| Comment | California has shown leadership on climate change by creating a
price on carbon. But the program can still be improved in several
ways.
The Petroleum Refining, Natural Gas Extraction, and Cement sectors
received over 49 million free allowances in 2016. At $12.73 per
allowance, that subsidy is worth over $629 million per year. That
is in my opinion grossly unwarranted. Reducing or eliminating this
subsidy would help bolster demand which has been lagging in recent
permit auctions.
The California Climate Credit that appears twice a year on
electricity bills can be turned into an off-bill per-capita
dividend that would be simple, transparent, and inclusive of
disadvantaged communities. The State can gain supporters for the
program’s extension, by moving the funding for environmental
programs into the regular budget process and returning Cap & Trade
revenues back to people as climate dividends. That would be a much
more advantageous use of the funds.
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