Tuesday, December 8, 2009

AB 32 Is An Illegal Tax? How Can A Bill Designed To Cut Greenhouse Gas Emissions Be Turned Into A Tax?

I used to repeat this a lot during the early days of this blog, and I guess I'm just going to have to do it again. If you really want to understand what is going on in the State of California, you need to figure out the money angle. Because no matter what the recommended belief might be, or its accompanying flower child "save the world" message, it really is all about money. It is the one thing that drives everything here. The rest is just stuff put out there to sucker in the chumps. And apparently there is an almost endless supply of them.

On the Op-Ed page of yesterday's New York Times, environmental policy advocate and author James Hansen had some harsh words to share about certain aspects of President Obama's global warming initiative. In particular the policy called "cap and trade." And according to Hansen its real purpose has precious little to do with any further reduction in air pollution, and a whole lot more with making a lot of money.

Cap and Fade - At the international climate talks in Copenhagen, President Obama is expected to announce that the United States wants to reduce its greenhouse gas emissions to about 17 percent below 2005 levels by 2020 and 83 percent by 2050. But at the heart of his plan is cap and trade, a market-based approach that has been widely praised but does little to slow global warming or reduce our dependence on fossil fuels. It merely allows polluters and Wall Street traders to fleece the public out of billions of dollars.

Now how can that be? The move towards reducing greenhouse gases can actually be manipulated to become a money making proposition? One that involves trading pollution for dollars? Hansen explains the process:

Supporters of cap and trade point to the 1990 Clean Air Act amendments that capped sulfer dioxide and nitrogen oxide emissions from coal-burning power plants - the main pollutants in acid rain - at levels below what they were in 1980. This legislation allowed power plants that reduced emissions to levels below the cap to sell the credit for these excess reductions to other utilities whose emissions were too high, thus giving plant owners a financial incentive to cut back their pollution. Sulfur emissions have been reduced by 43 percent in the two decades since. Great success? Hardly.

Because cap and trade is enforced through the selling and trading of permits, it actually perpetuates the pollution it is supposed to eliminate. If every polluter's emissions fell below the incrementally lowered cap, then the price of pollution credits would collapse and the economic rationale to keep reducing pollution would disappear.

Governments and large corporate polluters are making money out of fouling up our air, and what is the necessary commodity? Air pollution. Imagine, we now have a system that has turned greenhouse gases into a profit center. And how are we going to get people to stop polluting when they are making millions from doing that very thing, and with government support? Certainly Sacramento couldn't resist getting in on something like that. This is perfect for them, it doesn't involve doing anything productive, and it gives them beaucoup swagger with those having lots of money to give. And after all, if there is one thing this state is still capable of producing in bountiful quantities, it is air pollution. It's our greatest unnatural resource.

So would you believe that Sacramento is already well into the game? And the way they got into it was to pass and sign into law AB 32, the so-called Global Warming Solutions Act? AB 32 (father of SB 375, aka the "Destroy Small Cities Act"), is apparently not quite as beneficent a piece of legislation as you might have first believed. And while it was sold to the public as being a way of stopping greenhouse gas pollution, it really has an awful lot more to do with the incredible sums of money to be made.

Remember a couple of days ago when we posted an article speculating that AB 32/SB 375 might not survive 2010 because of some developing, and apparently serious, political problems? Well, it would now appear that the Howard Jarvis Taxpayers Association have uncovered something that could cause our two favorite laws to suffer stiff legal challenges as well. AB 32, without which there would be no SB 375, could very well contain an illegally imposed tax.

Here's how the Jarvis people break it down:

HJTA Questions Legality of New $143 Billion AB 32 Tax - Last week the Howard Jarvis Association sent the AB 32 Economic and Allocation Advisory Committee (EAAC) a letter spelling out the reasons why we believe that the state has no legal authority to impose a new AB 32 auction tax on California companies and consumers. The California Air Resources Board (CARB) and the Governor have asked the EAAC to provide advice to CARB on how to spend up to $143 billion in new government revenue. We thought it would be wise for the EAAC to consider whether CARB actually has the authority to raise this revenue in the first place.

Beyond the fact that imposing a new $143 billion or more tax on California's already struggling companies would destroy thousands of jobs and force more employers to leave the state, CARB has no legal authority to initiate a cap and trade auction, as the Legislature did not grant any such authority under AB 32. Should lawmakers attempt to bestow this taxing power on CARB retroactively, it will require a two-thirds vote of both houses because imposing government costs through a cap and trade auction is clearly a TAX.

The idea being that the only entity in California that can impose a new tax like this would be the California State Legislature, and then it would take a 2/3s vote to do it. The notion that some bureaucracy in Sacramento can do such a thing being clearly unconstitutional. And let's face it, without a "cap and trade" element to sustain it, AB 32 becomes little more than a smog check with important sounding language attached.

