California Lawmakers Abandon Key Part Of Climate Legislation, Blaming Oil Industry Lobbying

Calif. Gov. Jerry Brown, flanked by Assembly Speaker Toni Atkins, D-San Diego, left, and Senate President Pro Tem Kevin de Leon, D-Los Angeles, announced that they are scaling back a proposal to address climate change, during a news conference, Wednesday, Sept. 9, 2015, in Sacramento, Calif.

California Democrats dropped a major component of their ambitious climate change legislation Wednesday, after a group of moderate Democratic holdouts threatened to spell the end for the bill.

The legislation affected was Senate Bill 350, which originally aimed for a 50 percent reduction in petroleum use in cars and trucks, a 50 percent increase in energy efficiency in buildings, and a goal of 50 percent of state utilities’ power coming from renewable energy, all by 2030. On Wednesday, lawmakers scrapped the goal of a 50 percent reduction in petroleum use in cars and trucks. California Senate President Pro Tem Kevin de León, who authored the legislation, said Wednesday that a major lobbying campaign by the oil industry was largely to blame for the doubt that had emerged over the bill.

“The fact that, despite overwhelming scientific opinion and statewide public support, we still weren’t able to overcome the silly-season scare tactics of an outside industry which has repeatedly opposed environmental progress and energy innovation — means that there’s a temporary disconnect in our politics which needs to be overcome,” de León said.

The oil industry has poured money into a campaign against SB 350, calling the legislation the “California Gas Restriction Act of 2015″ and warning that it could lead to bans on SUVs.

SB 350 is “an attempt to essentially put oil companies out of business,” Tupper Hull, spokesman for the Western States Petroleum Association, said in August.

De León has maintained that none of the oil industry’s claims are true. Still, SB 350 had come up against a wall of moderate Democrats in recent weeks. In late August, about 20 Assembly Democrats met with Assembly Speaker Toni Atkins, saying they were worried that SB 350 isn’t clear enough on how it will affect motorists. These Democratic holdouts could have meant the end for the bill during this legislative session.

Taking out the petroleum measure was meant to be a concession to these moderate Democrats — and it seems to have worked, at least on one. Henry T. Perea, a moderate Democrat who had led the opposition to the petroleum measure, told the New York Times that he would now support SB 350.

“S.B. 350 will set California apart as a leader in climate change policy and will go a long way in reducing emissions in areas like the Central Valley that suffer from some of the worst air quality in the nation,” he said.

Gov. Jerry Brown also said Wednesday that he wouldn’t let the oil industry get in the way of his efforts to reduce greenhouse gases in California.

“Oil has won the skirmish, but they’ve lost the bigger battle,” he said. “Because I am more determined than ever to make our regulatory regime work for the people of California: cleaning up the air, reducing the petroleum and creating the green jobs that are going to put hundreds of thousands of people to work over the coming decades.”

SB 350 is expected to come to a vote before the end of the week. The bill is part of a larger climate package of 12 bills, some of which have already been voted on. SB 185, which prompted the state’s public employee investment funds to divest from coal, passed the Assembly last week, and is expected to be signed by the governor.

Another bill, SB 32, which would have required the state to reduce its greenhouse gas emissions 80 percent below 1990 levels by 2050, failed in the Assembly this week, though it may come up for another vote.

Oil lobby leads list of top spenders in 2014

California’s oil and gas industry kept its long-running title as the biggest employer of lobbyists in California last year, according to numbers released this week by the California Secretary of State.

The top spender for 2014 was the Western States Petroleum Association. It spent $8.9 million on lobbying last year, almost double what the organization spent the prior year.

Much of that money funded efforts to reverse regulations that would place transportation fuels into the state’s cap-and-trade program. The association helped bankroll grassroots organizations with names such as Fed Up At The Pump, which warned that California greenhouse gas emission program would raise gas prices.

The campaign was challenged by record drops in fuel prices. As the year came to a close, the petroleum association acknowledged that repealing the regulation after it went into effect presented a greater challenge.

