Smooth Sailing for First Auction with Gasoline under the Climate Pollution Cap, and More Benefits to Communities

Despite oil industry fear-mongering over adding transportation fuels such as gasoline to the state's emissions cap as of January 1, the first auction of carbon allowances resulted in a carbon allowance price in line with the previous auctions and will make more funds available for communities affected by climate pollution.

To put the results announced today by the California Air Resources Board in context, the allowance price has been between $10 and $14 per ton of carbon over the last nine auctions, and this auction's price was about $12. The auctions are a key element of California's plan to reduce climate pollution by requiring power plants, industrial facilities, and now the producers of transportation fuels like gasoline to either reduce emissions or to acquire - at auction or by trading amongst each other - a shrinking pool of allowances for every ton of climate pollution that they emit. These auctions are a critical tool in reducing carbon emissions to 1990 levels by 2020 under the state's Global Warming Solutions Act of 2006 (AB 32).

The oil industry spent millions of dollars in 2014 setting up elaborate front groups and waging a marketing campaign against adding polluting fuels under the cap. Their big spending on lobbyists and baseless claims have amounted to nothing - and now funding from their purchases of allowances will be used to make progress on climate in California.

With fuel providers now included, there were more allowances sold at this auction. This means more funding for initiatives that reduce greenhouse gas emissions - and at least 25 percent of the funds must benefit California's most disadvantaged communities, which are disproportionately affected by climate pollution. These funds, and the other policies under the umbrella of AB 32, are vital to meeting our 2020 climate goals - and to making sure that the benefits of addressing climate change are shared widely.

Jesus Magallanes, photo credit: Lexey Swall

California's clean energy policies are bringing growth to industries like renewables, alternative fuels, energy efficiency and to many other clean-energy related businesses. The benefits go well beyond reducing climate pollution, and include bringing good jobs and boosting California's economy in places hardest hit by the recession. NRDC recently partnered with Greenlining Institute to start capturing some of the California climate policy success stories - the real people benefitting from California's leadership on climate.

One example is Jesus Magallanes from California's Central Valley, who is just one of the many people benefitting from polices that have incentivized clean energy. Before he went into training for solar installation, Jesus worked in construction. When that thinned out as a result of economic downturn, he took odd jobs to get by, going to packinghouses, driving a forklift. Jesus, who has three kids, had several minimum wage jobs at a time, but it was impossible to make ends meet. "I was making $300 a week and I had to move back into my parents' house in Visalia," he recalls. He lived there for three years with his kids while working multiple jobs and looking for better opportunities.

Then he heard from friends that there were a lot of new positions in the Central Valley installing solar panels, and sought out training. He got a job with Lifestyle solar, doing rooftop solar installations in and around the Fresno area. Now he's got his own crew and just bought a $250,000 house in Visalia, which he could never have afforded before.

There are a growing number of people that, like Jesus, are prospering with the growth of the clean energy economy. California's climate leadership is providing environmental, air quality, and economic benefits - and these benefits can and should be shared widely across California's communities. The oil industry may have fought being part of the solution, but they are showing they can comply with California's climate laws and pay for their pollution by purchasing allowances. The auction this week with the fuel providers under the cap is another successful milestone for California's climate policies, which are making a big difference not only for carbon reductions, but also for hard-working Californians.