybody from seeing that the cap-and-trade program is really just a tax is coming unglued.

Last weekend, Mayor Eric Garcetti blasted out an email newsletter happily announcing that the Jordan Downs public housing development in Watts will be refurbished with money from the hidden tax you’re paying for gasoline and electricity.

Photo courtesy of Eric Garcetti, Flickr.

Watts will receive a $35 million grant of cap-and-trade funds, which Garcetti said will help make “dreams come true” with “improved quality of life, a renewed focus on public health, and better access to affordable housing.”

The city said the work on Jordan Downs will include rebuilding “distressed” units, creating recreational programs, and opening “about 165,000 square feet for retail.”

The funds will also pay for solar panels, a food waste prevention program, and 10 electric buses.

The cap-and-trade money comes from the state’s Greenhouse Gas Reduction Fund, which takes in revenue from the sale of allowances to emit greenhouse gases. The allowances, sold at state auctions, are purchased by companies that generate electricity, refine petroleum, make cement and process food. The prices of those things in California now include the cost of buying these permits to emit greenhouse gases.

Other states don’t do this, but in 2006, to save the planet from global warming, California passed a law to require a reduction in greenhouse gas emissions. Under the mandate now set in current law, greenhouse gas emissions statewide must be 40 percent below 1990 levels by 2030.

To achieve this goal, the California Air Resources Board developed the cap-and-trade program. It puts a statewide limit on GHG emissions, and businesses that are under the law are required to have a permit for each ton of GHG emitted. Every year fewer permits are issued, and the minimum price is a little higher.

The money that’s paid to the state for these permits looks a lot like a tax. But a state appeals court ruled that it’s not a tax, because it’s not compulsory. Any business that doesn’t want to pay it, the court reasoned, could simply go out of business.

Now you know why other states don’t do this.

For California politicians, the cap-and-trade funds are like a gift from heaven. Gov. Jerry Brown is spending them on the bullet train, which is barred by law from being funded with a tax increase. And the Legislature can hand out the rest of the loot to local governments and organizations seeking funding for pet projects.

To help spend the money, lawmakers created a committee called the California Strategic Growth Council and tasked it with advancing the revitalization of local communities. The SGC oversees the Transformative Climate Communities program, which considers grant applications from community groups, like the Watts Rising Collaborative, an advocacy organization made up largely of departments of the city government.

So your city tax dollars are being spent to lobby for cap-and-trade funds that come from the extra money you’re paying for electricity, gasoline and anything that’s made or moved in California.

Some of the $35 million grant for Watts will be spent to connect residents with new jobs created by TCC projects, and in a hint of how the spending will work out in practice, the funds will also be used for a “displacement avoidance plan” which will provide resources to “educate residents about their housing rights.” In other words, gentrification.

But nobody’s admitting that. It’s all under the banner of fighting climate change.

The president and CEO of the Housing Authority of the city of Los Angeles, Douglas Guthrie, said the Housing Authority is “proud to be leading this transformational initiative to build a healthier Watts” with “greenhouse gas reduction strategies.”

It’s just a tax. All of California accounts for only 1 percent of worldwide greenhouse gas emissions, so cutting emissions to 40 percent below 1990 levels is an exercise in futility, if what you’re really worried about is climate change.

Politicians are not really worried about climate change.

The cap-and-trade program is turning into a tax for community redevelopment and for a plain old slush fund. It doesn’t help Earth’s climate, but it does real damage to California’s business climate. Cap-and-trade is a hidden tax on energy that is making everything in California more expensive than in other states.

The biggest challenge for regulators is to prevent the prices of the allowances from going up too sharply. It might bring the game to a crashing end if people noticed the economic damage they’re enduring. When the voters put two and two together, things can heat up fast.

Susan Shelley is an editorial writer and columnist for the Southern California News Group. Reach her at Susan@SusanShelley.com and follow her on Twitter: @Susan_Shelley.

