By: Erica Morehouse, Senior Attorney, and Katie Hsia-Kiung, High Meadows Research Fellow
What do we call regularly occurring activities? A routine. Which, let’s face it, can sometimes feel tired and uninteresting. But other times, getting into a routine can mean good things. When you get an all-clear at a check-up with the doctor or dentist, you’re not disappointed, right? Well, here’s another example of a smooth routine: as of May 28, we’ve now chalked up 11 auctions that have taken place as part of California’s cap-and-trade program. And the latest results tell us yet again that a good routine is just what the doctor ordered.
The auction results released today reflect a stable and healthy carbon market, in line with results we’ve seen consistently over several of the past quarterly auctions. (Click here for background on how the auctions work under cap-and-trade). One hundred percent of the allowances offered – which can be used for compliance as early as this year – were sold in the current auction, at a price of $12.29, 19 cents above the minimum floor price set by the California Air Resources Board (CARB). This is only eight cents above the price per allowance seen at the last auction, and the lack of any significant price movement from auction to auction is indicative of the stability and maturity of the market. It also shows that companies are becoming more comfortable with the requirements of the cap-and-trade regulation. To date, none of the current vintage allowances offered in the California auctions have gone unsold.
Hollywood produces some duds, especially right after the end of Oscar season. But virtually all of the environmental scriptwriting that happens in the Golden State has four-star appeal. Californians are trailblazers in protecting the environment and our planet from harm. The state debuted the first-ever vehicle efficiency standards in the 1960s and building efficiency standards in the 1970s and government leaders haven't slowed down since.
Today Californians find themselves ahead of schedule on meeting ambitious 2020 climate pollution goals. The state’s top leaders, from the Governor to the Legislature, are discussing ways to solidify targets, for 2030 and beyond, that would dramatically cut pollution and create a powerful script about public health and prosperity that other states could emulate.
As is fitting for deliberations involving our state’s future, these discussions are built on what could be thought of as “the dirty work” – careful research and planning, and sound analysis. California government leaders have released research they commissioned that analyzes the potential pathways for getting to a lower-carbon future. The research shows that we have the technical know-how to achieve ambitious targets for pollution reduction by 2030 while ensuring robust economic growth. Read More
More Americans, these days, understand the threat climate change presents in the present and in the future, and support taking action. Over 64 percent of Americans and 67 percent of Californians support curbing carbon pollution from existing power plants which the Environmental Protection Agency (EPA) is proposing to do through the Clean Power Plan. The EPA's proposal would set specific reduction targets for each state. In California and other states that are already acting to reduce climate pollution, the early assessments seem to be an upbeat "yes, we can meet those targets and probably exceed them." You wouldn't know that after reading a recent white paper released by Latham Watkins recently on behalf of the Western States Petroleum Association (WSPA), though.
The white paper purports to identify "design flaws" in California's cap-and-trade program. Some of the technical adjustments to the cap-and-trade program suggested in this paper are worthy of careful consideration. In fact, some have been addressed in part or are being considered through the regulatory process at the Air Resources Board. So there doesn’t seem to be any real reason to sound the alarm bells on California’s program at this point in time. Read More
By Erica Morehouse and Larissa Koehler
On this 4th of July week, a time of celebratory fireworks and barbeques, Americans commemorate our country’s hard-fought independence from colonial oppression. Americans are again working for greater independence, this time from fossil fuels that threaten our health, economic prosperity, and future. This week California won a pivotal legal challenge on this front.
Just three days ago, the U.S. Supreme Court refused to review a 9th Circuit Court of Appeals decision upholding California’s Low Carbon Fuel Standard (LCFS). The Rocky Mountain Farmer’s Union and the American Fuel and Petrochemical Manufacturers were seeking to overturn the sound and well-reasoned decision from the 9th Circuit. The High Court’s refusal affirms the legality of a vital policy that decreases our reliance on foreign oil by promoting alternative sources of energy while reducing climate and air pollution from our vehicles.
Governor Brown signed a budget last week that lays out for the first time how to invest the millions from California’s landmark cap-and-trade program ($734 million so far). California has shown another way that cap-and-trade is like the Swiss army knife of environmental policies: a versatile tool known for its usefulness and adaptability.
A Multi-faceted Investment Portfolio
California will invest $850 million over the next year to reduce dangerous climate pollution, a portfolio of investments that will benefit almost every part of California’s economy, going to low-carbon and public transportation, weatherization and energy efficient buildings, water efficiency, waste diversion, and natural resources like urban forests. Substantial investments, at least 25% of the total, will be directed to benefit disadvantaged communities most likely to be impacted first, and worst, by climate change.
Research has shown that the green economy is a solid investment since it already grows faster and is more resilient than traditional economic sectors (the San Joaquin Valley saw a 133% growth in employment in seven “green economy” sectors between 1995 and 2010). The budget also creates long-term guidelines for investing in the green economy as the stream of revenue grows in coming years.
Where the Revenue Comes From
California already limits, or “caps,” total carbon pollution from industries like cement manufacturers and food processors, as well as utility companies. Next year, the cap will expand to include transportation fuels and natural gas providers– two of the biggest polluting sectors in the state. The dollars California is investing are generated by holding these polluters accountable for their impact on the environment. Read More
To be a class valedictorian, you can’t get an A on just one or two tests, or even in just the first quarter of a school year; being at the top means a concerted, continuous effort over the long-term.
For California to continue to be at the ‘head of the class’ on climate leadership, it must move forward on setting climate pollution reduction goals through 2030.
AB 32, the state’s landmark climate law, passed in 2006 and established a statewide emissions goal of reducing climate pollution to 1990 levels by 2020. California is well on the way to meeting that goal through a suite of policies, including cap and trade, which puts an absolute limit on this harmful pollution.
California was ahead of the curve, having passed a law in 2006 to stop unlimited climate pollution in the state. And since 2009 — spurred by AB 32 policies and a guarantee of reductions over a decade into the future — venture capital investments in California’s green sectors have grown by over 30 percent.
State legislators in California did not know what the energy landscape would look like in 2020 when they passed AB 32, but they set a goal and the state’s strong policies have helped to drive the growth of low-carbon energy sources around the country. For example, solar power generation in California has almost doubled in the last year, the cost of solar panel nationwide dropped 75% per watt from 2008-2011, and wind power generation has more than tripled in that time. Read More