Let’s Be Honest About Industry Incentives To Slash Greenhouse Gases

It's time for California to debate the pros and cons of cap-and-trade, the program that caps carbon emissions and lets companies trade any extra pollution allowances to cut them. Jerry Brown wants to extend the program so badly beyond 2020 that he has slipped it into a budget trailer bill. More than 20 advocacy groups, including Food & Water Watch and Consumer Watchdog, are saying not so fast in a letter to an Assembly budget subcomittee.

Just the simple fact that the Western States Petroleum Association, the state's biggest and most powerful corporate lobbyist, is now embracing this "market mechanism" should be the kiss of death.

The fact is, this is the ideal moment to let cap-and-trade expire. The reasons are simple: the program has not played a critical role in reducing emissions.

What has worked is utility investment in green energy generation or procurement, increased energy efficiency, clean transportation incentives, and an end to coal-fired power. Even so, for California to slash greenhouse gas emissions by 40 percent below 1990 levels, cap-and-trade isn't the silver bullet. According to the Lawrence Berkeley National Laboratory,current policies will only get us half way to the 2030 goal.

To get to our goal of a 40 percent cut in emissions below 1990 levels and 50 percent renewable energy generation by 2030, we need to use all the tools available, including decentralizing clean generation so that every commercial and apartment building has rooftop solar, the construction of smaller scale clean energy projects from geothermal to wind, and encouraging new models of clean energy procurement.

We need to stop building any new natural gas power plants until we sop up all the extra capacity we've built and don't use. Meantime we need to regulate greenhouse gas emissions at their source.

So let's drop the trailer bill language and other bills to extend cap-and-trade until we publicly examine its true merits. We should ask for proof that the program is making any perceptible difference in state greenhouse gas emissions.

We should ask whether it protects low-income communities of color who overwhelmingly live side by side with polluting refineries, metal processors, and power plants. These sources of greenhouse gas emissions concurrently spew deadly particulate matter and other chemicals. Direct regulation of greenhouse gases could kill two birds with one stone.

We should also ask whether the program encourages economic dependency on continued pollution. 

Here are some facts. We’ve seen no evidence yet that cap-and-trade has cut greenhouse gas emissions in California. Instead, allowing polluters to buy pollution allowances, and also “offsets” in the form of investments into saving forests in Michigan in exchange for continuing to pollute in California, actually undermines a permanent cut in state emissions. 

That’s because companies will continue to pollute as long as it remains cheaper to pay for it than to upgrade their equipment. 

A recent decision by the South Coast Air Quality Management District proves this. The district just decided to phase out a quarter-century old anti-smog cap-and-trade program never really dented ozone levels and air pollution from particulate matter. Prior to that program, what really got results was direct regulation.

On environmental justice, it’s easy to pay lip service to the principle of fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to environmental laws, regulations, and policies. That includes the prevention of their poisoning.

It’s equally easy to ignore those communities that can’t afford high-priced fixers and campaign contributions, trying instead to please the fossil fuel sector that donated nearly $10 million to Brown’s campaigns, causes, and ballot measures, and the state Democratic Party since 2011. 

So far, industry benefits by paying relatively little to keep polluting while poorer communities of color lose. A close look by USC and Berkeley researchers at emissions reductions as a result of cap-and-trade finds that localized emissions from several sectors, including oil and gas production, refining, and electricity generation rose since 2012. 

Funding from cap-and-trade has resulted in $1.2 billion worth of completed projects since 2013, and another $4.8 billion has been appropriated or awarded.  A good chunk of money has gone to supporting Brown’s high-speed bullet train, low carbon transportation, and affordable housing and sustainability projects.  But the question remains whether depending on continued pollution for funding creates incentives for continued emissions.

Let’s not pull a fast one on the public for the sake of keeping the oil and gas industry happy. Let’s look at all the facts first. 

Capitol Watchdog is owned and operated by nonprofit Consumer Watchdog. For more information about Consumer Watchdog visit http://www.consumerwatchdog.org