This article was originally published by the Orange County Register

Filed Under: Top Stories Tagged With: Cap and trade, CARB, Eric Garcetti, Greenhouse gases, Susan Shelley

GOPers who backed ‘cap and trade’ likely to face more fallout

August 29, 2017 By Chris Reed 8 Comments

Chad Mayes of Yucca Valley is out as Assembly Republican leader, replaced last week by Assemblyman Brian Dahle of Bieber. But the fallout may continue over the decision of Mayes and six other GOP Assembly members to provide Gov. Jerry Brown and Assembly Speaker Anthony Rendon, D-Lakewood, with the votes necessary to save the state’s cap-and-trade program on July 17.

Mayes touted the GOP support as helpful in rebranding the party with young voters worried about climate change and emphasized the concession he won from Brown and Rendon, which could make it possible for the Legislature to effectively scrap the state’s troubled high-speed rail project in 2024. But the votes infuriated many Republicans for betraying the party’s core anti-tax, anti-regulation beliefs and for allowing a handful of Assembly Democrats in swing seats to avoid having to vote to extend cap and trade until 2030.

Under the program, businesses buy permits for emission rights. Because of fears that courts would find the permit fees were tantamount to taxes, Brown wanted two-thirds votes in the Legislature to ensure cap and trade’s extension would be on solid legal ground under Proposition 13. Thanks to the votes of Assembly Republicans Mayes, Catharine Baker of San Ramon, Rocky Chavez of Oceanside, Jordan Cunningham of San Luis Obispo, Heath Flora of Ripon, Devin Mathis of Visalia and Marc Steinorth of Rancho Cucamonga, Brown got 55 votes for the extension, one more than he needed.

Harmeet K. Dhillon, a San Francisco lawyer who is one of the state’s members on the Republican National Committee, told the Los Angeles Times that Mayes shouldn’t be the only one held accountable for preserving cap and trade.

“Now, given the fact that six of these [Republican lawmakers] did vote for a massive tax increase, Republicans are going to be very vigilant about these issues,” she said. The state GOP voted earlier this month to ask Mayes to step down at Dhillon’s behest.

Another RNC state delegate – former state GOP chair Shawn Steel – also blasted Republicans who sided with Brown on cap-and-trade.

Mayes, Baker, Chavez, Cunningham, Flora, Mathis, Steinorth and state Sen. Tom Berryhill, R-Modesto – the only GOP Senate vote to extend cap and trade – are likely to face heat from conservatives in their re-election bids or in seeking other elective posts. Conversely, they could also attract support from moderate and independent voters, given the popularity of environmental causes among state voters.

New GOP leader wants no more cap-and-trade recriminations

But new Assembly GOP leader Dahle – a 51-year-old seed business owner and farmer and former Lassen County supervisor – wants to the put the cap-and-trade flap behind.

“There are 24 other members of this caucus and they all have different views,” he told reporters Thursday after Mayes stepped down. “There are people in our caucus who voted their conscience for their district, and I support those who did that. In my case it didn’t work in my district, so I was opposed to that.”

Mayes, 40, was first elected to the Assembly in 2014 and began as GOP leader in January 2016. While now under fire from conservatives, he could someday be remembered as the man who killed the bullet train – the state project that’s as unpopular among California Republicans as cap and trade.

As part of the cap-and-trade deal, Mayes got Democrats to agree to put a constitutional amendment he wrote before state voters in June 2018. Under the unusual measure, if voters gave the go-ahead, there would be a vote in 2024 by the Legislature on whether to continue to allow cap-and-trade revenue to fund the $68 billion project – with two-thirds support necessary to continue funding.

Brown and bullet-train backers are counting on cap-and-trade fees to increase in coming years and to keep the project viable. So far, the California High-Speed Rail Agency has been unable to attract outside investors to help pay for a statewide system, and federal funding dried up after Republicans took control of the House in 2010.

This article was originally published by CalWatchdog.com

Filed Under: Top Stories Tagged With: Brian Dahle, CA GOP, California Assembly, Cap and trade, Chad Mayes

Republicans didn’t have to vote for cap and trade

August 1, 2017 By Jon Coupal 4 Comments

Last month, eight Republicans in the California Legislature made the unfortunate decision to vote for an extension of cap and trade that will increase the cost of fuel by as much as 71 cents a gallon by 2031. The primary justification was that the market-based cap-and-trade solution was preferable to any option controlled solely by the powerful and hostile California Air Resources Board. While that argument can’t be discounted, it is nonetheless useful to speculate what would have happened if no Republicans supported the deal.

