California Lawmakers Extend Cap-and-Trade to 2030, with Republican Support

The climate bill, a victory for Gov. Jerry Brown, drew opposition from some environmental groups for what they saw as giveaways to the oil industry.

California Gov. Jerry Brown. Credit: Robyn Beck/AFP/Getty Images
California Gov. Jerry Brown has been an outspoken leader on climate change, both in the U.S., where California has led efforts to cut greenhouse gas emissions, and internationally. Credit: Robyn Beck/AFP/Getty Images

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California lawmakers voted Monday night to extend the state’s signature program for cutting greenhouse gas emissions, furthering California’s leadership on climate change. The bipartisan vote provides what many supporters hope will become a model for tackling global warming as the Trump administration works to unravel federal regulations.

California’s cap-and-trade program—the only one of its kind in the country and the second largest in the world—is the centerpiece of the state’s efforts to reduce carbon emissions. It was established by a 2006 law and launched in January 2013 to run through 2020, but its fate beyond that was uncertain until now.

Monday’s vote extended the cap-and-trade program through 2030, but with a few changes that turned some environmental groups against the legislation. Among them, it allows big polluters to continue buying permits to emit more greenhouse gases and it bars some separate regulations on refineries.

The bill passed the Senate 28-12 and was approved 55-21 in the Assembly, earning the supermajority it needed to pass. It now heads to Gov. Jerry Brown for his signature.

A Rocky Road to Approval

When Brown last week announced the legislation to extend the program, three vocal factions emerged: Republicans pleaded with the governor to back away from the proposal, saying it would hurt California’s economy. Progressive environmental groups—including may representing polluted minority communities—bashed the proposals as a giveaway to polluters, particularly the oil industry. Other influential environmental groups applauded the legislation, saying it represented a reasonable balance that represented the best change for moving the program forward.

“It’s been crazy wheeling and dealing all week,” said Danny Cullenward, a researcher with Near Zero, a climate consultancy based at the Carnegie Institution for Science at Stanford University.

The state’s cap-and-trade program reduces emissions by setting a statewide emissions cap that is lowered over time. Polluters are required to either cut their greenhouse gas emissions by a set amount or buy permits, or allowances, from other companies that successfully cut theirs.

Brown, who is attempting to cement a climate legacy after a long career in politics, spent most of the last week appealing to lawmakers, even attending a committee hearing in the state capital on Thursday where lawmakers pored over details of the bill.

Speaking to the committee, Brown described the state’s cap-and-trade program as “the most efficient, most elegant” way to get the job done and reduce the risks that climate change creates, including extreme temperatures, rising seas, increased migration and the spread of vector-borne diseases. The alternative to cap-and-trade, the governor warned, would be command-and-control state regulation that would be more expensive and would be felt more widely.  

“He gave an impassioned plea,” said Louis Blumberg, director of the climate change program for the California chapter of The Nature Conservancy, which supported the legislation. “I think he shored up the Democrats and he opened the door to some Republicans.”

Sweetening the Deal for Industry?

In order to pass, the measure needed a two-thirds majority. Under state law, any bill that raises revenue needs such a “supermajority”—which Democrats have.

But many of them threatened to vote against the extension, aligning with environmental groups, including the Sierra Club, and state-based groups, including the California Clean Air Coalition. Those groups said they did not support the bill, largely because they said it allowed polluters too many allowances to continue emitting greenhouse gas emissions and to continue the use of offsets—the practice of allowing polluters to meet a certain amount of their emissions targets by investing in greenhouse-gas-reducing projects, including those out of state.

“There are far too many allowances, by design, in the system, and the caps are set very high,” Cullenward said. “There’s no question it’s an industry-backed bill. You see a lot of provisions that make the deal sweet to the industry, especially oil.”

Their objections made it necessary for Brown and proponents of the bill to court Republicans, who had opposed the program. In a letter to Brown last week, the Senate Republican Caucus wrote that an extension of the program would deliver a “crushing blow to California residents and small business negatively impacting their quality of life.”

Republicans also objected to a provision that would allow the state Air Resources Board, which oversees the cap-and-trade program, to set a price ceiling for allowances. “This will give that agency enormous power over the state’s economy,” the senators wrote.

On Friday, the leader of the Republicans in the Assembly introduced a separate measure to amend the state Constitution to require legislative approval of how to spend funds generated by the cap-and-trade program. So far, roughly $5 billion has gone into a greenhouse gas fund, with much of it directed toward the state’s high-speed rail project. The amendment was seen as an effort to get more Republicans on board.

“This is definitely intended to make sure that the Republicans who will likely be in the minority in the state for some time have a voice in the spending process,” Cullenward said.

The amendment passed both chambers.

Republicans Help Carry the Vote

Ultimately, eight Republicans in the Assembly voted for the cap-and-trade legislation, and three Democrats voted against it. On the Senate side, one Republican joined the Democrats.

“Republicans and Democrats set aside their differences, came together and took courageous action,” Brown said in a statement after the vote. “That’s what good government looks like.”

Many groups credited Brown’s weeklong crusade for getting the legislation passed.

“This has been a great process,” said Erica Morehouse, an attorney with the Environmental Defense Fund, which supported the legislation, “with people and interest groups from across the spectrum talking to each other, and the governor himself putting enormous personal energy into driving the package forward.”