Look, I personally get the greenhouse gas thing. But if the state is going to lie to us about forced high density development issues, confiscate city control over local planning and property taxes, demolish CEQA reviews and other important environmental protections, and then try to end run our elected officials to bureaucratically impose what could be an additional onerous tax upon our already challenged industrial base, and all in the name of stopping Global Warming, then I am just going to have to opt out.

The people of this state are starting to wake up to what is really going on here. 2010 is not going to be a good year for those responsible for running a cynical scam that on the surface appears to have ecological importance, but in reality is all about feeding the Sacramento patronage system. In other words, business as usual.


  1. Great article, Sir Eric.

    Makes me wonder why the fast fading Los Angeles Times and other California major newspapers don't carry your columns? Might just increase their declining readership.

    Thanks for being our voice here in Sierra Madre.

  2. This is fraud on a massive scale. Have the politicians become
    so sure that the voters cannot comprehend public policy that
    they are now doing little more than lining the pockets of those
    they do business with?

  3. The answer to you question, Curly.....
    Yes, they are.

  4. Why do Joe and John take the side of these people?



    That is a joke isn't it?

  6. What is a joke? Joe and John taking the side of Sacramento against Sierra Madre?

    No, I am afraid it's not.

  7. Love the cartoon!

    More right on than most folks realize.

  8. Developers taste like chickenDecember 8, 2009 at 9:13 AM

    Cap and trade is more like a pea and shell game.
    It is like making more profit on a filthy mess and trading the names to keep the public confused and small competiative businesses small. Like emission derivatives, gambling and taxing instead of curing or changing, or making the change as expensive as possible.

    I remember the great exodus of businesses from california in the 80's when the air coast management took effect, our air is the 5th cleanest in the nation. We already did our part to curb emissions...

    I am grateful to the howard jarvis organization,
    this year, I am going to send a little money to help with their legal costs.

    Thank you Sir Eric

  9. SM dodged a bullet - so farDecember 8, 2009 at 9:18 AM

    Heard a discussion about 2 candidates in the SF Valley running for LA City Council, one opposed to overdevelopment, one for development along regional transportation corridors. Yep. It's a race between
    CHRISTINE ESSEL - go green (aka go BIA CAR Over development) and
    PAUL KREKORIAN - telling people to follow the money, check on Essels' contributors, listen to neighborhoods about what they want.
    I know nothing else about the candidates, but unless Krekorian is a raving fundamentalist of ANY religion, he's got my support.

  10. What "Demo-Green Committee" finanaced by ouside special interests is going to support Joe in the upcoming election. Be sure to read the small print at the bottom of the 100 glossy mailers you will be getting.

  11. Be sure to read the blue link (Break it down) that Sir Eric has provided. The truth is much worse than you think.

  12. Follow the money is as true here in Sierra Madre as it is on the state level.

    A big problem for us will be getting those financial disclosures in time to publicize them. There is a loophole that allows candidates to withhold that information until the last minute, and then reveal.

  13. Still no MVNews on the streets or online. Now 3 days late. Can it be the court finally seized it?

  14. Follow the Money (Again!)December 8, 2009 at 9:47 AM

    Developers taste like chicken, hold on to your wallet. Jarvis group was responsible for Prop 13 steering all local property tax to Sacramento, where it got hoovered into a system that has no bottom. Besides that, they got the legislature to pass the loophole that lets group homes into R-1 without any oversight or ability of the local community to regulate or control them. Huge money there just to warehouse bodies and celebrity recovering addicts. Huge income stream for Sacramento and County Supes.

  15. 9:31......we'll be following the Mosca money closely, and any other dirt candidates.....people are fed up with these special interests dictating their greedy nonsense to the people of Sierra Madre.
    We're sick of these special interests financing the political campaigns of the DIRTS.
    Buchanan and Joffe both had large contributions from out of town special interests of a major political party and other special interests hell bent on destroying Sierra Madre.
    The two other candidates were financed 100% by the people of Sierra Madre's small contributions and hard work by their supporters.
    Thank God one of these candidates won anyway.

    Enjoy tonight's council meeting, all you DIRTS!

  16. 9:45

    Please don't get our hopes up again, Harriet Susan Henderson- town GRIFTER is like a "t**d that won't flush"
    When are all the dumb dirts going to stop supporting this fraud?

  17. Who can forget the $170,000 in BIA and CAR money pumped into Sierra Madre to defeat Measure V? They might be able to buy the loyalty of a couple small town city councilmen, but they certainly couldn;t fool the voters of Sierra Madre.