Historically, Republicans have been the primary defenders of California’s middle-class taxpayers. They almost always vote against any proposal to weaken Proposition 13 and for that they deserve our thanks. But there is no debate that the cap-and-trade legislation will increase gas prices. The only debate is over how much.

Republicans in the Legislature should also be thanked for providing the lion’s share of votes against the cap-and-trade bill. But now they are in a situation where they have to explain why eight of them voted for the bill which has created a significant messaging problem. Voters don’t understand cap and trade and they don’t understand what “saving them” from a $2 fuel price increase looks like because they’ve never experienced it. Compounding the messaging problem is the inevitable political fallout. Republican support gave Democrats and Gov. Jerry Brown acres of political cover. Democratic legislators in at least two marginal seats were protected against having to cast a vote for higher energy costs and Gov. Brown secured a relatively stable source of funding for high-speed rail.

So what would have happened if no Republican legislators voted for cap and trade? Conceivably, Gov. Brown could have demanded Democratic allegiance and, using both carrots and sticks, may have secured it. But that would put Democrats in marginal districts at tremendous risk. At a minimum, Republicans could have leveraged their opposition for policies that actually are friendly to citizen taxpayers including, but not limited to, a rebate or broad based sales tax reduction for consumers to offset the added cost of gas over the next decade.

Republican refusal to give in to the type of extortion reflected in the cap-and-trade bill may very well have forced the Democrats into approving a CARB-style bureaucracy with a simple majority vote — which, by the way, might still happen. The far-left of the Democratic Party may have cheered but, for Republicans, it would open up vast new demographics — working Hispanics, other ethnic groups and recent immigrants — for whom just a few more cents in a gallon of gas is a big deal.

Unfailing opposition to the deal by Republicans would have provided something else almost always absent from California politics — clarity and accountability. When gas prices go through the roof — which they surely will — there would be no doubt which party to blame.

But we’ll never know as it will be difficult, if not impossible, to repair the damage and restore the Republican brand. Thus the odds of Republicans gaining seats in any of the next four election cycles (thanks to redistricting in 2022) are now in doubt. And for what? So Republicans can now adopt the losing argument that they voted for increased fuel costs to save taxpayers from even higher prices? What ordinary voting taxpayer is going to buy that argument?

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This article was originally published by the Orange County Register.

Filed Under: Top Stories Tagged With: Cap and trade, Chad Mayes, HJTA, Jerry Brown, Jon Coupal

Sacramento GOP channels Forrest Gump

July 27, 2017 By Bill Saracino 12 Comments

One of the most memorable lines of the movie “Forrest Gump” is “stupid is as stupid does.” Eight Republican legislators gave life to that saying last week in Sacramento as they handed Governor Jerry Brown, tax-raising Democrats and environmental extremists a huge victory by providing the votes needed to extend the so-called “cap and trade” pollution control program.

My purpose here is not to argue the merits or lack thereof in the legislation that was passed. Rather, it is to point out how stupidly the GOP leadership behaved as they helped the very radical elements of the Democrat legislative majority pass another very radical bill. A couple of highlights include raising taxes, imposing more regulation on business, raising the cost of gasoline and giving a few billion dollars to the “bullet train.”

The GOP leadership’s willingness to put this legislation, vitally important to the governor and the Left, over the top was stupid in many ways, but two stand out.

The “bullet train to nowhere” was about to suffocate for lack of dollars. The Trump administration and congressional Republicans are slowly turning off the money spigot. Republican votes for the “cap and trade” bill gave this monstrosity a new lease on life. The train – which will be great for anyone needing to get from Visalia to Modesto in a hurry – is very unpopular with voters of both parties. Nobody but the bureaucrats and environmentalists like it. It had reached the rigor-mortis stage and had one foot in the grave. The GOP legislative geniuses yanked it out of the sepulcher and performed CPR. Stupid is as stupid does.

