California is a wonky state and now, it seems a hypocritical one.
The Global Warming Solutions Act, which Governor Schwarzenegger signed into law in 2006, is essentially ‘Cap & Trade’ on the state level, with the lofty goal of reducing CO2 levels to 1990 levels, by 2020. While this is a goal we should all strive to attain, like the Federal Cap & Trade legislation, the law seeks to attack industry and not address the overwhelming issue of the state with the most vehicles on the road.1
Before we go any further, let’s discuss why that matters, so you will have a better understanding of the complex, yet core issue.
Cap and Trade, which is a core component of the Global Warming Solutions Act, is a system where the California Air Resource Board would oversee, monitor and implement a ‘credit’ system, which industry would use to ‘pay’ for the pollution they emit. Think of it similar to carbon offset credits people and companies buy, only this is credit based on a market trade system. The law was not approved by voters; rather it was solely passed by the legislature.
CARB would determine how much pollution X business (refiners, cement factories, power companies) produces and each industry type would be given a set number of credits per year to use; if they emit less pollution, those credits can be sold in a market to other companies that use more than their allotted credits. This creates a yearly cost of millions, if not hundreds of millions of dollars for businesses and, as you might expect, the cost will be passed along to the consumer. Now, the law doesn’t state specifics, but if California’s law adopts the Federal standard for this policy, refiners would not only be responsible for the pollution they emit from operations, but also the emissions from the product they create when driver use the fuels! To add to the issue, the credits issued to the refiners are far less than other industry and certainly would not cover the emissions of the vehicles that use the fuel. This would be like charging cement manufacturers for each home that uses their product or power companies for each kWh their customers use; the refiners are the only industry treated this way.
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