Comment on CARB’s 2030 Target Scoping Plan Update Discussion Draft
Michael Wara and Danny Cullenward submitted a letter to CARB to comment on technical inadequacies, unbalanced evaluation of carbon taxes, and other shortcomings in the 2030 Scoping Plan Discussion Draft, highlighting six issues:
• Analysis of current program performance. The Discussion Draft relies on a superficial assessment of why California’s greenhouse gas emissions trajectory is on track to reach the 2020 Target. Rather than rely on optimistic thinking, CARB and stakeholders need to take a hard look at all of the factors that have driven performance to date. While some policies have been very successful, low emissions (and low carbon market prices) are also partly the result of low economic growth after the great recession. A robust analysis of factors contributing to and detracting from the successful trajectory California now enjoys is critical for planning the next phase of California climate policy.
• Cumulative vs. annual emissions accounting. As we have previously commented, CARB appears to approach the 2030 scoping plan process with the goal of achieving cumulative emission reductions between 2021 and 2030, as calculated against a counterfactual baseline scenario. CARB’s Draft Scoping Plan Scenario extends cap-and-trade and allows banking of surplus allowances for compliance in future years. This will result in 2030 emissions that are substantially higher than the 2030 Target. As a result, we believe CARB’s use of cumulative emissions accounting does not actually address the requirements of SB 32.
• Post-2020 carbon prices. As we have previously commented, CARB’s models and analytical methods are insufficient to reliably estimate a range of carbon prices necessary to achieve the 2030 Target. Combined with a superficial assessment of program experience to date that takes low carbon prices for granted, the Discussion Draft suggests an unrealistically small role for post-2020 carbon pricing across both the draft 2030 Target Scoping Plan Scenario and Alternative 2 (Carbon Tax). We urge CARB and stakeholders to conduct a robust analysis and take seriously the possibility that the 2030 Target requires significantly higher carbon prices than are present in today’s cap-and-trade program.
• Discussion of existing carbon taxes. CARB’s discussion of existing carbon taxes fundamentally misrepresents the performance of British Columbia’s carbon tax policy. It relies not only on websites that aim to discredit British Columbia’s efforts, but also one that proudly rejects climate change science. Where CARB does rely on credible analyses of the British Columbia carbon tax, the Discussion Draft nevertheless mischaracterizes the conclusions of the official reports it cites. Whatever CARB’s ultimate policy preferences, the Discussion Draft’s consideration of carbon taxes falls well short of the standards the nation’s leading climate regulator has met in past rulemakings and should strive for here.
• Comparison of the draft 2030 Target Scoping Plan Scenario and Alternative 2 (Carbon Tax). An evenhanded comparison of the two carbon pricing alternatives under consideration is essential for CARB and stakeholders alike. But the presentation of pros and cons is both inaccurate in a number of important respects and strongly biased against the use of a carbon tax to achieve California’s 2030 Target. We provide a more balanced set of comparisons based on CARB’s own criteria, illustrating how well designed cap-and-trade and carbon tax policies can achieve similar outcomes.
• A Detailed Proposal for a Carbon Tax. We believe that part of the reason CARB has failed so far to properly evaluate a carbon tax alternative to its preferred policy of extending cap-and-trade is that it has not actually considered any tax proposal designed to facilitate compliance with a specific annual emissions target. We present a simple policy design that could help achieve the goals laid out in the scoping plan while also creating important opportunities to collaborate with other jurisdictions, most notably Canada under the Trudeau Government.
Disclaimer: we are writing in my personal capacities only, not on behalf of our employers, affiliates, or any other organizations.