Saturday, September 3, 2016

Prof. Ethan Elkind: One More Legislative Hurdle For California’s 2030 Climate Law

Image result for Ann Carlson UCLA Law

As I blogged yesterday, the California Assembly took a giant step in approving SB 32 (Pavley), with one vote to spare for a majority.  But the bill is tied to AB 197, which is up for debate today.  That bill restricts some of the California Air Resources Board’s independence to implement the 2030 law by giving the legislature more oversight.  It also adds in a requirement that all regulations under SB 32 must include a “social cost” accounting that could make command-and-control regulations more palatable than market-based solutions like cap-and-trade.  My colleague Ann Carlson [right] at UCLA Law has more analysis at Legal Planet.

The oil and gas industry has apparently targeted AB 197 as a way to bring down SB 32, plus the state senate will need to reconsider SB 32 given that the assembly amended it after it passed the senate first.  So it could be another nail-biter.

But assuming these bills are approved in their current form, the implications for California’s post-2020 plans will become much more clear.  First, most of the major climate regulations in place now will be able to continue through 2030, without the uncertainty of relying just on an executive order.  The big exception is cap-and-trade.  However, with command-and-control regulatory authority in place from SB 32, the oil and gas industry will have an incentive to try to re-authorize cap-and-trade as a more palatable alternative to direct regulation.  That could make 2017 a big year for that program in the legislature.
In the end, cap-and-trade is just one means to achieving our state’s climate goals, and there are other ways to get there.  Command-and-control may be more effective at guaranteeing actual emissions reductions.  The downside is that this approach could entail greater costs for industry than a market-based program.  And for environmentalists, these site-specific regulations don’t generate auction proceeds like cap-and-trade, which the state is now relying on to fund a host of programs, from high speed rail to low-income housing near transit.

But all of this speculation is premature, as we wait to see what the legislature does with AB 197.  I’ll provide updates as the process moves forward.


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