Gone Fishing

I’ll be on vacation for the next week or so.  Blogging will return August 7th.  Enjoy the summer!

California Republicans Mistakenly Think Cap-And-Trade Extension Will Kill High Speed Rail

After I just wrote that the cap-and-trade extension to 2030 throws a lifeline to high speed rail in California, I read in today’s San Francisco Chronicle that California Republicans think they’ve potentially “de-railed” their hated train by helping to extend the program:

In extending California’s cap-and-trade system of controlling greenhouse-gas emissions through 2030, lawmakers approved a Republican plan this week to put a constitutional amendment before voters that seeks to give the minority party more say over how the program’s money is spent. One-fourth of that money — more than $1 billion so far and $500 million projected a year in the future — goes toward high-speed rail, a project that Republicans widely oppose.

With the proposed $64 billion train line between Los Angeles and San Francisco facing not only Republican opposition but financial struggles, any cut in funding from the cap-and-trade program could be fatal.

“This absolutely calls into question the viability of high-speed rail going forward,” said Assemblyman Marc Steinorth, R-Rancho Cucamonga (San Bernardino County), who voted to extend cap and trade in part because of the proposed constitutional amendment. “If the bullet train can’t prove its worth, (this amendment) provides a pathway to ending the funding for the boondoggle once and for all.”

The logic to me is basically ridiculous. First, the constitutional amendment has to be passed by the voters, which is a big “if.” Second, the amendment won’t even affect any dollars until 2024, at which point the vote in the legislature would have to take place.  And finally, even if a spending plan kills high speed rail, a simple majority vote of legislators after 2024 can change the spending priorities again.

The bottom line: the extension of cap-and-trade both shored up the existing cap-and-trade market through 2020 by increasing business confidence that the program is here to stay, and it gave the train line at least 4 additional years after 2020 to compete for funding under the program.

To be sure, there are still funding risks for high speed rail by relying on cap and trade. The legislature can try right away to tweak the funding formulas for how auction proceeds are spent, although this governor would likely veto any plan that diminishes funds for his priority project. And the amount of money from cap and trade may not be enough to finish the first section anyway from north of Bakersfield to San Jose.

Ultimately, the best bet for high speed rail is a new U.S. Congress that pays its share of federal dollars for the project, or a private investor to step up, which so far hasn’t happened. But the extension of cap and trade can only be seen as a positive at this point for high speed rail.

Game Of Climate Thrones

Just ahead of last Sunday night’s season premiere of HBO’s epic Game of Thrones, Vanity Fair published an article linking the plot of the show to climate change.  It’s a subject I happened to have mused on before, as the threat of the white walkers to Westeros really does mirror the collective threat of climate change to our civilization.

But going even further, the article attempts to determine which characters in the show correspond with real-life leaders in the climate change debate.  They interview some of my UCLA Law colleagues on the subjects, with many comparisons I support.  Here’s the Yara Greyjoy-Hillary Clinton one:

Neither of these women has done much about either the White Walkers or climate change. Still, Reich’s idea is too fun to ignore: “The feminist ass-kicker from the Iron Islands is definitely Hillary Clinton. There was that whole scene where [Yara] is going to become the king, and then this random dude shows up out of nowhere and everyone is like, ‘Yeah, this guy! He’s totally unqualified!’ ” When Yara’s uncle won, she disappeared. Clinton did the same—though not for good.

It’s actually an effective way to make climate change and its “cast of characters” accessible and interesting to the public, so I’m glad Vanity Fair ran this piece.

Of course, nothing beats the video of the show’s theme song sung by goats.

L.A.’s Radical Rail Transformation

David Dayen in the American Prospect has a long piece describing the “revolt” in Los Angeles against the automobile and how the city is transforming before our eyes:

In January, the city received $1.6 billion in federal support for the Purple Line, and Mayor Garcetti has asked the Trump administration for more, to move up subway completion from 2035 to 2024, in time for that year’s Summer Olympics, for which L.A. is one of the two finalists. “We have become the infrastructure capital of the world,” says Phil Washington. “With two NFL teams, a rail spur to that stadium, the possibility of the Olympics, it creates this economic bonanza, what I call a modern-day WPA [Works Progress Administration].”