More egregious was letting vulnerable Democratic legislators avoid a vote on this very controversial legislation. Democrat legislative leadership had to twist arms mightily and give away billions of dollars last month to secure the votes necessary to increase the gas tax. Their members representing districts that have shown Republican strength were most uncomfortable having to do that and were most anxious to avoid voting for another bill unpopular with their voters.

Those members were going to have to be dragged, kicking and screaming, by their leadership to vote for another bill that raised taxes. They knew that casting another tax-raising vote put a huge bulls-eye on their backs for fed-up, tax-paying voters. Those vulnerable Democratic legislators now have much less to fear – thanks to the GOP leadership shielding them from a very tough vote and protecting them from the wrath of their voters. Stupid is as stupid does.

There is a tactic called a “lifeboat” that legislative leaders use when confronting controversial votes that would endanger any of their partisan compatriots. If you can snooker (or pay off) a few gullible members of the other party to help you pass the bad legislation, you can then put your most vulnerable incumbents in the “lifeboat” of not voting.

Competent legislative leaders – at least those interested in improving their party’s representation in Sacramento – go to great pains not to provide the opposition with such a life boat. You do so by not providing any of your votes to help pass legislation that is important to your opposition.

If you have members who really want or need to vote for the opposition’s controversial legislation, you provide those votes only after all of the opposition’s members have voted for the poison pill. You do not shield the vulnerable members of the opposition. You force them to cast a vote that will hurt them in their home districts next election.

This is not rocket science, nor advanced campaign tactics. This is politics 101, and the failure of the Sacramento GOP leadership to practice such was dereliction of duty.

In the interests of full disclosure, I was Chief of Staff for the Assembly Republicans from late 1984 to mid-1987. During the legislative sessions of ’85 and ’86, we confronted many “lifeboat” situations. We never, ever put up Republican votes for controversial Democrat legislation until each and every Democrat had voted for it. We never, ever gave vulnerable Democrats the protection of a “lifeboat.”

Partially as a result of that practice, Republicans gained three Assembly seats in November, 1986, bringing GOP representation in the Assembly to 36. This was not because we were geniuses, although the GOP Assembly caucus had some brilliant political minds in it at the time. It was because, to paraphrase the late, unlamented President Obama, we avoided doing stupid shit. And there is very little more stupid than to make life easier for your most vulnerable political opponents.

I suspect that Assembly GOP leader (for now) Chad Mayes and the seven other Republicans who voted for the cap-and-trade legislative mutant are fine people and would make wonderful neighbors. This isn’t about that. It’s about letting the most at-risk Democrats off the hook.

The GOP “leadership” handed the Democrats an enormous gift by enabling the most vulnerable Democrats to avoid this vote. The GOP “leadership” has in essence given “in-kind” contributions worth hundreds of thousands of dollars to the Democrat legislators most in danger of defeat. The GOP “leadership” has helped bullet-proof the Democrats most likely to lose to a Republican in November next year.

Stupid is indeed as stupid does, and the Sacramento GOP did it up big time on this one.

Bill Saracino is a member of the Editorial Board of CA Political Review.

Filed Under: Top Stories Tagged With: Cap and trade, Chad Mayes, Forrest Gump

California Legislature abandons state’s middle class

July 25, 2017 By Jon Coupal 5 Comments

California’s middle class, who pay the bulk of all taxes in California, are constantly under attack from Sacramento politicians. Already this year, the Legislature approved Senate Bill 1, to add 19 cents per gallon to the cost of fuel beginning in October and an average of a $50 increase in the car tax. This translates into at least $400 in additional taxes for the average California family.

Now, Sacramento politicians have compounded the damage by imposing another fuel cost increase by extending the state’s cap-and-trade program, a market-based regulatory system for controlling greenhouse gas emissions. Under this program, impacted industries buy credits at auction which are then used to incentivize decreases in pollution levels.

Surprisingly, many industries forced into the “cap-and-trade” auctions supported the extension because they were threatened by Gov. Brown, environmental extremists and powerful regulators with an alternative program run completely by the government bureaucrats at the California Air Resources Board. And those were not idle threats.

