Organisation Name
Western States Petroleum Association (WSPA)
InfluenceMap Query
Emissions Trading
Data Source
Legislative Consultations
 
 

Score for this Data / Query Cell

-1.0

InfluenceMap has researched and collated the following pieces of evidence associated with the data source and query indicated above. Extraordinary information is indicated by a coloured flag in the upper right corner. Evidence items in order of data inputted with exceptional items first.

 

Not supporting emissions trading

InfluenceMap Comment:

Advocating for measures that might weaken the incentive to reduce emissions.  Calling for price ceiling (the mechanism that will trigger extra emission permits in system) to be increased at a lower annual rate (WSPA, detailed comments to CARB, Cap and Trade, October 2018)

Extract from Source:

On behalf of the Western States Petroleum Association (“WSPA”),1 I submit thefollowing comments on the California Air Resource Board’s (“CARB” or the “Board”)“Proposed Amendments to the California Cap on Greenhouse Gas Emissions and Market-Base Compliance Mechanism [...]  WSPA believes that several elements of CARB’s Proposal are not supported by the record and do not comply with California law. [...] WSPA’s primary concerns relate to CARB’s proposed price ceiling (including both the level of the initial price ceiling and the proposed annual 5% escalator) [...] The proposed price ceiling is not based on a reasonable interpretation of AB398 and AB 32 [..]. Among other issues, the ISOR fails to consider the economic impacts of theproposed price ceiling at approximately $100 (in 2018 dollars)2 in 2030 onconsumers and on the viability of the Cap-and-Trade Program. In addition,CARB has not justified the use of a 5% annual escalator and the application ofsuch escalator to the price ceiling is, accordingly, arbitrary and capricious [...] CARB’s selection of a 2021 ceiling of $61 and its application of the 5%escalator results in a 2030 price ceiling of approximately $100 in 2018 dollars.This is dramatically (roughly 66%) higher than the $60.39 value from the Social Cost of Carbon that CARB identifies as its benchmark. CARB offers no rationale for setting the 2030 price ceiling at a level so far in excess of its benchmark 2030 estimate of the social cost of carbon. [...] Based on the foregoing, WSPA urges CARB to: (1) conduct an appropriate economic analysis of reasonable alternative price ceiling designs and how these affect each of the factors identified in AB 398; (2) eliminate the 5% escalator, which is arbitrary and capricious and lacks economic or policy justification; and (3) select a price ceiling equal to or lower than a defensible2030 estimate of the social cost of carbon, at a 3% discount rate.

Created: 19/03/2019 Last edited: 19/03/2019

 

Not supporting emissions trading

InfluenceMap Comment:

Not supporting ambitious cap and trade policy. Opposing the removal of emission allowances from the system (WSPA, Comments to CARB, Cap and Trade, October 2018)

Extract from Source:

Proposed Removal of Allowances Is Unnecessary and Adds Programmatic Costs. CARB’s proposed regulation contemplates removing allowances from the 2026 to 2030 period and placing them into the second speed bump as a response to the quantitative offset usage limit increasing from 4 percent to 6 of such in 2026. Doing this simply adds cost and uncertainty tothe program. [...] WSPA recommends CARB keep the 22.7 million allowances in the 2026 to2030 allowance budget.

Created: 19/03/2019 Last edited: 19/03/2019

 

Not supporting emissions trading

InfluenceMap Comment:

Advocating for measures that might weaken the incentive to reduce emissions.  Calling for price ceiling (a mechanism that will trigger extra emission permits in system) to be lower (WSPA, letter from CEO to CARB, Cap and Trade, December 2018)

Extract from Source:

Through this entire rulemaking proceeding, we have been very clear and transparent regarding ur concerns about the price ceiling and speed bump replacement. OUr comments and input have one objective - to ensure cap-andtrade can remain a cost-efficient and environmentally effective part of California's climate policy. We were disappointed that the Chair and some members of the board questioned the sincerity our concerns [...]  CARB has clearly articulated that the design of the cap-and-trade amendment is intended to avoid reaching either the speed bumps or price cieling. The intent of AB398 is not to have CARB set the speed bumps and price ceiling so high that they are never reached. 

