One of the most high profile bills in the legislative session that resumes next week just got pushed into the center of the spotlight. AB 69, the measure to delay applying cap-and-trade regulations to transportation fuels, drew the attention of hedge fund billionaire Tom Steyer who pledged “to spend what it takes” to see that the greenhouse gases reduction law is implemented according to schedule.
If AB 69 does not move forward, beginning in January, the cap-and-trade provisions of AB 32, the California Global Warming Solutions Act, will cover motor vehicle fuels. Estimates range from a 15-cent to 70-cent increase in the cost of a gallon of gas if vehicle fuels are included.
Steyer’s move puts him at odds with some California Democrats who are concerned that their constituents and the economy will suffer with increased fuel costs.
AB 69 is authored by Henry Perea (D-Fresno), one of 16 Democrats who signed a letter to the Air Resources Board in June urging delay in the expansion of the cap-and-trade program. Perea’s bill would put off the implementation of the cap-and-trade rules on fuel for three years until January 2018 to allow time for businesses and individuals to prepare for the new rules.
In a recent Public Policy Institute poll, respondents were inclined to support the idea of oil companies producing fuels with lower emissions (76% Yes), but that support dropped dramatically (39% Yes) when the respondents were informed it means an increase of the gas prices at the pump.
Steyer’s money supports environmentalists who want no changes to the timetable and also bucks up other Democrats who oppose any delay to the law’s implementation. Perea’s measure is an urgency bill, meaning it would take effect immediately if signed by the governor, however, urgency measures need a two-thirds vote in the legislature to pass.
To counter the message sent to the Air Resources Board by their colleagues, 32 Democrats signed a letter to the governor asking that the cap-and-trade provisions on fuels go into effect in January as scheduled.
The cap-and-trade law is already bringing in millions in revenue, money spent in this year’s budget on high-speed-rail, affordable housing and mass transit. Legislators would have more money to spend if the cap-and-trade law is expanded to fuels.
This battle is shaping up as a classic case of progressive elites versus blue collar workers, both generally considered groups loyal to the Democratic Party. It puts Democratic legislators on the spot. Do they support the agenda of environmentalists or the workers who could suffer if fuel costs increases provide a shock to the economic system and to the workers’ wallets?
To be clear, the Democrats who advocate for the delay, as well as many members of the business community lead by the California Chamber of Commerce, support the goals of AB 32. This battle is over implementation of the law and the costs associated with it.
But it goes deeper than that – it is schism within the dominant, ruling party in California and the interests they claim to represent.