In Defense of Republicans Who Supported the Cap and Trade Compromise

Robert Naylor
President of Robert W Naylor Advocacy and Former Assembly Minority Leader

Long, long ago and very close by, I was Assembly Republican Leader charged by my caucus to get the best deal I could in budget negotiations and on major appropriations bills requiring a 2/3 vote. Sometimes, I was the target of the same kind of criticism that David Kersten (“Has the California GOP Become Too Liberal?”), Fox and Hounds, July 24, 2017) leveled at Assembly Republican Leader Chad Mayes and other Republicans who voted for the extension of cap and trade last week.

I think these Republicans deserve a vote of thanks.  (I in no way denigrate those who voted NO out of general protest about California shouldering huge costs which only impact its tiny one per cent contribution to global carbon emissions.)

What is almost always ignored in the commentary on this legislation is that the real culprit for imposing huge costs on our economy was SB 32 (Pavley) enacted in 2016, with only a single Republican aye vote and several Democratic no votes.   That bill granted the broadest possible regulatory authority to the California Air Resources Board by MANDATING it to “ensure that statewide greenhouse gas emissions are reduced to at least 40 per cent below [1990 levels] no later than December 31, 2030.”

As a result, the reality that the allegedly “too liberal” Republicans faced in dealing with the cap and trade extension  was:  without the bill, CARB would be forced to achieve the entire reduction with draconian command and control regulations, or with the bill, they could achieve a significant part of the reduction with what all economists I know of (as well as the Legislative Analyst) believe to be the least costly approach, a market mechanism by which emitters can either find new technology to reduce emissions, if it is less expensive, or buy “credits” from those who do find cheaper ways of complying.

These Republicans made the hard but intelligent choice of choosing the alternative that would be less costly to California’s economy and its consumers—and in the process got some significant tax reductions in the bargain (elimination of the fire fee on rural residents, who tend to live in the least economically prosperous counties, and continuation and expansion of a significant, pro-business sales tax exemption on manufacturing equipment, and now R&D).

They also got the opportunity, if the public votes for a constitutional amendment authored by Mr. Mayes, to require a two-thirds vote on future cap and trade expenditures, which heretofore have been part of the majority vote budget process.

What is “liberal” about pushing for tax cuts and lighter regulation on business?   Especially in face of the otherwise inevitable heavier hand of CARB-imposed mandates for greenhouse gas reductions?

 

The biggest complaint about this vote is that cap and trade could add up to 73 cents a gallon to the cost of gasoline.   But failure of the bill would have deprived refiners of the alternative of buying less costly credits from other greenhouse gas emitters who find more efficient ways of reducing emissions.  So failure of the bill almost certainly would have caused a LARGER increase in the cost of gasoline.  What is “conservative” about that?

It is easy to lose sight of this kind of inconvenient detail in the rhetorical caldron that is the hallmark of these divisive times.  I for one applaud the thoughtful approach that Mr. Mayes and a few brave souls in his caucus took to this legislation.  And applaud the whole caucus for (thus far) giving them the leeway to exercise their own judgment.   Especially since there is nothing liberal about their stand.

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