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California's New Climate Change Blueprint

This plan would almost eliminate oil and shift to renewable energy sources. But where’s the update on the controversial pollution-trading market known as cap and trade?

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CalMatters
PUBLISHED MAY 11, 2022 12:00 A.M.

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BY NADIA LOPEZ
California’s clean-air regulators on Tuesday unveiled a highly anticipated roadmap packed with strategies for tackling the climate crisis. But it falls short on a key component: the role that its signature environmental policy—cap and trade—will have in cutting greenhouse gas emissions. 

The California Air Resources Board’s draft of its ambitious proposal, called a scoping plan, outlines policies that focus on reducing reliance on oil, capturing carbon dioxide emitted by industries and increasing dependence on renewable power sources, such as wind, solar and electric cars. The plan makes a bold commitment to eliminate 91% of oil used in the state by 2045. 

The purpose of the plan is to fulfill state mandates that require reducing carbon dioxide and other climate-warming emissions 40% below 1990 levels by 2030 and achieving carbon neutrality by 2045. The strategies would cost an estimated $18 billion in 2035 and $27 billion in 2045.

In their earlier version of the plan, adopted in 2017, air board officials had estimated about 38% of gas reductions would come from the state’s emissions-trading program, called cap and trade. According to the new plan, cap and trade will play a smaller role in meeting the state’s goals as it transitions to renewable energy.

But just six pages of the 228-page document address cap and trade, without providing a detailed analysis of how significant that role will be. That’s a problem, one expert said, because the modeling that air board staff used to make projections for each measure doesn’t provide any evidence of how cap and trade is working.

“They haven’t given us the basis for how much work cap and trade has to do over the next decade,” said Danny Cullenward, an economist and vice chair of the Independent Emissions Market Advisory Committee, a group of five experts who assess the effectiveness of the program. “Their projections show emissions that are significantly lower than what’s in the official emissions inventory. There’s not enough here to go on.”

In order to meet its goals, the state needs 27% less emissions reductions from cap and trade than what was initially expected in 2017, according to the plan.

Air board officials said they will be evaluating the cap-and-trade program in 2023 and providing more details after the plan is finalized and voted on by the board this summer.

They said they need additional data because of regulatory changes that went into effect in January 2021, which included reduced offsets and a new price ceiling for allowances. 

“We need additional data — potentially another years-worth of data — into this new program before we go into that level of detail,” Rajinder Sahota, the board’s deputy executive officer of climate change and research, said in response to a CalMatters question during a press conference on Tuesday. “That also means that the scoping plan is not meant to be a design or a change to an existing program, it is meant to be a high-level planning document that serves as a guidepost.” 

Cullenward disagreed, saying the staff shouldn’t need to wait because those regulations were written and available to the staff in 2018. Instead, he said, they’re “delaying the process.”

Read 'State unveils new climate change blueprint' at CalMatters.

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

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