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Cap and Trade oversight hearing highlights need for SB 775
Improved Cap and Trade system to reach 2030 targets is most cost-effective approach, experts say
Sacramento – Building on the lessons learned under the current Cap and Trade system, California should extend the program beyond its 2020 expiration date to enable the state to meet its goal of reducing greenhouse gas emissions to 40 percent below 1990 levels by 2030, experts testified today in a Senate Environmental Quality Committee oversight hearing.
Many of the speakers also spoke favorably of key elements in Senator Bob Wieckowski’s (D-Fremont) Senate Bill 775, including calling for carbon price ceilings, providing more certainty in the system, reducing or eliminating the use of free allowances, and giving residents a climate dividend to help offset cost increases.
“A viable Cap and Trade offers the most flexibility for California industries to meet the state’s GHG reduction goals, but important changes are needed beginning in 2021 to strengthen the system,” said Wieckowski, the chair of the Senate Environmental Quality hearing. “That is what many of the experts told us today. We need to implement a price collar to prevent the cost of carbon from skyrocketing, gradually increase the price to reduce emissions and spark innovation, and give back a climate dividend to California residents. These components, along with a two-thirds vote to reduce the threat of a Prop. 26 legal challenge, are all key components of SB 775.”
Cap and Trade is a rule adopted by state regulators to help reduce heat-trapping gases that cause global warming. Many businesses and economists believe it results in less expensive compliance costs than direct regulation.
Committee members heard from Mary Nichols, the director of the Air Resources Board, the Legislative Analyst’s Office, two experts on carbon pricing, industry representatives and environmental organizations.
“SB 775 would complement the standards and incentives that are reducing greenhouse gas emissions in California, and would help meet the reduction requirement of last year’s SB 32 (which sets the 2030 GHG reduction goals),” said Bill Magavern, policy director of the Coalition for Clean Air. “The architecture of the program prescribed by SB 775 would substantially improve on the existing cap-and-trade regulation.”
Senator Wieckowski represents the 10th District, which includes southern Alameda County and northeast Santa Clara County.