cap-and-trade

By Jeremey Brecher - Labor Network for Sustinability, December 1, 2020

This commentary by Jeremy Brecher analyzes Joe Biden’s “Plan for Climate Change and Environmental Justice” released in August. The following commentary, “The Biden Climate Plan: Part 2: An Arena of Struggle,” will consider the struggles that are likely to emerge over what parts of the plan can and should be implemented. To read this commentary, please visit: this page.

By staff - Act!onAid, et. al., October 2020

Far from signifying climate ambition, the phrase “net zero” is being used by a majority of polluting governments and corporations to evade responsibility, shift burdens, disguise climate inaction, and in some cases even to scale up fossil fuel extraction, burning and emissions. The term is used to greenwash business-as-usual or even business-more-than-usual. At the core of these pledges are small and distant targets that require no action for decades, and promises of technologies that are unlikely ever to work at scale, and which are likely to cause huge harm if they come to pass.

This joint briefing highlights concerns that many governments and corporations are jumping on the bandwagon and declaring “net zero” climate targets.

These announcements might sound like they signify ambitious climate action. But unfortunately, the “net” in “net zero” is being used to green-wash weak climate targets, and could end up driving huge land grabs, particularly in the global South.

Instead of accepting “net zero” targets at face value, civil society and media must scrutinise these announcements to assess whether they signify real climate action.

Read the text (PDF).

By Greg Karras - Communities for a Better Environment, July 2020

Machines that burn oil are going away. We will burn much less oil, either to prevent the increasing accumulation of pollution impacts that could cause the collapse of human societies as we know them, or as a footnote to the collapse of our societies and economies on which the petroleum fuel chain now feeds. Which path we take matters.

Sustainable energy technologies that are proven, available now, and obviously more economic than societal collapse could replace oil and other fossil fuels. But critical oil infrastructure, permitted mainly in working class communities and communities of color, is still growing. Environmental, economic, and racial injustice weaken societal capacity to break free of this toxic path. Societal capacity to organize—political feasibility—has emerged as the primary barrier to solving our existential pollution crisis.

California has this problem. It hosts the largest oil refining center in western North America. It has the worst air pollution in the nation, and yet it has allowed its oil sector’s critical infrastructure to grow in low-income communities of color, where this pollution is disparately severe compared with the state average. It uses pollution trading—the exchange of money for permits to pollute—leaving communities largely on our own to fight refinery and oil terminal expansion projects.

Communities rose up to stop tar sands projects in many inspiring efforts that for a decade have held to a trickle the flood of cheaper, dirtier oil that refiners sought. But some projects slipped through. The petroleum fuel chain emits more carbon from extracting, refining, and burning fuels made from the oil refined in California than all other activities in the state combined, and as other emissions have begun to decline, its emissions have not.

In fact its emissions increased from 2013–2017 as refiners here increased production for exports that sold for more money than the entire oil sector spent on permits to emit under the state’s carbon trading scheme. They could do that because no refiner faced any limit on carbon emissions from its plant. They still can because politicians caved in to their demand to make carbon trading the only curb on those emissions. Since 2017, state law has prohibited state air officials from setting a carbon-cutting limit on any oil refining plant under this carbon trading scheme.

Governor Brown argued this law was the best “compromise” that was politically feasible. Yet state climate policy has ignored the need, first voiced by the Oil, Chemical & Atomic Workers Union decades ago, for a mandate that assures workers a just transition. Equally important to political feasibility, communities must predict how fast to transition their job and tax bases from oil to sustainable alternatives. But by letting any polluter delay emission cuts at any time, pollution trading makes it harder to make this very prediction.

Read the report (PDF).

By Winfridus Overbeek - World Rainforest Movement, February 2020

What could be wrong about planting trees? Haven’t communities around the world been planting a diversity of trees since the dawn of human civilization?

Yes they have. But in more recent times, companies have also been planting trees, especially in Africa, Asia and Latin America, and the way they do so is very different from that of communities. They cover huge areas with trees from one single species, creating vast industrial or monoculture plantations devoid of biodiversity.

Today, these same companies plan to start a new round of massive expansion. Exploiting growing public awareness and concern about climate change, they argue that monoculture plantations are an excellent option to help solve some of the world’s most urgent problems: loss of forests, global heating and dependence on fossil fuels (oil, coal and gas).

