Cap and trade is looking more and more like a tax

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

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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.

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.

Columnist and member of the editorial board of the Southern California News Group, and the author of the book, “How Trump Won.”

This article was originally published by Fox and Hounds Daily


  1. Surprised?

  2. Cap and Trade should be business directed by the business paying the “fees”. But then, how would the politicians get re-elected?

  3. As usual, the DEMOCRAT majority who controls the legislature continues to muddle with bills and programs, then DIVERT the funds to other uses by statute.
    LETS MAKE CALIFORNIA GREAT AGAIN by throwing those out that seem hell bent on spending our tax dollars better than we can. NO individual Californian can track the thousands of bills coming out of the dome, let alone attend all the committee hearings. Rant over 4 now….

  4. What a Silly Rabbit……of course it’s a tax.
    Everybody in the State except the dummies sitting on the Bench knew it is a tax and should have been subjected to a vote of the people.
    You’d have to be pretty damn stupid to think otherwise…..or a judge.

  5. Gotta Gedada Displace says

    OK, upgrading a buildings energy and efficiency is a “legitimate” (?) use of “Cap and Trade” funds, BUT REHABBING THE BUILDING UNDERNEATH IT IS FRAUD !!! What ELSE to expect from “Grab our Money” Garcetti ???
    In another SCAM, we suckers in Anaheim just got (by our somnambulist City Council) signed on to an annual $1.8 MIL FOR 20 YEARS for a 51% share (36 MW) of a solar farm for our City Owned Utility (2 other City owned Utilities split the rest. SO is that $36 Mil for 36 MW ???? NOOOOOOOOOO We get to BUY the power at Cal-ISO rates !!! – $36 MIL is just (added onto our utility rates) to FUND THE PROJECT in return for “phony poker chip” credits for State Mandated (BUT UNFUNDED ! ) “sustainability credits” !! WTF ???
    So I guess you could say the Anaheim ratepayers really “bought the farm” on THIS ONE !!!

  6. Cap and Trade is United Nations Agenda 21 scam. It is literally taxing the air we breath. We need to put this monster out of its misery. Can’t believe Chad Mayes voted for this stuck in stupid tax.

  7. The Pruitt-Igoe housing project was a disaster and turned into a real shit-hole. A crime-rampant community that had to be eventually razed and the liberal response: “It was such a wonderful idea, too bad it didn’t work.”

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