The chopped liver of climate policy is making a comeback

From: POLITICO's The Long Game - Tuesday Dec 20,2022 05:01 pm
Dec 20, 2022 View in browser
 
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By Debra Kahn

PROGRAMMING NOTE: We’ll be off next week for the holidays but back to our normal schedule on Tuesday, Jan. 3.

THE BIG IDEA

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Reports of cap-and-trade's death may be greatly exaggerated. | You Tube screen shot

CARBON MARKET MADNESS — Don't look now, but the country's first- and third-largest economies are both pursuing carbon prices on industrial emissions.

New York regulators on Monday approved their first-ever "scoping plan," or roadmap for how they're going to cut emissions 85 percent from 1990 levels by 2050, as Marie J. French reports. It includes a policy that's anathema to some on the left: a carbon market.

And California approved the fourth iteration of its scoping plan last week, which reserves a significant role for cap and trade through 2045. The policy was the bane of environmental justice groups last time around, but this time they largely held their fire.

New York is calling it "cap and invest," but it's the same concept: High-emitting facilities have to either lower their emissions in accordance with the cap, or buy permits to cover them. The proceeds could go to programs that lower emissions on the local level, with priority given to disadvantaged communities, or rebates to cushion higher energy costs for low-income households.

Cap and trade has been on the ropes for a while, ever since Congress failed to pass a national program in 2010. It became a policy non grata on the left shortly after that, due to concerns about it allowing industrial facilities, often located in economically disadvantaged areas, to buy their way out of actually reducing emissions.

It was a major part of environmental justice groups' objections to President Biden's consideration — and ultimate rejection — of California's top climate regulator, Mary Nichols, to lead EPA.

Its enduring attraction is the money. California has raised more than $22 billion since auctions began a decade ago, and has been spending it on things like electric vehicle incentives, affordable housing, tree-planting and repairing drinking water systems. Both states specify that at least 35 percent of the money has to benefit disadvantaged communities.

And it's also about the actual goal. Without an overarching carbon cap and an accounting mechanism, it's impossible to know whether the states are actually meeting their targets.

"We have this big opportunity at the state level to accelerate ambition because we can take advantage of funding from the federal government," said Katelyn Roedner Sutter, Environmental Defense Fund's California director. "But the IRA doesn't guarantee emissions reductions. We need these limits and we need enforceable policy at the state level coupled with the IRA to actually get the tons."

It's still a touchy topic. New York is considering modifications like limits on trading pollution allowances into or near disadvantaged communities, source-specific caps for polluters impacting those communities and targeted air-quality monitoring.

“I can't say anything positive about this. All I can say is that at least it's clear that our major concerns were heard," said Eddie Bautista, the executive director of the New York City Environmental Justice Alliance.

Environmental groups in California are also still wary, but the debate is being punted to next year, when state regulators plan to consider amendments to the program. California also introduced a new emission-reduction option, carbon capture and sequestration, which is drawing ire away from cap and trade.

"There's still huge flaws in the program," said Maya Golden-Krasner , deputy director of the Center for Biological Diversity's Climate Law Institute. Next year is "when a lot of the criticism of the program is going to come."

It's just the beginning for New York, which will have to do an entire separate rulemaking to implement the program. Washington (the state, not D.C.) is next, and is moving fast: Its carbon market is starting auctions in February, and officials say they may eventually try to link with California.

 

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BUILDING BLOCKS

CHINA SAVES THE DAY — Nations negotiating a U.N. biodiversity treaty in Montreal on Monday recognized the link between nature and long-term economic prosperity, POLITICO's Louise Guillot writes. (Half of the world’s GDP is dependent on healthy ecosystems.)

They agreed to restore 30 percent of degraded habitats by the end of the decade; to halt the extinction of threatened species by 2050; to cut $500 billion in environmentally harmful subsidies and to slash pollution, among other targets.

The U.S. isn't a party to the underlying agreement, so federal officials were on the sidelines. “We are engaged, not at the table, but with our colleagues and other like-minded governments," Monica Medina , U.S. special envoy for biodiversity and water, told Louise. (California officials were there in force, though, talking up their own 30X30 goal.)

China, the leader of the talks, cannily offered a win for developing countries — more funding for biodiversity — and one for developed countries, which succeeded in securing the goal to protect 30 percent of the planet as well as a robust monitoring framework.

Namibia officials summed it up: "a finely balanced package deal that makes everyone equally unhappy, which is the secret for reaching agreement in the U.N. system."

AROUND THE NATION

WASTE NOT — New York is where it's at this week. Consumer advocates are watching the Empire State for the fate of a bill that could reduce electronic waste, POLITICO's Marcia Brown reports.

The Digital Fair Repair Act would require manufacturers of personal electronics to provide diagnostic and repair information and make spare parts more readily available. It was passed in June and has been on New York Gov. Kathy Hochul's (D) desk since Dec. 16. She has until Dec. 28 to sign or veto the measure.

Hochul is also able to negotiate changes to the bill before signing chapter amendments that must be agreed to by lawmakers and passed next year. That has advocates worried, given that the bill has already been winnowed to exclude medical devices, agricultural equipment and home appliances.

“We’re hearing rumors that she’s considering a neutered version of the bill that would basically do nothing,” said Kyle Wiens, CEO of iFixit, an online vendor of parts and repair guides. Advocates in Albany have started taking out online ads and billboards.

Assemblymember Patricia Fahy (D) confirmed that discussions with the governor are in process but that she wants the bill to be “as substantive as possible.” She said dozens of other states plan to copy New York.

“This is a truly momentous bill,” she said.

A spokesperson for the governor did not immediately respond to a request for comment but has previously told POLITICO the governor was “reviewing the legislation.”

 

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Team Sustainability is editor Greg Mott, deputy editor Debra Kahn and reporters Jordan Wolman and Allison Prang. Reach us all at gmott@politico.com, dkahn@politico.com, jwolman@politico.com and aprang@politico.com.

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WHAT WE'RE CLICKING

— Confused about blue, green, purple and pink hydrogen? Read this explainer from POLITICO's E&E News' David Iaconangelo.

Denver is subsidizing e-bike purchases as a way to get motorists out of their cars in a program that could be a model for the rest of the country, the Washington Post reports.

— Other innovators, meanwhile, are turning vintage automobiles into EVs. The Associated Press has that story. 

 

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