With the legislature just passing a landmark extension of cap-and-trade through 2030 by a supermajority vote, attention now turns to implementing the state’s major climate programs to achieve the ambitious climate goals for that year and beyond.
Critics frequently argue that efforts to fight climate change hurt the economy and cost jobs. Yet as I blogged about a few weeks ago, research on California’s San Joaquin Valley and then-forthcoming from the Inland Empire show net positive results.
The Center for Law, Energy and the Environment (CLEE) at UC Berkeley Law and UC Berkeley’s Center for Labor Research and Education, working with the nonpartisan nonprofit Next 10, just released the first comprehensive cost/benefit study of climate policies in Southern California’s Inland Empire, one of California’s most environmentally vulnerable regions.
The Net Economic Impacts of California’s Major Climate Programs in the Inland Empire: Analysis of 2010-2016 and Beyond examines the impact of four climate programs in the region, defined here as San Bernardino and Riverside Counties. We chose these counties as a follow-up to our San Joaquin Valley report due to the region’s environmental and economic challenges and because elected leaders from the area have asked questions about the impact of climate policies on their constituents.
The report analyzed not only the benefits of California’s climate and clean energy policies, but also compliance expenditures, investment expenses, and other costs.
After examining the data and using advanced modeling software, we found that the four key California climate and clean energy policies, including cap and trade, the renewables portfolio standard, distributed solar policies and energy efficiency programs (among the most important in California’s suite of climate policies) brought a net benefit of $9.1 billion in direct economic activity and 41,000 net direct jobs from 2010 to 2016 in the region, some of which are permanent and ongoing and many of which resulted from one-time construction investments.
We found that the overall benefits to the Inland Empire are likely to continue and grow through 2030, as the state strives to meet its newly legislated climate goals for that year, via SB 32 (Pavley, 2016), SB 350 (De Leon, 2015), and now AB 398 (Eduardo Garcia, 2017). Those efforts will require at least 50% renewables by 2030, a doubling of energy efficiency in existing buildings, and a robust cap-and-trade program through 2030.
Based on the findings in the Inland Empire, we suggest that policy makers wishing to continue these benefits focus on policies that reward cleaner transportation in this region, help disburse cap-and-trade auction proceeds in a timely and predictable manner, and create robust transition programs for workers and communities affected by the decline of the Inland Empire’s greenhouse gas-emitting industries, including re-training and job placement programs, bridges to retirement, and regional economic development initiatives.
You can access the full report via CLEE or Next 10’s websites and check out media coverage in Southern California’s Press-Enterprise and on KPCC, KFI, and KVCR radio.
Most of us throw out old food all the time. But combined with the food waste from grocery stores, restaurants, and other businesses, it’s become a serious economic, environmental, and even moral problem. Astonishingly, researchers tell us that 40% of all food grown in the United States each year winds up in the trash.
This waste occurs while nearly 1 in 5 children in California goes to bed hungry each night. The economic losses are significant, and the waste also creates an environmental problem, as the decaying food emits potent greenhouse gases.
So what can we do differently on farms and in restaurants, grocery stores and our own homes to reduce the amount of food wasted? Join us tonight on City Visions when we explore the topic of food waste and find out what several Bay Area organizations are doing about it.
Guests will include:
- JoAnne Berkenkamp, Senior Advocate in the Food and Agriculture Program of the Natural Resources Defense Council
- Chris Cochran, Executive Director of ReFED
- Mary Risley, Founder of Food Runners
You can tune in live at 7pm on 91.7 FM in San Francisco or stream it on the City Visions website. Feel free to send me your questions for the panel directly. Hope you can join the conversation!
Last night the California Legislature scored a super-majority victory to extend the state’s signature cap-and-trade program through 2030. It was a rare bipartisan vote, although it leaned mostly on Democrats. My UCLA Law colleague Cara Horowitz has a nice rundown of the vote and its implications, as does my Berkeley Law colleague Eric Biber on the bill.
Lost in the politics is what this means for high speed rail. The system has a fixed and dwindling amount of federal and state funds at this point, and it’s relying on continued funding from the auction of allowances under cap-and-trade to build the first segment from Fresno to San Jose and San Francisco.
