72-Hour Clock Ticking for Gov. Brown to Pass New Cap-and-Tax Deal

Jerry Brown State of the State 2017 (Rich Pedroncelli / Associated Press)
Rich Pedroncelli / Associated Press

The 72-hour public disclosure clock is ticking for Gov. Jerry Brown to convince a couple of Republicans to roll over and pass bills to reauthorize California’s cap-and-trade (“cap-and-tax”) scheme.

Breitbart News reported that Gov. Brown jetted off to China in early June to deliver the Under2 Coalition keynote speech to 176 nations, provinces and cities to promote the adoption of California’s scheme,which forces businesses to pay high auction prices on a government-run exchange for the right to emit carbon.

But back home, Brown’s legacy as world’s leader in the battle against climate change was already at risk of imploding as he was unsuccessfully lobbying industry opponents and their Republican allies to find enough pork and tax exemptions to prod a couple of Republicans to roll over on their caucus and vote to extend by a decade the “California Global Warming Solutions Act of 2006” (AB 32), which requires reducing greenhouse gas (GHG) emissions to 1990 levels by 2020.

Originally signeded by Republican Gov. Schwarzenegger, AB 32 requires the state Air Resources Board to adopt a statewide GHG emissions limit, and set up a market-based mechanism to achieve maximum feasible and cost-effective GHG reductions.

Brown calls Cap-and-Trade a free-market solution to the world’s most pressing crisis, but according to the League of Cities it acts like a tax to fund social-justice initiatives, including:

  • $200 million for transportation and sustainable affordable housing;
  • $200 million for low-carbon transportation programs;
  • $150 million transit;
  • $250 million for high-speed rail; and
  • $202 million for clean energy, natural resources, and waste diversion.

Democrats in both houses of the legislature have endorsed Brown’s efforts to keep the cash flowing to their constituents and California’s highly-subsidized “sustainable industries.” But Brown needs a two-thirds vote of both houses by the July 21 recess to have a higher probability of sustaining the inevitable legal challenges.

Passing the legislation looked good until the petition to recall California freshman Senator Josh Newman over voting to raise the gas tax went viral and Republican sponsors turned in 85,000 qualified signatures on June 27.

The recall success stimulated support and funding for the “Repeal The Gas Tax” initiative, which seemed well on its way to getting the 365,000 signatures to qualify for the November ballot. Democrat concerns spiked after the UC Berkeley’s Institute of Government Studies poll revealed that 35 percent of voters support the tax and 58 percent are opposed.

Although the Democrat-controlled legislature changed its rules to move the recall to next June, Breitbart News reported July 11 that repeal sponsors plan to go to court to oppose Democrat California Atty. Gen. Xavier Becerra’s “misleading” official description of the ballot initiative as, “Eliminates recently enacted road repair and transportation funding by repealing revenues dedicated for those purposes.”

Brown’s political triangulation to pick up business and Republican support for cap-and-trade includes offering oil companies higher California GHG emissions rights for joining the “Reducing Emissions from Deforestation and Forest Degradation’ (REDD)” system in Nigeria and Indonesia — and has infuriated the powerful environmental lobby, which sees such “carbon credits” as a scam.

But the California Chamber of Commerce, which lost a suit to invalidate cap-and-trade as an illegal tax, told the San Jose Mercury News that they would support a 2030 extension if the right deal were offered. Brown supposedly is offering to give existing California businesses more grandfathered GHG credits and limit the highest auction price for GHG credits.

Gov. Brown has until Thursday night to win Republican support for the two bills. Although that looks challenging now, the Democrats are sure to be dealing as the clock ticks down.


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