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Cap-and-trade vs. "t-word" in California

Sarah Gardner Mar 20, 2008

Cap-and-trade vs. "t-word" in California

Sarah Gardner Mar 20, 2008


KAI RYSSDAL: The problems posed by high oil prices aside, there aren’t many things the three remaining presidential candidates agree on. Global warming is one of them, though. Everybody still in the race for the White House endorses what’s called cap-and-trade as the best way to reduce greenhouse gases.

Carbon emissions would be limited, but companies would be able to sell whatever quota they don’t use. Europe’s already got a program, some states here have theirs ready. But not everybody’s on-board. From the Marketplace Sustainability Desk, Sarah Gardner reports on greenhouse gases in the Golden State.

Sarah Gardner:When California activist Angela Johnson Maszeros thinks about climate change, she focuses on the folks she says stand to lose the most on a warmer planet — and let’s just say they don’t live in Beverly Hills.

Angela Johnson Maszeros: Look at Katrina as an example…

Maszeros says climate change may not have directly caused Hurricane Katrina, but global warming will likely bring more extreme weather just like it:

Maszeros: And you see who was impacted in New Orleans by that hurricane.

In 2006, Gov. Arnold Schwarzenegger signed a historic global warming bill. Now the state is working up a plan to cut emissions — it includes a proposed cap-and-trade system for California. But environmentalists working in poor communities are fighting that approach. That puts them in direct conflict with many of the mainline green organizations here.

Groups like Maszeros’ California Environmental Rights Alliance are skeptical of a market-based approach. They say while cap-and-trade will force some refineries and power plants to clean up their acts, others will just buy carbon credits — and that means they’ll just keep spewing CO2 and all the dirty pollutants emitted along with it.

Maszeros: Whenever we talk about addressing carbon and carbon reductions, we also have the opportunity to have reductions in co-pollutants — particulate matter, which we understand has very significant, negative health impacts on communities…

On poor, minority communities, Maszeros says, where most of these plants are located. She and her green allies say cap-and-trade is also too vulnerable to fraud and corporate manipulation. Just look at Europe, she says, where industry pressured regulators to hand out too many free permits and carbon prices plunged.

Many of these environmentalists favor a carbon tax instead. That’s a tax on greenhouse gas emitters. These environmentalists believe a tax would inspire fossil-fuel reductions more quickly, and more broadly. But Terry Tamminen, a key environmental advisor to Gov. Schwarzenneger, doesn’t believe it.

Terry Tamminen: The whole point of a cap-and-trade program is the cap. You have certainty about reducing a particular pollutant over time and you don’t have that with a tax. And we would have to guess how high would a tax have to be.

Tamminen and others here who support carbon trading argue it might take a heck of a tax to get people to stop using so much fossil fuel.

Tamminen: So if you want to get a guaranteed reduction in the use of gasoline — and therefore, the use of greenhouse gases from that source of emissions — you might have to charge a dollar a gallon or more.

And that, he says, would be a big burden on the poor. Tamminen’s support of cap-and-trade is is echoed by mainline environmental groups here, like the Natural Resources Defense Council. NRDC’s David Pettit says a tax may sound simpler, but for many the “t-word” is a non-starter.

David Pettit: There was a proposal during the Clinton administration to have a BTU tax, which went absolutely nowhere. And I am afraid that a carbon tax, especially nationally, might reach the same end.

This internal feud is slightly uncomfortable for the green community. Polite sniping is the result: Tamminen says the “complaining” about cap-and-trade threatens to paralyze progress on global warming. Activist Maszeros says her goal is reducing emissions, not just a “political win.”

Maszeros concedes, however, this trade-versus-tax debate has made for strange bedfellows. It’s not every day she finds herself agreeing with the chairman of ExxonMobil. He says he’d prefer a carbon tax, too.

In Los Angeles, I’m Sarah Gardner for Marketplace.

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