The risk, as Dayen points out, is that the Trump administration will withdraw federal funds, leaving Los Angeles to pay for much of this transformation on its own and essentially backfill the missing the federal dollars.

But cities have gone that way before. The Bay Area, for example, largely built BART on its own in the 1960s and 1970s, as the federal government didn’t provide funding for rail transit at the time.

The difference now is that costs have gone way up, making it harder for a region like Los Angeles to fund this transformation without getting its share of federal tax dollars back to reinvest locally.

The article also rightly points out (with some quotes from yours truly) that the great unanswered question is whether the region will allow growth to follow this new transportation infrastructure. Poor land use decision-making is what got the region into the mobility and air quality mess its in. Only smart growth near rail transit will provide residents the option of a way out.

But the necessary transit backbone, as Dayen describes, is finally coming into place, giving local leaders a viable foundation for rebirth.

Cap-And-Trade Extension A Lifeline For High Speed Rail

Last night the California Legislature scored a super-majority victory to extend the state’s signature cap-and-trade program through 2030.  It was a rare bipartisan vote, although it leaned mostly on Democrats.  My UCLA Law colleague Cara Horowitz has a nice rundown of the vote and its implications, as does my Berkeley Law colleague Eric Biber on the bill.

Lost in the politics is what this means for high speed rail.  The system has a fixed and dwindling amount of federal and state funds at this point, and it’s relying on continued funding from the auction of allowances under cap-and-trade to build the first segment from Fresno to San Jose and San Francisco.

If the auction was declared invalid or ended at 2020 with depressed sales, the system would be in major jeopardy of collapsing before construction even finished on the first viable segment.  Now it has some assurance of access to funds.

But of course it’s not that simple.  The bill that passed yesterday has diminished available funds set aside for the programs that have been funded to date with cap-and-trade dollars.  As part of the political compromises, more auction money will now go to certain carve-outs, like to backfill a now-canceled program for wildfire fees on rural development.

And another compromise may put a ballot measure before the voters, passage of which would require a two-thirds vote for any legislative spending plan for these funds going forward.  That means Republicans — who generally hate high speed rail — would be empowered to veto future spending proposals.

Still, high speed rail once again has a lifeline, as do the other programs funded by cap-and-trade, such as transit improvements, weatherization, and affordable housing near transit.  It’s an additional victory beyond the emissions reductions that will take place under this extended program.

Gene Editing Plants, Animals, & The Unborn — Tonight At 7pm On City Visions

Gene editing techniques have the potential to cure genetic diseases in humans, transform agriculture, and even help the environment.  But at this point, the technology raises more questions and concerns than it answers.

Should we be manipulating the genomes of the unborn? How can this technology be equitably distributed and effectively regulated? And what role does the public play in this debate?

I’ll be discussing the social, ethical and legal implications of the CRISPR/Cas9 gene editing technology tonight at 7pm on City Visions on KALW 91.7 FM.  Joining me will be:

Tune in or stream live tonight — and please call or send in your questions.

Fighting Climate Change As A Jobs & Economic Growth Strategy

Since 2009, I’ve been working with UC Berkeley and UCLA Schools of Law on an initiative to find business solutions to combat climate change, with a focus on implementing California’s world-leading climate change laws.  Bank of America has been our steadfast partner and sponsor; the Bank is interested in the industries that will grow in the effort to reduce greenhouse gas emissions, with California as the perfect laboratory.

In that time, we have:

  • produced 18 policy reports;
  • held multiple conferences, workshops, webinars, lunch briefings (from Fresno to L.A. to Sacramento to Washington DC);
  • written numerous op-eds;
  • testified in multiple legislative hearings;
  • launched a new website to house all of our research and solutions; and
  • had our work covered in media outlets from the New York Times to local television and radio.

