Cap-and-Trade: Good for California?

Governor Schwarzenegger applauded the passage of a statewide cap and trade tax Tuesday, lauding the state’s Air Resources Board for drafting “the nation’s first cap and trade program,” according to a statement from the Governor’s Office. This is nothing that the governor should be proud of.

Assembly Bill 32, the Global Warming Solutions Act of 2006, introduced by Fabian Nunez, blames individuals and businesses for climate change, and seeks to punish all for the alleged crimes against the earth. Like the 20×2020 challenge, AB 32 seeks to impose artificial restrictions on California citizens. While the 20×2020 program, as signed into law earlier this month, will mandate that all citizens must cut their water consumption by 20 percent by 2020, AB 32 mandates that also by 2020, the California will have to reduce carbon emissions by 25 percent. How does AB 32 propose we drastically cut down on emissions without harming businesses? With “green” solutions, of course, to be determined at a later time. Coupled with this bill, the governor also recently signed legislation to open the playing field more for alternative fuel providers, despite the fact that gasoline remains the most plentiful and readily available and affordable source of fuel for the masses.

In a statement, the governor applauded the drafting of the cap and trade program:  “California has led the nation and the world in developing green policies and programs, and we are continuing to take action with a first-in-the-nation cap-and-trade program… I have no doubt the nation’s first cap-and-trade program will also drive innovation and generate green jobs.” Schwarzenegger also applauded the California Air Resources Control Board for “laying the groundwork in developing a program with flexibility to achieve emission reductions at lower costs.” At lower costs to whom? Certainly not to business, which Schwarzenegger has claimed he wants to bring back to the state. What business would come back to California, where it would be taxed at a higher rate than surrounding states for being productive?

By taxing innovation and the much-maligned big business, lawmakers are looking to put the squeeze on older industries and instead favor up-and-coming green designations. Unfortunately green enthusiasts, the entire basis of the cap-and-trade argument is now being undermined: more individuals are questioning whether global warming is indeed man-made, or if global warming is indeed a firm phenomenon itself. The recent news of leaked emails showing skepticism on man-made global warming has been a damning indictment.

Cap-and-trade is just one more way to tax and discourage innovation. Why a self-proclaimed Republican governor, who made his own vast wealth working in business, would support such a plan, defies reason.