SACRAMENTO – A report by the Legislative Analyst's Office (LAO) requested by Assemblymember Henry T. Perea (D-Fresno) and Senator Michael J. Rubio (D-Shafter) to explore options that would minimize effects of cap-and-trade on California businesses showed an allowance auction is not necessary to achieve the goals set forth in AB 32.
Assemblymember Perea requested the LAO explore opportunities to achieve the emission reduction goals of the AB 32 program without conducting costly allowance auctions that concerned members of the many industries targeted.
"The fact that we can accomplish our environmental goals without forcing the sale of allowances is encouraging," Assemblymember Perea said. "We need to remember our ultimate goal here is to improve our air quality by encouraging industries to invest in clean technology and I believe that can be done with 100 percent free allowance auctions."
"We need to make sure we are exploring all alternatives to reducing greenhouse gas emissions in our state while minimizing potential economic impacts on California businesses and the jobs they create," said Senator Rubio.
The LAO report says "a key advantage of 100 percent free allocation is that it would significantly offset more of the marginal cost increase resulting from compliance with the program as compared with the Air Resources Board (ARB) approach and reduce the potential for leakage while preserving the environmental integrity of the program."
Assemblymember Perea hosted two forums this summer to discuss the potential impacts of cap and trade on various industries. What he heard from concerned business owners solidified his views about the devastating effects cap and trade could have on businesses.
NOTE: For comment from the Legislative Analyst's Office regarding this report please contact Tiffany Roberts at 916-319-8309.
Contact: Alisha Gallon 661-364-3655