Be that as it may, some legislators are using the “it could have been worse” argument to claim that they’ve won some sort of victory for taxpayers. Without cap and trade, they say, your fuel costs would have increased by nearly two dollars a gallon. Even if completely true — which is doubtful — cap-and-trade advocates won’t tell you the whole story. The non-partisan Legislative Analyst’s Office has said that under the legislation just approved, fuel prices could go up by 21 cents in 2022 and 71 cents by 2030. Only in the Alice in Wonderland world of Sacramento politics does a 71 cent fuel price increase constitute a victory for taxpayers.

So what’s the ultimate impact on working Californians? If the new legislation is added into April’s gas tax increase, consumers will see their price at the pump increase as high as 40 cents per gallon by 2022 and 90 cents by 2031. Overall household fuel costs will likely eventually increase by over $1,000 a year per household. And all this is occurring so that liberal Democrats can reach an arbitrary threshold of a 40 percent reduction in greenhouse gas emission levels by 2030.

While the handful of Republicans in the California Legislature — who make up less than a third of the members in each house — are usually the reliable opposition to the punishing policies inflicted on the middle class by the majority party, that did not prove to be the case last week. Eight Republicans voted for the extension.

But could they argue they received something in return which benefits their voting constituents? Nope. The vast majority of California taxpayers will receive no direct financial relief in exchange for their thousand dollars a year they will pay for goods and services. Perhaps it would be easier to share in the cost of climate change if California wasn’t going it alone on cap-and-trade in the United States, while we emit only one percent of the world’s greenhouse gas emissions.

The extension of cap-and-trade ensures one thing, that funding for high-speed rail will continue. The legislation dictates that at least 25 percent of the new funding will be spent on a train that a majority of Californians have made it clear they would reject if given another chance on a statewide ballot. Ironically, high-speed rail has proven to be a net increaser of greenhouse gas emissions. So much for trying to save the world.

A hollow victory at best is the suspension of the infamous fire tax against those living in rural unincorporated areas of California. Some 800,000 property owners will no longer have to pay this fee, which remains the subject of a class action lawsuit commenced several years ago by Howard Jarvis Taxpayers Association lawyers. While the suspension (not repeal) of the tax is welcome relief for rural property owners, it does not include any rebates for the millions of dollars already paid. For that reason the HJTA litigation will continue over the issue of refunds.

As is common with complex legislation that ultimately hurts the middle class, special interests suffered little or no harm and, in many instances, negotiated for a financial windfall. Most got a piece of the revenue from the higher gas prices that consumers will be paying. The governor got more funding for high-speed rail and corporations got significant tax breaks. But legislators couldn’t even fight to give citizen taxpayers a rebate for the higher gas prices they’ll be paying. Will any legislator fight for them? Is there anyone left in the Capitol who will put the middle-class taxpayer before their next political deal that results in another crushing financial burden? For the sake of this once Golden State, we hope so.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This article was originally published by the Orange County Register

Filed Under: Top Stories Tagged With: California legislature, Cap and trade, Jerry Brown, Jon Coupal, taxes

Legislators continue to drive up the cost of fuels

July 20, 2017 By Ronald Stein 10 Comments

The concept of reducing our emissions is correct, but show me some progress!

Cap and trade has been a revenue generator for the state since 2006. It has raised over $7 billion for the state, but after 10 years since AB32 was signed into law in 2006, according to the California Energy Commission, has yet to lower our 1 percent contribution to the world’s greenhouse gases. It has however been very effective in hitting citizens’ pocketbooks to fund a multitude of governmental pet projects.

We could shut down the entire state that represents only 0.5 percent of the world’s population, close all the airports, get rid of the 35 million vehicles, turn off all the generators, and shoot all the cows, and it would have absolutely no effect whatsoever on the global climate.

Fuel costs for the entire world, EXCEPT California, are primarily driven by the cost of crude oil to manufacture the fuels and by-products from crude oil that drives every industry sector and supports our current quality of life. With crude oil hovering around the $45 range vs. the $100 range a few years ago, we’re enjoying more affordable fuels than in previous years.

However, in California, it’s our legislators and their appointees that are directly responsible for California having higher costs for our fuels and energy than the other 49 states.