Created: 19/03/2019 Last edited: 19/03/2019

 

Not supporting emissions trading

InfluenceMap Comment:

Not supporting ambitious cap and trade policy. Opposing measures that would "arbitrarily make the system more stringent" (WSPA, Comments to CARB, Cap and Trade, October 2018)

Extract from Source:

California’s Cap-and-Trade Market Is Not Oversupplied.CARB staff has correctly found that the state’s climate initiatives havecollectivelyachievedmore emission reductions than forecasted3.Rather than focusing on the positive news that California is doing better than expected in achieving its climate goals, a few stakeholders have tried to make the case that because of this over-performance, allowances should be removed from the market.The assertion is baseless, and the suggested remedies would have the potential to disrupt the stable market that CARB has worked diligently to develop.[...]It isimportant to note that after 2020, the annual cap decline factor is increased 3.4% per year, up from 1.7% per year, twice as stringent as pre-2020. Debates about oversupply inevitably involve debates about allowance banking since the perceived concern about oversupply arises from a fear that allowance banking allows entities to avoid reducing emissions. [...] CARB should avoid making the program arbitrarily more stringent mid-stream. Companies have already begun to make investments based on current market dynamics established under the state’s cap-and-trade regime. Making significant and arbitrary mid-course corrections would change the factors that informed that decision-making process and is likely to punish entities who have taken early actions to reduce greenhouse gas emissions

Created: 19/03/2019 Last edited: 19/03/2019

 

Not supporting emissions trading

InfluenceMap Comment:

Advocating for measures that might weaken the incentive to reduce emissions.  Calling for price ceiling (a mechanism that will trigger extra emission permits in system) to be lower (WSPA, Comments to CARB, Cap and Trade, October 2018)

Extract from Source:

A Well-Designed Price Ceiling and Speed Bumps Provide Effective Safeguards. The state hashistorically emphasized the importance of having a climate change program that achieves thedual goals of meeting the state’s environmental targets while at the same time reduces thepotential negative economic impacts of a carbon policy. To that end, AB398 directs CARB todevelop a price containment mechanism that includes a price ceiling and two price containmentpoints – speed bumps – which, if reached, would trigger additional allowances to be sold at a tobe-determined price structure. [...] AB398 also intended to set a price ceiling in theprogram that would keep the price of allowances in check, ensuring the price would not escalatebeyond a certain point. [...] CARB is proposing to set the firstspeed bump at $41.40 (2021), the second speed bump at $53.20 (2021), and the price ceiling at$65.00 (2021). CARB then escalates all these values by 5 percent plus CPI annually [...] CARB’s proposal disregards the legislative intent of AB3981. CARB has clearly articulated thatthe design of the cap-and-trade amendments is intended to avoid reaching either the speed bumpsor price ceiling. The intent of AB398 is not to have CARB set the speed bumps and price ceilingso high that they are never reached. [...] Other factors may suggest placing the price ceiling at a level lower than the SCC. This would bethe case, for example, if CARB were to determine that a lower level were needed to avoidmaterially harming consumers (i.e., through the imposition of regressive energy costs), driving economic activity from the state (i.e., the loss of businesses and jobs), or discouraging otherstates from linking with California’s program (which Ontario’s recent exit reminds us is anongoing concern.) [...] we remain seriously concernedabout the use of an escalator that would increase the price ceiling independent of an annual CPIadjustment. In fact CARB’s price ceiling proposal starts in 2021 at a point above the SCCderivedupper bound of net social benefit (i.e., causing net harm) and continues to an increasingdegree each year. This would appear to run directly afoul of the statute and would open theproposal to potential legal challenge. [...] We urge CARB to align the price ceiling/speed bump design with the Section 38562(c)(2)factors in the manner described above and in accordance with other provisions of AB 32. Thiscan be done by either eliminating or

Created: 19/03/2019 Last edited: 19/03/2019