Gov. Jerry Brown is working with lawmakers, business groups and environmentalists to reach a deal on extending cap and trade, California's landmark program aimed at slowing global warming.
Brown wants a consensus before lawmakers start summer recess on July 21. Reaching a deal this week means the Legislature can vote by Monday, the day before Jimmy Gomez heads to Congress from the state Assembly and takes his reliable cap-and-trade vote with him.
The program puts a limit on the state's carbon emissions and requires polluters to buy allowances to emit greenhouse gases. It's the primary way for California to reach its ambitious goal of reducing carbon emissions 40 percent below 1990 levels by 2030.
If lawmakers do nothing, the program expires in 2020.
The Sticking Points
Key pieces of the negotiations are how to regulate local air pollution and contain the program's costs for businesses and consumers.
Assembly Democrats and environmental groups are pushing for a program that would give local air districts power to put additional emissions restrictions on oil refineries in their areas.
A group of 20 Democrats sent Brown a letter in June saying low-income neighborhoods and communities of color near oil refineries and other polluters are not seeing the health benefits of cap and trade. Companies can keep emitting pollutants if they have purchased enough allowances.
The oil industry wants to prevent additional greenhouse gas reductions on oil refineries.
The final deal may include a compromise — putting restrictions on how far carbon regulations can go while also outlining measures for reducing local air pollutants.
The sides also are debating whether to include a price cap on emissions allowances and how high to set it. Industry groups prefer a lower number, but environmental groups want to ensure it's not so low that it removes incentives for reducing emissions.
Brown needs support from two-thirds of both chambers, so even one yes vote such as Gomez's is critical.
The Assembly Democrat has said he wants to stay in Sacramento to vote for a deal before becoming a member of Congress on July 11.
A new rule requires legislation to be in print for 72 hours before a vote, so a deal is needed by late this week to allow Gomez to participate in a vote by Monday.
With some Assembly Democrats non-committal, Brown has said he will look to Republicans for support. But their votes are not a sure thing either.
Nancy McFadden, Brown's chief of staff, has said reauthorizing the program could improve the next auction for emissions allowances, set for August. Money from the auctions pays for high-speed rail, housing and energy conservation efforts.
Legal challenges and uncertainty over the program's future led demand for pollution permits to plummet last year.
"We think we can have a fairly successful auction in August if the market sees California is serious about continuing this program beyond 2020," McFadden said June 21 during a panel discussion. "If they have their doubts, and we're kind of flailing, and the governor has said we need to do this, and there is no action, we'll see a market response in that August auction."