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Environment & Science

ARB Chair Mary Nichols to manufacturers: fight climate change, not California's cap-and-trade plans

California Air Resources Board chief Mary Nichols, whose agency oversees state climate policy efforts under AB 32.
California Air Resources Board chief Mary Nichols, whose agency oversees state climate policy efforts under AB 32.
Molly Peterson/KPCC

I wrote earlier about how manufacturers and refiners hate cap-and-trade. Well, based on the just-released statement from California Air Resources Board chair Mary Nichols, they're getting a little tired of hearing that over at the agency that's been implementing AB 32 for the past six years.  

Nichols zinged the businesses who came to today's CARB hearing to protest the cap-and-trade market. 

We will hear a great deal today about, why we do not need an auction. Surprisingly, this opposition is coming not from the many environmental and environmental justice advocates who supported direct regulation, in which each facility would be told exactly how many tons of greenhouse gases to reduce on a specific schedule.

Instead, as we draw closer to the point of allocating allowances and opening the first auction of 2013 and 2015 allowances, California businesses who argued for the largest possible market are deciding they don't like the market after all.

No surprise there, and Nichols isn't the only one who disputes the manufacturers' take on things. Two economists who have commented regularly on AB 32 implementation, Pomona College's Bo Cutter and UCLA's Matt Kahn, released their own statement during today's hearing: 

This industry-designed scenario would actually reward polluters for past pollution by providing them with more allowances. A more equitable scheme would be to use the new revenue generated by the carbon market to cut California taxes and to fund key public programs during this time of sharp budget deficits.

CARB Chair Nichols also points out that getting on board earlier rather than later could be economically beneficial for businesses involved; outside of electric utilities, she said, they don't have to take part in the auction at all if they don't feel like it. She went on:

Utilities and industrial sources subject to the cap and trade rule will be issued allowances covering fully 90% of the greenhouse gases they are currently emitting for the first years of the program. As time goes on and the cap declines, those who have cleaned up will have extra allowances to sell.  Others will need to do additional cleanup or purchase extra allowances or get offsets created by businesses outside the cap that have been able to find ways to permanently reduce emissions.

Frankly, Nichols sounds more than a little sick of all the opposition. "At this point it's time for CMTA [California Manufacturers & Technology Association] and WSPA [Western States Petroleum Association] and the Chamber to join the many hundreds of businesses that are investing in the fight against climate change instead of fighting AB32," she said.