Even as Arnold Schwarzenegger expounds on the virtues of a national cap-and-trade scheme in the wake of Prop. 23’s Election Day defeat, the California Air Resources Board is quietly watering down the state’s cap-and-trade program. The Sacramento News & Review, an alt-weekly in the state’s capital, reports:
[D]ays before the polls opened, the California Air Resources Board announced it was ready to make some major concessions to oil companies, electric utilities and other polluters—and proposed to give away hundreds of millions of dollars worth of carbon allowances to businesses as part of a “cap and trade” rule to be formally adopted in December.
The proposal is a departure from what a panel of economists recommended to the agency earlier this year. But CARB chairwoman Mary Nichols blamed the recession for the different approach. “Because of the state of the economy, to go to a large auction quickly just isn’t realistic,” she told state legislators in October, shortly before the 3,000-page rule was formally released.
In other words, although Schwarzenegger and others in the environmental and “green-jobs” lobby loudly and publicly denounced Prop. 23 during the campaign, saying proponents’ warnings about AB 32’s economic consequences were overblown, it appears as though the regulators have themselves accepted at least part of the proposition’s logic.
(By the way, Steve Hayward at the American Enterprise Institute called it.)