The corporate argument is that plantations will encourage “forest restoration”, can serve as a natural “solution” to the climate emergency, or help foster a “bio-economy”.

The simple truth, however, is that the industries involved want more plantations simply to increase their profit margins. And other industries and polluters are also using such deceptive arguments, in order to hide their contributions to an ever-worsening social and environmental planetary crisis.

In this booklet, WRM aims to alert community groups and activists about the corporate push for a new round of industrial tree plantation expansion. It also reveals why planting trees on such a large scale can be extremely detrimental, in spite of seductive marketing campaigns claiming that these plantations will or could be a “solution” to the climate crisis.

Read the report (PDF).

By J. Mijin Cha, JD, PhD - Climate Equity Network, April 2019

The signs that the climate crisis is already happening are clear. The most recent Intergovernmental Panel on Climate Change report detailed the evidence from more than 6,000 studies that found that over the past decade, a series of record-breaking storms, forest fires, droughts, coral bleaching, heat waves, and floods have taken place around the world in response to the 1.0 °C of global warming that has taken place since the pre-industrial era. These events, and the losses associated with them, are expected to become substantially worse with 1.5 °C of warming currently targeted by global climate agreements, and far worse if these agreements are not effective. Without major cuts in greenhouse gas (GHG) emissions, this warming threshold could be reached in as little as 11 years, and almost certainly within 20 years. Even if such cuts were to begin immediately, reaching this threshold would not be prevented, only delayed.

Any chance of staving off even worst impacts from climate change depends on significant reductions in GHG emissions and a move from a fossil fuel- based economy to a low-carbon economic future. While this transition is fundamentally necessary, the challenges it poses are great. Every aspect of our economy and our society is dependent upon fossil fuel use – from the reliance on electricity provided by fossil fuel power plants to the tax revenue local communities receive from fossil fuel extraction and facilities to the jobs held by those working in an industry that may keep their incomes high but often puts their communities at risk. The imprint of fossil fuels is so deeply embedded within our way of life that ceasing its use will require a fundamental shift in how we procure and use energy.

The good news is that this shift is possible—and California is already on a path to a low-carbon future. In addition to several ambitious climate targets, in September 2018, then-Governor Jerry Brown signed an executive order pledging the state to achieve carbon neutrality no later than 2045. As the world’s fifth largest economy, the commitment California made to reduce greenhouse gases can provide a pathway to a low-carbon future that could lay the groundwork for others to follow. But to get there, we need to aim even higher than California’s already ambitious goals.

Transitioning away from fossil fuels must be done more quickly and also in a manner that protects workers and communities economically dependent on the fossil fuel industry. Transitioning is also an opportunity to include those who have historically been excluded from the jobs and economic benefits of the extractive economy and expand the populations who have access to future jobs and economic opportunities. As we move to a low-carbon future, environmental justice communities should be prioritized for job creation and renewable energy generation. Without protecting displaced workers and expanding opportunities to other workers, transitioning to a low-carbon future will replicate the mistakes and inequalities of the extractive past and present.

Read the report (PDF).

By Chris Lang - Redd Monitor, June 20, 2017

From 26 to 28 May 2017, a meeting took place in Xapuri, in the state of Acre, Brazil. The meeting brought together Apurinã, Huni Kui, Jaminawa, Manchineri and Shawadawa indigenous peoples, representatives of traditional communities, rubber tappers, academics and supporting organisations. The meeting’s theme was, “The effects of environmental / climatic policies on traditional populations”.

The meeting was supported by Friends of the Earth International, the Indigenous Missionary Council (CIMI), the Rosa Luxemburg Foundation and the World Rainforest Movement.

In a short report about the meeting, Daniel Santini of the Rosa Luxemburg Foundation, writes that the participants reject the term “carbon credits”, because they are actually “pollution credits”. Trading pollution makes the climate problem worse by giving the illusion that something is being done, when in fact it allows pollution to continue.

Santini writes,

Instead of policies based on restrictions on the way of life of traditional peoples, the participants argued that the political-economic model of occupation of the region should be changed, with the suspension of generous public financing for agricultural expansion, industrial logging, and monoculture tree plantations.

