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Cap and Trade: California's Best Secret

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A new statewide poll in California has mixed results for those of us dedicated to fighting climate change. While the good news is actually great news, the bad news is a call to action.

Let me start on the upbeat side, which recognizes the magnitude of the issue.

The Public Policy Institute of California's 12th annual poll on "Californians and the Environment" found that a strong majority of Californians, 78 percent, thinks that the world's temperature has probably increased over the last 100 years, versus 17 percent who said it probably hasn't. Most respondents, 60 percent, said the effects of global warming have already begun, and even more, 71 percent, support the state law requiring emissions reductions. Their feelings are borne out by hard science, as we know from NASA scientist James Hansen's recent op-ed, in which he definitively links the extreme weather of the past few years with climate change.

More of the encouraging results:
• Majorities favor policies requiring increased energy efficiency for residential buildings, commercial buildings and appliances (77 percent);
• requiring industrial plants, oil refineries, and commercial facilities to reduce emissions (82);
• encouraging local governments to change land use and transportation planning so people could drive less (77);
• requiring all automakers to reduce emissions of greenhouse gases even further in new cars (78);
• and requiring fuel providers to reduce the carbon intensity of transportation fuels at least 10 percent by the end of the decade (79).

But now for the head-scratcher.

California actually already has a law in place to lower emissions: AB32, which aims to reduce carbon levels to their 1990 levels by 2020. But a major mechanism to achieve those goals, a cap and trade program, remains somewhat of a mystery to a majority of state residents. The poll found that 57 percent had never heard of it -- despite the hundreds of news stories on the topic in 2012 alone.

As Californians learn more about AB32, it's critically important that they get the right information.

Well-financed opposition groups are revving up a noisy campaign to block cap and trade from taking effect. Using untruths, half-truths and scare tactics, they're charging that it amounts to a tax, that it would drive businesses out of California, that it would drive up energy costs for consumers.

Let me be clear: Not true. Not true. Not true.

A tax? No. Current state law allows the state to raise revenues from companies engaged in harmful activities. Polluting the air is harmful to public health, causing illness, deaths and higher health-care costs, a huge drain on the family budget and peace of mind. Putting a price on this harmful activity -- much as we put a price on, say, tobacco -- will more accurately account for the true costs of pollution on the state's budget, and will raise an estimated $1 billion in new revenue for California.

Drive businesses away? No. In California's program, a significant portion of the allowances -- 90 percent in the first year -- will be distributed free to utilities and the biggest carbon producers. This will ease the transition toward cleaner operations and give these industries plenty of incentive to remain in the state. If anything, the cap and trade program will bring more business and jobs to California. Look at the success of cap and trade in the northeast states under the Regional Greenhouse Gas Initiative (RGGI): through that program, they've added about 16,000 new jobs in energy efficiency and renewable energy and seen billions of dollars in net economic benefits for the region overall.

Other revenues from carbon allowance auctions will be re-invested in California in the form of support for research and development, commercialization, manufacture and installation of renewable and efficient energy technologies.

Raise energy costs? No. Giving free allowances to utilities in the early years of the program means they won't have to increase electricity rates. If we spend the revenue from the cap and trade program wisely, we might actually see a drop in energy costs.

The RGGI states are saving consumers $1.1 billion on electric bills and $174 million on natural gas and heating bills over the next decade because they invested cap and trade revenue in energy efficiency retrofits. Since the inception of RGGI, Massachusetts has generated $3 to $4 of savings for each $1 invested in energy efficiency.

Those dollars translate into more money in household budgets, which in turn allows those consumers to spend more on other goods and services, helping the overall economy of the region. And energy savings for industrial consumers leads to more efficient and competitive manufacturing and commercial operations -- also a boon for the region.

Despite the clear benefits of policies to address climate change, the federal government and most states have continued to ignore the issue. Not California. AB 32 is the most ambitious program in the United States to combat the pernicious effects of global warming. But the program will only be successful if it is embraced by the California citizens who say they want action on climate change.

I see the PPIC poll as a call to action -- especially for those of us with the luxury of working every day on policy issues we care about. We need to do a better job communicating with our allies communicate about those issues to our allies, policymakers, and the public, to change California's perception of AB32.

California has always been an innovator when it comes to national problem solving, and the poll results suggest it's time to take an aggressive stand against further damage to the atmosphere. The state's approach to the solution, through AB 32, is based on science and economic realities that hold benefits for the environment and for the state economy.

The more that people understand that, and the more we can spread the word, the less anyone will be scared off by half-truths and fear.

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