KP Public Affairs, which represents clients in health care, aerospace manufacturing and other issues, was the top lobbying firm by revenue in both the final quarter of 2014 and the entire year. The firm was bolstered by new clients in Internet technology last year, adding Lyft and Airbnb, said Patrick George, a director at KP.

Next year, the firm will continue to focus on health care and technology, and expects legislative debates on telemedicine, which combines both subject areas. One policy issue is privacy concerns around electronically transferable health records, George said.

“Legislators are looking at those issues, and organizations that have a stake in that want their voices heard,” he said.

  • Top lobbying employers by expenditures in 2014
  • Western States Petroleum Association — $8.9 million
  • California State Council of Service Employees — $5.9 million
  • Chevron Corp. and its subsidiaries — $4.3 million
  • California Chamber of Commerce — $3.9 million
  • California Hospital Association and California Association of Hospitals and Health Systems — $3 million
  • Kaiser Foundation Health Plan Inc. — $2.8 million
  • Pacific Gas and Electric Co. and its affiliated entities — $1.9 million
  • California Medical Association — $1.9 million
  • California School Employees Association — $1.8 million
  • California Manufacturers and Technology Association — $1.7 million

Who needs lobbyists? See what big business spends to win American minds

Forget lobbying. When Washington, D.C.’s biggest trade associations want to wield influence, they often put far more of their money into advertising and public relations, according to a new Center for Public Integrityinvestigation.

Take, for example, the American Petroleum Institute. The oil and gas industry trade group spent more than $7 million lobbying federal officials in 2012. But that sum was dwarfed by the $85.5 million it paid to four public relations and advertising firms to, in effect, lobby the American public — including $51.9 million just to global PR giant Edelman.

From 2008 through 2012, annual tax filings show, the API paid Edelman a staggering $327.4 million for advertising and public relations services, more than any other contractor.

It’s been well-publicized how much industry spends on lobbying the government, but little is known about how much money goes toward influencing the public. In an effort to find out more, Center for Public Integrity reporters examined the tax returns for trade associations that spent more than $1 million on lobbying in 2012. The IRS requires the groups to report their top five contractors.

Of $3.4 billion in contracts reported by the 144 trade groups from 2008 through 2012, more than $1.2 billion, or 37 percent, went toward advertising, public relations and marketing services, more than any other category. The second-highest total, $682.2 million, or 20 percent of the total, was directed toward legal, lobbying and government affairs.

By industry sector, the biggest clients of PR, marketing and ad services were energy and natural resources associations.

Oil industry doubled spending on lobbying in California last year

The oil industry nearly doubled its spending on lobbying in California last year, as the Jan. 1, 2015 date approached for gasoline to be included in the state’s cap-and-trade program.

The Western States Petroleum Association poured nearly $8.9 million into lobbying California government in 2014, according to new filings with the secretary of state. That compares with almost $4.7 million the group spent on the effort in 2013.

The oil industry’s increase in spending was part of a larger trend in 2014 that saw interest groups spend more on lobbying in California than ever before. Overall, spending on lobbying was up 4 percent, with interest groups pouring a combined $293.7 million into lobbying state government.

The oil association’s spending helped keep Sacramento’s KP Public Affairs as the top-earning lobbying firm in the state. Lobbying reports show that the group treated several legislators to meals in Maui and Napa at the end of last year. Shortly after the November elections, the petroleum association took three lawmakers to dinner at Spago in Maui: Senate GOP leader Bob Huff of Diamond Bar, Assembly Republican leader Kristin Olsen of Modesto, and Democratic Assemblyman Henry Perea of Fresno, who heads an informal caucus of business-friendly Democrats and led an industry-backed effort last year to postpone adding fuels to the cap-and-trade plan. In December, the association took newly elected Democratic Assemblymen Jim Cooper of Elk Grove and Bill Dodd of Napa to lunch at Hotel Yountville in Napa.

Yet the vast majority of the petroleum association’s spending on lobbying last year – about $7.2 million – was reported under a catch-all “other” category that requires no detailed disclosure showing who benefited or how the money was spent. Californians were subject to numerous publicity campaigns last year opposing climate change policies and proposals for an oil-extraction tax, but the the lobbying reports do not illuminate who paid for them or who received the money because the state allows such activity to escape disclosure by being reported as “other payments to influence.”