While the work is rewarding in and of itself, we ultimately do it to help get climate policy right in California and to show that smart climate policies are good business, too.  After all, if it can work in California, it can work anywhere and inspire other jurisdictions to follow suit.

So in a recent LinkedIn piece, I decided to describe some of this work, the impact it has had on policy, and the resulting economic and job benefits from key policies.  As more of the world turns to California for climate leadership, my hope is that the resources in this initiative will be helpful not just here in our state but to the world beyond.

New Research Shows California’s Cap-And-Trade Program Is Net Economic Benefit For San Joaquin Valley & Inland Empire

The California Legislature may vote on reauthorizing California’s cap-and-trade program as soon as Monday. The program needs a two-thirds vote to inoculate the auction mechanism to distribute allowances from legal challenges, which is a heavy political lift that has required a lot of compromise and concession.

But in the midst of the debate, state legislators are lacking crucial data on the impact of the program to date on some of California’s most environmentally and economically disadvantaged regions, particularly the San Joaquin Valley and Inland Empire.

To fill that gap, CLEE and the UC Berkeley Labor Center teamed up earlier this year to release a report on the economic impacts of California’s major climate programs on the San Joaquin Valley. And using the same methodology and publicly available data, we are soon to release a follow-up report on the Inland Empire, both sponsored by Next 10.

But with the vote looming on cap and trade, we wanted to release our findings on the impact of cap and trade on the Inland Empire in particular, as well as summarize our previous findings from the Valley report. Our new op-ed in yesterday’s Daily Bulletin summarizes the data:

After accounting for the costs and loss of jobs in industries required to comply with cap and trade, as well as the benefits from investments of cap-and-trade revenue, we found in the Inland Empire, the program had net economic impacts of $25.7 million, $900,000 in tax revenue and net employment growth of 154 jobs.

These net benefits do not account for funds that have been appropriated but have not yet been spent. Since only about one third of appropriated funds have so far been spent on projects in these regions, the positive impacts will only grow. When we account for the expected benefits after all funds collected are reinvested in projects, the net economic benefit reaches nearly $123 million, with 945 jobs created and $5.5 million in additional tax revenue.

We found even greater net positive impacts in the San Joaquin Valley, totaling $202 million in economic activity, along with $4.7 million in state and local tax revenue. The program also created 1,612 net jobs in the Valley. When including expected benefits after all funds collected are reinvested in projects, this figure balloons to nearly $1.5 billion in economic benefits. These projects will create 7,400 total jobs, including more than 3,000 direct jobs in the San Joaquin Valley.

We hope this information will be useful to the public and to legislators as they decide on the program’s fate beyond 2020. I will post again on the report once it’s available for release.

California Legislators About To Vote On Post-2020 Cap-And-Trade Reauthorization

California’s cap-and-trade program likely can’t survive in its current form after 2020 without a two-thirds vote of the legislature to reauthorize it.  That’s because a central feature of the program involves auctioning allowances to pollute, which courts are likely to consider to be a “fee” that requires two-thirds approval of the legislature under 2010’s voter-approved Prop 26.

With that high hurdle, advocates have been scrambling to get the needed votes.  Despite having a Democratic super-majority in both houses of the legislature, a number of key Democrats are opposed to (or at least skeptical of) cap and trade, because they fear the program allows polluters to continue polluting disproportionately in “environmental justice” communities — predominantly low-income communities of color.

So advocates have had to seek a bipartisan two-thirds solution, which requires oil-and-gas industry support.  And that means major concessions to the fossil fuel industry.

