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Katy Grimes

California Attempts to Regulate the Sale of Gas Under Cap-and-Trade

On Monday, Assemblyman Jim Patterson, R-Fresno, Sen. Andy Vidak, R-Hanford, and more than 20 other Republican lawmakers announced the introduction of the Affordable Gas for California Families Act, legislation to exempt transportation fuels and natural gas from the California Air Resource Board’s cap-and-trade program.

“We struck a nerve!” Patterson told me. Patterson said he was surprised at the media response, and how many in the media did not know the gas tax is starting Jan. 1 – next month.

Patterson is working on issues like the gas tax, which unfairly tax and regulate consumers, and disproportionately impact the small businesses of California.

No other state or country in the world has attempted to regulate the sale of gasoline and diesel under a cap-and-trade program.

What is cap and trade, and why California?

In December 2010, the California Air Resources Board created a cap-and-trade program to auction off carbon allowances to California businesses, forcing businesses deemed “polluters” to pay billions of dollars just for the privilege of continuing to do business in California.

The “cap” in cap-and-trade is the legal limit on the quantity of greenhouse gases a business can emit each year, and “trade” means that companies can swap or trade emission permits among each other.

Prior to California developing a cap-and-trade program, one of the most important environmental programs tied to the United Nations Agenda 21, was the U.S. cap-and-trade legislation.

But when the cap-and-trade legislation failed to pass in the U.S. Senate, the Environmental Protection Agency instead took it upon itself to regulate greenhouse gases, ignoring Congress.

The CARB has acted in much the same way, operating autonomously and seemingly without any regulation by the Governor or Legislature.

Someone needs a lesson in Economics…

Mary Nichols, chairwoman of the California Air Resources Board since 2007, says her programs are good for the economy. Really.

“I think the evidence to date clearly shows that AB 32 has not hurt the California economy,” Nichols said in a recent interview with The Planning Report, a trade publication about urban planning, and public infrastructure investment. “As we rebound from the recession, we see a number of instances of sectors where the existence of AB 32 has been a cause for investment and for growth. We remain the single largest attractor of green venture capital.”

“We are the largest venue for solar installations in the country,” Nichols added. “We have a vibrant and growing set of companies that are investing in clean fuels. These areas all indicate that AB 32 is, as we predicted, good for the California economy.”

New report exposes CARB’s cap and trade plan flaws

The Western States Petroleum Association has a different take on Nichols’ cap and trade program and policies. WSPA commissioned a report, as the CARB prepares to launch a major expansion of its three-year-old cap-and-trade program. The new report identifies a series of major design flaws that make the cap and trade program vulnerable to market meltdowns, and offers solutions to possibly mitigate impacts, inevitably passed along to California consumers.

On January 1, as California begins to include transportation fuels – gasoline, diesel and propane – in the nation’s first carbon emission cap-and-trading scheme, it is important to remember, no other state or country in the world has attempted to regulate the sale of gasoline and diesel under a cap-and-trade program.

“Past experience demonstrates the importance of proper design,” said Jean-Philippe Brisson, author of the report, and a carbon markets expert with the Latham & Watkins law firm. Brisson found:

“Market design flaws can result — and have resulted — in catastrophic implications for environmental markets around the globe.”

“Few industries face the breadth of public policy issues the petroleum industry faces – from issues that impact the costs and availability of fuel for everyone, to domestic oil production and energy independence, and to our ability to transport that essential source of energy on rail cars and other time-tested means of transport.”

“Climate change policies will impact everyone – families, individuals, communities and companies – and far too many of them have been left entirely out of the discussion and debate surrounding these issues.”

“WSPA has always recognized the urgent need to address climate change, including the role that fossil fuels play in global warming,” the WSPA blog reports. “But that, of course, has never been the question.  The question is what to do about it – how to transition to a lower carbon energy future without unnecessarily harming our economies, our businesses and our citizens.”

 Inside the Mind of the Eco-sensitive

For a look inside the minds of those pushing cap and trade, below is a list of mobility issues from, for dealing with transportation:

When it comes to our present arrangements for transport in cities, that which we are calling the “old mobility,” the answer to this is a quite long one:

  • The present (car-based) system is dangerous, injurious and menaces our health as one of the most debilitating public health menaces of our era.
  • It provides poor value for money – for individual car owners as well as others. And for the taxpayer in terms of bang per public buck.
  • It is socially unjust and discriminatory to the poor, racial minorities, women, children, the unemployed, and people with physical disadvantages. To all those who cannot or should not be driving a car (a very large number in fact). And to those who chose not to drive a car.
  • It consumes and wastes resources on an intolerable scale.
  • It pollutes to the extent that it is endangering the planet’s ecosystem
  • It puts the national economy, the international economy and your and my economy at risk by total systemic dependence on a cartel of oil suppliers. (And pours money into the coffers of non-democratic societies and cliques.)
  • Despite the fact that it costs an arm and a leg to both individual citizens and the community as a whole, the system is steadily degrading in environmental, performance and economic terms year after year.

You just can’t make this stuff up.

“Why is the State of California lagging behind coming out of the recession?” Patterson asked. “This government, instead of doing something for you, is doing something to you. This is the California problem written extremely large… a one-party government, with leaders who do anything they want,” Patterson said. “It just ratchets up the high cost of living for all Californians. It’s all interconnected.”


GOP Assembly and Senate lawmakers present at the press conference included Sen. Andy Vidak, Sen. Tom Berryhill, Sen. Jim Nielsen, Sen. Mike Morrell, Assemblyman Jim Patterson, Assembly Minority Leader Kristin Olsen, Assemblywoman Melissa Melendez, Assemblywoman Shannon Grove, Assemblyman Eric Linder, Assemblyman Katcho Achadjian, Assemblyman Brian Jones, Assemblyman Don Wagner, Assemblyman Frank Bigelow, Assemblyman Brian Maienschein, Assemblyman Brian Dahle, Assemblywoman Young Kim, Assemblyman Bill Brough, Assemblyman James Gallagher, Assemblyman James Harper, Assemblyman David Hadley, Assemblyman Tom Lackey. Apologies to anyone I missed. 

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