California already has five reasons for their cost of fuels being higher the rest of the country:

California fuel taxes are among the highest in the country.
To date, according to the Legislative Analyst’s Office, cap and trade has already added eleven cents to the price of gasoline.
California has boutique fuel brands that no one else in the country currently makes. If other states chose to manufacture the California boutique fuels, the only way to get it to the California energy island is to ship it thru the Panama Canal to California ports.
California’s Low Carbon Fuel Standard increases the cost of the gasoline and diesel fuels produced from crude oil.
To meet current demand, 10 million gallons of aviation fuels, and 40 million gallons of transportation fuels for our 35 million vehicles are manufactured DAILY in California which is the most environmentally regulated location on earth.

Our Legislators crusade to maintain the cap and trade “revenue generator” through 2030 provides the public with a dim forecast in the coming years as the burden of additional fuel costs will be falling completely on motorists and businesses. More cost increases that are coming are:

Starting in November 2017, SB1 will add significant tax increases to gasoline and diesel fuels, as well as higher registration fees to finance transportation infrastructure,
4 years from now, according to estimates from the LAO, cap and trade could raise gas prices by another 63 cents per gallon in 2021, increasing to 73 cents per gallon in 2031.
California’s LCFS is expected to grow and overtake the cap and trade costs.

In the last 40 years, the California population has almost doubled to 38 million, but our air is cleaner today than it was in the 1970s. In the decade from 2006, California’s population has grown 1.077 percent to 38.8 million and we have less manufacturing jobs today than we had in 2006.

The inconvenient truth about AB32, as well as cap and trade, is that we now have higher gasoline prices and higher electricity costs. The coastal elites who support “going green” at all costs just don’t care that the working poor and struggling middle class living away from California’s coast are bearing the brunt of higher energy costs. Tellingly, our state has the worst poverty rate in the nation where 1 out of 5 California families are barely hanging on. Thus, it’s hard to understand the time and effort being extended on the subject of the emissions crusade that is obviously negatively impacting our poverty and homeless populations.

It’s our legislators that are causing the price of California fuels to increase, not the oil companies. With the approval to extend the cap and trade system to 2030, California’s top politicians will have immense effects on what consumers spend for gasoline and a myriad of other products and services.

Ronald Stein is founder of PTS Staffing Solutions, a technical staffing agency headquartered in Irvine.

This article was originally published by Fox and Hounds Daily

Filed Under: Top Stories Tagged With: AB32, Cap and trade, Gas, Gas prices

GOP Votes Give Jerry Brown Big Win on Cap-and-Trade

July 18, 2017 By Jon Fleischman 18 Comments

The “shadow presidency” of California Governor Jerry Brown scored a win Monday night as eight Republican legislators crossed the political aisle and voted with most Democrats to extend a key component of the “cap-and-trade” program that has literally shifted $4.42 billion from the private sector to the government since mid-2012.

While a lot of politicking went into rounding up the votes for the cap-and -trade extension among both political party caucuses in both chambers, it was clear that Governor Brown had enough political capital, along with a willingness to “strategically target” the spending of cap-and-trade tax dollars to woo Democrats.

So in the final days preceding a vote, much of the attention was focused on Republican legislators. Because it is a tax increase, the bill required a two-thirds vote to pass. Democrats have barely over two-thirds in either chamber and so, in theory, could have passed it without a solitary GOP vote. But Democrats were not 100% unified, and also at least one Democrat in the State Assembly was going to be absent this week on a long-planned family vacation, meaning at least one GOP vote would be needed in the lower house.

On the GOP side it was a David vs. Goliath situation, with a small coalition of small business and taxpayer advocates, as well as GOP groups like the Orange County Lincoln Club. They were out-gunned and out-spent, up against many well-heeled interests, including the California Chamber of Commerce, the California Manufacturing and Technology Association, and others. (Big businesses can handle navigating a cap-and-trade system, and largely pass along the costs to consumers. The small- and medium-sized businesses suffer the most, and of course taxpayers in general.) Those billions and billions in taxes paid to the California Air Resources Board drive up the costs of so many products — most notably gas and electricity prices: it is estimated that by the early 2020s, cape-and-trade will be adding over 70 cents to the price of a gallon of gasoline. In the end Goliath won, with more than enough Republicans voting for the extension.

