California Considers “Ambitious” New Cap And Trade System

Because the last one worked so well, let’s try again

California Proposes Ambitious New Cap-and-Trade Program

This week, a California state senator will introduce legislation that would replace the state’s troubled cap-and-trade program, and eventually establish one of the highest prices for carbon dioxide in the world. Around 90 percent of the revenue from the program, which would raise several billion dollars annually and climb steadily over time, would go back to California citizens in the form of a “climate dividend rebate.”

The proposal, which will be set forth in an amended version of SB 775, marks the latest effort by the world’s sixth-largest economy to step up as a leader in climate policy, highlighting a path to lower greenhouse gas emissions that other states or nations could follow. (snip)

In its current form, Sen. Wieckowski’s proposed system would establish a so-called price collar that sets both a floor and ceiling for the price of a metric ton of carbon dioxide. The price collar would start at $20 and $30 in 2021, rise to $20 and $40 in 2022, and then tick up each subsequent year by $5 and $10, respectively, plus inflation adjustments. The ceiling would immediately be higher than the price of carbon in most European nations, and would quickly exceed the roughly $37 tax proposed in Canada starting in 2022. At some point in the 2030s, assuming no other changes, it would also surpass Sweden’s carbon tax of around $150 per metric ton, which is the most expensive in the world.

Few are buying them now, and many of the companies that would be forced to buy them have quietly left the state. The money hasn’t come in like the California politicians prognosticated, and won’t in the future. It’ll just lead to job loss and stagnation. And higher costs for the people of California. But, hey, they voted for this. They should have to stay and deal with the fallout.