SB 775 text and status: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB775
SB 775 Details:
- Establishes a new cap-and-trade program that begins on January 1, 2021. The new program applies to the same set of covered entities that are subject to the current program; The California Air Resources Board (ARB) would retain its current authority to change coverage in the future.
- Sets declining annual caps on emissions from covered sources that are consistent with achieving the 2030 statewide emissions goal.
- Includes a price floor and price ceiling (a price collar) for carbon at quarterly auctions. In combination, these two program elements reduce market volatility, help to ensure smoother revenue flows, and enable a gradual transition to higher carbon prices.
- The initial price ceiling begins at $30/tCO2e and rises at $10/tCO2e per year, plus inflation.
- The initial price floor begins at $20/tCO2e and rises at $5/tCO2e per year, plus inflation, after a one-year delay, such that there is a $20/tCO2e spread between the floor and ceiling after one year of market operation and a $60/tCO2e spread between the floor and the ceiling in 2030.
- Prohibits the use of carbon offsets, banked allowances from the pre-2020 market, and allowances from external market programs that have not yet linked to the new post- 2020 program. These steps separate the trading periods completely.
- The new program can link external market programs.
- Requires annual (as opposed to 3-year) compliance for all covered entities.
- Prohibits banking of allowances for use outside of the year they are issued.
The Economic Case for SB 775
A State-appointed panel of experts, called the Economic and Allocation Advisory Committee (EAAC), studied the best strategy to allocate the revenue raised by a cap & trade program. The EAAC’s January 10th, 2010 report recommended that the largest share – roughly 75% of allowance value – should be returned to California households. According to EAAC figures, this dividend translates to $388 in 2012 for a family of four, rising to $1,036 by 2020, adding a total of $7,004 to family incomes over the 8 year period. The Climate Center continues to reach out to lawmakers to incorporate this recommendation into future legislation. If we are successful, it will be a huge victory for California’s economy and the environment!
The Climate Center continues to reach out to lawmakers, businesses, the broader community to support this legislation. If we are successful, it will be a huge victory for California’s economy and the environment!
Download the factsheet (pdf): https://theclimatecenter.org/wp-content/uploads/2017/06/SB-775-Fact-Sheet-6.09.17.pdf
Close to Home: State can show the way on climate policy by Jane Bender and Larry Robinson, June 8, 2017
California is about to revolutionize climate policy … again, by David Roberts, Vox.com May 3, 2017
Understanding SB 775: A Realistic Path to Achieving California’s Climate Goals, by Michael Wara and Danny Cullenward, Legal Planet, Berkeley Law and UCLA Law, May 15, 2017
Wieckowski, De León unveil new post-2020 Cap and Trade program, May 1, 2017
California’s climate debate heats up behind closed doors as Gov. Brown pushes to extend cap and trade by Chris Megerian and Melanie Mason, LA Times, June 23, 2017