California’s Climate Partners Get Cold Feet

On Wednesday’s edition of The California Report, correspondent Tom Banse takes the pulse of a vital organ in California’s climate strategy; the regional carbon trading market. The upshot: Reports of its well-being may be greatly exaggerated.

Are they with us?  It’s hard to tell looking at some of California’s supposed partners in the Western Climate Initiative.

WCI includes six states besides California and four Canadian provinces.  Last year the group agreed on a regional “cap-and-trade” plan to reduce greenhouse gas emissions (and not coincidentally to show the federal government how it’s done).  Governors and environmental agencies in the participating states continue to voice support for moving ahead with a regional initiative.  The rub is that the executive branch cannot just snap its fingers and will the plan into being.  A major policy change like this requires state legislatures to adopt the cap-and-trade rules.  And some of those lawmakers definitely have other ideas.

Utah offers the most dramatic example.  Before adjourning for the year, the state House of Representatives voted 52-19 in favor of a non-binding resolution directed at Utah Governor Jon Huntsman:

    “…WHEREAS, experts, including the Congressional Budget Office, warn against cap and trade policies, especially regional programs like the seven-member WCI;WHEREAS, experts also point out that the costs of such programming will be borne by consumers, placing a disproportionately high burden on poorer households; andWHEREAS, no state or nation has enhanced economic opportunities for its citizens or increased real GDP through cap and trade or other carbon reduction policies:NOW, THEREFORE, BE IT RESOLVED that the House of Representatives urges the Governor to withdraw Utah from the Western Climate Initiative.”

Huntsman, a Republican, is apparently ignoring the legislative shot across his bow.

Skepticism is also alive and well in the Arizona Legislature, where this preemptive strike skips the whereases and gets right to the job of handcuffing the executive branch.

    “The [Arizona Department of Environmental Quality] shall not participate in the Western climate initiative that is organized and operated by an affiliation of state governors and one or more provinces of Canada.”

The succinct bill has passed out of state House committee and awaits a floor vote.

Meanwhile in New Mexico, the legislature is done for the year.  Legislation to authorize a greenhouse gas emissions cap was not even broached.  Montana’s legislature is still in session, but all lawmakers in Helena have the stomach to tackle is preparatory measures.  They would set up the regulatory framework for underground carbon storage (aka, sequestration) and require large companies to track and report their carbon emissions.

At his glassmaking plant in southwestern Washington, Steve Smith worries that a regional cap on carbon emissions will render his business unable to compete with suppliers outside the region. Photo by Tom Banse.

At his glass making plant in southwestern Washington, Steve Smith worries that a regional cap on carbon emissions will render his business unable to compete with suppliers outside the region. Photo by Tom Banse.

The governors of Oregon and Washington State served up the full climate enchilada to their legislatures this January only to see it picked apart.

That leaves California as the sole state in the Western Climate Initiative that has so far adopted cap-and-trade as the law of the land.  California’s partners have consistently told us that a national program is the preferable way to regulate greenhouse gases.  Now the “preferable” way is starting to look like the only way.

  • http://ncwatch.typepad.com/ Russell Steele

    And we now know that at the “preferable way” to Cap and Trade at the National level is dead for this year. In the Senate last week, 15 Democrats joined all 41 Republicans to insist that any new cap and tax on carbon energy would require at least 60 votes. Those coal rich states in the middle of the county are not going to let the environmental rogues on each coast destroy their economies. It looks like the only place that Cap and Trade has any potential is in California. The real questions is, are we dumb enough to destroy our economy to solve a non-existing problem of CO2 driven global warming.

    • Craig Miller

      Tom Friedman takes an interesting whack at this in his New York Times column, suggesting that national cap & trade may be a political non-starter and therefore (here’s the part Russell will enjoy) an outright, above-board carbon tax is the better way to go.

  • http://www.usehalf.org Tim

    Looks as if legislators are kicking the can down the road to energy independence once again. With oil prices climbing again, like a crack-addict looking for a fix we will be enriching Iran, Saudi Arabia, Russia (watch Mr. Putin get aggressive again when oil passes $80 per barrel), and Venezuela at our expense.

  • http://ncwatch.typepad.com/ Russell Steele

    Well, I am not for more taxes, but if carbon taxes are forced down our gullets it would be nice if our political leaders were honest and call then what it really is a TAX on our prosperity! Cap and Trade is smoke and mirrors, a menu of hidden taxes. Taxing by cowards.

  • Steve Bloom

    What we are likely to get instead of either cap-and-trade or a tax is regulation, which can be done under existing law without Congressional approval.

  • http://ncwatch.typepad.com/ Russell Steele

    Consider this:

    I am really encouraged by President Obama’s commitment to clean energy and combating climate change. I just have three worries: whether he has the right policies, the right politics and the right official to sell his program to the country. Other than that, things look great!
    –Thomas L Friedman, The New York Times, 8 April 2009

    • Craig Miller

      My comment, above, links to the entire column from which this excerpt is drawn.

  • Ryan

    This morning, President Obama gave a very strong vote of confidence to Congressional carbon cap legislation, arguing that we can no longer delay putting a framework for a clean energy economy in place” and advocating “a gradual, market-based cap on carbon pollution” in order to create clean energy jobs.

    He said, “If businesses and entrepreneurs know today that we are closing this carbon pollution loophole, they will start investing in clean energy now… We all know that the country that harnesses this energy will lead the 21st century. Yet we have allowed other countries to outpace us on this race to the future. Well, I do not accept a future where the jobs and industries of tomorrow take root beyond our borders. It is time for America to lead again.”

    That seems like a pretty strong statement of support, with a clear connection to our economic recovery. He also seems to have signaled some openness to negotiating on timeframes and targets for emissions reductions — a smart acknowledgment of the political realities.

    I think it’s far too soon to close the book on cap and trade, especially with Congressional hearings on legislation coming up next week.