Days before the meeting, in Rio Branco, the capital of Acre, corporate and state government representatives met to discuss the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). This is the aviation industry’s disastrous proposal to continue polluting, while using carbon credits to “offset” its emissions.

The World Bank is in talks with the International Civil Aviation Organization about using REDD credits in CORSIA.

Acre is one of the states from which California is looking to buy REDD credits as part of its cap-and-trade scheme. In April 2016, Dave Clegern, a Public Information Officer at the California Air Resources Board, said that,

“The projects that we’re looking at are supported by the locals. They are what is known as sector-based projects, which means that they would be run in conjunction with the government of that country which would provide the opportunity for regular monitoring, verification of the quality of the offsets.”

REDD-Monitor asked Clegern some questions about this statement, including whether a process of free, prior, and informed consent had been carried out about REDD in Acre. And if not, which “locals” was Clegern talking about?

REDD-Monitor is still waiting for Clegern’s reply.

By Matt Huber - Jacobin, October 9, 2016

Climate change is often chalked up to “market failure.” We’re told that, despite prevailing assumptions that prices accurately transmit “signals” about the costs of goods and services, emitters like power plants, refineries, automobiles, and households simply do not pay the full ecological costs of their emissions. Hence, the market has failed.

To fix the problem, the argument goes, we must internalize the costs of emissions into the price mechanism so that emitters pay the full costs of their actions. If we could craft a policy that accurately monetized the ecological costs of emissions — a carbon tax, or fee and dividend scheme — fossil fuels would become costlier and renewables would be more competitive and cost effective. The failure could be corrected, and the market would succeed in guiding us to a clean energy future.

Accounting for ecological costs has become the primary way of crafting environmental policy for public officials and legal experts. But the rhetoric of cost internalization is a political dead end for a left climate politics.

Focusing on getting the price right, and thereby assuming the market can be corrected, allows right-wing and fossil-fuel interests to effectively argue that any and all climate policy will be a cost to working people. Recently, the CEO of Chevron put it bluntly “I’ve never had a customer come to me and ask to pay a higher price for oil, gas, or other products.” Indeed, while many on the climate left attribute slow movement on climate to a problem of education and denial of climate science, popular opposition to climate policy is more often framed in economic terms, focusing on costs to the economy and to everyday people’s lives.

In an ideological landscape dominated by an obsession with accounting for and trimming costs, environmental policy proposals often advocate raising costs—costs that are likely to end up being passed down to working people. Opponents of climate justice easily argue that any tax or cost will end up percolating throughout the economy and hitting ordinary people: wealth doesn’t trickle down, but costs do.

A left climate politics must move beyond a language of cost-internalization, and emphasize the real material benefits for a society beyond fossil fuel: not only in terms of a cleaner environment, but also cheaper energy and green jobs. This requires a language of public goods and collective action, not a language of markets and costs. If the Left must speak of costs at all, it needs to be framed in class terms — costs that the wealthy and corporations must pay to fund a better energy economy.

By Rachel Morello-Frosch, Manuel Pastor, James Sadd, Lara Cushing, Madeline Wander, and Allen Zhu - California Environmental Justice Alliance, September 2016

California’s cap-and-trade program is a key strategy for achieving reductions in greenhouse gas (GHG) emissions under AB32, the California Global Warming Solutions Act. For residents living near large industrial facilities, AB32 offered the possibility that along with reductions in GHGs, emissions of other harmful pollutants would also be decreased in their neighborhoods. Carbon dioxide (CO₂), the primary GHG, indirectly impacts health by causing climate change but is not directly harmful to health in the communities where it is emitted. However, GHG emissions are usually accompanied by releases of other pollutants such as particulate matter (PM₁₀) and air toxics that can directly harm the health of nearby residents.

In this brief, we assess inequalities in the location of GHG-emitting facilities and in the amount of GHGs and PM₁₀ emitted by facilities regulated under cap-and-trade. We also provide a preliminary evaluation of changes in localized GHG emissions from large point sources since the advent of the program in 2013. To do this, we combined pollutant emissions data from California’s mandatory GHG and criteria pollutant reporting systems, data on neighborhood demographics from the American Community Survey, cumulative environmental health impacts from the California Environmental Protection Agency’s CalEnviroScreen tool, and information from the California Air Resources Board (CARB) about how regulated companies fulfilled their obligations under the first compliance period (2013-14) of the cap-and-trade program. Our methodology is described in greater detail in the appendix to this report.

