The polarizing effect of cap-and-trade

Testimonies against cap-and-trade in Sacramento, CA.

Last week a crowd of residents from Richmond, Huntington Beach, and Hunter’s Point, to name a few, gathered at the California State Capital in Sacramento to rally against the cap-and-trade proposal in the Global Warming Solutions Act (AB32). Most of the protestors were organized by Communities for a Better Environment (CBE), and their testimonies were heart breaking. They told stories about their children with asthma and other pollution-related health problems associated with living in close proximity to some of California’s largest refineries. 

There really isn’t an argument against access to clean air. We can probably all agree that’s everybody’s right and the government’s job to protect it. But who are the real culprits here, and is cap-and-trade really a ‘trade-off’ to capping pollution?

As many of you have heard, despite a long day of opposing testimonies, on August 24^th, California's Air Resources Board (CARB) approved the AB32 Scoping Plan, with cap-and-trade included. Until this new legislature takes effect, the jury is still out on how effective cap-and-trade will be for pollution levels in general, and what this will do for citizens most directly impacted by pollution where they live.

When some of the greatest environmental organizations, such as the Natural Resource Defense Council (NRDC), Sierra Club, and Environmental Defense Council (EDF), are in favor of cap-and-trade, there’s got to be some reasoning behind its methodology. The concern, of course, is that cap-and-trade will let polluters off the hook, and this is why feedback loops need to work in sync with the implementation plan. Tim O’Conner, director of EDF’s California Climate and Energy Initiative, who testified at the public meeting prior to CARB’s vote, says, of cap-and-trade, ‘It still has to be managed in real-time to track and respond to any unforeseen impacts.’

In an attempt to decipher the polarizing effect of cap-and-trade, let’s look at how well the government has been doing at curbing industrial emissions thus far. Obviously pollution persists. The controversy surrounding the EPA’s proposed revision to the Bush Administration’s 2008 Ozone Rule is so great, that revising it to reflect acceptable pollution levels founded on science (rather than the bargained up emissions level accepted by Bush), has been shelved repeatedly since last year. Some members of Congress have called a revision to the Ozone Rule a ‘job killing rule’ and have further called the Environmental Protection Agency, ‘a job killing agency’. Others have suggested the EPA no longer be funded by tax payer dollars.

If the EPA is so threatened by the market, when it comes to doing their job, then clearly market-based solutions to pollution have some relevance. The question is, how can the government protect citizens’ health, while fostering a carbon trade market to incentivize pollution reduction? 

Implementing a cap-and-trade market is no small feat and will undoubtedly have its failures along with any successes. But it is a step towards engaging business in solutions to pollution, and that’s something we look forward to at Sustainable Industries.