California

Crony Capitalism on Display in California's Cap-and-Trade Re-Authorization

The anti-climate change policy included plenty of sweeteners for favored industries.

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Neon Tommy/Wikimedia Commons

The California Legislature has reauthorized the nation's first state-run cap-and-trade program, to the delight of Governor Jerry Brown.

California has already raked in $3.4 billion from cap-and-trade auctions since the Legislature implemented the program in 2012, much of that money going to politically favored projects.

Brown and his allies in the legislature loaded the reauthortization bill, AB 398, with exemptions and sweeteners for favored industries to ensure its passage, angering a diverse set of interest groups and activists in the process.

"This is what good government looks like," said Brown in a statement following cap-and-trade's final passage Monday night.

Shawn Lewis, communications director for the California National Federation of Independent Businesses, saw it a bit differently.

"The way the deals were cut…cutting out small businesses, cutting out working families, who are trying to just live their lives, is a very frustrating state of public policy," Lewis says.

Reauthorization will raise California's gas prices, already some of the highest in the nation, by 15 to 64 cents a gallon by 2021 according to the Legislative Analyst's Office, potentially costing consumers as much as $2 billion a year.

Cap-and-trade—which caps greenhouse gas emissions in the state, and auctions off emitting rights to industry—has already hit small businesses and consumers hard through increased fuel costs Lewis tells Reason.

The Legislature gave away expemptions to lessen the impact on larger industries. A partial sales tax exemption for manufacturers was extended past its initial 2022 expiration date, and was expanded to include power companies and agricultural businesses. Lawmakers suspended a special fire prevention fee on rural landowners.

They included those measures to get politically powerful groups like the Chamber of Commerce and the Western Growers Association on board with cap-and-trade, but did little to convince the small businesses represented by NFIB.

At the same time, the Legislature managed to outrage hardline environmental groups.

"Instead of setting a national precedent for aggressive, equitable climate policy, we rolled out the red carpet for industry," said Amy Vanderwarker of California Environmental Justice Alliance in a press release, adding that "California's most vulnerable communities will bear the burden of these failures."

Also helping to corral support for cap-and-trade reauthorization is the added revenue the scheme would bring from continued auctions of greenhouse gas emitting credits.

Among the beneficiaries of cap-and-trade are California's high-speed rail project—currently a gross greenhouse gas contributor— which nonetheless has received $800 million in funding, while affordable housing developments, hardly a climate change priority, have gotten another $570 million.

The mayors of several California cities backed reauthoritization in the chase for the pork inherent in cap-and-trade. Chris Cabaldon, mayor of West Sacramento, urged a yes vote on the cap-and-trade program on Twitter, pointing out that it was partially funding his city's $150 million streetcar project. Ditto Fresno Mayor Ashley Swearengin, who's relying on the program to fund renovations of a hundred-year-old downtown hotel.

All of this in the name of environmentalism and underwritten by businesses not favored by elected officials, Lewis says.

"We're increasing costs on small businesses to pay for high-speed rail, to pay for credits to buy Telsas," he says. "I don't know how that's saving the environment. I don't know how that's preventing the sky from falling."

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  1. As long as climate change legislation continues to damage for-profit businesses, then it can only be a good thing right?

    Is there any doubt left that ACC is a rouse perpetuated by pols and leftist minions? It was capitalized upon by lobbyists and pols as a way to get rich on the sympathies of stupid people.

    It has the undying support of leftists who only really want to see for-profit businesses go down in flames all under the auspices of their brainwashed hatred for fossil fuels. Fossil fuels, of course, which have made the world a better place and which afford the cheaper energy that developing economies want to make their loves better.

    Beyond being a scam, ACC is the domicile of luddite assholes who have no idea of the wonders of capitalism and the progress with which we have all benefited exponentially over the last 120 years.
    At best it is only a theory and bears much more research before government mandates should ever be considered to the detriment of the producers and the economy.

    1. It is a two fer for progressive politicians. They get rid of those evil Capitalist Businesses at the same time getting the peasants back into congested urban environments where they are far easier to control. The worst thing to happen to the progressive movement was the invention of the car and as a result the suburbs where people could move away from the corruption, crime and insane political machines that rule big cities in the US. Their dream of progressive utopia died when they could no longer rule the masses in cities. So they have been trying everything in their power to get people back under their thumb. So by making driving expensive that will then force people to get back to the pedestrian mass transit lifestyle that progressives seem to love so much. that gets people back into the cities where their vote doesn’t matter and they can get their little Venezuela to come to life.

    2. Does libertarianism and climate denial go hand in hand? Get the science right and this anticapitalism just vaporizes. Wrecking our climate for short term gain is totally inane.

