California Cap-and-Trade Put On Hold—At Least for Now

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Does it matter what good intentions cost?

Back in 2006, during flusher times, the California legislature passed and then-Gov. Arnold Schwarzenegger signed AB 32, the California Global Warming Solutions Act. That Act requires the state by 2020 to reduce its emissions of greenhouse gases to 1990 levels. Last year, California residents voted down a referendum which would have delayed implementation of the Act until unemployment rate in the Bear Republic state had fallen below 5.5 percent. The current unemployment rate remains at over 12 percent.

Yesterday, a state court judge put on hold the cap-and-trade scheme devised by the California Air Resources Board to implement AB 32. As the San Francisco Chronicle reports:

California's attempt to implement its landmark global warming law with a market-oriented "cap-and-trade" system of pollution credits hit a snag Monday with a judge's ruling that the state had not looked hard enough at alternatives.

The ruling by Judge Ernest Goldsmith of San Francisco Superior Court does not prohibit the state Air Resources Board from adopting cap and trade or explicitly require that officials delay its scheduled implementation next year. But Goldsmith said the board must first analyze other options, such as a tax on carbon emissions, and explain why it did not choose them.

The state agency "seeks to create a fait accompli by premature establishment of a cap-and-trade program before alternatives can be exposed to public comment and properly evaluated," Goldsmith said in Friday's ruling, which the state and environmental group that sued over the plan received Monday.

As the CARB spokesman Stanley Young told the Chronicle:

A broadly worded ruling "puts at risk a range of efforts to move California to a clean-energy economy and improve the environment and public health," Young said.

Whatever a cap-and-trade scheme may do for the climate,  it will not fufill the goal of creating lots more jobs as is often claimed by clean energy proponents. Last February,  I noted in my column, The Unseen Consequences of "Green Jobs", that a 2009 report [PDF], by Hillard Huntington, executive director of the Energy Modeling Forum at Stanford University concluded:

"Policymakers and government agencies should look askance at the claimed additional job benefits from green energy."

In addition, another study by University of Texas economist Gurcan Gulen agreed:

"Adding 'net' jobs cannot be defended as another benefit of investing in these [green] technologies."

Despite the fondest hopes of its proponents, building out clean energy projects is not the panacea for our current economic woes. In any case, the court ruling does not rule out the eventual adoption of a cap-and-trade scheme.

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  1. That Act requires the state by 2020 to reduce its emissions of greenhouse gases to 1990 levels.

    Actually, the Cal government was trying its earnest to achieve those goals, at least indirectly: by driving businesses and people away towards Nevada, Texas and Oklahoma.

      1. I wonder how Detroit’s current emmissions compare to 1990 levels.

        1. Including the tire fires and burning buildings?

  2. California’s attempt to implement its landmark global warming law with a market-oriented “cap-and-trade” system of pollution credits hit a snag Monday with a judge’s ruling that the state had not looked hard enough at alternatives.

    The “market-oriented” being some sort of inside joke. Cap-and-trade is as “market-oriented” as government licensing “auctions.”

    1. Or as market-oriented as their earlier energy “privatization.”

      1. Re: Spiny Norman,

        Or as market-oriented as their earlier energy “privatization.”

        Shit, yeah, tell me about it. Anti-market ideologues were brandishing that one as an example of the failure of “privatization.”

        1. You set up a crippled market and then complain that it doesn’t work well. Only a leftist could love that.

  3. Hillard Huntington, executive director of the Energy Modeling Forum at Stanford University concluded:

    “Policymakers and government agencies should look askance at the claimed additional job benefits from green energy.”

    But that’s like saying people should look askance at the claim that snake oil cures gout. I mean, what’s left then???

  4. California’s attempt to implement its landmark global warming law with a market-oriented “cap-and-trade” system of pollution credits hit a snag Monday with a judge’s ruling that the state had not looked hard enough at alternatives.

    Does California have some kind of constitutional requirement that requires the legislature to look “hard enough” at alternatives?

    It seems like maybe he should shut his piehole and leave the legislature to do whatever stupid thing it wants in this case.

    1. Re: Night Elf Mohawk,

      Does California have some kind of constitutional requirement that requires the legislature to look “hard enough” at alternatives?

