Legislative fault lines came to the fore when California Governor Jerry Brown tried to extend the cap and trade system in the state. It is proposed that the action will be effective beyond 2030. Bill AB398 contains a number of elements to make it appealing to oil industry along with its ancillary commerce. It also serves as a sweetener for political allies like the moderate Democrats.
Cap and trade system
As per the cap and trade system, the state sets a yearly limit, which is termed as a cap, on the greenhouse gas emissions of the state. This bill will compel businesses to purchase an allowance applicable to every ton of gas emitted by their commercial activity. The number of permits in any year matches cap. Both are reduced every year, lowering the emissions. A business can purchase allowances via quarterly auctions. The latter can be administered by the state or by each other.
The AB398 bill will restrict future price of the cap and trade permits. This provides businesses that are covered by cap and trade system the assurance of not getting stymied by rising allowance prices. This is possible as California will try to cut its greenhouse gas emissions during the coming decades. As per the law prevalent in the state, it must cut back emissions by about 40 percent within 2030.
Advocates of environmental justice, who studied the pollution impact on minority and low-income communities, have slowly increased their influence in recent years. To their minds, the extension of the cap and trade bill is a step backward. This opinion is applicable for both the climate efforts done by the state and by individuals residing near large refineries and other big polluting units. These environmentalists have noted that Governor Brown is striving to position the California state as the climate action bastion in the United States. This is happening at a time when President Trump is intent on destroying the anti-global warming efforts.
It is to be noted that the system is the centerpiece of climate battle waged by the state. California has tried to persuade other states to join, even the international ones. Only Quebec state in Canada has. A number of environmentalists wanted higher floor for the allowance prices. They did not prefer a ceiling.
Western States Petroleum Association representatives, the principal lobbying group for the oil industry in Sacramento, declined to provide any information. Governor Brown tried to pass but failed on extending cap and trade system in 2016. He encountered resistance from business-friendly Democrats and also from environmentalists holding the perception that this scheme is actually a license for polluting the environment.