California Bill Would Extend Greenhouse Gas Tax

SACRAMENTO (CN) — Nudged by Gov. Jerry Brown to extend the lucrative linchpin of California’s climate change policy, a group of state Democrats on Thursday introduced legislation to expand the state’s cap-and-trade emissions program.

Assembly Bill 151 would preserve the emissions program that rewards clean energy use by requiring businesses to pay according to the amount of greenhouse gases they emit. The measure would extend the embattled cap-and-trade program past 2020 and allow the state to continue charging the emissions tax.

State Democrats said extending the program, which generates revenue through quarterly auctions, is critical to continue funding California’s ambitious global warming policies.

“It is important that we preserve the intent of the cap-and-trade program beyond 2020 and we continue to provide incentives for energy efficiency,” said Assemblywoman Blanca Rubio, D-Baldwin Park. “AB 151 will adhere to the state’s goal of reducing gas emissions while bringing clarity to existing law.”

Enacted in 2006, the cap-and-trade program has generated billions of dollars for the state. The California Air Resources Board sets a declining limit each year on the amount of greenhouse gases businesses can emit and forces them to buy allowances or permits for exceeding the limit.

The Canadian province of Quebec also employs a cap-and-trade program.

Democrats are eager to spend the cap-and-trade taxes to jumpstart clean energy and transportation projects, particularly the $64 billion high-speed rail project.

Brown called on his party to extend the carbon-tax program Tuesday while introducing his budget proposal. Democrats clinched a supermajority with the 2016 election, and could pass AB 151 without any Republican votes.

While Brown considers the cap-and-trade system integral to the state’s fight against climate change, the program is mired in a lawsuit filed by the California Chamber of Commerce. The chamber claims the program is an illegal business tax and should have required a two-thirds vote by the Legislature in 2006, not a simple majority. The case is before the Third District Court of Appeal, with oral arguments scheduled this month.

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