A punch from the left, a punch from the right but still standing, battered but victorious, the cap-and-trade extension.
It was an odd fight. Republicans citing environmental groups’ positions to oppose the measure; Democrats hauling up the flag of big business in support.
Establishment Republicans like former Gov. Pete Wilson and former United States Secretary of State George Schultz advocated for the bill, Schultz writing that Ronald Reagan would be proud to support cap-and-trade.
As most policy issues go, the points of contention were costs and taxes.
With cap-and-trade extended for ten years any casual observer listening to the debate and the summing up by the politicians who took part would be forgiven to wonder if costs and taxes are going up or not.
Consider the following comments from Republican legislators.
Sen. Jim Nielsen: “Today, we are hit again with another gas tax. We will soon have to pay another $0.63 per gallon to fuel our cars…”
Sen. Jeff Stone: “This package of bills is nothing more than a huge tax increase on California’s working families…”
But Sen. Tom Berryhill, the only Republican senator to support the extension, also used the tax issue to justify his vote. He claimed passing the measure checked higher taxes: “This bill suspends the illegal fire tax and keeps Sacramento Democrats from increasing taxes on gas by substantially more than one dollar per gallon.”
On the assembly side, Republican Leader Chad Mayes said, “This plan cleans up the environment for future generations and cuts the cost of taxes, fees and regulations by $16 billion a year for ordinary Californians.
While his colleague, Assemblyman Bill Brough countered, “Cap-and-trade began as a tragic oversell as a way to rescue the planet from the clutches of pollution and has become a multi-billion-dollar moneymaking farce that the state needs to support the biggest budget in history. I voted in opposition to this gas tax that is 5 times worse…”
So, which is it? With a political dictionary in hand our casual observer can understand what the lawmakers are saying. Costs will go up with the cap-and-trade extension, as opponents claim. But they won’t go up as high as they would without the extension because of whatever mechanism might have replaced it, supporters say.
Senate President Pro-Tem Kevin de Leon, a Democrat, argued during his closing debate remarks that despite cap-and-trade operating for a couple of years, gas prices are at a ten year low. His point: cap-and-trade doesn’t assert upward pressure on the price of gas. To be fair, he noted that market forces partly explain the relative low cost of gas—Venezuela dumping oil cheaply to deal with the crisis in that nation; new technology to reach more oil—de Leon kind of giving fracking a thumbs up here.
Still, the Legislative Analyst reported that cap-and-trade already has added about 11-cents to the cost of a gallon of gas. Experts haven’t agreed on what the extension will add, but it certainly will increase the cost of gasoline and other goods.
We ought to be able to monitor the effect of cost pressures on gasoline because of cap-and-trade and determine if de Leon or the opposing Republicans are right.
The question is, will anyone pay attention in a few years and remember this moment—one that Governor Jerry Brown called the most important vote of a legislator’s life—and point to those who erred.
The voters haven’t had a say in this recent rush of activity that saw gas taxes increased and now cap-and-trade extended with potential cost consequences to gas, goods and services. Their chance comes next year if a recall vote and/or a gas tax repeal make the ballot.