{"id":139,"date":"2014-08-07T12:57:21","date_gmt":"2014-08-07T12:57:21","guid":{"rendered":"https:\/\/dev.ruudmedia.com\/gsc\/?p=139"},"modified":"2017-12-06T13:00:36","modified_gmt":"2017-12-06T13:00:36","slug":"cap-and-trade-faces-first-major-political-test","status":"publish","type":"post","link":"https:\/\/garrysouthconsulting.com\/cap-and-trade-faces-first-major-political-test\/","title":{"rendered":"Cap-and-Trade Faces First Major Political Test"},"content":{"rendered":"
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Prices at the pump are widely expected to go up early next year.<\/p><\/div>\n

California\u2019s cap-and-trade system expands next year. And while the program has already discreetly impacted energy prices, consumers will likely get their first direct glimpse at cap and trade\u2019s effect on markets when it\u2019s applied to transportation fuels.<\/p>\n

That fact has many politicians nervous,\u00a0including a group of Democrats who are urging Governor Jerry Brown to hit the breaks on cap and trade.<\/p>\n

\u2018What The Hell Is Going On?\u2019<\/strong><\/p>\n

There\u2019s no day-to-day cost that smacks you right in the face quite like gasoline. You fill your car up, and you stare straight at the price as it climbs higher and higher. So it\u2019s no surprise that when a recent poll asked whether Californians would keep supporting the state\u2019s cap-and-trade system, even if its new phase leads to higher gas prices,\u00a0support suddenly tanked by nearly 40 points.<\/a><\/p>\n

Democratic political consultant Garry South doubts many people really understand what the program does. \u201cI think it\u2019s just so far out of the typical person\u2019s viewfinder that the impact of this is not going to be known until gasoline prices actually start occurring,\u201d he said,\u00a0\u201cand people say, \u2018Hey what the hell\u2019s going on here?\u2019\u201d<\/p>\n

What\u2019s going on is, in fact,\u00a0a kind of stock market for pollution<\/a>. Companies buy and sell the right to emit carbon dioxide and other greenhouse gasses. Right now, the system covers industrial sources like power plants. And the direct consumer impact has been blunted a bit by rebates and other breaks for power utilities.<\/p>\n

Next year, cap-and-trade expands to cover transportation fuels. Oil companies will be charged that assessment up front, and then pass the cost along to consumers. State officials say that could lead to a price spike of as much as 30 cents a gallon, though most experts think it will actually be around 10 cents. \u201cThe actual price increase will depend on a wide variety of economic, technological and regulatory factors that are difficult to predict,\u201d\u00a0the Legislative Analyst\u2019s Office noted this week.<\/a><\/p>\n

Either way, Republicans and business groups have latched on to the potential price increase, which they\u2019re calling a \u201chidden gas tax.\u201d<\/p>\n

Democratic Pushback<\/strong><\/p>\n

But even some cap-and-trade supporters are having doubts.\u00a0\u201cI represent a district in southern Fresno County that is very poor,\u201d explained Assemblyman Henry Perea, a Democrat. \u201cMy constituents are going to be hurt a lot more than constituents in other parts of the state where the economy\u2019s stronger, and people are making a lot more money.\u201d<\/p>\n

Perea is leading the effort to delay cap-and-trade\u2019s expansion to transportation fuels. Fifteen other Democrats are supporting a slow-down. Perea said the push is about the economy, not the environment. He\u2019s framing the debate as Valley Vs. Coast, Rich Vs. Poor, pointing out the geographic divide between the lawmakers supporting a slowdown, and those pushing to stay the course.<\/p>\n

A three-year delay, he said, would allow policymakers to ask some questions. \u201cHow do we meet the goals of AB 32, how do we reduce greenhouse gasses and how do we do that in a meaningful way through fuels, and not have a large economic impact on everyday people who are struggling to make ends meet?\u201d<\/p>\n

