Stop throwing rocks

Written by aditya trivedi


Last week, the Sierra Club’s California lobbying arm issued a letter (.pdf) urging Governor Jerry Brown to “re-evaluate” California’s cap-and-trade program to reduce greenhouse gas emission, particularly the program’s rules regarding use of offsets.

A quick refresher on what’s been going on here in the Golden State. In 2006, then-Governor Schwarzenegger signed into law California’s Global Warming Solutions Act, known commonly as AB 32, which directed the California Air Resources Board (ARB) to develop regulations that would reduce greenhouse gas emissions to 1990 levels by 2020. The ARB was given wide latitude to decide what regulatory mechanisms to use, though the law did set down policy boundaries such as maximizing environmental and economic benefits while minimizing cost.

A whole host of regulations have been adopted pursuant to AB32 over the past several years, including most recently the cap-and-trade system set to get underway January 1, 2012. As adopted, the system allows emitters to use a combination of onsite emission reductions and offsite emission reductions to meet their reduction burden. The offsite emission reductions – the offsets – are limited in quantity, in geography, and in the types of emission sources which may be reduced.

This is a groundbreaking moment for climate change action. Here we are, poised to committing greenhouse gas emitters to substantive emission reductions, and now that the challenges from the emitters have been dealt with, the ever-fractious environmental community is starting to throw rocks. The latest, voiced by Sierra Club California Director Bill Magavern, argues:

>Excessive reliance on offsets could open up loopholes that undermine the very purposes of
California’s AB 32 cap on emissions. Curbing global warming will require a fundamental
transformation of our energy economy, a task that cannot be outsourced to other countries.
Requiring California’s largest polluters to reduce their own emissions will spur technological
advances that can be exported to the rest of the world, bringing green jobs to the Golden State.

The letter continues to argue that ARB’s approach contains a number of offset-related problems, including disproportionate impacts to low-income communities, weak forestry offset protocols, and a general skepticism of offsets from an enforcement standpoint.

I’m disappointed. I expected better from my fellow environmentalists over at the Sierra Club. In particular, they disappointed me with:

1. Use of exaggerated claims.

“Excessive reliance on offsets could open up loopholes that undermine the very purposes of California’s AB 32 cap on emissions.”

As a matter of policy, the ARB has decreed that the majority of required emission reductions must occur onsite, at the regulated facilities. The cap-and-trade regulation translates this emission reduction requirement to an emission limit: “a covered entity may use no more than 8% offsets to satisfy its emissions obligation.” (See pg. 5 of the ARB regulation (.pdf) or if you need a visual, see the chart on pg. 10 of this presentation (.pdf).) I hardly think 8% constitutes “excessive reliance.”

2. A la carte style of selecting supporting (but not really relevant) points.

“As experienced environmental prosecutors for the state have noted, ‘the cap-and-trade market poses significant enforcement challenges,’ and ‘offsets pose multiple additional enforcement problems, including jurisdiction, verification, and certainty.'”

Right, but the point of the article cited (.pdf) isn’t to take offsets out of the picture. It does point out that the newly developing offset market will require new enforcement mechanisms. That’s not rocket science or anything we didn’t already know; indeed, the article states this point as an obvious fact without any data or rationale to defend its stance. The point of the article is that local enforcement mechanisms need to be integrated into the larger enforcement process. Which is great. I’m sure they’re right. What I don’t see in the article is a case against offsets as unenforceable or as poor regulatory tools, as the Sierra Club’s letter implies. Did they not expect anyone to read it?

3. Complete lack of alternatives, proposals, suggestions, or anything else constructive.

“Curbing global warming will require a fundamental transformation of our energy economy.”

This is absolutely true. It’s also going to be a pretty expensive task. Offsets are included in this cap-and-trade system to reduce the cost of achieving the required emission reductions. When you’re dealing in greenhouse gases, reducing the cost means keeping the rise in energy/fuel prices to a moderate level. We aren’t going to get off of carbon by talking about ideals; we need a path to get us there which will solve for both environmental and economic conditions.

The ARB’s regulations aren’t perfect. I agree with Sierra Club California there. But when I see yet more data such as last week’s National Science Council report (.pdf), “America’s Climate Choices” stressing the urgency of greenhouse gas emission reductions, I come out firmly in the “let’s get this thing started” camp. Please. No more rocks.

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  1. Fred Magyar

    Ok, let me throw a big rock right through everyone’s wind shield. As long as we continue to cling to the business as usual, automobile centric paradigm, there is absolutely no way to move forward.
    …And you probably don’t want to get into a science based discussion with me regarding human population dynamics and its multiple feed back loop effects on global ecosystem destruction.
    We need a $5.00 per gal. gasoline tax on top of the current $4.00 per gal. of regular being paid at the pump today, starting 10 years ago.
    Then again, I know that people much prefer to discuss how many angels can dance on the head of a pin.