If the auction was declared invalid or ended at 2020 with depressed sales, the system would be in major jeopardy of collapsing before construction even finished on the first viable segment. Now it has some assurance of access to funds.
But of course it’s not that simple. The bill that passed yesterday has diminished available funds set aside for the programs that have been funded to date with cap-and-trade dollars. As part of the political compromises, more auction money will now go to certain carve-outs, like to backfill a now-canceled program for wildfire fees on rural development.
And another compromise may put a ballot measure before the voters, passage of which would require a two-thirds vote for any legislative spending plan for these funds going forward. That means Republicans — who generally hate high speed rail — would be empowered to veto future spending proposals.
Still, high speed rail once again has a lifeline, as do the other programs funded by cap-and-trade, such as transit improvements, weatherization, and affordable housing near transit. It’s an additional victory beyond the emissions reductions that will take place under this extended program.
Since 2009, I’ve been working with UC Berkeley and UCLA Schools of Law on an initiative to find business solutions to combat climate change, with a focus on implementing California’s world-leading climate change laws. Bank of America has been our steadfast partner and sponsor; the Bank is interested in the industries that will grow in the effort to reduce greenhouse gas emissions, with California as the perfect laboratory.
In that time, we have:
- produced 18 policy reports;
- held multiple conferences, workshops, webinars, lunch briefings (from Fresno to L.A. to Sacramento to Washington DC);
- written numerous op-eds;
- testified in multiple legislative hearings;
- launched a new website to house all of our research and solutions; and
- had our work covered in media outlets from the New York Times to local television and radio.
While the work is rewarding in and of itself, we ultimately do it to help get climate policy right in California and to show that smart climate policies are good business, too. After all, if it can work in California, it can work anywhere and inspire other jurisdictions to follow suit.
So in a recent LinkedIn piece, I decided to describe some of this work, the impact it has had on policy, and the resulting economic and job benefits from key policies. As more of the world turns to California for climate leadership, my hope is that the resources in this initiative will be helpful not just here in our state but to the world beyond.
The California Legislature may vote on reauthorizing California’s cap-and-trade program as soon as Monday. The program needs a two-thirds vote to inoculate the auction mechanism to distribute allowances from legal challenges, which is a heavy political lift that has required a lot of compromise and concession.
But in the midst of the debate, state legislators are lacking crucial data on the impact of the program to date on some of California’s most environmentally and economically disadvantaged regions, particularly the San Joaquin Valley and Inland Empire.
To fill that gap, CLEE and the UC Berkeley Labor Center teamed up earlier this year to release a report on the economic impacts of California’s major climate programs on the San Joaquin Valley. And using the same methodology and publicly available data, we are soon to release a follow-up report on the Inland Empire, both sponsored by Next 10.
But with the vote looming on cap and trade, we wanted to release our findings on the impact of cap and trade on the Inland Empire in particular, as well as summarize our previous findings from the Valley report. Our new op-ed in yesterday’s Daily Bulletin summarizes the data:
After accounting for the costs and loss of jobs in industries required to comply with cap and trade, as well as the benefits from investments of cap-and-trade revenue, we found in the Inland Empire, the program had net economic impacts of $25.7 million, $900,000 in tax revenue and net employment growth of 154 jobs.
These net benefits do not account for funds that have been appropriated but have not yet been spent. Since only about one third of appropriated funds have so far been spent on projects in these regions, the positive impacts will only grow. When we account for the expected benefits after all funds collected are reinvested in projects, the net economic benefit reaches nearly $123 million, with 945 jobs created and $5.5 million in additional tax revenue.
We found even greater net positive impacts in the San Joaquin Valley, totaling $202 million in economic activity, along with $4.7 million in state and local tax revenue. The program also created 1,612 net jobs in the Valley. When including expected benefits after all funds collected are reinvested in projects, this figure balloons to nearly $1.5 billion in economic benefits. These projects will create 7,400 total jobs, including more than 3,000 direct jobs in the San Joaquin Valley.
We hope this information will be useful to the public and to legislators as they decide on the program’s fate beyond 2020. I will post again on the report once it’s available for release.
