Latest on Global Warming Solutions Act
In 2006, the Legislature and Governor enacted the Global Warming Solutions Act, which sets an overall cap on greenhouse-gas emissions (including carbon dioxide, methane nitrous oxide and hydrofluorocarbons) and within that cap allows companies who emit less than their individual credits to sell their excess emissions capacity to companies that would otherwise exceed theirlimits. The law requires total emissionsin the State to be reduced to 1990 levels by 2020—representing a 25% reduction.
Since its passage, theimplementation of the law has undergone challenges which have been turned back by the Courts and at the ballot box. One challenge was by a group of minority-group advocates, who contended that the provision of the law allowing companies to buy extra emissions credits means that low-income communities, which allegedly have a disproportionate number of polluting industries in the communities’ midst, would actually suffer from increased greenhouse-gas emissions even as the overall emissions in the State went down. Another challenge was through proposition 23, which if approved would have put emissions caps on hold until unemployment had been reduced to a much lower level than the presentlevel. As noted, neither challenge was successful.
Now, new controversy has arisen over the law. At least 4 bills (AB 1532, Assemb. Memb. Perez, D-Los Angeles; AB 2404, Assemb. Memb. Fuentes, D-Los Angeles; SB 1572, Sen Pavley, D-Agoura Hills; and SB 237, Sen. Wolk, D-Davis) are now pending which would increase revenues from
the State’s distribution of credits and would allow the State to use those revenues for other, environmentally-related programs.
Business groups, led by the California Chamber of Commerce, vigorously oppose these bills. The business groups argue that the original intent to the Global Warming Solutions Act was not to raise tax revenue and fund additional spending but rather to raise only enough money to enable the State to administer the Act. Business argues that turning the Act into a tax-and-spend measure will only increase burdens on an already-struggling economy and will result in even more companies leaving the State/declining to enter the State than is already the case.
While opponents of the Act have lost previous struggles challenging the Act’s implementation, present opposition to increasing charges and spending related to the Act may resonate with the public. According to the August 2, 2012 edition of the Contra Costa Times, a Public Policy Institute poll conducted from July 10-24 shows that 65% of Californians have little or no confidence that the State would wisely spend money generated by revenues raised. Moreover,the poll shows that 57% of those surveyed know nothing about how permits will be distributed under the Act, while 30% said they had heard a little about this and only 12% professed that they had heard a lot.
You can find the Contra Costa Times’ report at http://www.contracostatimes.com/politics-government/ci_21213313/more-than-half-californians-say-they-know-nothing?source=rss. These numbers, if accurate, suggest that the public-relations battle over whether to raise the revenues originally contemplated under the Act and then distribute those revenues to various programs is a battle winnable by eitherside of the argument.
As if anticipating the controversy of placing additional costs on business, this past Monday, July 30, the Air Resources Board (the entity empower to implement the Act) said it was considering simply giving away an increased number of greenhouse-gas credits during the Act’s first two-year compliance period, 2012-13. The Board indicated it would judge the likelihood of various industries leavingthe State and would attempt to concentrate the free credits on those industries. Among the industries being mentioned for receiving increased free credits are cement production, oil refining and food production.
(Article originally published in my column, "Legal News You Can use", appearing in the Valley News Group of papers, San Fernando Valley, California).
