SACRAMENTO, California — A group of 22 California state lawmakers urged the California Air Resources Board on Wednesday to give more flexibility to refineries and other industries in its signature carbon market to avoid higher customer costs.
What happened: The bipartisan California Problem Solvers Caucus called on CARB in a letter to make further changes to its proposed cap-and-invest rules, under which companies buy and trade pollution permits under a declining emissions cap. The board is planning a May vote on the proposal, which would extend the program through 2045 while significantly tightening emissions limits.
Why this matters: The letter adds to the chorus of industry pressure on CARB to retool its carbon market proposal to avoid raising gas prices and driving more of the state’s refineries out of business after two already announced plans to close. It also reflects broader political sensitivity around energy costs, which have slowed or reshaped carbon pricing efforts in places like New York and the European Union.
More details: The letter, spearheaded by Assemblymember David Alvarez, provides detailed recommendations, including increasing allowances for sectors at risk of losing jobs and business activity to other states, like refineries and food processing companies. It also suggests maintaining some subsidies to low-income customers of gas utilities that are set to be transferred to all-electric utilities. The group of lawmakers argue their proposed changes would prevent $10-15 billion in costs from being passed on to consumers through higher electricity, gas and fuel prices, while acknowledging that would also mean less revenue from the program.