    3. You don’t understand theory from the science point of view. ACC is a working and valid theory with reality observations backing it up.

  2. California, fighting the Angry Volcano God, one crony deal at a time.

    Onward, Climate Change Soldiers! Onward!

    1. There’s a Catholic retreat near where I live, whose sign out front changes aperiodically as it changes Catholic hands. For a while it proudly proclaimed “Legionaires for Christ” and that somehow just seems wrong; not only soldiers for the original peacenik, but Roman soldiers, the very ones who killed him.

      1. Legionaires for Christ… gives this story new meaning.

        http://abcnews.go.com/Health/l…..d=12924405

  3. “This is what good government looks like,” said Brown in a statement following cap-and-trade’s final passage Monday night.”

    Quoth the failed Jesuit who has been in power during two historic droughts and done NOTHING to add water storage anywhere in California.
    The populace are SINNERS and we should suffer; getcher ‘lowered expectations’ from moonbeam!

    1. To me, that quote was both astonishingly accurate and revealing. That IS what good government looks like. Corrupt as fuck. Cronyist to the core. That IS what good government looks like. We should all stop bitching about corruption and cronyism as reflection of bad government. We need to truly *understand*… that IS what good government looks like.

      Now, just imagine if we had BAD government.

      1. you must be talking about Trump for corruptoin?

  4. The march towards Calizuela picks up the p[ace a bit.

  5. Politicians trying to simulate a market because they can’t stand the idea of ordinary individuals making decisions on their own. I honestly do not know if it’s because they fear the idea of spontaneous order or don’t believe it; I think they don’t either. It’s just icky and gives them the creeps.

    But the sad part is how awful their simulations are. It’s like trying to simulate Greek / Roman statues with old fashioned blocky Legos, or viewing the Mona Lisa on a pixellated Apple I.

    1. Power is an end, not a means. They do it because they can. Because they have the power. No other reason.

      1. I know, but it really is like watching fine art on a crap CGA screen. Markets are fascinating in their dynamism, fluidity, flexibility, efficiency, and surprises. To distort that beauty, to only see it with pixelated CGA snapshots, is depressing.

  6. “and auctions off emitting rights to industry”
    Did the California legislature just publicly admit to conspiracy to violate the very clean air laws they passed?
    How is this NOT bribery writ large?

    Oh, wait. California.
    Secede already, and please take Hawaii with you. Form a new nation, and get annexed by China. Everybody wins.

  7. “This is what good government looks like,” said Brown in a statement following cap-and-trade’s final passage Monday night.

    Shawn Lewis, communications director for the California National Federation of Independent Businesses, saw it a bit differently.

    “The way the deals were cut?cutting out small businesses, cutting out working families, who are trying to just live their lives, is a very frustrating state of public policy,” Lewis says.

    Shawn, maybe you didn’t hear it the first time. This is what government looks like.

    1. Shawn represents those corrupt little businesses which have been denied a spot at the corrupt big business trough.

  8. Reauthorization will raise California’s gas prices, already some of the highest in the nation, by 15 to 64 cents a gallon by 2021 according to the Legislative Analyst’s Office, potentially costing consumers as much as $2 billion a year.

    I know Reason cares about this, but I’m not sure even yelling this over the megaphone matters. I’m pretty sure the people who wanted this know it’s going to raise gas prices that much, and furthermore consider it a feature. Except for a few very dimwitted people, I’m not sure anyone believes that carbon-based energy systems will get cheaper with cap-n-trade. The whole point is to raise the price of carbon-based energy making it less attractive than wind or solar.

    1. As we use fossil fuels less and less the cost goes down. It is a market signal that tells society to change. And a necessary one.

  9. “We’re increasing costs on small businesses to pay for high-speed rail, to pay for credits to buy Telsas,” he says. “I don’t know how that’s saving the environment. I don’t know how that’s preventing the sky from falling.”

    When you accept the fact that environmentalism is a political movement and not a scientific one, everything begins to make sense.

    1. I am an environmentalist politically, and I am based in science. People depend on me to know the science accurately. Both are important

  10. What in the sam hill is Climate Justice?

    1. It’s the moral imperative of giving lotsa money to NGOs that purport to help the victims of the Angry Volcano God.

    2. It’s when women no longer have to use those little heaters under their desk because the patriarchy was smashed, allowing them to raise the temperature in the office by 7.5 degrees.

      1. That was awesome.

    3. What in the sam hill is Climate Justice?

      It is the poor that are going to suffer the most under climate change.

