By Mark Altgelt
Special to the Herald
California legislators recently took a giant step toward creating a sustainable future by passing Senate Bill 100, the “California Renewables Portfolio Standard Program.” That legislation requires development of renewable energy and zero carbon resources for California to produce 100 percent clean energy by 2045.
Senate Bill 100 will create millions of high paying jobs while significantly reducing greenhouse gas emissions in conjunction with the “California Global Warming Solution Act of 2006.”
The “cap and trade” section of the California Global Warming Solution Act of 2006 (Assembly Bill 32) is scheduled to expire in 2020. Senate Bill 775 has been introduced to extend cap and trade and make it a hybrid system that includes pricing carbon while eliminating carbon offsets and ending free carbon emission allowances.
SB-775, the “California Global Warming Solutions Act of 2006: market-based compliance mechanisms”, would place a cap on carbon dioxide emissions and allowances for emissions would be auctioned within a floor and ceiling price. The allowance floor price would start at $20 per ton in 2021 and rise $5 per year plus inflation starting in 2023, the ceiling price would start at $30 per ton and rise $10 per year starting in 2022.
SB-775 would establish a predictable, steadily rising price on fossil fuel and return the revenue collected in equal quarterly dividend payments to all California adult residents including the homeless, unbanked and undocumented residents.
Billions of dollars in dividend payments would be distributed to California households which would boost California’s economy and create millions of jobs, as economic studies have shown. Most low and moderate income households would receive more money from the dividends than they pay for fossil fuel.
The increasing cost of fossil fuel would create a financial advantage for people to invest in alternative energy which would help reach the goal of 100 percent renewable energy production.
A small portion of the allowance revenue would be invested in the California Climate Infrastructure Fund and the California Climate and Clean Energy Research Fund which would also create new jobs.
Border adjustments will protect jobs and businesses from leaving California by creating a level playing field through an equivalent carbon price on carbon intensive products coming into the state and a matching rebate for goods that are exported.
The economic incentive to invest in clean energy created by SB-775 would give the public more of a role in making the transition to 100 percent clean energy. The designated increases in fossil fuel prices and corresponding dividend payments would assure significant energy cost savings from investing in sustainable clean energy.
Most of the revenue from SB-775 would be refunded to every adult in equal dividend payments that would either be more or less than the cost of fossil fuel each individual consumes. Since government does not spend the money, technically it is not a tax. But a small portion of the revenue goes to green technology development or protecting and rebuilding infrastructure to defend against rising sea levels. So government does redistribute that money.
Protecting our individual and shared resources from undue harm is a vital role of government. Correcting the market’s failure regarding carbon pollution and returning the money to households is a simple and effective way to do just that.
SB-775 is an investment in our future by pricing greenhouse gasses in relation to the damage they are causing to the global environment and returning the dividends to everyone to stimulate our economy and transition to clean energy.
Fortunately the passage of Senate Bill 100 indicates the California State Legislature understands the urgent need for California to lead the world in producing 100 percent clean energy by 2045 while creating millions of clean energy jobs.
SB-775 could be voted on before August because it has been declared an urgent component of the greenhouse gasses section of the California Health and Safety Code.
Please write and call State Sen. Bill Dodd and Assemblymember Tim Grayson or your assemblymembers and ask them to vote Yes on SB-775 to effectively make the transition to 100 percent clean energy.
Mark Altgelt is a member of Californians for a Carbon Tax.