The Washington Post ran a story on the new climate bill to overhaul California’s cap-and-trade system for greenhouse emissions, quoting Near Zero’s Danny Cullenward as well as Near Zero collaborator Michael Wara, a Stanford Law School professor.
Now, a new proposal, announced Monday, would replace California’s current cap and trade carbon pricing program, its flagship effort to reduce the state’s greenhouse gas emissions, with an updated — and, according to supporters, more socially progressive — scheme.
“The state and the federal government were until recently working hand in hand on these issues,” said Danny Cullenward, an energy economist, lawyer and research associate with environmental research organization Near Zero, who helped advise the development of the new proposal. “In an era of the Trump administration, carbon pricing is one of the few tools that the state has to [use] whatever the federal government does.”
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Additionally, the revenue [the cap-and-trade system] has raised for the state through the sale of emissions allowances has recently begun to slow — suggesting to some experts that a different kind of program might be called for in the future.
“The last five quarterly markets, the state has struggled to sell the permits it wanted to make available,” Cullenward said. “Prices are low, revenue isn’t coming in, and there’s frankly a lot of challenges associated with that market structure.”
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The exact details of this program, and how the money would be distributed, are still in the works — the proposal also establishes an advisory committee to help make those decisions. But the program is likely to particularly benefit low-income communities, Cullenward noted.
“Because poor people use relatively little energy and emit relatively little carbon, it turns out these kinds of processes … tend to produce a progressive impact on people who live in the state,” he said.
And according to Michael Wara, an energy and environmental law expert at Stanford University, who also advised the development of the proposal, moving to extend the state’s cap-and-trade program, rather than allowing it to expire, is an ambitious move in the first place.
“This is really a discussion about what do we do next, and any program that comes next is going to have to be enacted by the legislature,” he told The Washington Post. “The alternative to not extending carbon pricing is really command and control regulation.”
The proposal also requires more legislative effort than the previous cap-and-trade program did when it passed. The original program was established by a simple majority vote — but since then, “the voters approved changes to the rules on how new programs that raise revenue can be passed,” according to Cullenward. The new proposal will likely require a two-thirds majority vote to pass — a requirement that could make the legislation’s passage more challenging, but will also insulate it against legal challenges in the future, he said.
For the time being, there have been few other proposals discussed that would address a replacement for the current program, Cullenward added. Absent another plan, he said, his concern would be that after 2020 “nothing happens” — an even more significant concern for environmentalists at a time when the federal government has begun rolling back numerous environmental and climate regulations established under the Obama administration.