HomenewsreleaseAB 398 › Governor Jerry Brown Betrays Californians with Massive Giveaway to Oil and Gas Industry in Proposed Extension of Cap-and-Trade Program

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Governor Jerry Brown Betrays Californians with Massive Giveaway to Oil and Gas Industry in Proposed Extension of Cap-and-Trade Program

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Liza Tucker, Consumer Watchdog; Julie Light, Food & Water Watch

Sacramento, CA — Consumer Watchdog and Food & Water Watch oppose Assembly Bill 398, brokered by Governor Jerry Brown to extend California’s cap-and-trade program past 2020, as a massive giveaway of billions of dollars to the oil and gas industry that fails to rein in one of the largest sources of greenhouse gas emissions in California. The organizations are calling on state legislators to defeat the bill, which could be called for a vote on Thursday.

"Jerry Brown calls climate change an existential threat, but this bill is a sell out to the oil and gas industry that does nothing to avert that threat,” said consumer advocate Liza Tucker. “Brown and lawmakers who support this bill will be helping the oil and gas industry continue to pollute rather than slash their emissions."

AB 398 creates several exemptions for the oil and gas industry and fossil fuel power plants from air pollution regulation by giving the Air Resources Board (ARB) total authority over their emissions. It then straightjackets ARB’s oversight by requiring it to regulate only via cap-and-trade, prohibiting it from crafting meaningful greenhouse gas reduction goals.

“Governor Brown is once again favoring the oil and gas industry, giving it a pass to pollute for another decade,” said Adam Scow, California director at Food & Water Watch. “Legislators who care about public health and California’s future must reject this bill and instead demand polluters make real emissions reductions at the source.”

If the bill is approved, the oil and gas sector will see immediate benefit in the form of reduced regulation. Brown’s legislation pre-empts local air quality districts that regulate the biggest refineries in the state, preventing them from setting stricter emissions limits that polluters would have to meet.

In addition, the legislation makes the cap-and-trade program, which relies on the issuance and sale of emissions “allowances,” even more favorable to the oil and gas industry. The program would keep carbon emissions cheap by continuing to give hundreds of millions of dollars’ worth of free pollution credits to the oil and gas industry.

The legislation also exempts the electric power industry from state taxes. The lost state taxes will be made up for with cap-and-trade revenue that would go into the general fund. That cap-and-trade revenue then will not be available to fund pollution monitoring or reduction programs.

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