Justice Deferred: A Break Down of California’s Cap & Trade Bill from the Environmental Justice Perspective

By: Strela Cervas & Amy Vanderwarker

***Editor’s Note: The following article is one viewpoint on the cap-and-trade bill (AB 398) signed by Governor Jerry Brown this year. The bill is the topic of our Head to Head feature for August. On August 31, an opposing viewpoint was published in the article California Wins With Bipartisan Cap-and-Trade Bill.

The California Environmental Justice Alliance is comprised of community-based organizations whose members live and work on the frontlines of climate change. Across California, our biggest climate polluters are more likely to be located in low-income communities and communities of color. These polluters release a range of harmful emissions, from carbon dioxide to other contaminants that harm health. Environmental justice communities will be hit first and worst by the impacts of climate change, but have the fewest resources to adapt.

The recently passed cap-and-trade bill, AB 398, fails to address these concerns, which the environmental justice community has consistently articulated. It may actually hinder our ability to achieve our statewide greenhouse gas reduction targets, includes harmful regulatory rollbacks, and undermines our climate investments.

Cap-and-trade is a program designed to drive down greenhouse gas emissions on a statewide basis. But for the communities where we work, it’s what happens next door that matters most. Our communities — and the climate — need to see facilities directly reduce their emissions. AB 398 includes many loopholes that allow industry to buy their way into compliance, rather than actually changing their operations. The bill guarantees large quantities of free permits to pollute through 2030 and fails to grapple with an already-existing overabundance of permits. These provisions drive down prices and makes it possible for polluters to comply with little to no actual changes in emissions locally. They also undermine our state’s overall emission reductions, impeding our progress in fighting climate change.

In addition, AB 398 limits the ability of state and local regulatory agencies to enact new carbon dioxide regulations on some of the largest sources of greenhouse gas emissions, including refineries. This is essentially a roll back of a bill passed last year, AB 197 that required direct emission reductions. It is also an attack on a local organizing effort in the Bay Area, where residents have been working for years to enact new limits on refinery emissions.

Finally, AB 398 includes a fee repeal, and an expansion and extension of a tax break to manufacturers and electricity producers. These hits to the General Fund — costing approximately $300 million — will be backfilled by climate revenues. This means less money to fund greenhouse gas reducing projects and programs across the state. The bill also failed to create any policies to drive up the price on carbon, which will also undermine how much revenue the state can bring in.

AB 398 will continue to leave environmental justice communities struggling with local emissions that harm our health and worsen climate change. Moving forward, we hope to see our state regulatory agencies take an aggressive approach to implementing the program to ameliorate some of these concerns.

Strela Cervas & Amy Vanderwarker are co-directors of the California Environmental Justice Alliance. The opinions in this article are presented in the spirit of spurring discussion and reflect those of the author and not necessarily the Treasurer, his office or the State of California.