With Rare Bipartisan Climate Support, California Extends Its Cap-and-Trade Program

by | July 18, 2017

By Melanie Mason and Chris Megerian

California lawmakers voted Monday evening to extend the state's premiere program on climate change, a victory for Gov. Jerry Brown that included unprecedented Republican support for fighting global warming.

In a break with party leaders and activists in California and Washington, eight Republicans joined with Democrats to continue the cap-and-trade program, which requires companies to buy permits to release greenhouse gases into the atmosphere.

The legislation would keep the 5-year-old program operating until 2030, providing a key tool for meeting the state's ambitious goal for slashing emissions. Cap and trade also generates important revenue for building the bullet train from Los Angeles to San Francisco, another priority for the governor.

California's program is the only one of its kind in the U.S. and has been considered an international model for using financial pressure to prod industry to reduce emissions. Bipartisan support for the system comes as Republicans in Washington, including President Donald Trump, have blocked, resisted or undermined national efforts to fight global warming.

"California Republicans are different than national Republicans," said Assembly Republican leader Chad Mayes, R-Yucca Valley, who pushed members of his caucus to work with Democrats on the issue. "Many of us believe that climate change is real, and that it's a responsibility we have to work to address it."

The legislation to extend cap and trade, Assembly Bill 398, passed 55-21 in the Assembly and 28-12 in the Senate.

Lawmakers also approved a companion measure, AB 617, aimed at reducing pollution that causes local public health problems such as asthma. It passed 50-24 in the Assembly and 27-13 in the Senate.

"Republicans and Democrats set aside their differences, came together and took courageous action," Brown said in a statement before holding a celebratory bipartisan news conference in the Capitol. "That's what good government looks like."

The willingness to support cap and trade was hardly unanimous among GOP lawmakers. Only one Republican in the Senate, Tom Berryhill of Modesto, voted for the proposal. A majority of Assembly Republicans, who were involved in negotiations for weeks, did not support the plan.

But Republican backing was much stronger than in the past, when major California climate policies never gained more than one or two votes from the minority party. Some grew emotional as they spoke on the floor.

"We have to make decisions as legislators _ do we do what is right or do we do what is politically right?" said Assemblyman Devon Mathis, R-Visalia, choking up during his speech.

Support for cap and trade is a bid for political relevance for Republicans who have been shut out of all positions of power in state government and have paltry prospects to regain influence.

There is a "broad consensus" among California voters that global warming merits a response from Sacramento, said Mark Baldassare, who handles polling as president of Public Policy Institute of California.

"While Democrats are more supportive of climate change policy than Republican voters overall, there's a substantial number of Republican voters (who say) climate change is real and the state should be acting," he said.

Some advocates hope California could become a political trendsetter when it comes to broader political support for fighting climate change.

"There's an important signal coming from California Republicans' willingness to engage in the conversation," said Bob Inglis, a former South Carolina congressman who leads republicEn, an advocacy organization dedicated to persuading conservatives to back climate policies.

Former Republican Gov. Arnold Schwarzenegger, who signed the 2006 legislation that provided the foundation for cap and trade, said the bipartisan vote "fills me with tremendous pride."

"We can fight for free market policies to clean up our environment for our children at the same time we fight for a booming economy," Schwarzenegger said in a statement.

Others doubt there will be ripple effects.

"Is this California leading the way with a new Republican philosophy? No," said Mike Madrid, a Republican strategist. "That's not going to happen any more than Ohio Democrats advocating for backing off of gun control measures will spread to California."

Monday's vote involved an unusual coalition for a climate change measure because Brown wanted a two-thirds vote for the legislation to insulate cap and trade from legal challenges.

National advocacy organizations, such as the Environmental Defense Fund and the Natural Resources Defense Council, backed the legislation despite initial concerns that it wouldn't be tough enough on greenhouse gas emissions.

Also supporting the deal were powerful business groups, including the California Chamber of Commerce and associations representing manufacturers and agriculture interests. Oil companies, while not staking a public position, backed the deal behind the scenes. Although businesses have fought the program in the past, they viewed it as less costly for their bottom line than other direct regulations that have been considered to reach the 2030 goal.

Senate leader Kevin de Leon, D-Los Angeles, called the measure a "legislative unicorn" because of its broad support from organizations usually at cross purposes.

Meanwhile, activists at the California Environmental Justice Alliance and the Sierra Club continued to criticize the measures as too favorable to industry. Particularly troublesome to them was a provision to limit some separate regulations on refineries.

Also opposing the legislation were conservative activists disappointed to see Republicans sign on to legislation that could increase costs for Californians.

Earlier this year, Republicans almost universally opposed funding road repairs with an increase in the gasoline tax.

However, cap and trade could boost prices at the pump 24 to 73 cents a gallon by 2031, according to the nonpartisan Legislative Analyst's Office. By voting to extend the program, Republicans are weakening a potential political cudgel they could have used against Democrats during next year's campaigns, said Jon Coupal, president of Howard Jarvis Taxpayers Association.

"They lose the moral high ground of representing themselves as representing the middle class," Coupal said.

Cap-and-trade legislation was opposed by U.S. House Majority Leader Kevin McCarthy, R-Calif., who had Mayes' position in the state Legislature a little more than a decade ago.

In a letter signed by some of his California House colleagues, McCarthy said the measure would end up "raising more taxes on California drivers and families so that Sacramento has more money to spend wastefully" on building the bullet train.

Some establishment Republicans tried to provide political cover. George Shultz, a former secretary of State who has supported climate policies, wrote in a letter that the late President Ronald Reagan "would be proud" to see cap and trade receive bipartisan support. Former California Gov. Pete Wilson also signaled his support.

Securing Republican support involved a number of concessions, including rolling back a fire prevention tax levied on landowners largely in rural areas of the state, which has long been a target for repeal by the GOP. Republicans also secured the extension of a tax credit for manufacturers, which was broadened to include some power companies.

More negotiations focused on a proposed ballot measure, Assembly Constitutional Amendment 1, that Republicans hope will give them more say over how cap-and-trade revenue is spent. The proposal was passed by lawmakers, and if approved by voters next year it would require a one-time two-thirds vote to continue spending the money in 2024.

The higher threshold could provide Republicans with an opportunity to undermine funding for the bullet train project, which counts on cap-and-trade revenue.

(Times staff writer Liam Dillon contributed to this report.)

(c)2017 Los Angeles Times