California’s cap-and-trade program likely can’t survive in its current form after 2020 without a two-thirds vote of the legislature to reauthorize it. That’s because a central feature of the program involves auctioning allowances to pollute, which courts are likely to consider to be a “fee” that requires two-thirds approval of the legislature under 2010’s voter-approved Prop 26.
With that high hurdle, advocates have been scrambling to get the needed votes. Despite having a Democratic super-majority in both houses of the legislature, a number of key Democrats are opposed to (or at least skeptical of) cap and trade, because they fear the program allows polluters to continue polluting disproportionately in “environmental justice” communities — predominantly low-income communities of color.
So advocates have had to seek a bipartisan two-thirds solution, which requires oil-and-gas industry support. And that means major concessions to the fossil fuel industry.
But at the same time, the fossil fuel industry has lost leverage. The passage last year of SB 32, to extend the greenhouse gas reduction goals from 2020 to 2030, and AB 197, which allows for direct command-and-control regulation of polluting facilities, has put their back against the proverbial wall. And they recently lost their lawsuit challenging the legitimacy of the current auction mechanism. Industry would rather have the more “flexible” cap-and-trade system now, where they can seek reductions in the most economically efficient manner.
So there are some industry concessions and some environmental wins in the apparent consensus bills unveiled on Monday. First, AB 398 would officially extend the cap-and-trade program to 2030. In a big win for industry, the legislation would prevent local air districts in California from imposing their own limits on greenhouse gas emissions from sources already covered under cap and trade. As the San Francisco Chronicle describes, it would “effectively kill long-running efforts by Bay Area air quality regulators to place hard limits on emissions of carbon dioxide and other heat-trapping gases from local oil refineries.”
In another win for industry, the bill puts a ceiling on the price of allowances (permits to emit one metric ton of greenhouse gases under the cap). To date, allowance prices have typically hovered at or near the current price floor. Consider the ceiling a gift to industry by giving them a maximum penalty they’d have to face for polluting.
But in a concession from industry, the bill would reduce the use of “offsets” (projects outside of the capped facilities that help reduce greenhouse gases) and require that half of them occur in California or have a direct environmental impact on the state. The use of offsets weaken the sale of allowances by giving industry a cheaper out, so this is good news for the integrity of allowances.
Finally, the bill would prioritize the kind of state programs that could receive funding from the auction proceeds. The money must first go to efforts to control toxic air pollution from mobile or stationary sources like factories and refineries, second to low-carbon transportation projects, and third to sustainable agriculture programs.
This last provision is potentially a mixed bag on impacts, since it doesn’t necessarily track the highest emitting sources. But it may allow continued funding for high speed rail, which is on financial life support and at this point is only propped up by cap-and-trade proceeds. The governor doesn’t want to see the project die, which was part of his motivation for getting the auction reauthorized.
Meanwhile, AB 167 is a must-pass companion bill would require stricter air pollution monitoring around industrial facilities and tougher penalties for violating pollution regulations. This measure allows environmental justice advocates to claim some victory be securing the promise of direct emissions reductions from nearby polluters.
A number of environmental groups are not happy with the concessions, although the bill has received support from the likes of Environmental Defense Fund and tepidly from billionaire environmental activist Tom Steyer.
For my part, I think it’s an okay but not great deal. It’s probably worth continuing the state’s cap-and-trade program, if nothing else to try to prove the concept in case it can be workable in other states and nationally. And the auction proceeds provide some useful funding for everything from weatherization to transit to low-income housing.
Meanwhile, the state still retains a lot of authority over polluters via SB 32 and the state implementation of the Clean Air Act, and multiple complementary policies are still needed and remain in effect to reduce greenhouse gas emissions, such as the renewable energy, energy storage, energy efficiency, and electric vehicle mandates.
The vote could come as soon as Thursday, so stay tuned for the results.
UPDATE: The vote was just postponed to Monday, which could mean they’re having trouble getting the needed votes.
Electric vehicles (EVs) represent one of the most promising clean technologies, in terms of their potential benefits for the electricity grid, local air pollution, and reducing the greenhouse gas emissions that cause climate change. Not to mention they’re fun to drive.