  18. Who would have thought Sierra Madre'd ever have a blog that discusses things like carbon credits and "cap and trade?" Quite a change from that blog Buchanan endorsed a couple years back.

  19. Quite true, 10:30

    Dirts are not high in well endowed in the upper stories. They only respond to bs and greed.
    Look at their "leaders"...Bart (eminent domain) Doyle, John "green" Buchanan and "traitor" Joe Mosca, Susan (bad check-convicted fraud) Henderson.
    If you fall for these low lifers, you'll fall for anything.

    To quote Old Kentucky:
    "enjoy tonights, council meeting, all you dirts".

  20. When it gets closer to election, the "Buchanan" endorsed blog will be back.

  21. Isn't it odd that this would be the week that the Mountain Views News would be MIA? After all, could there be a more important business week for the paper's advertisers? They support the paper all year 'round, but here it is one of the most important weeks of all for them. and the paper is nowhere to be found.

  22. It isn't MIA anymore - but you have to wonder if there will be any consequence at all for the slip shod publishing schedule. Yeah, Suzi cleaned up her act after Zimmerman pointed out her failure to publish on time, but maybe her better performance was just a short-lived response to the rules.

  23. Still read the papers, but not that oneDecember 8, 2009 at 4:28 PM

    Haven't seen it yet, but I heard she comes out in support of getting rid of eminent domain.
    Wonder how her handlers will respond to that?
    Maybe they like it when she gets a little feisty, pretends a little about the old freedom of the press thing.

  24. Where did y'all see the paper? It's not online...

  25. Grumpy Office WorkerDecember 8, 2009 at 4:38 PM

    It showed up downtown early this afternoon. Again Susan is the only person who writes about Sierra Madre affairs. The old white guys on the op-ed pages continue to regurgitate whatever it is they've watched on cable news lately. About as enlightening as a drunk's fart. And Susie positively tiptoes past the grave yard on the eminent domain issue. Probably a preview of what we'll hear from Two Face Joe tonight on this issue. Should be a hoot watching SCAG's very own RHNA boy trying to act like he's against government seizures of private property.

  26. Curly at 7:47, I think we're really talking about the worst thing in America: apathy. When the citizens are too uninterested to participate, you get this kind of discouraging corruption. The efforts to make the environment better are absolutely a good cause, which has been absolutely corrupted, because power hungry, petty people have come to dominate politics. Who voted them in office? The citizens.

    Damn, look at how we've been fooled here in town, and some of us have been paying attention.

    Councilman Watts once said that people always think somebody else will make the decisions, or carry through policies, but it isn't somebody else. It's us.

  27. There are lots of people who talk, and a lot who enjoy being near the action and know the players. But when all is said ans done it is just a precious few who actually deliver.

  28. I wonder how the DIC is going to react to the Blight Law. They can't be too pleased about that one. Be a lot harder for Joe to play both sides of the street on that one.

  29. Very interesting Mosca moves in store tonight. I bet he's been preparing.

  30. They're going to kick off the meeting with a closed session full of fun - police, developers, upcoming suits - all the messes that keep us tied to our big money lawyers.

  31. Heh. Nothing adds to the comedy more than a fool who thinks he has it all figured out.

  32. No one is going to say they favor eminent domain, they will just give reasons why it is not feasable.
    Don't believe it. It is feasable.
    They may take Sierra Madre to court...and we may lose....however.......the national media will pick it up and do tons of damage to the development crowd.
    They may just let us slide through with it.

  33. OK - Eminent domain scares the crap out of the dirts. As does being linked to Sacramento. They're going to fib up a storm tonight. Just watch.

  34. Somebody going to time Buchanan? I would, but I'm afraid my brain would explode.

  35. Gee not a whole bunch of there- there now is there?

  36. Having Eminent Domain on the ballot, plus an ordinance that will fine the bejeezus out of the SNF Dirt Palace isn't enough for you? Just because the two SCAGGY lawyers weaseled a bit is hardly a reason for getting distracted.

  37. Was Joe trying to author the ballot arguements or what?

  38. Appears that way. I wonder what it is that he fears might be included? And of course Dirt 1 and Dirt 2 are perfectly aware that a local Eminent Domain Law would hardly be enough to stand up to the kind of state power they represent. That was about as oily a performance that I've seen in quite some time.

    Not that I want to tip off tomorrow's column or anything ...

  39. Perhaps Joe's jumping on the band wagon, to have his name on the argument for the ballot could be about running again.??

  40. Joe will run again. He actually believes he is some sort of politician, and that he has a future in this stuff. meanwhile he is flushing his most productive money making years down the tubes. He is a child.

  41. Yes indeed, he fought hard on that writing the ballot point, only to be silenced by the smartly wielded logic of the mayor.