      No, the judge just pulled that one out of his ass… just like almost all California state judges do.

      1. Live by the bullshit, die by the bullshit.

        1. If only thay had Clint Eastwood when he was Dirty Harry…he would squint, and look HARD at the alternatives…
          Alternatives: “We poop our pants!”

  5. I am happy to find this post very useful for me, as it contains lot of information

  6. You have to keep in mind that the plaintiffs here aren’t necessarily the Kochs or some other anti-regulation group. The plaintiffs filed the suit solely because they would rather the state regulate more heavily and unilaterally and keep market mechanisms out of it. What they want is even strict and (arguably) more expensive in the end. AND, the judge ruled that CARB had the standing to do the regulations… the argument was just about what *kind* of regulations.

    This isn’t necessarily good news for GW skeptics, unless your time horizon is really really short. ALL of it is still going to eventually happen absent an injection of sense into the legislature, which really seems unlikely.

    1. Thats a good insight.
      My view is that the sooner people start enjoying the consequencs of their screwy decisions, the sooner people will realize that you can’t just legislate rainbows, butterflies, and rose scented farts into existence.

      1. I was in California earlier this month visiting with some friends who complained nonstop about their property taxes and gas prices, yet still had the Obama sticker on the refrigerator door.

        Not that Obama is responsible for those things specifically, but the mindset of someone who would vote for him in the first place, and keep the sticker up even now, sure is.

        It’s just the way most urban Californians are – their perceived moral vanity trumps any real world consequences.

  7. West Texas: You’re right — As you note, the groups that sued in this case are “environmental justice” groups that want stronger measures.

    1. Mr. Bailey, I have it on good authority that corsets will be introduced as a CO2 emission reduction product very shortly.

    2. Re: Ron Bailey,

      As you note, the groups that sued in this case are “environmental justice” groups that want stronger measures.

      Or may be Texan, Nevadan or Oklahoman business advocacy groups in disguise…

      1. That would indeed be devious. Nonetheless, I work in the energy business (sometimes even renewable fuels, no less) and I have it on good authority that there really are people out there who are that screwy and in love with fascism.

    3. Mr. Bailey, please thread your comments like everyone else except P Brooks. Thank you.

  8. That Act requires the state by 2020 to reduce its emissions of greenhouse gases to 1990 levels.

    Considering the ongoing exodus of businesses and productive citizens, they might make it.

  9. Should be very interesting to see how that turns out.

    http://www.real-privacy.it.tc

  10. California’s attempt to implement its landmark global warming law with a market-oriented “cap-and-trade” system of pollution credits hit a snag Monday with a judge’s ruling that the state had not looked hard enough at alternatives.

    This is interesting to me. California, however flawed it is, came to this cap-and-trade scheme through a relatively robust democratic system.

    The legislature voted for it, it was signed into law by the governor, and the people of California, as collectively stupid as they are voted against tempering the law by tying it to unemployment.

    And yet a judge can just say, “Yeah, no, it’s not that the law’s unconstitutional, it’s not that it violates some ethereal rights of some individuals or group, it’s just that the state didn’t try hard enough.”

    Do I have that about right?

    1. The legislature voted for it, it was signed into law by the governor, and the people of California, as collectively stupid as they are voted against tempering the law by tying it to unemployment.

      Why did not the statewide print media (Los Angeles Times, San Francisco Chronicle) tell the truth about the law?

    2. exactly right. After trying, ernest trying, truly trying, cromulent trying, and sincerely trying, other imaginary judicial emanations and prenumbras can be used to uphold, overturn, or enforce based on a coin flip.
      Its California’s no fault governance.

      1. I guess I’m also partially disappointed that I don’t get to watch California destroy itself. I had the popcorn out and everything. Nothing satisfies me more than watching the Stupid that is California.

      2. Its California’s no fault governance.

        Patiently waiting for the State Constitution to outlaw consequences.

  11. How is it that politicians are sticking to these plans that will not solve anything, while a technological quick fix already exists, and has been known to exist since 1983?

  12. Everyone knows that CO2 is a pollutant and a toxin. Just ask your local forest.

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