{"id":4215,"date":"2010-01-11T20:50:05","date_gmt":"2010-01-12T04:50:05","guid":{"rendered":"http:\/\/blogs.kqed.org\/climatewatch\/?p=4215"},"modified":"2010-01-11T20:50:05","modified_gmt":"2010-01-12T04:50:05","slug":"committee-no-free-lunch-for-carbon-emitters","status":"publish","type":"post","link":"https:\/\/ww2.kqed.org\/climatewatch\/2010\/01\/11\/committee-no-free-lunch-for-carbon-emitters\/","title":{"rendered":"Committee: No Free Lunch for Carbon Emitters"},"content":{"rendered":"

California\u2019s cap-and-trade program took another baby step toward fruition on Monday, with the release of the state-appointed Economic and Allocation Advisory Committee<\/a>\u2019s final report on implementing carbon regulation.<\/p>\n

Stopping just short of recommending a 100% auction of emission credits, the report<\/a>, which is non-binding and was written to help the California Air Resources Board develop an economically sound cap-and-trade program<\/a>, advises the state to sell off the majority of its carbon permits to emitters \u2014 with a few exceptions. Industries that \u201crely heavily\u201d on carbon-based energy or compete directly with firms that do not face carbon regulation, the report says, should be \u201cprovided with assistance\u201d or given funds earned from the auction.<\/p>\n

The report pointedly advises against handing out free permits to utilities. Although the state\u2019s utilities will almost certainly pass increased costs onto customers, the committee predicts that the price spike will provide an incentive for Californians to start saving energy. The committee\u2019s press release says the report takes a \u201chousehold friendly\u201d approach to cap-and-trade, recommending that at least 75% of the proceeds from selling carbon permits be returned to households through either tax cuts or direct financial transfers.<\/p>\n

Even before the report was released on Monday, the looming possibility of a carbon permit auction was causing anxiety in industrial circles. The AB-32 Implementation Group<\/a>, an organization that aims to protect California business interests, claimed last week that if the price of carbon is set to $60 per ton, \u201clarge employers could be subject to an \u2018Auction Tax\u2019 of up to $143 billion by 2020.\u201d Environmental groups have been urging the Air Board to auction off all the carbon permits initially offered.<\/p>\n

In a written statement, Governor Arnold Schwarzenegger responded to the committee’s report, saying \u201cthe best program will be one that returns value to the people through tax cuts, rebates or dividends, and I applaud the Committee for recognizing those options.\u201d<\/p>\n

Here\u2019s a quick run down of the rest of the report\u2019s key recommendations:<\/p>\n

Protect Low Income Households <\/strong><\/p>\n

The report recommends returning some of the auction\u2019s profits to low income households, since such households tend to spend a greater percentage of their income on energy.<\/p>\n

Invest in a Low Carbon Economy<\/strong><\/p>\n

The committee recommends that the state create an independent Investment Advisory Board to help make it reach its low carbon targets.<\/p>\n

Simple Auctions<\/strong><\/p>\n

The state\u2019s carbon permit auctions should simple and allow the public to sell permits in the auctions along with the state.<\/p>\n","protected":false},"excerpt":{"rendered":"

On the road to carbon trading in California, a key committee report favors auctioning off the majority of carbon credits.<\/p>\n","protected":false},"author":11419,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3],"tags":[34,67,74,80,179,193,435],"coauthors":[],"series":[],"affiliates":[],"programs":[],"collections":[],"interests":[],"class_list":["post-4215","post","type-post","status-publish","format-standard","hentry","category-government-business","tag-assembly-bill-32","tag-california-air-resources-board","tag-cap-and-trade","tag-carbon-credits","tag-economics","tag-emissions","tag-policy"],"acf":{"template_type":"standard","featured_image_type":"standard","is_audio_post":false},"yoast_head":"\nCommittee: No Free Lunch for Carbon Emitters | Climate Watch<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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