Here’s a look at spending by the Western States Petroleum Association over the last decade. Hover over the charts to see more detail:

Energy businesses, unions and health care companies dominated the interest groups that spent big on lobbying California government last year. These are the 20 groups that spent the most:

Here’s a look at lobbying spending since 2005.

Several Sacramento lobbying firms saw their fortunes rise in 2014:

▪ Mercury Public Affairs, which includes former Assembly Speaker Fabian Núñez as a partner, reported bringing in $3.2 million, a nearly 50 percent increase in business from the prior year. Núñez is a childhood friend of Senate President Pro Tem Kevin de León, who took the leadership post in October.

▪ California Strategies and Advocacy reported billing $3.6 million in 2014, an increase of 48 percent from the year before. In 2013, the firm registered three of its partners as lobbyists after they paid a fine to the state’s political ethics watchdog for lobbying without disclosing their activity.

▪ Gonzalez Quintana & Hunter reported bringing in almost $3.1 million in 2014, an increase of 32 percent. The firm picked up several new clients last year including Sacramento County and the Sacramento Republic FC soccer team.

Other firms saw a decrease in reported business:

▪ Sloat Higgins Jensen and Associates reported billing $3.7 million in 2014, a drop of roughly 23 percent from the year before. The firm and its founder, Kevin Sloat, paid a $133,500 fine early last year for hosting lavish fundraisers for politicians that amounted to prohibited campaign contributions. It then lost one of its most high-profile clients, the San Francisco 49ers.

▪ Greenberg Traurig reported billing $2.5 million for lobbying, a drop of almost 15 percent. The firm added former Senate leader Darrell Steinberg to its legal team at the end of last year.

This chart shows the 20 California lobbying firms that billed the most last year:

Call Laurel Rosenhall, Bee Capitol Bureau, (916) 321-1083. Follow her on Twitter @LaurelRosenhall.

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Fossil fuels subsidized by $10m a minute, says IMF

Fossil fuel companies are benefitting from global subsidies of $5.3tn (£3.4tn) a year, equivalent to $10m a minute every day, according to a startling new estimate by the International Monetary Fund.

The IMF calls the revelation “shocking” and says the figure is an “extremely robust” estimate of the true cost of fossil fuels. The $5.3tn subsidy estimated for 2015 is greater than the total health spending of all the world’s governments.

The vast sum is largely due to polluters not paying the costs imposed on governments by the burning of coal, oil and gas. These include the harm caused to local populations by air pollution as well as to people across the globe affected by the floods, droughts and storms being driven by climate change.

Nicholas Stern, an eminent climate economist at the London School of Economics, said: “This very important analysis shatters the myth that fossil fuels are cheap by showing just how huge their real costs are. There is no justification for these enormous subsidies for fossil fuels, which distort markets and damages economies, particularly in poorer countries.”

Lord Stern said that even the IMF’s vast subsidy figure was a significant underestimate: “A more complete estimate of the costs due to climate change would show the implicit subsidies for fossil fuels are much bigger even than this report suggests.”

The IMF, one of the world’s most respected financial institutions, said that ending subsidies for fossil fuels would cut global carbon emissions by 20%. That would be a giant step towards taming global warming, an issue on which the world has made little progress to date.

Ending the subsidies would also slash the number of premature deaths from outdoor air pollution by 50% – about 1.6 million lives a year.

Furthermore, the IMF said the resources freed by ending fossil fuel subsidies could be an economic “game-changer” for many countries, by driving economic growth and poverty reduction through greater investment in infrastructure, health and education and also by cutting taxes that restrict growth.

Another consequence would be that the need for subsidies for renewable energy – a relatively tiny $120bn a year – would also disappear, if fossil fuel prices reflected the full cost of their impacts.

“These [fossil fuel subsidy] estimates are shocking,” said Vitor Gaspar, the IMF’s head of fiscal affairs and former finance minister of Portugal. “Energy prices remain woefully below levels that reflect their true costs.”