  2. Anonymous

    Send your $5.00 per gallon tax to the US Treasury, You don’t have to wait on government to request it. Buck it up and show the rest of us how. The world thanks you for your leadership.

  3. Donald Pachner

    I am extremely disappointed in Terra Pass’ remarks on cap and trade policy. Unless Terra Pass thinks through the consequences of their policy decisions, they will play second fiddle to organizations that are taking strong stands to protect us from the dangers of global warming and publishing scientific fact to educate the public on environmental issues.
    Cap-and-trade can work if implemented properly, which has not been accomplished to date. In the case of AB32 and similarly weak cap-and-trade laws, no significant reduction of greenhouse gases result, depsite the cost of implementing the programs. It gives the public a dangerously false sense of accomplishing these goals.
    TerraPass has not presented facts, only theory about why a flawed law should work. Shame on you!

  4. darooda

    I don’t think anyone here is surprised by your conclusions and there are plenty capable of engaging in science based discussions.
    The necessity of a $5/gal tax, as the most efficient motivator from a carbon based infrastructure is debatable, but would be effective if accomplished in a way that didn’t exacerbate economic stresses beyond their breaking point.

  5. Fred Magyar

    That last comment was intended as a reply to anonymous…

  6. mhbraganza

    Voluntary tax payments would be insignificant and only affect the people that volunteered to pay it. Society needs compulsion.
    A $5 (or more) gasoline tax and a straight tax on Carbon emissions would be better than the intricate mess of current state and federal government legislation and incentives. Government should not decide what the solutions should be. They should just prohibit or punitively tax the things it considers undesirable and let the market/technology drive the specific solutions.

  7. richard schumacher

    Someone please go hit the Sierra Club in the head with a 2×4 and remind them that the perfect is the enemy of the better. Even if not a complete success California’s plan will at least test and demonstrate the strengths and weaknesses of the approach.

  8. Anonymous

    As someone who is unable to hike or ride a bike due to a staph infection which destroyed my ankle, car travel is the only means for me to travel. We recycle and do our part, but when increasing taxes on fuels would cripple (pun intented) not only our economy but people who are trying tomake it. I own an environmental company dealing with indoor air and solar products. Pass your tax dollars on to a very ineffient government and buy your china made bikes. Go Green! do it, don’t talk abouit it!

  9. limburger

    How about stress testing the theory that additional ‘gas tax’ reduces greenhouse gas emission. But first there must be adequate measurement infrastructure in place to unambiguously measure the correlation. Then let’s ratchet up the price of fuel to the point where drivers (and flyers and manufacturers) change their habits and purchasing decisions that benefit everyone on the planet. It is good public policy. And it is good economics at a time when carbon energy supplies are dwindling.

  10. Jim Hilsinger

    My opinion is that cap and trade is just another form of free market excess, bank fraud mentality.
    Any corporation will be able to justify savings in efficiencies in the long run by eliminating pollution. Perhaps they’ll have to go to the bank to borrow money. Or, perhaps tax breaks can assist the unworthy or uncommitted.
    As part of every day decision making, corporations and individuals can commit to buying large tracts of land [or similar committments] for preservation purposes, simply because they have a community conscience. This should be the challenge to all free market thinkers.
    Transferring pollution privileges as part of some mystical market economy is simply cheating and convoluted thinking.

  11. GT

    I’m surprised and dismayed that TerraPass is still throwing stones at visionary, wise environmentalists willing to deal with the WHOLE, LONG-TERM picture, without whose voices we undoubtedly would not have moved as far in the right direction as we have to date. They understand that turning the tide on the degradation of the systems that support us all will take real change — change of living modes and heart — not short-term stop-gaps.
    TerraPass has done, and has the potential for, too much good to undermine its work by such castigation of some of the sincerest fellow environmentalists.

  12. valerie

    i totally agree. the bad thing about us democrats is we don’t kick enuf a**!

  13. jd

    Just finished reading Aerotropolis by Kasarda & Lindsay. Pretty scary. We have the developing billions who want the “American” lifestyle. The Chinese are exporting like crazy not to mention polluting like crazy and going gangbusters in Africa in pursuit of raw materials to feed the constant desire by everyone for more and by exporting pull their own people out of poverty (with less sanguine results for the American economy). On the other hand if we cut the supply chain a lot of poorest nations’ people lose their livlihood and starve. And yet if we keep going as we are we run out of planet. Everything is about population. There are just too many of us. Without population control I’m not sure what else is going to help. Even with population control I’m not convinced it’s not too late, not that we should give up, of course.

