Might recent events allow Governor Brown to consider a new direction for AB 32 implementation?

My colleague Jonathan Zasloff suggests that environmental justice groups are using litigation to try to get leverage for some sort of compensation or other measures, rather than to actually stop the state’s cap-and-trade program for greenhouse gases. I doubt that.  But what I do wonder — with no evidence, but I can speculate wildly on a blog, can’t I? — is whether this litigation actually might start the state on a path away from cap-and-trade.

EJ groups have been vehemently and implacably opposed to cap-and-trade from the beginning.  They said from the beginning – before the law even passed – that they would oppose cap-and-trade for GHGs in whatever way they could.  And then they did.  Now I assume they will try to take advantage of legal leverage and a changed political climate to reduce or eliminate the cap and trade program from the AB 32 scoping plan. Perhaps there’s something else they will settle for, but I have no doubt that their goal is to get cap-and-trade removed.

But here’s where I’ll really speculate: perhaps Governor Brown will use the injunction against the program’s implementation, and the court’s mandate to study alternatives to cap and trade more seriously, as a
segue to a different set of policy tools for regulating greenhouse gases.

Remember, AB 32 doesn’t require a cap and trade program; that was the Governor’s decision.  While former Governor Schwarzenegger was very gung-ho about it, there’s no real reason to think that Governor Brown will necessarily continue on the same path. And as I pointed out in a prior post, cap and trade isn’t even responsible for a large percentage of the overall GHG emissions reductions projected under AB 32.

Moreover, political support for cap and trade in the business community was very high when the Air Resources Board was first developing the program.  Now, despite the defeat of Proposition 23 (which lost because the opponents hammered home the idea that the measure was funded by outside oil interests, while studiously avoiding using the phrase “climate change”), I believe political support for cap-and-trade might be lagging in the business community, as evidenced by the failure of federal cap-and-trade legislation that seemed possible just a couple of years ago.  And many environmental groups (though certainly not all) are agnostic about the proper policy tools for GHG reduction; they just want meaningful action, and have believed that cap-and-trade is the most politically viable option.

The court decision, which may (depending on any decisions to stay the outcome pending appeal) delay the program implementation, and which certainly will require significant new work to study alternatives to cap-and-trade, may give the Governor the opportunity to revisit the program, if he’s so inclined.

Governor Brown has offered bold initiatives in other contexts, including audacious tax proposals.  If he believes that another path is more likely to achieve emission reductions with fewer political or practical barriers, he might decide to do that.  The downside is that time is of the essence, both in terms of the regulatory deadlines and our need to reduce greenhouse gas emissions dramatically, and soon.

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Reader Comments

7 Replies to “Might recent events allow Governor Brown to consider a new direction for AB 32 implementation?”

  1. Like your other commentary on this court decision, this is a very thoughtful posting. Most economists would prefer a carbon tax to a cap-and-trade scheme, although with auctioning and price caps the difference isn’t large. For me, however, this is a situation in which the perfect is an enemy of the good. It hasn’t exactly been easy to get to the point where we are in implementing AB 32. Starting over with something different will not only take a lot of time, it will upset whatever compromises were needed to get where we are. Who knows how many other provisions of the plan would have to be reconsidered if we replaced this one? And someone — perhaps the current plaintiffs, perhaps business interests — will just file suit again anyway. In the meantime, with every passing day, we’re losing more momentum and more carbon is accumulating in the atmosphere.

    Maybe the Governor could use this to impose occasion to impose a carbon tax (assuming that California constitutional law allows that power to be delegated to the executive). That would probably be good for the environment and for the state’s budget. Alternatively, he could order command-and-control regulations to be implemented — but we know from experience that those will take years to devise. In the end, I don’t think this is a good time to throwing out the current plan and starting from scratch.

  2. There’s no need to start from scratch. CARB could impose a price floor, which was a core feature of the federal cap-and-trade initiatives. If allowances are selling at the floor price (as they are in RGGI), the system would be equivalent to a tax because the “auction” would become a fixed-price sale of allowances. Free allocation would be compatible with a price floor if the allocation is distributed as a portion of auction revenue, rather than as free allowances. Allocation policy could even be used to morph cap-and-trade into something closely resembling feed-in tariffs, which the Governor supports.

  3. Who would have dreamed that AB 32 could be defeated by environmental justice. How appropriate. America is a great Nation. Let Freedom Ring. May environmental justice triumph again and again. Hurray!!!

  4. Just to be clear: AB 32 was enacted by the legislature, and no one has “defeated” the law. In fact, California’s voters decisively defeated at the polls an initiative – funded largely by out-of-state energy interests – that would have suspended its implementation. This court ruling prevents – at least temporarily – the Air Resources Board from moving forward with its particular regulatory program for implementing AB 32.

  5. Dear Sean,
    It may be difficult to grasp the reality of defeat because it will take time for reality to manifest the fate of AB 32. This reality is clearly seen in legislative trends in Washington DC and in many states throughout America. The era of big government “climate change” regulation is coming to an end, thanks in part to environmental justice.

    It is hard to comprehend the enormity of the affronts to environmental justice posed by climate change. Justice demands consideration of alternatives. The defeat of AB 32 is a great victory for the people of California.

  6. Your answer is incomprehensible. It is simply a fact that AB 32 was reaffirmed by the voters last fall, and is still the law in California. Your statement that it was “defeated” is plainly incorrect.

    I certainly agree with your statement that “it is hard to comprehend the enormity of the affronts to environmental justice posed by climate change.” As the very environmental justice advocates who sued to block AB 32 have noted, the brunt of climate change’s impacts will be felt by the poor and disenfranchised. And those impacts are likely to be very severe. Some have speculated that the enormity of the challenges climate change poses, and humans’ inability to process the implications of those challenges, is exactly what leads people to deny that the risk exists even in the face of strong evidence.

  7. Dear Sean,
    We do not deny that the climate is changing and we recognize there are potential risks associated climate change. Our scientific understanding informs us that there are no available technologies, scientific methods, or regulatory policies that could control, reduce, and effectively mitigate global climate.

    Proposals and actions such as cap and trade, sequestration, carbon taxes, carbon dioxide pollution controls, etc., are fraudulent because it can be scientifically demostrated that such measures have no measurable effect on controlling global climate and never will.

    Environmental justice demands that we use our limited public resources to address manageable environmental problems that have undisputed and broad public benefits such as health care, good sanitation, safe food and drinking water. We reject wasting public money on hypothetical problems that humanity has no control over.

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About Sean

Sean Hecht

Sean B. Hecht is the Co-Executive Director of the Emmett Institute on Climate Change and the Environment, Evan Frankel Professor of Policy and Practice, and Co-Director o…

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