Research & Commentary: Curbing Executive Authority to Unilaterally Join Regional Cap-and-Trade Schemes is the Right Move for Florida’s Legislature

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Companion legislation has been introduced in the Florida legislature that would block Florida governors from unilaterally signing the Sunshine State on to “certain state and regional programs to regulate greenhouse gas emissions” without being given the assent of the Legislature via a vote of authorization.

The legislation reads “Notwithstanding any other law, a state agency may not adopt or enforce a state or regional program to regulate greenhouse gas emissions for the purposes of addressing changes in atmospheric temperature without specific legislative authorization, including, but not limited to…low carbon fuel standards”, as well as “plans or programs enabling regulation of or mobile stationary sources, greenhouse gas taxes or fees, or greenhouse gas trading” and “state or regional programs prompted by the participation of the United States in international treaties or executive agreements or interstate compacts or agreements.”

Certainly, most obvious in mind when thinking of the necessity of this legislation are elephant-in-the-room cap-and-trade regional compact programs such as the Regional Greenhouse Gas Initiative (RGGI) and the now-defunct Transportation and Climate Initiative (TCI), which many states were made a party to via executive fiat.

RGGI, established in 2009, is an interstate cap-and-trade program made up of the New England states, along with New York, New Jersey, Delaware, Maryland, and Virginia. Cap-and-trade programs are systems that limit carbon-dioxide (CO2) emissions by establishing a specific amount of carbon dioxide businesses or other organizations may produce and allowing additional capacity to be bought from other organizations that have not used their full production allowance. If an entity emits above the cap without purchasing additional allowances, it will suffer a financial penalty. RGGI requires power plants larger than 25 megawatts in capacity to purchase emissions allowances at auction for each ton of carbon-dioxide emissions they produce. There are a limited number of allowances issued, and these are gradually reduced each year.

TCI, an initiative pushed by the Georgetown Climate Center, was based on California’s cap-and-trade program and the RGGI consortium of states. The purpose of TCI was to reduce CO2 emissions from cars and trucks to head off climate change. It would have done this by placing a cap on gasoline and diesel fuel allowed for sale in the states participating in the program. This would have increased the price at the pump for these fuels, discouraging consumers from buying them.

Gradually, the amount of these fuels allowed for sale would have been reduced while wholesalers would have had to purchase CO2 allowances to stay in business. TCI’s initial goal was to reduce CO2 emissions from transportation fuels by 25 percent by 2032.

Joining such a program as RGGI would be a terrible for Floridians, as cap-and-trade programs do little to reduce carbon dioxide emissions. Even worse, they are basically regressive taxes, as these programs disproportionally burden low-income households, many of whom can’t afford the higher energy and gasoline costs these programs are designed to produce. The more someone pays at the pump means the less they can afford to save or use for food, rent, mortgage payments, utility bills, etc.

A Manhattan Institute study estimates the California cap-and-trade program raised residential electricity costs by as much as $540 million in 2013. California’s Legislative Analyst’s Office (LAO) estimates cap-and-trade will have increased gasoline prices by 15–63 cents per gallon by 2021, and by 24–73 cents per gallon by 2031. LAO projected Californians will spend an additional $2 billion to $8 billion on gasoline by 2021. It also estimates the increased gasoline prices will cost $150–$550 per household by 2026. Retail electricity prices in the Golden State are also 70 percent higher than the national average. Prior to the enaction of its cap-and-trade program, they were only 40 percent higher.

In a Cato Journal article released in 2018, David T. Stevenson of Delaware’s Caesar Rodney Institute writes there are “no added reductions in carbon dioxide emissions, or associated health benefits, from the RGGI program. RGGI emission reductions are consistent with national trend changes caused by new EPA power plant regulations and lower natural gas prices. The comparison requires adjusting for increases in the amount of power imported by the RGGI states, reduced economic growth in RGGI states, and loss of energy intensive industries in the RGGI states from high electric rates.”

Cap-and-trade programs like RGGI simply aren’t needed; carbon-dioxide emissions are already dropping in the United States, a development that is primarily due to the recent hydraulic fracturing revolution, which many cap-and-trade supporters continue to oppose, and the switch from coal-generated electricity to natural gas.

