A group of employer and taxpayer organizations has formally asked Gov. Jerry Brown to delay the scheduled Nov. 14 auction of greenhouse gas allowances long enough to “fix” the state’s cap-and-trade program.
The auction would sell to regulated businesses the right to emit greenhouse gases in a scheme that would lower annually the permissible total emissions. The theory is that, over time, companies would switch to technology that emits less, reducing greenhouse gases emitted in California. Of course, ramped-up use of coal in China and other expanding industries worldwide would more than offset any savings, generated at great cost, in California. The Register’s Editorial Board opposes the law as an unwarranted tax, an ineffectual tool and too costly to the economy.
The request last week was in a letter to Mr. Brown by the AB32 Implementation Group, saying it is “an urgent problem that needs to be addressed immediately.” At press time, the governor apparently had not responded, but if Mr. Brown’s prior statements are any indication, it is likely the auction will proceed as planned.
The AB32 Implementation Group is a coalition of large and small businesses that seek to ensure greenhouse gas emission reductions under the state’s Global Warming Solutions Act, known as Assembly Bill 32, “are achieved while maintaining the competitiveness of California business and protecting the interests of consumers and workers.”
Studies indicate that implementation of AB32’s many regulations, including the cap-and-trade auction, will harm California’s economy. The state’s own independent Legislative Analyst’s Office “has confirmed that an auction is not necessary to reach” the law’s reduction goals, the letter reminded Mr. Brown.
Critics alleged billions of dollars paid for “allowances” in reality amount to a tax to bail out a state in dire fiscal condition. While AB32 allows auctioning off these emission rights, it also restricts how the money may be used. Gov. Brown has suggested some of the billions could be diverted to help finance California’s high-speed-rail project, which is tens of billions short of what is projected to complete it, a proposal that also has drawn criticism.
While the AB32 Implementation Group says reductions should be achieved, it should be done “in a manner that will protect jobs and the economy,” wrote the group’s co-chair Dorothy Rothrock in the Oct. 16 letter to Gov. Brown.
Ms. Rothrock’s letter asks the governor to delay the auction, in the manner of “your recent leadership in directing (the California Air Resources Board) to suspend summer gasoline blend requirements to avoid ‘unacceptable cost impacts on consumers and small businesses.'”
The Register repeatedly has criticized AB32 as not only costly and unneeded, but a solution to a nonthreatening situation. The AB32 Implementation Group takes a middle ground between our position and the state’s zealotry, merely asking for a delay to review the regulations’ impact before subjecting businesses and consumers to “high and unnecessary costs.” Mr. Brown should heed the advice.