Ultimately eight Republican legislators voted to extend the multi-billion dollar tax: State Senator Tom Berryhill (R-Stanislaus), and Assemblymembers Catherine Baker (R-Walnut Creek), Rocky Chavez (R-Oceanside), Jordan Cunningham (R-San Luis Obispo), Health Flora (R-Modesto), Devin Mathis (R-Visalia), Mark Steinorth (R-Rancho Cucamonga), and Chad Mayes (R-Yucca Valley), the latter being the Assembly Republican Leader.

While much attention will be paid to the “Crazy 8” (as they are already being called) Republicans who voted to extend this draconian program, it is significant to note that 34 GOP legislators voted against it, with a good number of them speaking out on the floors of their respective legislative chambers. Perhaps none spoke as eloquently as State Senator Andy Vidak (R-Hanford), who said, in part, “I represent the poorest district in the state. I cannot, in good conscience, vote for yet another bill that will raise gasoline and electricity rates on the poorest of the poor. Let’s be honest, this is a tax — and a regressive one at that! Then where does the money go? It goes to rebates for rich folks who buy a Tesla. Billions go to the boondoggle that is high-speed rail, which is a gross polluter, now and for decades to come — again, off of the backs of the poor who currently live in energy poverty.”

Interestingly, the political win for Assembly Democrats wasn’t just in passing the cap-and-trade extension, but also the fact that so many Republicans voted for the bill that Speaker Anthony Rendon (D-Paramount) was able to let three of his targeted members, who are occupying seats the GOP would like to pick back up, either not vote at all or vote no. A big strategic blunder for Assembly Republicans.

After the vote was held, despite the fact that over two-thirds of Assembly Republicans voted against the bill, a gleeful Assembly GOP Leader Chad Mayes spoke in a press conference with Governor Jerry Brown and Democratic legislative leaders as they celebrated the passage of a package of the legislation. Mayes could hardly contain himself as he touted that with this legislation “we lowered taxes, we reduced costs, we reduced regulations – and at the same time we are going to protect our environment.”

You may ask how a two-thirds vote to raise taxes for this program for another decade could lower taxes, reduce costs and reduce regulations? Apparently Mayes and other Republicans justified their votes by imagining what it would be like if, in the absence of cap-and-trade, Democrats implemented a different and worse system. The “lowering” and “reducing” Mayes refers to are the imaginary savings achieved because the other, allegedly worse regimen of regulation, was averted.

Mayes went on to say: “We believe that markets are better than Soviet style-command and control. We believe that markets are better than the government coercing people into doing things they don’t want to do… .”

Apparently Mayes believes that when the government creates Soviet-style limits on resources but leaves people with the freedom to exist in a world of artificial scarcity on their own terms, that is not command and control. This is analogous to having a hundred people but food for only ten, and choosing which ten get the food, versus simply putting ten meals in the room and letting the hundred people figure it out themselves.

With the cap-and-trade vote now in the rear-view mirror, it remains to see what the political fallout will be. If 2009 is any guide, which was the last time a small group of six GOP legislators crossed party lines to vote for a massive tax increase, all six legislators ended up paying a steep political price. Both legislative leaders lost their leadership posts.

Either way, the California GOP has a unique messaging problem for next year, having provided support for a multi-billion dollar carbon emissions tax.

Jon Fleischman is the Politics Editor for Breitbart California. His columns appear regularly on this page. Follow Jon on Twitter here.

This article was originally published by Breitbart.com/California

Filed Under: Top Stories Tagged With: Cap and trade, GOP, Jerry Brown

‘Cap and Tax’ Would Slam High-Tax, High-Poverty California

July 17, 2017 By John Moorlach 15 Comments

Photo courtesy Steve Rhodes, flickr

The craziest story of the moment is the Governor’s insistence on passing even more draconian legislation on the topic of climate change in the form of extending what is known as cap and trade (or, in this iteration, cap and tax) (also see MOORLACH UPDATE — Surprise! — July 11, 2017).

Gov. Brown believes that “climate change is real” and that California has to be the guinea pig in the world stage on addressing it. Therefore, Californians have to make certain financial sacrifices now to protect those who follow us 100 years from now. And that is only if his postulation that “climate change is real.”