\u2018Higher Prices Discourage Demand\u2019<\/strong><\/p>\n

That may be hard to do, though, since the entire point of cap-and-trade is to make carbon emissions more expensive.\u00a0That\u2019s not the sort of thing politicians say in front of crowds. But Senate President Pro Tem Darrell Steinberg did just that during an unusually blunt speech earlier this year.\u00a0\u201cIt may not be popular to say, but that\u2019s necessary. Higher prices discourage demand,\u201d he told the Sacramento Press Club. \u201cIf carbon pricing doesn\u2019t sting, at least a little bit, we won\u2019t change our habits.\u201d<\/p>\n

Not exactly a populist argument. But the push to delay the cap-and-trade expansion may still come up short. That\u2019s due mostly to a lack of political muscle.<\/p>\n

First, there\u2019s the simple fact that gas prices won\u2019t be affected until January, long after the state\u2019s election.<\/p>\n

The second factor is more powerful: cap-and-trade\u2019s biggest cheerleader is the popular, well-funded Governor Jerry Brown.\u00a0\u201cThis is a path that must be pursued today, the next decade, the next hundred years,\u201d Brown said at a climate change conference in May.<\/p>\n

Brown hasn\u2019t directly weighed in on the push to delay cap-and-trade\u2019s expansion to transportation fuels. But the chair of California\u2019s Air Resources Board, appointed by Brown, has warned the delay would be \u201ca major set-back\u201d to the program, pointing out transportation fuels are responsible for \u201calmost 40 percent\u201d of California\u2019s greenhouse gas emissions.<\/p>\n

Still, political consultant Garry South argued Brown may have a tough time convincing Democrats to keep backing a program that\u2019s costing voters money. \u201cI equate this to Obamacare,\u201d he said. \u201cThis is another fairly massive change in government policy to affect a real problem that people are concerned about, but that is going to have some impact on people\u2019s daily lives. And that always has the potential for a revolt taking place.\u201d<\/p>\n

Brown has acknowledged cap-and-trade and other climate change efforts can be a tough sell.\u00a0\u201cThis is really a complex set of pressures that are not easy to talk about in a sound bite, a bumper sticker, or a one-liner,\u201d he said in May. \u201cIt is something that is yet to fully capture the public imagination,\u201d<\/p>\n

But like it or not, politicians live in the world of one-liners and bumper stickers. Hearing voters say, \u201cYour program costs me money\u201d is a powerful motivator for politicians. And Brown may have to spend a lot of political capital keeping jittery Democrats in line, if predictions about the price at the pump come true.<\/p>\n","protected":false},"excerpt":{"rendered":"

California\u2019s cap-and-trade system expands next year. And while the program has already discreetly impacted energy prices, consumers will likely get their first direct glimpse at cap and trade\u2019s effect on markets when it\u2019s applied to transportation fuels. That fact has many politicians nervous,\u00a0including a group of Democrats who are urging Governor Jerry Brown to hit […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"_links":{"self":[{"href":"https:\/\/garrysouthconsulting.com\/wp-json\/wp\/v2\/posts\/139"}],"collection":[{"href":"https:\/\/garrysouthconsulting.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/garrysouthconsulting.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/garrysouthconsulting.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/garrysouthconsulting.com\/wp-json\/wp\/v2\/comments?post=139"}],"version-history":[{"count":1,"href":"https:\/\/garrysouthconsulting.com\/wp-json\/wp\/v2\/posts\/139\/revisions"}],"predecessor-version":[{"id":159,"href":"https:\/\/garrysouthconsulting.com\/wp-json\/wp\/v2\/posts\/139\/revisions\/159"}],"wp:attachment":[{"href":"https:\/\/garrysouthconsulting.com\/wp-json\/wp\/v2\/media?parent=139"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/garrysouthconsulting.com\/wp-json\/wp\/v2\/categories?post=139"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/garrysouthconsulting.com\/wp-json\/wp\/v2\/tags?post=139"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}