Cap and trade lets California’s biggest polluters off the hook

As many state lawmakers and Gov. Gavin Newsom’s cabinet members join the U.N. global climate conference this week, they rightly face calls to take aggressive action on climate change. The worst drought in a century, the hottest summer after the hottest decade ever and record wildfires show the climate crisis overwhelms our policies to stop it.

Announcing big climate goals is easy. The hard part is making them work, especially for communities most harmed by big polluters.

California relies on a cap-andtrade system to reduce carbon emissions that contribute to climate change. It regulates nearly 450 entities accounting for 85% of emissions. Instead of requiring reductions, polluters pay for allowances per ton of carbon they emit under a declining cap. If total emissions approach the cap, allowance prices rise to prevent the cap from being topped.

That is the theory. In reality, cap and trade lets California’s biggest polluters off the hook, concentrates pollution in working class communities of color and undermines the credibility of our climate policy.

Cap and trade began with too many allowances, and millions were given away, undermining the concept that the cost of pollution would reduce emissions. Since allowances can be banked by polluters, a glut of them remains unused. By the end of 2018, big polluters had enough allowances to meet the total emissions reductions required this decade.

It gets worse. Cap and trade allows polluters to purchase offsets — like paying for forests or farms to store carbon — to ‘balance’ the impact of their emissions. One study found most offsets in California’s program do not represent true emissions reductions. This is troubling because big polluters can meet half of their obligation to cut emissions this decade with offsets.

The dirty secret about cap and trade is it enables polluters to paper over their contributions to climate change with accounting gimmicks. Emissions from California’s oil and gas industry rose 3.5% since it began, concentrating more pollution in working class communities of color that live alongside oil refineries and gas plants.

One conclusion remains. Cap and trade will not generate the emissions reductions we need, and the stakes are too high to double down on a failed policy. We need a new framework that generates real results by holding polluters accountable for direct, measurable emission reductions at the source. Absent this reform, Californians should be skeptical about the impact of new climate goals pursued by our state.

Fortunately, over the next year, California is reevaluating the program through a process to update its climate policy roadmap. As this process unfolds, it is encouraging to see environmental leaders such as California’s Secretary of Environmental Protection question whether cap and trade is an effective way to meet our climate goals.

There is no time to waste. Our planet will reach a dangerous level of climate change as early as 2027. The actions state leaders take now will decide if we create a safe and healthy future for all Californians or descend into an irreversible climate catastrophe.

California is moving in the right direction. Gov. Newsom recently proposed a ban on new oil and gas operations within 3,200 feet of homes, schools and hospitals. In the Bay Area, communities won a new requirement on oil refineries to install technology that will cut emissions by over 70%. Both advance our climate goals while improving the lives of more than 2 million Californians, predominantly working class families and Californians of color who have higher rates of cancer and respiratory disorders because they live near big polluters.

This is what climate action looks like. And, we need more of it.