With “quiet dignity and grace” (a line from “Young Frankenstein”), the Governor claimed that on Monday the Legislature would be making “the most important vote of our lifetimes.”

Is the vote to disallow collective bargaining a la Wisconsin Governor Scott Walker?

Is the vote to abolish the California Rule, and modify pension formulas going forward?

Is the vote for establishing a hybrid pension plan that includes a defined contribution component?

Is it a plan to make state government more efficient, since California has the highest tax rates and still can’t deliver decent services and roads to its residents?

Is the vote to address the highest poverty rate of any state in the nation?

No.

It’s about one man’s personal crusade to supposedly “save the planet,” when the science may not support his claims.

His comments culminated with the hysterical claim no one else in the country seems to believe enough to enact mitigating policy: “Climate change is a threat to organized human existence.” Pop some corn and enjoy his harangue.

No doubt, everyone is concerned about our planet. But, at a cost of some 90 cents per gallon of gas? Most people don’t think so.

John Moorlach state Senator representing the 37th Senate District

This piece was originally published by Fox and Hounds Daily

Filed Under: Top Stories Tagged With: Cap and trade, Climate change, Jerry Brown

Jerry Brown, California Legislature, Reach Cap-and-Trade Extension Deal

July 13, 2017 By Joel B. Pollak 8 Comments

California Governor Jerry Brown announced Tuesday evening that he had reached a deal with both chambers of the state legislature to extend the Golden State’s “cap-and-trade” program beyond its original expiration date in 2020.

Brown, Senate President pro Tem Kevin de León (D-Los Angeles) and Assembly Speaker Anthony Rendon (D-Lakewood) announced “a legislative package that will launch a landmark program to measure and combat air pollution at the neighborhood level – in communities most impacted – and extend and improve the state’s world-leading cap-and-trade program to ensure California continues to meet its ambitious climate change goals,” according to a statement released on the governor’s website.

The statement adds that the deal “includes AB 617 by Assemblymembers Cristina Garcia (D-Bell Gardens), Eduardo Garcia (D-Coachella) and Miguel Santiago (D-Los Angeles) and AB 398 by Assemblymember Miguel Santiago (D-Los Angeles) and is the product of weeks of discussions between the administration and legislative leaders with Republican and Democratic legislators, environmental justice advocates, environmental groups, utilities, industry and labor representatives, economists, agricultural and business organizations, faith leaders and local government officials.”

The cap-and-trade system sets an upper limit for carbon dioxide emissions, and then issues emissions permits that can be bought and sold by producers. The system applies an effective tax on emissions (one that some businesses would prefer to leave the state to avoid). Companies that are more energy-efficient can sell their permits for profit — a model that Tesla, for example, has used to pad its bottom line.

The legislation will have to proceed in the absence of former Assemblyman Jimmy Gomez, who will be sworn into Congress on Tuesday — more than a month after winning a special election to replace Attorney General Xavier Becerra in the 34th congressional district. Gomez had delayed the ceremony partly to make his vote available for a cap-and-trade extension deal.

The deal, as noted by Bay Area public radio station KQED, will include provisions to allow local communities to monitor air quality and industrial air pollution, without allowing them to regulate carbon dioxide emissions. Climate change activists often confuse the two phenomena, though one has little to do with the other: carbon dioxide is an odorless, colorless gas that is not harmful.

KQED adds that the deal also ends “a fire prevention fee largely paid by residents living in rural, Republican areas of the state.” That could indicate that Democrats struck an agreement with Republicans to vote for the bills.

Without Gomez, the Democrats will not have the two-thirds majority required to renew cap-and-trade without facing a state referendum. But with Republican votes, that obstacle will disappear.

Following last year’s passage of Proposition 54, which requires bills to be on public display for 72 hours before a vote, that could mean a vote on cap-and-trade could come as early as Thursday.

Joel B. Pollak is Senior Editor-at-Large at Breitbart News. He was named one of the “most influential” people in news media in 2016. He is the co-author of How Trump Won: The Inside Story of a Revolution, is available from Regnery. Follow him on Twitter at @joelpollak.