  14. eschmitt

    Totally agree with jd. The exploding global population is the primary issue. We are approaching 10 billion. We should do our best to cut our rampant consumption in America but it is a drop in the bucket on a global scale.

  15. anon

    I totally agree! As a huge Muir fan, supporter of many environmental organizations, and as a person who has downsized into a “tiny” living lifestyle with my hubby & kids…I am shocked at the lengths that the Sierra Club has gone to in order to destroy their previous mission and vision in favor or political pandering.
    I stopped donating to them after they fought Washington’s “Roads & Rails” bill which would have given 60% to mass transit options and 40% to road improvement simply because roads were included. Really!?! That actually hampered the growth and design of Puget Sound’s transit infrastructure which has never been able to regain the momentum again. It was almost passed if it hadn’t been for the Sierra Club’s lobbying, commercials, and advertising.
    Better is what I strive for and I was shocked that the Sierra Club cut its nose off despite its face. While we all strive to improve our environment, there is no way to take all cars off the road tomorrow.
    I’d love to see Fred’s $5/gallon tax proposal go through so that he’d see the downstream pain that would cause. Do you think groceries, goods, and small businesses wouldn’t feel that pain? What about low income populations that traditionally have to drive further for jobs? What about their inability to feed their family (considering we already have some of the highest numbers of families requiring food stamps and food banks)? I guess in Fred’s world and that of the Sierra Club there is a utopia that only the childless, high income, and highly educated can live, eat, and be mobile because there is no change management/mitigation and infrastructure built for other less affluent populations.

  16. Erin Craig

    Hi GT,
    Thanks for your supportive comments about TerraPass! Reading your comment gave me two thoughts: 1) We have created a bit of irony, haven’t we? We want environmentalists to stop throwing rocks at each other, so we throw a rock to get our point across. Maybe not the best approach.
    And also 2) I love the diversity of ideas that “the left” is known for. I honor the diverse voices and agree with a surprising number of them, even some which are inherently contradictory. And yet, there have been 5 years of studies, workshops, hearings, comment periods, behind-closed-doors lobbying, ballot measures and open protests to get to to where we are today on climate change in California: on the brink of actually *doing* something instead of debating whether and how. The time to call for re-examinations is past. Let’s get on with it.

  17. Anonymous

    I’m with you mhbraganza.
    Another point on a carbon tax: It could contribute to BALANCING THE BUDGET, which seems to be the most urgent item on the agenda of Congress.
    (Oh, I forgot– The item is NOT “balancing the budget”, it is “balancing the budget only by cutting expenditures while raising no taxes”. — Damn!)

  18. John Brown

    RE: “I’d love to see Fred’s $5/gallon tax proposal go through so that he’d see the downstream pain that would cause. …” (8. Anon)
    A carbon tax can be effective without squashing the little guys! The carbon tax can be designed so that the money collected is “rebated” to the populace on an equal per-capita basis. (“Cap and Rebate”.) That way the poor will have more money in their pocket to spend on transportation, heating etc. With that extra money, if they want to keep on as they are, they can– but they will have an incentive to develop a less carbon-intense life style, because if they do, they will pay less carbon tax and consequently have more of that “rebate” money to keep.

  19. MH

    That’s a great idea! I’m sure our oil-based economy would survive it.

  20. Fred Magyar

    “I’d love to see Fred’s $5/gallon tax proposal go through so that he’d see the downstream pain that would cause. Do you think groceries, goods, and small businesses wouldn’t feel that pain?”
    Perhaps you need to get out in the world a bit past the shores of the USA. A lot of people in this world live on much less than what Americans take for granted and don’t live lives that are all that bad. My suggestion is intended as wake up call for our entire society.
    The way we live now is not sustainable and there is already plenty of future pain for the disenfranchised built into the pipeline. Too bad we as a society have pretty much painted ourselves into a corner.
    For the record, I already live quite modestly as compared to even the lower end of US lifestyles. Having at timeslived outside of the US I don’t have much sympathy for the automobile centric lifestyle as being absolutely necessary.
    What we need is radical social paradigm change, not that I’m holding my breath or anything…

  21. Wobbly

    Re: Rampant human population, the emerging solution seems to lie in better education and careers for women.
    Re Carbon/resource tax being regressive and hurting the poor more: Please decrease my income tax while increasing my gas/electricity/etc tax in small steps, so that, for me, it breaks even.
    Income tax is a tax on jobs. Income tax makes employing more expensive. Reduce it while collecting the same amount from resource tax.
    Shift incentives to employ more people while using less energy, but do it in small, predictable 1% steps so that the business and people have the chance to change their cars, AC’s etc, where they choose to live, etc gradually.
    Tax shift.