But at the same time, the fossil fuel industry has lost leverage.  The passage last year of SB 32, to extend the greenhouse gas reduction goals from 2020 to 2030, and AB 197, which allows for direct command-and-control regulation of polluting facilities, has put their back against the proverbial wall.  And they recently lost their lawsuit challenging the legitimacy of the current auction mechanism.  Industry would rather have the more “flexible” cap-and-trade system now, where they can seek reductions in the most economically efficient manner.

So there are some industry concessions and some environmental wins in the apparent consensus bills unveiled on Monday.  First, AB 398 would officially extend the cap-and-trade program to 2030.  In a big win for industry, the legislation would prevent local air districts in California from imposing their own limits on greenhouse gas emissions from sources already covered under cap and trade.  As the San Francisco Chronicle describes, it would “effectively kill long-running efforts by Bay Area air quality regulators to place hard limits on emissions of carbon dioxide and other heat-trapping gases from local oil refineries.”

In another win for industry, the bill puts a ceiling on the price of allowances (permits to emit one metric ton of greenhouse gases under the cap). To date, allowance prices have typically hovered at or near the current price floor.  Consider the ceiling a gift to industry by giving them a maximum penalty they’d have to face for polluting.

But in a concession from industry, the bill would reduce the use of “offsets” (projects outside of the capped facilities that help reduce greenhouse gases) and require that half of them occur in California or have a direct environmental impact on the state.  The use of offsets weaken the sale of allowances by giving industry a cheaper out, so this is good news for the integrity of allowances.

Finally, the bill would prioritize the kind of state programs that could receive funding from the auction proceeds.  The money must first go to efforts to control toxic air pollution from mobile or stationary sources like factories and refineries, second to low-carbon transportation projects, and third to sustainable agriculture programs.

This last provision is potentially a mixed bag on impacts, since it doesn’t necessarily track the highest emitting sources.  But it may allow continued funding for high speed rail, which is on financial life support and at this point is only propped up by cap-and-trade proceeds.  The governor doesn’t want to see the project die, which was part of his motivation for getting the auction reauthorized.

Meanwhile, AB 167 is a must-pass companion bill would require stricter air pollution monitoring around industrial facilities and tougher penalties for violating pollution regulations.  This measure allows environmental justice advocates to claim some victory be securing the promise of direct emissions reductions from nearby polluters.

A number of environmental groups are not happy with the concessions, although the bill has received support from the likes of Environmental Defense Fund and tepidly from billionaire environmental activist Tom Steyer.

For my part, I think it’s an okay but not great deal.  It’s probably worth continuing the state’s cap-and-trade program, if nothing else to try to prove the concept in case it can be workable in other states and nationally.  And the auction proceeds provide some useful funding for everything from weatherization to transit to low-income housing.

Meanwhile, the state still retains a lot of authority over polluters via SB 32 and the state implementation of the Clean Air Act, and multiple complementary policies are still needed and remain in effect to reduce greenhouse gas emissions, such as the renewable energy, energy storage, energy efficiency, and electric vehicle mandates.

The vote could come as soon as Thursday, so stay tuned for the results.

UPDATE: The vote was just postponed to Monday, which could mean they’re having trouble getting the needed votes.

Video Of “Plugging Away” Report Release Event With Energy Commissioner Janea Scott Now Available

For those who missed the UCLA Law lunch event to launch the new EV charging report “Plugging Away: How to Boost Electric Vehicle Charging Infrastructure,” the video recording is now available.

The event featured a keynote address by The Honorable Janea Scott, Commissioner, California Energy Commission, as well as panel presentations by:

  • Tyson Eckerle, Office of Governor Jerry Brown, Business and Economic Development (GO-Biz)
  • Terry O’Day, EVgo
  • Dean Taylor, Southern California Edison

With the recent news that Volvo will be moving exclusively to models with plug-in batteries by 2019, the need for more EV charging stations will become even more pressing.

The report was also the subject of recent media coverage by KPCC radio in Los Angeles and NPR Marketplace Weekend (episode “Bad Movies and Good Wages” at 19 minutes in).

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