Pacific Swell | Southern California environment news and trends
Environment & Science

Down to the wire, cap-and-trade carbon market is unpopular with California's manufacturers, refiners, some businesses

AB 32's carbon reduction goals will apply to manufacturers, and refiners like Tesoro in Wilmington.
AB 32's carbon reduction goals will apply to manufacturers, and refiners like Tesoro in Wilmington.

Manufacturers, oil refiners, and other business groups really, really, really don't want the state of California to cap carbon emissions and enable trading for them, a carbon market the state intends to establish in just a couple of months. 

The idea of such a market is to cap carbon pollution and then reduce the amount of it California's market participants send into the air. Some businesses can't (or won't) change their carbon-producing ways; in which case, they will be able to buy credits from other businesses that can. The state plans to auction 61 million credits in mid-November, and recently tested the market function to make sure it would go smoothly. 

Today they're taking their one last shot at the California Air Resources Board, using the public comment at a run-of-the-mill hearing to call attention to what they want. According to the Sacramento Bee's Dale Kasler

"It's our last chance to really comment on this thing before they go forward with the auction," said Gino DiCaro, spokesman for the California Manufacturers and Technology Association.

As for what they want? A lighter load, at the most basic level. They want no capping and trading, unless they want the rules to be rewritten, unless they want free carbon allowances rather than ones they'd pay for at auction. 

In a letter dated September 7, the California League of Food Processors, the California Chamber of Commerce, the California Manufacturers and Technology Association, and the California Business Roundtable wrote to Governor Jerry Brown:

…[T]he cap and trade auction now being implemented by the Air Resources Board goes far beyond that, imposing an additional multi?billion dollar energy tax on consumers and businesses – but doing nothing to further the goals of AB 32…We must ensure that this auction does not raise billions of dollars in new taxes on the backs of California businesses and consumers and does not kill jobs or damage our fragile economic recovery.

The letter goes on to essentially ask for all allowances to be freely distributed (a move, incidentally, which has crippled the European market). But it's a good strategy: public letters like this have sometimes yielded a political benefit: many of the carbon credits that will populate the initial market are free, for example, after years of intense lobbying and lawsuits. 

AB 32 has been law since 2006; these groups have fought it tooth and nail every step of the way; these last-minute appeals aren't surprising. What would surprise environmental groups watching the final two months before the auction would be if business groups squeezed more out of the Air Resources Board.