In this analysis, we focus primarily on what are called “emitter covered emissions,” which correspond to localized, in-state emissions (derived mostly from fossil fuels) from industries that are subject to regulation under cap-and-trade. The cap-and-trade program also regulates out-of-state emissions associated with electricity imported into the state and, beginning in 2015, began regulating distributed emissions that result from the burning of fuels such as gasoline and natural gas in off-site locations (e.g., in the engines of vehicles and in homes).

We found that regulated GHG-emitting facilities are located in neighborhoods with higher proportions of residents of color and residents living in poverty. In addition, facilities that emit the highest levels of both GHGs and PM₁₀ are also more likely to be located in communities with higher proportions of residents of color and residents living in poverty. This suggests that the public health and environmental equity co-benefits of California’s cap-and-trade program could be enhanced if there were more emissions reductions among the larger emitting facilities that are located in disadvantaged communities. In terms of GHG emission trends, in-state emissions have increased on average for several industry sectors since the advent of the cap-and-trade program, with many high emitting companies using offset projects located outside of California to meet their compliance obligations. Enhanced data collection and availability can strengthen efforts to track future changes in GHG and co-pollutant emissions and inform decision making in ways that incentivize deeper in-state reductions in GHGs and better maximize public health benefits and environmental equity goals.

Read the report (PDF).

By Carol Zabin, Abigail Martin, Rachel Morello-Frosch, Manuel Pastor and Jim Sadd - UC Berkeley Labor Center, September 13, 2016

California’s leadership role in climate policy has once again been confirmed by the passage of Senate Bill 32 (Pavley, 2016), which commits the state to the ambitious target of reducing greenhouse gas emissions to 40 percent below 1990 levels by 2030—staying the course to an 80-percent reduction by 2050. A central issue in the SB 32 political debate, as well as the many related policies that preceded it, is the impact of climate policy on equity: how to ensure that low-income and working-class Californians do not dis-proportionately bear the costs and are included in the benefits of California’s transition to a low-carbon economy. This report presents a Climate Policy Equity Framework to assist California decision-makers interested in reducing greenhouse gas emissions in ways that promote economic, social, and environmental equity. We suggest that policymakers, regulators, community groups, advocacy organizations, and business interests should develop a “social contract” to manage a transition to a low-carbon economy that both maximizes the benefits of low-carbon economic development and minimizes the risks to working people and disadvantaged communities. This social contract can strengthen the broad political coalition needed to stay the course on the state’s ambitious greenhouse gas reduction goals, particularly in the face of accelerating greenhouse gas emission reductions and a legal challenge to the constitutionality of California’s cap-and-trade system. The Climate Policy Equity Framework can then guide policy development and program implementation to reflect and support the social contract.

But what is climate equity? How can it be defined in a way that promotes both good jobs and prioritizes those communities that are hardest hit by climate change, multiple environmental hazards, and socio-economic stressors? What key criteria can then be used to develop and assess policies such as renewable portfolio standards, incentives for energy retrofits, cap and trade, transit-oriented development, low-carbon fuels and vehicle deployment, and much more? And finally, when faced with trade-offs between different equity criteria or tensions between environmental justice and labor interests, how can decision-makers maximize equity outcomes?

To answer these questions, this report proposes a “Climate Policy Equity Framework” that operates at three levels to:

• Articulate equity principles and goals to guide policy design;
• Present key criteria to analyze how close a particular climate policy or program comes to meeting these equity goals; and
• Propose indicators that point the way to mechanisms and strategies to advance climate equity.

We then apply these equity criteria to assess progress on environmental justice, economic equity, and public accountability goals, using the limited data currently available. Our assessment highlights positive developments, remaining challenges, and the data gaps that must be filled to facilitate more complete assessments in the future. We also apply the criteria and indicators to two specific climate policy arenas—energy efficiency and renewable energy—to illustrate how to improve the equity outcomes of specific climate policies and programs. Finally, we present a preliminary set of recommendations to illustrate some concrete opportunities for equitable climate initiatives.

Read the report (PDF).