As Sacramento awaits a key report expected to recommend market programs for achieving the goals of California’s new climate change law June 1, the head of the panel writing the recommendations said the document only will suggest a cap-and-trade system under which greenhouse gas emission rights can be bought and sold. “I think there’s been too much hyperventilating over whether we’re going to use markets,” Winston Hickox, chair of the state’s Market Advisory Committee, told the Senate Energy, Utilities, & Communications subcommittee on alternative energy May 29 at an oversight hearing on the state’s greenhouse gas reduction law, AB 32. Legislators on the panel did not reject the notion of a cap-and-trade program under the state’s new climate change law. However, they stressed that it should be just one element of the state’s fight against climate change. “Sometimes I hear that we are going to cap-and-trade” as if it’s a foregone conclusion, said Alan Lowenthal (D-Long Beach), noting that the law itself does not require it. Senator Joe Simitian (D-Palo Alto) said that he shared in the concern that “we have a conversation and then reach a conclusion, rather than reach a conclusion and then have a conversation” about whether to create an emissions trading market. Under a cap-and-trade program, emissions from businesses are put under a limit that gradually declines. If companies keep their emissions under that limit, they can sell their unused emissions rights to companies that may need to exceed their limits. Overall emissions from all companies, however, are to remain under the collective cap. Hickox said a cap-and-trade program could play a significant role in helping California meet its greenhouse gas reduction target, but that the ultimate decision on whether and how to construct a program will be up to the California Air Resources Board. “The preponderance of greenhouse gas reductions will come under command-and-control rules,” he said, even if a market is formed. These rules will include many existing requirements periodically updated, like building energy efficiency standards and mandates for utility procurement and energy efficiency programs. While Hickox downplayed the role of any cap-and-trade program, others criticized the committee’s role in the AB 32 process itself. “All the advisory committees should meet in public and declare their economic interests,” said Bill McGavern, Sierra Club senior legislative representative, in reference to the Market Advisory Committee’s private meetings (Circuit, April 20, 2007). “Even though it may not be required by law, that’s just good government.” Devra Wang, Natural Resources Defense Council California energy program director, urged a limited role for any cap-and-trade program.
