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The Trump administration is making massive cuts to programs that address climate change and improve the environment, while throwing money at the biggest polluters. Meanwhile, my organization believes that the California Air Resources Board (CARB), which should be defending us, just circumvented California law to give huge handouts to the state’s largest polluters. We’re suing to stop them.
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To understand what is at stake, it is first important to understand California’s Cap-and-Invest program that is run by CARB. Created in 2013, the program originally known as Cap-and-Trade was designed to reduce pollution that makes our planet hotter and harms people’s health. It has been touted by many, including CARB, as a cornerstone of California’s climate strategy.
The “cap” in Cap-and-Invest is a statewide limit on greenhouse gas emissions from major industrial polluters that is supposed to decline each year so that we reach our climate goals. Oil refineries and other industrial polluters must hold permits known as allowances. Each allowance permits a polluter to put out one ton of climate pollution. Industrial polluters can buy allowances through state-run auctions or in secondary markets.
As the total supply of allowances shrinks, allowances become more expensive, creating a financial incentive for industrial polluters to reduce their emissions. The money generated from California’s allowance auctions has been used to fund programs that improve public health and reduce emissions, like public transit, affordable housing and clean air and water (this is the “invest” in Cap-and-Invest).
CARB proposed changes to the program this past April that included a massive shift of allowances to a new, untested subsidy for industry — free allowances through a Manufacturing Decarbonization Incentive. This incentive gives an estimated $4 billion in free allowances to industrial polluters like manufacturers and refineries. The stated goal of this incentive is to help these businesses reduce their emissions so they can stay operational in California.
Academics and legislative advisors estimate that every year, the Manufacturing Decarbonization Incentive will , eliminating funding for public transit, affordable housing and clean air and water programs.
The independent California Legislative Analyst’s Office has expressed concern that some of these large polluters may get allowances that exceed their actual emissions. It would be horrible policy if the oil industry is getting more pollution credits than they currently pollute, calling into question the fundamental mechanics of the program.
The California Environmental Quality Act requires CARB to look before they leap. Instead, however, CARB is heading into the unknown when the stakes are highest for climate and our communities.
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CARB did not go back to their environmental review documents to analyze the environmental impacts of how the Manufacturing Decarbonization Incentive program will reduce available funds for the other investments in California’s climate solutions.
Hundreds of members of the public attended a recent CARB hearing on these substantial changes to express concerns and stress that not doing environmental review left the public in the dark.
That’s why we had to sue.
We are asking the court to strike the rule changes and send CARB back to the drawing board to redo their analysis. These massive changes deserve the review and public process that the law requires.
We believe that prioritizing funding for a safe and healthy California through programs that promote local clean air and water, public transit and affordable housing will move the needle on addressing climate change more than additional industry subsidies.
In this time of federal attacks and increasing climate chaos, CARB must act based on evidence. At a minimum, our communities, which bear the brunt of climate disasters, air pollution and environmental injustice, deserve transparency and accountability as CARB steers California’s largest climate program into uncharted territories.
We take no pleasure in taking legal action against CARB. But the climate crisis is real, and the consequences of the wrong emissions strategy in California are far too important for us to stand by and do nothing.
Darryl Molina Sarmiento is executive director of Communities for a Better Environment.
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