Thursday, April 24, 2014
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With the adoption of AB 32, the state’s Global Warming Solution Act, California confirmed its role as a leader in addressing the challenges of climate change.

 

Now as we move from the rulemaking process to the actual steps necessary to achieve our greenhouse gas emissions (GHGs) reduction goals, it’s important that while we are reducing our carbon footprint we are  also protecting California jobs and our state’s economy – as the bill’s authors anticipated and required as part of the law.

 

The California Air Resources Board (CARB) is taking a positive step in that direction by considering adjusting the level of emissions allowances that were withheld from certain large energy users under its cap and trade regulation.

 

Simply put, cap and trade establishes a ceiling – or cap – on GHG emissions from various activities, such as manufacturing.  It also requires entities to purchase a portion of the allowances through a state-run auction or to trade with entities that have extra allowances, in order to continue doing business here.

 

The basic concept is that some entities will be over the limit, some will be under. By the trading of allowances, we will realize the required level of GHG reductions – which is exactly where we want to be.

 

What concerns many businesses in California are the decisions that are made and that add unnecessary costs of meeting GHG emissions goals when no other states are following our lead.  The decision to hold back some emission allowances for the state run auction it dramatically increased the cost of compliance without realizing any additional environmental benefits.

 

Now, thankfully, CARB has recognized those legitimate concerns and taken steps to address them. Unless the rule is adjusted, these businesses will wind up paying hundreds of millions, if not billions, of dollars for emissions allowances.  This will translate to lost jobs, higher energy and other costs for consumers, and a real risk of business flight to states without such stringent and expensive rules.

 

It doesn’t have to be that way.  My colleagues and I held public forums on cap and trade last year and heard convincingly from the state’s independent Legislative Analyst’s Office, economic experts and others that it is the cap on emissions – not the way allowances are distributed – that will bring GHG emissions down to the desired level.

 

That’s important because it illustrates that we can significantly lower our carbon footprint without risking jobs, without burdening consumers and businesses with higher costs and without losing California companies and the tax revenues that go with them to other states. 

 

CARB is on the right track in pursuing adjustments to how emissions allowances are distributed while still holding businesses accountable for reducing emissions.  It will avoid harm to our economy while keeping the state on track for reaching the goals of AB 32.

 

Even with signs of economic recovery in the Golden State, over 1.6 million people are still out of work in California. We need to get AB 32 right; for our environment and our economy.

with them to other states.

 

Category: Op-Ed


 

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