Curbing executive authority to prevent governors from unilaterally tying these cap-and-trade millstones to the neck of Floridians is the right move for the Legislature to take. While joining these programs or others of their ilk would have no benefit for the Sunshine State, the place for that debate to be had is in the Legislature, by the representatives of the people. If a current or future governor would like to enlist Florida in the climate crusade, let them do so not by a simple Caesarean edict, but only after they have earned the support of the legislative branch as well.

The following documents provide more information about RGGI and cap-and-trade programs.

A Review of the Regional Green Gas Initiative
https://object.cato.org/sites/cato.org/files/serials/files/cato-journal/2018/2/cato-journal-v38n1-chapter-11.pdf
This Cato Journal article authored by David T. Stevenson of the Caesar Rodney Institute finds the Regional Greenhouse Gas Initiative has not shown any added emissions reductions or associated health benefits, has had minimal impact on energy efficiency and low-income fuel assistance, and has increased regional electric bills.

Legislating Energy Poverty: A Case Study of How California’s and New York’s Climate Change Policies Are Increasing Energy Costs and Hurting the Economy
https://www.pacificresearch.org/wp-content/uploads/2018/12/LegislatingEnergy_F_Web.pdf
This analysis from Wayne Winegarden of the Pacific Research Institute shows the big government approach to fighting climate change taken by California and New York hits working class and minority communities the hardest. The paper reviews the impact of global warming policies adopted in California and New York, such as unrealistic renewable energy goals, strict low carbon fuel standards, and costly subsidies for buying higher-priced electric cars and installing solar panels. The report finds that, collectively, these expensive and burdensome policies are dramatically increasing the energy burdens of their respective state residents.

Less Carbon, Higher Prices: How California’s Climate Policies Affect Lower-Income Residents
https://www.heartland.org/publications-resources/publications/less-carbon-higher-prices-how-californias-climate-policies-affect-lower-income-residents
This study from Jonathan Lesser of the Manhattan Institute argues California’s clean power regulations, including the state’s renewable power mandate, is a regressive tax that harms impoverished Californians more than any other group.

The U.S. Leads the World in Clean Air: The Case for Environmental Optimism
https://files.texaspolicy.com/uploads/2018/11/27165514/2018-11-RR-US-Leads-the-World-in-Clean-Air-ACEE-White.pdf
This paper from the Texas Public Policy Foundation examines how the United States achieved robust economic growth while dramatically reducing emissions of air pollutants. The paper states that these achievements should be celebrated as a public policy success story, but instead the prevailing narrative among political and environmental leaders is one of environmental decline that can only be reversed with a more stringent regulatory approach. Instead, the paper urges for the data to be considered and applied to the narrative.

Climate Change Reconsidered II: Fossil Fuels – Summary for Policymakers
https://www.heartland.org/publications-resources/publications/climate-change-reconsidered-ii-fossil-fuels—summary-for-policymakers
In this fifth volume of the Climate Change Reconsidered series, 117 scientists, economists, and other experts assess the costs and benefits of the use of fossil fuels by reviewing scientific and economic literature on organic chemistry, climate science, public health, economic history, human security, and theoretical studies based on integrated assessment models (IAMs) and cost-benefit analysis (CBA).

The Social Benefits of Fossil Fuels
https://www.heartland.org/publications-resources/publications/the-social-benefits-of-fossil-fuels
This Heartland Policy Brief by Joseph Bast and Peter Ferrara documents the many benefits from the historic and still ongoing use of fossil fuels. Fossil fuels are lifting billions of people out of poverty, reducing all the negative effects of poverty on human health, and vastly improving human well-being and safety by powering labor-saving and life-protecting technologies, such as air conditioning, modern medicine, and cars and trucks. They are dramatically increasing the quantity of food humans produce and improving the reliability of the food supply, directly benefiting human health. Further, fossil fuel emissions are possibly contributing to a “Greening of the Earth,” benefiting all the plants and wildlife on the planet.

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Environment & Climate News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.

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