Gov. Newsom says expansion proposals will be announced in the coming weeks to ensure that the emissions reduction program can continue beyond 2030.
On April 15, California Gov. Gavin Newsom and the state’s Democratic legislative leader announced they were trying to extend the state’s cap-and-trade emissions reduction program.
The announcement comes a week after President Donald Trump issued an executive order to investigate state energy policies, including California’s initiative, on possible constitutional violations.
“California must continue to reduce pollution and ensure that the climate dollar benefits all residents,” the statement said.
On April 8, Trump signed an executive order directing the Department of Justice to identify energy and climate-related state laws. “It may be unconstitutional, preempted by federal law, or unenforceable.”
California Cap and Trade is one of the survey participants.
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“Americans are better when the US controls energy,” Trump said in order. “When state and local governments try to regulate energy beyond constitutional or statutory authorities, America’s energy control is threatened.”
According to the executive order, many states are trying to enact, or are hoping to enact, “climate change” or energy policies that threaten America’s energy control and… economic and national security, as “burdened and ideologically motivated.”
Trump accused several states, including California, of forcing businesses to pay for carbon use.
California’s Cap and Trade Program aims to reduce greenhouse gas emissions. The California Air Resources Board (CARB) sets an annual cap on total carbon emissions and issues tradable allowances based on metric tons of carbon dioxide. Companies use allowances to cover their emissions. You can also sell unused allowances and buy more to meet your needs.
Emissions have declined over time to meet climate targets, reducing emissions to less than 40% from the 1990 levels by 2030, and by 2045 it has fallen at least 85% below the 1990 levels.
Dallas Baritrow, a senior fellow at Washington, DC-based think tank resource, told the Epoch Times that the Cap-and-Trade program itself will not expire in 2030.
“But permission to use auctions to sell allowances is at risk,” he said, a huge majority vote from the state legislature.
“So, auctions are really suspicious, and that’s really important because, as Governor Newsom’s budget explains, auction revenues, auction revenues are really important to the overall strategy.”
Newsom and legislative leaders said in a statement on April 15th that plans on how to expand the cap-and-trade program will be shared with the public in the coming weeks.
Bortraw said that most of the emissions cuts California has achieved have gone through other regulations, but cap-and-trade is inexpensive.
Under the Cap-and-Trade Program, about half of the carbon allowance is freely provided to industrial facilities and utility companies, while the other half is auctioned off with carbohydrates, Bortraw said. The proceeds generated by the auction will be used to fund a variety of green energy projects and as climate credits to compensate wage payers for electricity bills.
Oil refineries receive free allowances for the refining process, but they must purchase carbon allowances through the auction of gasoline they sell, and the cost is 100% passed at the gasoline price.
Utility companies will receive free allowances. These companies have very little emissions, so they will return the allowances to auction. The majority of the money they earn from the auction is sent back to the fee payer as “climate credit,” which appears twice a year on the fee payer’s electricity bill.
