California bill seeks to extend cap-and-trade program

Dive Brief:

A bill introduced in the California legislation would extend the state’s greenhouse gas emissions cap-and-trade program.
The bill would no longer limit the applicability of the GHG cap-and-trade program to an end date of Dec. 31, 2020.
The bill, AB 151, aims to support the state law that requires GHG emissions to be cut by at least 40% below 1990’s level by 2030.

Dive Insight:

California’s current GHG cap-and-trade program was passed without the supermajority in both houses required for a tax bill. Critics of the law are battling it, arguing that it is, in fact, a tax. In the summer of 2016, Gov. Jerry Brown (D) announced a plan from the California Air Resources Board to extend the cap-and-trade program through 2050.

The proposed plan calls for reducing GHG emissions 40% below 1990 levels by 2030. Business groups challenged the plan, saying CARB does not have legal authority to conduct an auction. As the debate continues, lawmakers appear to be tackling it through legislature.

Democrats won enough votes in the November elections to support a supermajority. Gov. Brown is hoping that political support will be enough to protect the state’s cap-and-trade program from political attack.

Critics of the cap-and-trade program argue that it does not have a legal basis to extend beyond 2020. If passed, AB 151 could make the cap-and-trade program permanent. But Brown runs a risk in bringing the issue to a vote. If he can’t muster a supermajority, the emissions cap program could face a politically uncertain future.