In yesterday’s edition of Fox and Hounds, I explained that Californians see climate change as a serious issue, but do not favor regulatory actions that unfairly penalize them. Today, we’ll explore if there are opportunities for California to lead without placing the burden on the most vulnerable Californians and/or cause displacement of middle-income jobs to other states and nations. The good news is that solutions are available if we approach the issue thoughtfully.
What we need is a global triple-bottom-line transition plan from dependence on fossil fuels. We need to develop rigorous analytics that measure the triple-bottom-line impact of climate change policies; analytics that can be applied to California, but that other states and nations will want to follow because they can see the beneficial triple-bottom-line impacts.
We need a transition plan because, let’s face it, we’re not close to the post-fossil era. The American Energy Institute, Bloomberg and Goldman Sachs all agree that we have about 1 billion internal combustion engines in operation today and very few electric cars. They also agree that in 2050 we’ll have 1 billion electric cars and that we’ll still have 1 billion internal combustion engines.
Such a transition plan must start with a goal, which we have yet to clearly articulate. One goal statement we might all be able to get behind is to build a vibrant low-carbon economy that reduces income inequality. Let’s define how we will measure success. What does a vibrant economy look like? What does low-carbon look like? What does reduced income inequality look like? Let’s make sure that the measurement of outcomes against these metrics is done in a way that is transparent and merits the people’s trust.
And let’s develop clear ranking criteria for where we are going to invest taxpayer dollars to generate the highest triple-bottom line returns. The price in Cap-and-Trade auctions of reducing one metric ton of emissions is roughly $13. The LAO has issued a report that shows some projects are very cost efficient, while others cost ten times as much to produce the same results.
Let me be clear: There are options to California’s current strategy. We can fix Cap-and-Trade to make it triple-bottom-line, or consider a market-based carbon tax — i.e., a revenue-neutral, gradually increasing carbon tax, with all (or most) of the collected proceeds returned to households as a carbon dividend, and a border carbon adjustment fee to protect our economy from unfair competition — but I’m not picking a dog in the fight. I’m just advocating for the best plan that concurrently advances progress on our environment, our economy and socio-economic equity. That’s how I would suggest we measure success. The goal statement suggested above is as applicable to the U.S. — and to China for that matter — as it is to California.
That’s where our opportunity to lead lies. California is still the most innovative state in the nation. Let’s apply that innovation not only to accelerate the development of clean energy technology but to develop a transition model that other states and nations will want to follow.
To the many Californians who feel a sense of urgency about acting on climate change, I urge you to apply that sense of urgency to support of a triple-bottom-line strategy. This year, the legislature will be considering extension of Cap-and-Trade authority from 2020 to 2030. No such extension should be passed without a commitment to measurement and reporting of triple-bottom-line impacts. This link http://findyourrep.legislature.ca.gov/ will help if you wish to contact your representative in the legislature to urge a triple-bottom-line approach.