The good news is that as EV prices have dropped by nearly half the last few years, the number of Californians driving them has gone way up, with almost 300,000 EVs now on the state’s roads (up from about 10,000 just five years ago). The batteries in these vehicles can be used to soak up surplus renewable energy, and the use of electricity instead of petroleum as a fuel means significant reductions in air pollution and greenhouse gas emissions.
But all this progress is threatened by the lack of reliable and accessible charging stations, particularly for the 40 percent of Californians who live in apartments, townhouses, and condominiums without dedicated on-site parking spaces with charging capability (including even just a simple wall outlet).
Researchers estimate that California may need up to 220,000 publicly accessible charging ports by 2020 to meet projected demand, way beyond the roughly 12,000 available today. Hundreds of thousands of additional charging stations may be necessary at those multi-unit dwellings.
Private investment alone won’t be enough to make it happen: the business model for charging stations is currently not strong enough to attract sufficient private capital. Simply put, many charging stations are too expensive to build and operate right now, without dependable near-term revenue to cover costs and produce a profit.
“Plugging Away” Report Releasing Today
To address the challenge, UC Berkeley and UCLA Law convened experts from the EV charging sector in 2016, including automakers, utilities, and charging companies, as well as government officials, academics, and nonprofit advocates.
Based on those discussions, the law schools are today releasing the new report “Plugging Away: How to Boost Electric Vehicle Charging Infrastructure.” It is the eighteenth report from our Climate Change and Business Initiative, generously supported by Bank of America since 2009.
Among a number of detailed solutions, the report recommends:
- More robust and strategic electric utility investments in charging infrastructure, at least for any new wiring to the charging station, in key locations such as workplaces, multi-unit dwellings, and fast-charge “plazas” to stimulate maximum EV convenience and adoption;
- Revised commercial electricity rates to encourage charging at the right places and times to best meet grid needs, including options to reduce high demand charges related to peak usage at remote fast-charging sites; and
- Targeted rebates and grants for office and multi-unit dwelling building owners to install charging stations, as well as expedited permitting to allow more curbside charging.
Free Lunch Event & Webcast at UCLA Law, Noon to 1:30pm
To launch the report, UCLA Law is hosting a free lunch event from noon to 1:30pm today, featuring a keynote by California Energy Commissioner Janea Scott and a panel including:
- Tyson Eckerle, Governor’s Office of Business and Economic Development (GO-Biz)
- Terry O’Day, EVgo
- Dean Taylor, Southern California Edison
For those not in the Los Angeles area or unable to attend in person, the event will be webcast live.
I hope you can tune in or join. With a more robust and reliable charging network, policy makers and businesses can help ‘pave the way’ to more electric vehicle adoption in California and beyond.
The California Chamber of Commerce has just lost its case against the state’s cap-and-trade auction, with the news from the Los Angeles Times that the California Supreme Court has refused to hear an appeal from the state appellate court. This means the auction mechanism in the cap-and-trade program is valid at least through 2020.
As we’ve covered on this blog before (most recently with Ann’s post from last fall, which links to our other posts), industry plaintiffs had argued that the auction represented a tax that required two-thirds approval of the legislature, under Proposition 13. But the auction isn’t like a tax, the courts have now consistently and definitively ruled, allowing the current mechanism to continue through 2020.
After 2020, the auction may be subject to a different legal analysis under 2010’s voter-approved Proposition 26, which legally converted many “fees” to taxes and therefore extended the reach of the two-thirds bar. AB 32, the law that authorized the cap-and-trade program, passed in 2006 and therefore wasn’t subject to Proposition 26, which came later. Since AB 32 authorized the program specifically through 2020, it can now continue at least through that year without needing two-thirds vote in the legislature or facing further court challenges.
This is a significant win for the state for two reasons: first, it allows the auction to continue, which is a crucial feature for distributing allowances to pollute under the cap. It holds businesses economically accountable for on-site emissions reductions, rather than allowing them to get allowances for free (although there may be other, more convoluted ways that they could purchase auctions and avoid court challenges). Perhaps more importantly from a political perspective, the auction generates proceeds for the state that have been used to fund everything from high speed rail to transit and weatherization for low-income households.
