Sacramento, California– California air regulators updated the rules of a major climate program on Friday in a move that drew widespread protest from environmental groups who said the changes would weaken the program and undermine efforts to reduce global warming emissions.
Meanwhile, the oil industry said the program would still hamper efforts to reduce energy costs in the state, which has a reputation for high prices.
Democratic Gov. Gavin Newsom and the Legislature Last year reauthorization State Cap and trade program Through 2045. The program sets a tapering limit, or “cap,” on the state’s total greenhouse gas emissions from major polluters. Companies must work to reduce pollution, purchase allocations from the state or other companies, or finance projects aimed at offsetting their emissions. Similar programs exist across Europe and Asia, and California’s system is linked to others in Quebec, Canada and Washington state.
Under the changes approved Friday, the state will now give up to $3.5 billion in bonuses to companies — mostly manufacturers and oil refiners — for free if they build projects that help them reduce their emissions. State regulators have said the program is designed to ensure big companies don’t leave the state, but environmentalists say it defeats the purpose of the program, which aims to incentivize companies to reduce pollution so they can spend less on allowances. They also say it will mean there is less money to allocate to programs designed to mitigate or reduce the impact of climate change.
California Air Resources Board President Lauren Sanchez, formerly a senior climate adviser to Newsom, says the changes will allow the state to remain a climate leader.
“Moving forward shows we can respond to affordability concerns and new legislative guidance, while sending a clear signal to Californians, other states and global partners that we remain committed to driving long-term investments in clean energy jobs and reducing pollution in communities,” she said.
California law requires the state to reduce its greenhouse emissions to 40% and 85% below 1990 levels by 2030 and 2045, respectively. Supporters of cap-and-trade say it will help the state achieve those goals.
Newsom signed laws aimed at better aligning lower emissions caps with the state’s climate goals; Allocate funds generated by the program to various climate, housing and transit initiatives; And perhaps promote decarbonization projects. The legislation also changed the name to “Cap and Invest” to emphasize its funding for climate programs.
But how to achieve these goals has been the subject of discussion for months by the Air Board and intense lobbying campaigns by both environmental groups and the oil industry. The initial proposal focused largely on aligning the program with laws passed last year, but was changed to focus more on trying to reduce the program’s costs.
California leaders have faced increasing pressure to focus on affordability when crafting climate policies after two oil refineries declared… Plan to close In the past two years. The Democratic-led state also faces federal challenges to its climate agenda, including action by Republican President Donald Trump. It occurred last year ban a The first rule in the nation Ban the sale of new gas-powered cars by 2035.
The newly approved updates also increase funding from allowance sales by $2 billion from 2027 through 2030 for a program that provides utility bill credits to Californians and allocate approximately $800 million to help companies participating in cap-and-trade limit the program’s costs to Californians.
Before the changes, about $4 billion the state received annually from allowance sales helped pay for climate change mitigation, affordable housing and transportation projects through a pot of money called the Greenhouse Gas Reduction Fund.
Newsom and state lawmakers decide which programs receive money from the fund, and last year they agreed to allocate $1 billion annually to the long-awaited state program. High-speed rail project.
The updates would likely cut the fund’s annual revenue in half, according to the nonpartisan Legislative Analyst’s Office. Danny Cullenward, a climate economist who has been critical of the changes, said this was largely due to a new incentive program for manufacturers and refiners, although board staff disagreed with that.
Air regulators’ deliberations this week extended into a second day after hours of public comment in which climate advocates, legal experts and fossil fuel industry leaders debated the rules’ impact on pollution and people’s wallets, with many urging the board to delay its vote to bring the regulations more in line with state priorities.
Environmentalists, Democratic lawmakers and other critics of the changes say they hamper the state’s efforts to reduce global warming emissions. The new incentive program for manufacturers and refiners has not been tested and lacks sufficient guardrails to ensure it is not abused, Cullenward said.
“The country is not on track to achieve its climate goals,” he said in a press conference on Wednesday. “Reducing our climate finance does not help address consumer cost concerns, nor does it accelerate the pace of emissions reductions.”
The board agreed Friday to postpone the issuance of allowances from the new incentive program until the agency’s executive officer takes a close look at the program and reports back to the board any proposed adjustments.
Michele Parisette, director of legislative affairs at the social justice law firm Public Advocates, said the Greenhouse Gas Reduction Fund cuts would deal a major blow to broad programs that benefit communities across the state.
“These are investments that determine whether a student can afford transportation to school, whether a senior can get to a doctor’s appointment, and whether a family can live near reliable transportation instead of enduring long commutes and high costs,” Parisette said at a news conference Wednesday.
Meanwhile, Judy Mueller, president and CEO of the Western States Petroleum Association, said the updates move the state in the right direction but fail to adequately address concerns about future energy affordability.
“California refineries need long-term certainty to make investments that keep energy reliable and affordable for consumers — and right now, that certainty stops at 2030,” she said in a statement.
Rock Zerman, CEO of the Independent Petroleum Association of California, said the changes will increase California’s reliance on oil imports to meet its energy needs.
“This means higher greenhouse gas emissions, fewer jobs, higher gasoline costs, and lower tax revenues for schools, police, fire and parks,” Zerman said in a statement, using an acronym for greenhouse gases.