JUICE: The Carbon Goose-n-Gander

7 Jun 2017

Key bills expanding the state’s carbon cap-and-trade program failed to make it to the other side of the Legislature after last-minute vote changes on a controversial measure on the Assembly floor.

Considerable political capital has been expended on extending the scope of the California Air Resources Board’s greenhouse gas trading program beyond 2020—including campaign contributions, arm twisting and tears. But for the electricity sector these days, it’s much ado about nothing.

In contrast, it is much ado for the largest stationary source of emissions in California, oil refineries, and the vehicles that refined petroleum products power.

Among the bills that died is Assemblymember Cristina Garcia’s AB 378. Although granted reconsideration, it was not taken up for a subsequent vote June 5. It sought to add a cap on other harmful air pollutants to an extended carbon cap-and-trade program to protect the constituents of the Bell Gardens Democrat and others in polluted, low-income communities.

An emotional Garcia pleaded late last week for passage, which required 41 votes, while the bill vote was stuck at 38-36. Last minute it fell victim to vote switching and no votes by 15 Democrats, which hold a super majority in the Assembly. Concurrently, a related bill, AB 151 by Assemblymember August Burke (D-Inglewood), fizzled. Tied to AB 378, it would have required the Air Board to work with the Legislature on a greenhouse gas reduction scoping plan or regulations.

Campaign finance records show that Democrats who voted against Garcia’s measure get plenty of campaign money from oil companies, railroads, which haul crude and refined products, labor unions that work on refineries and oil pipelines, and from truckers and farmers, who use a lot of oil to run rigs and equipment. (See related story here.)

On the Senate side, the most far reaching cap-and-trade measure is an urgency bill, SB 775, by Sen. Bob Wieckowski (D-Fremont). It would raise the price of carbon emissions allowances after 2020.  In addition to setting a price floor and ceiling, and annual price increases, it would limit businesses seeking to exceed the carbon cap by purchasing greenhouse gas emissions offsets. It also would prohibit banking of allowances beyond the year they are issued.

It is not subject to the usual legislative deadlines because it is an urgency measure. If it makes it to the Assembly, its prospects are questionable at best.

The defeated carbon reduction legislation in the Assembly highlights the power of oil to wield influence in Sacramento and the dependence of sometimes climate protection-friendly Democrats on money from big oil and other major polluters.

After the years-long intense and successful effort to get the electricity sector to slash greenhouse gases, state officials must turn in earnest to the oil industry. After all, what is good for the electric goose is good for the oil gander.

With or without a cap on carbon emissions and auction of allowances, the power sector—the second largest stationary source of carbon emissions in California— is expected to meet its share of the state’s carbon reduction goal, set at 40 percent below 1990 emission levels. That is largely thanks to California’s renewable electricity standard.

Since the passage of the state’s first renewable portfolio standard in 2002, set at 20 percent by 2017, significant resources have been dedicated to cleaning up the electricity sector. The renewable standard has continually increased to 33 percent by 2020, 50 percent by 2030 and possibly to 100 percent under Senate President Pro Tem Kevin de León’s SB 100. It also would move up the 50 percent mandate by five years.

Carbon and other emissions from private and public utilities have and will continue to drop because of other ground-breaking clean energy programs as well. They include:

  • The growth of solar rooftops and distributed solar because of the nearly $3 billion provided by the California Solar Initiative;
  • Billions of dollars dedicated to energy efficiency;
  • Energy storage, with a possible $1.4 billion endowment under SB 700 by Sen Scott Wiener (D-San Francisco); and
  • Demand response.

If Democratic lawmakers continue to vote based on who contributes to their campaigns, they’ll be overtaken by the turning tide.

Consider that last week the San Francisco Bay Area Air Quality Management District announced it was going to cap Bay Area refinery emissions and prohibit increases via offsets and/or the purchase of additional emission allowances. The upcoming vote, which is backed by the state Air Board, could well be adopted by other regional air regulators.

Perhaps even more significant is that after years of carrot and stick approaches to getting utilities to clean up with their carbon pollution, they’ll play a large role in the lucrative electrification of the transportation sector.

Elizabeth McCarthy

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