Second, it means industry loses a bit of leverage to shape cap-and-trade going forward in the legislature, which is debating proposals to extend the program now. The case has loomed in the background on these debates, with industry potentially wielding it as a negotiation piece to extract concessions, implicitly if not explicitly. Coming on the heels of the passage of SB 32 and AB 197 last year, which directed more command-and-control type approaches to emissions reductions at regulated facilities, it represents another loss of leverage for industry going forward.
Meanwhile, cap-and-trade post-2020 debates are heating up at the Capitol, with the governor determined to extend the system before the August auction and solidify the program’s place through 2030, in part to ensure a continued revenue stream for high speed rail. Industry is now on board as well (although they’re trying to weaken the program as much as they can), as they’ve lost their fall back option of killing the auction completely in court and simultaneously face much more draconian command-and-control regulation if cap and trade doesn’t continue.
It makes me wonder what might have happened had the Obama Administration chose to use the Clean Air Act more aggressively back in 2009, which (if successful in court) would have made cap-and-trade at the federal level similarly more appealing for industry.
We’ll never know. But in the meantime, we can watch the political dynamic play out at the state level here in California, with one less card for industry to play at the negotiating table, courtesy of the state Supreme Court.
Few clean technologies are as central for meeting climate change goals as electric vehicles. Yet in places like California, which leads the U.S. with approximately 300,000 EVs on the road, the needed charging infrastructure is lagging.
Analysts estimate that the state will need as many as 220,000 publicly accessible EV charging ports by 2020 to meet demand, well beyond the roughly 12,000 available in the state today. So how will California meet this challenge?
Join the UCLA and UC Berkeley Schools of Law for a free lunchtime forum on policy options to boost California’s EV charging infrastructure on Thursday, June 29th at UCLA Law. The two law schools will release a major joint report at the event as part of the Climate Change and Business Research Initiative, entitled “Plugging Away: How To Boost Electric Vehicle Charging Infrastructure.”
WHEN: Thursday, June 29th, 12 noon to 1:30 p.m. (registration and lunch begin promptly at 11:30am).
WHERE: Room 1447, UCLA School of Law, 385 Charles E Young Drive, Los Angeles, CA 90095
Keynote Address:
The Honorable Janea Scott, Commissioner, California Energy Commission
Panel presentations:
- Tyson Eckerle, Office of Governor Jerry Brown, Business and Economic Development (GO-Biz)
- Terry O’Day, EVgo
- Dean Taylor, Southern California Edison
RSVP by Friday, June 23rd. Space is limited, and MCLE credit is available.
Funding for the Climate Change and Business Research Initiative is generously provided by Bank of America.
Republicans tend to be skeptical of climate science and actions to mitigate greenhouse gas emissions out of concern for the negative economic impacts and the potential for more government regulation.
But the reality is that fighting climate change represents a generational business opportunity for the United States. As I wrote recently, the required action will necessitate huge investments in everything from the electricity grid to the automobile sector.
Renewable energy in particular may be the “gateway drug” to get Republicans to support these investments. Take wind energy, as the New York Times reports:
The five states that get the largest percentage of their power from wind turbines — Iowa, Kansas, South Dakota, Oklahoma and North Dakota — all voted for Mr. Trump. So did Texas, which produces the most wind power in absolute terms. In fact, 69 percent of the wind power produced in the country comes from states that Mr. Trump carried in November.
So it’s not surprising that representatives and senators from these states have been some of the strongest supporters of federal tax credits for renewables in congress.
Overall, the electricity sector is one area where states have a lot of sovereignty to push for low-carbon technologies. Blue states in turn can encourage red-state action, which will help change the politics on clean technology in these states, as the clean tech industries mobilize and lobby their representatives.
A good example is the effort to integrate California’s grid with western states, as the New York Times story describes:
California and other Western states are discussing linking their electricity markets more closely, which would allow more renewable energy generated in the red states to flow to California consumers — and move California money into the pockets of red-state landowners.
Republican-led Wyoming, the nation’s largest coal-producing state, could be a prime beneficiary, with a proposed wind farm that would be one of the biggest in the world. The governors of Wyoming and California are discussing a deal, though both are nervous about giving up some control of their electricity markets.
That plan is held up by politics in California and a fear among these other states of having their grids controlled by California interests. But for climate advocates, it could be not only a long-term energy strategy, but a political one as well.
