Imagining California’s Clean Energy Future.

by Susan Frank, Director, California Business Alliance for a Green Economy

The war against AB 32 was fought and the anti-clean energy forces were defeated back in 2010, but as anyone who works in or around the political process knows, few victories are permanent without being vigilant. Here are some facts. AB 32 is the law of the land today. It is being implemented and the public wants to see it proceed. Yet the polluting industries that would like to see AB 32’s demise – including the California Chamber of Commerce, California Manufacturers and Technology Association (CMTA), and Western States Petroleum Association (WSPA), along with their respective lobbyists – haven’t given up on the notion that they can protect the status quo and, thus, their monopoly on dirty fuels.

The opposition’s current target: the November auction of pollution allowances, as part of the AB 32 cap and trade program. Their message: give us all of our allowances for free, rather than just the 90 percent that is currently planned. So let’s get this straight – a core tenet of AB 32 is to hold polluters accountable. But these oil and old manufacturing companies want to continue to pollute with impunity, and don’t want to have to pay a price to do it? Furthermore, the proceeds from the auction (of the just 10 percent of allowances that will be sold) will be invested in disadvantaged communities disproportionately impacted by air pollution as a result of legislation signed into law by Governor Brown this year. Gary Gero of the Climate Action Reserve said it best recently in an interview with E&E TV: “At the end of the day, the cap and trade program is a tool for achieving emission reductions. And sometimes we forget that there’s a goal at the end of the day.”

The state chamber, CMTA and WSPA like to perpetuate unproven myths that cap and trade is going to kill jobs and harm our economy. Alliance member Ruben Guerra, Chairman and CEO of the Latin Business Association, and I recently co-authored an op-ed published in the Sacramento Bee. It is worth excerpting part of that piece, in response to the opposition’s doom-and-gloom claims:

“…our members believe that requiring major polluters to pay for just 10 percent of the allowances they need is more than fair. We need to move past the rhetoric of a few industries that want a free ride at the expense of smaller businesses. All Californians stand to lose if these forces succeed in slowing our state’s transition to a clean and efficient economy. Our business members support AB 32 because it puts an economic value on efficiency, and shifts spending from polluting goods and services to clean ones…they know it is fueling innovation and growing jobs. And they know it feeds our state’s fast-growing clean tech sector, while racking up efficiency savings for mainstream businesses.”

What else do we know about AB 32 and the cap and trade program? We know that the California Air Resources Board is focused on implementing it correctly and successfully. We know that opposition groups don’t like the notion of having to pay more to pollute. We know that the broader business community – including small businesses, clean tech and mainstream companies – supports AB 32 and the policies that fall under it, all of which are aimed at cleaning up our air, improving public health and reducing the impacts of climate change.

As a former chamber of commerce executive, I know that no one business group speaks for all California companies. And the California Business Alliance for a Green Economy, while it includes 1,235 businesses from around the state, still only represents a fraction of the companies in California. But that also means that WSPA and CMTA shouldn’t purport to speak for anyone other than their oil company and manufacturing members. And the public needs to remember that, along with the California Chamber, these organizations have been working to derail or kill AB 32 since the law was passed in 2006. Plain and simple, they don’t want to see this law implemented, and it appears they won’t stop until they have spent millions of dollars on misleading advertising and media outreach trying to change hearts and minds.

There is just one problem. These opposition groups underestimate the intelligence of the California populace, which is smart enough to figure out that when gas prices spike like they have this past week, that oil companies are profiting in the millions while consumers are paying at the pump. And when an oil company buys a new refinery in Southern California, that must mean that they don’t think AB 32 will cause them that much harm, given they are investing billions in more refining capacity, infrastructure and employees.

I like to imagine a future where the California Chamber, WSPA and CMTA embrace the law of the land, and California’s clean energy future. This dream scenario would cost them a lot less and would allow the state to realize the goal of AB 32 – a cleaner, healthier, and economically-resilient future for us all.

Of the 44 companies represented by the California League of Food Processors, only 13, or just under 30% are actually subject to AB32. Of these 13 companies, every single one of them is eligible to get 90% of their allowances for free.

© California Business Alliance for a Clean Economy

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