Statement on California’s Cap-and-Trade Legislation

“Last year, when California policymakers established the world’s most stringent 2030 greenhouse gas (GHG) emissions goal, all knew that achieving it would be difficult, technologically challenging, and would require bipartisan leadership.

“The bipartisan cap-and trade package passed this week is the best, most balanced way for California to comply with state law requiring reduction of greenhouse gas (GHG) emissions.

“As lawmakers considered the options, cap-and-trade was not the only proposed mechanism that could have been imposed to ensure California’s compliance with the law.  Much more expensive ‘command and control’ programs were also on the table.  These draconian programs would have forced businesses to make drastic changes, imposing strict regulations without any flexibility in implementation.   The result would have been skyrocketing prices for consumers, a stifled economy, and California jobs lost.

“In fact, without a market-based approach like cap-and-trade in place, studies show meeting 2030 GHG goals would have been at least four times more expensive for every California family and cost the state four times more jobs than control measures that would have been imposed on manufacturing and industry in this state.

“Cap-and-trade’s market-based approach provides regulated facilities, like those of our industry, with more flexibility as they work to meet the new standards.  The bipartisan support of AB 398 ensured an improved cap-and-trade program with tax cuts, cost containment measures, and significant bureaucracy reduction that will contain costs for all Californians. Important tax cuts were fought for by legislative leaders in both parties that will ease the burden of businesses working to comply with the law, including an extension of the manufacturer sales and use tax exemption to cover the agriculture and energy industries.

“This significantly reformed cap-and-trade program presents the best available path forward for our industry in the toughest regulatory environment in the world.”

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