  11. We need to get rid of the federal ethanol subsidy. Trump get on it. Oh yeah…Iowa.

  12. I cannot say how hilarious it is hearing critical remarks about “crony capitalism” from “libertarians”. It’s got to be the easiest way to demonstrate how naive or nefarious or deluded “libertarians” are: yes, get rid of democratic governing regulation and those weak and incompetent crony capitalists will have it waaay harder.

    1. Did you imagine there was some sort of point buried in that lefty pile of shit?

      1. Look you white cishetero racist shitlord of a male, passing industry-crippling regulations that will increase the cost of gasoline and make it more expensive to live in a state with already ludicrously high costs of living, and then exempting the people who give generously to your reelection campaigns is JUST GOOD GOVERNMENT! Only anarchist libertarian hateful bigots like you would oppose something that will in the long run* make the world a better place.

        (*By that statists mean ‘long after everyone currently on the planet has died.’ But it’s totally worth it because social contract Mommy Gaia and anyone who thinks otherwise is racist against earthlings.)

        1. Plus we’ll offset any increase in the cost of living by raising the minimum wage to eleventy-billion dollars an hour, SO THERE YOU INTOLERANT SHITPILE!! OMG I JUST CAN’T EVEN RIGHT NOW!!!

          1. Exactly. All of this stuff makes sense if you believe in the power of the fiat. That and Willow defeating Bavmorda.

    2. get rid of democratic governing regulation and those weak and incompetent crony capitalists will have it waaay harder

      Yep. It’s much harder to compete in the market than it is to buy off politicians and soak taxpayers.

    3. I am quite sure I am wasting my time, but what the hell.

      Crony capitalists LOVE regulation. They are usually bigger businesses who can buy influence from elected officials. And they are the ones who can afford to soak up the regulatory costs. Meanwhile the small businesses are crushed. And that is why crony capitalists love it. It gets rid of all of the annoying competition.

      1. Trudy’s response:
        “But polar bears”

        You have indeed wasted your time. Its like having a conversation with a union member.
        Utter brainwashing cannot be reversed until the water cannons are coming down the street.

      2. small businesses love renewable energy. Many of them strive to be responsbible.

    4. LOL you do know, don’t you, who those crony capitalists are cronies of?

  13. “…by 15 to 64 cents a gallon by 2021 according to the Legislative Analyst’s Office, potentially costing consumers as much as $2 billion a year.
    Cap-and-trade?which caps greenhouse gas emissions in the state, and auctions off emitting rights to industry.”

    This is the real reason to implement stuff like this. More money for government coffers from lefty zealots and normal people alike. Allowing Taxifornia politicians to spend as it sees fit.

    1. Why does this bring out vitriol? CLImate change is true. Its like even conservatives around the world know this is true.

  14. “This is what good government looks like,” said Brown in a statement

    I don’t think any of these words mean what Brown thinks they mean.

  15. Good Gov’t. Good and hard.

  16. How are they going to pay for all their programs when there are no businesses and jobs left there? Take money from the Hollywood crowd? Yeah, like that’ll happen.

  17. It should not be called “Crony Capitalism.” That term is socialist propaganda, in much the same way as “State Capitalism.” Both terms are used to divert blame when socialists finally have to admit that their pet government policies have gone awry. The failures and bad outcomes are not the result of socialism – oh goodness no! – but rather the result of capitalism.

    Call it “Crony Communism” or “Crony Socialism.” Or just “Cronyism” if you want to be scrupulously neutral about not assigning blame to any particular economic system.

    1. precisely. Free market Capitalism has nothing to do with collusion with government and legislative protection from competition.
      It is cute how they had to use capitalism in the term as the culprit. Kind of like saying National Socialism was a right wing movement. How can something that so heavily involves the heavy hand of government and force be a right wing anything? Not even sure what right wing is since all freedom lovers simply want liberty, private property rights, and contract enforcement. Those along with wanting to be left alone and wanting to leave others alone is hardly extreme.

      Our system is actually far more akin to fascist Germany pre-WWII. That was a system of pay to paly, utter cronyism, and imminent failure. it was built upon nationalism and borrowing.

      Sound familiar?

    2. I’m inclined to just call it “theft”.

  18. It’s just another tax at the end of the day, in a state that loves taxes.

    1. hhhhhmmmmmm I think yyou don’t understand the science of climate change. How are we going to change?

  19. “”Instead of setting a national precedent for aggressive, equitable climate policy, we rolled out the red carpet for industry,” said Amy Vanderwarker of California Environmental Justice Alliance in a press release, adding that “California’s most vulnerable communities will bear the burden of these failures.””

    Well enviros, this is what happens when you turn to politicians for solutions. Expect the ream.

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