Cap-and-trade law levels playing field for reducing carbon emissions: Guest commentary

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By Tom Bowman | May 27, 2014

For decades, polluting industries have argued that California’s policy approach to addressing cleaning up our air harms our economy. The misleading warnings and doom-and-gloom predictions haven’t materialized — instead Californians continue to support our state’s approach to addressing climate change, in polls and at the ballot box.

It’s unfortunate that some continue to spread misinformation, largely based on the messaging of certain industries like oil companies that want to escape the level playing field where others like automakers and utilities are already playing.

Despite what you might have read, California landmark clean energy and climate law, Assembly Bill 32, and its cap-and-trade program currently being implemented, are working just as intended. The state’s largest emitters must buy permits to pollute. The marketplace, not the state, sets the price of those permits based on supply and demand. The beauty of this system is that each regulated company must look to the future and figure out how and when to cut harmful emissions — and the need for permits — most inexpensively.

As a business owner, I appreciate that level of certainty, and it’s that predictability of AB32 that has allowed the program to thrive. California’s cap-and-trade program has been praised as the best designed in the world. And the system is working. More than $663 million in proceeds are available to invest in clean energy and communities impacted by air pollution. Then there is the 17 percent decline in emissions in California from sources regulated under the cap since 2008.

Meanwhile, California is a hotbed of clean energy innovation. Our state attracts more private investment than any other — more than $27 billion since 2006, according to the California Green Innovation Index — and with new investments come jobs. We are seeing a thriving clean vehicle marketplace — registrations of zero emission vehicles increased 62 percent between 2011 and 2012 — and with cleaner cars come savings at the gas pump.

Most new technologies are expensive at first. Just like calculators, personal computers and smart phones, solar power and low-emission vehicles are becoming more affordable all the time. As they catch on and prices drop, consumers have more options that can save real money on monthly energy bills.

So the question isn’t how much more gasoline might cost in the future. The question is how many options consumers will have to reduce their dependence on volatile gas prices in the first place.

The state’s clean energy policies like AB32 are creating more and more options every year, and Californians are enjoying the benefits.

Consumers also will get cleaner fuel and transportation options, with less reliance on oil, through policies like the Low Carbon Fuel Standard, a key component of AB32. A new study by ICF International, commissioned by a coalition of business groups, looks at the LCFS’s impacts on the economy — including employment rates, personal income, and gross state product, and finds that any potential adverse impacts will be negligible and will be far outweighed by all the positive impacts.

California’s LCFS and AB32 cap-and-trade program are structured to ensure that emissions in future years will continually decline. Capturing transportation fuels within the cap is essential to managing the largest source of emissions within the state.

Air pollution, drought, wildfires — these are all costly to our health and our communities. We will pay far more in the future if we don’t fully commit to reducing the impacts of carbon pollution today.

AB 32 is already doing what needs to be done: reducing carbon and air pollution for everyone. It’s a win for our environment, our health, our economy and our pocketbooks.

Tom Bowman is president of Bowman Design Group in Signal Hill.