David Coady, the IMF official in charge of the report, said: “When the [$5.3tn] number came out at first, we thought we had better double check this!” But the broad picture of huge global subsidies was “extremely robust”, he said. “It is the true cost associated with fossil fuel subsidies.”

The IMF estimate of $5.3tn in fossil fuel subsidies represents 6.5% of global GDP. Just over half the figure is the money governments are forced to spend treating the victims of air pollution and the income lost because of ill health and premature deaths. The figure is higher than a 2013 IMF estimate because new data from the World Health Organisation shows the harm caused by air pollution to be much higher than thought.

Coal is the dirtiest fuel in terms of both local air pollution and climate-warming carbon emissions and is therefore the greatest beneficiary of the subsidies, with just over half the total. Oil, heavily used in transport, gets about a third of the subsidy and gas the rest.

The biggest single source of air pollution is coal-fired power stations and China, with its large population and heavy reliance on coal power, provides $2.3tn of the annual subsidies. The next biggest fossil fuel subsidies are in the US ($700bn), Russia ($335bn), India ($277bn) and Japan ($157bn), with the European Union collectively allowing $330bn in subsidies to fossil fuels.

The costs resulting from the climate change driven by fossil fuel emissions account for subsidies of $1.27tn a year, about a quarter, of the IMF’s total. The IMF calculated this cost using an official US government estimate of $42 a tonne of CO2 (in 2015 dollars), a price “very likely to underestimate” the true cost, according to the UN’s Intergovernmental Panel on Climate Change.

The direct subsidising of fuel for consumers, by government discounts on diesel and other fuels, account for just 6% of the IMF’s total. Other local factors, such as reduced sales taxes on fossil fuels and the cost of traffic congestion and accidents, make up the rest. The IMF says traffic costs are included because increased fuel prices would be the most direct way to reduce them.

Christiana Figueres, the UN’s climate change chief charged with delivering a deal to tackle global warming at a crunch summit in December, said: “The IMF provides five trillion reasons for acting on fossil fuel subsidies. Protecting the poor and the vulnerable is crucial to the phasing down of these subsidies, but the multiple economic, social and environmental benefits are long and legion.”

Barack Obama and the G20 nations called for an end to fossil fuel subsidies in 2009, but little progress had been made until oil prices fell in 2014. In April, the president of the World Bank, Jim Yong Kim, told the Guardian that it was crazy that governments were still driving the use of coal, oil and gas by providing subsidies. “We need to get rid of fossil fuel subsidies now,” he said.

Reform of the subsidies would increase energy costs but Kim and the IMF both noted that existing fossil fuel subsidies overwhelmingly go to the rich, with the wealthiest 20% of people getting six times as much as the poorest 20% in low and middle-income countries. Gaspar said that with oil and coal prices currently low, there was a “golden opportunity” to phase out subsidies and use the increased tax revenues to reduce poverty through investment and to provide better targeted support.

Subsidy reforms are beginning in dozens of countries including Egypt, Indonesia, Mexico, Morocco and Thailand. In India, subsidies for diesel ended in October 2014. “People said it would not be possible to do that,” noted Coady. Coal use has also begun to fall in China for the first time this century.

On renewable energy, Coady said: “If we get the pricing of fossil fuels right, the argument for subsidies for renewable energy will disappear. Renewable energy would all of a sudden become a much more attractive option.”

Shelagh Whitley, a subsidies expert at the Overseas Development Institute, said: “The IMF report is yet another reminder that governments around the world are propping up a century-old energy model. Compounding the issue, our research shows that many of the energy subsidies highlighted by the IMF go towardfinding new reserves of oil, gas and coal, which we know must be left in the ground if we are to avoid catastrophic, irreversible climate change.”

Developing the international cooperation needed to tackle climate change has proved challenging but a key message from the IMF’s work, according to Gaspar, is that each nation will directly benefit from tackling its own fossil fuel subsidies. “The icing on the cake is that the benefits from subsidy reform – for example, from reduced pollution – would overwhelmingly accrue to local populations,” he said.

“By acting local, and in their own best interest, [nations] can contribute significantly to the solution of a global challenge,” said Gaspar. “The path forward is clear: act local, solve global.”