California Cap and Trade Mandate May Run Out In 2020
The key partner in North America’s biggest carbon emissions trading market may be forced to withdraw by a 10-year-old legislated sunset clause, unless California bureaucrats can figure out a way around it, Climate Central reports.
California is the anchor partner of the Western Climate Initiative (WCI), a regional carbon emissions cap-and-trade market that also includes Quebec, and which Ontario, British Columbia, and Manitoba have all pledged to join. Officials in Mexico are reported to be considering bringing their country into the WCI, as well.
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Last month, the California Air Resources Board, which manages the state’s participation in the WCI, said it planned to continue auctioning emissions permits—the trading of which constitutes the market—until mid-century.
But its confidence overlooks a sunset clause contained in the 2006 legislation that created the program in the first place.
“The cap-and-trade program was created by a 2006 climate law which stated that the ‘market-based’ system for achieving pollution cuts was ‘applicable’ until the end of 2020. The law requires that state officials ‘make recommendations’ to lawmakers for reducing greenhouse gas emissions after that time.”
If the state tries to keep the program going after that without a new legislative mandate, warned Danny Cullenward, energy economist at the Carnegie Institution for Science, “they will absolutely be sued. This is not a secret. The opponents of the system are well aware.”
Complicating things for administrators trying to provide future certainty to the program is that fact that renewing it by a vote in the legislature may require a two-thirds majority, thanks to a binding 2010 voters’ proposition which required that level of support for any new “tax” measure.
“Even as California officials are outwardly nonchalant about the profound legal challenges,” Climate Central reports, “behind the scenes they are scrambling to find solutions, quietly consulting outside experts as they attempt to unearth a regulatory fix that could bypass lawmakers without falling afoul of existing law.” (h/t to The Energy Mix subscribers Ralph Torrie and Judy Smith for first pointing us to this story)