(The Center Square) – President Donald Trump issued an executive order targeting California’s cap-and-trade emissions credit program for unlawfully pre-empting federal law and limiting energy production.
California has the nation’s highest gas prices and second-highest energy prices after Hawaii.
Trump’s “Protecting American Energy from State Overreach” executive order directs Attorney General Pam Bondi to identify all state laws “burdening” domestic energy resources “that are or may be unconstitutional, preempted by Federal law, or otherwise unenforceable.” The order prioritizes “climate change,” “environmental, social, and governance” initiatives, “environmental justice,” carbon or “greenhouse gas” emissions, and funds to collect carbon penalties or carbon taxes.
The order specifically cites California’s cap-and-trade program, under which the state auctions the right to produce greenhouse gas emissions, as an example of a targeted program.
“California, for example, punishes carbon use by adopting impossible caps on the amount of carbon businesses may use, all but forcing businesses to pay large sums to ‘trade’ carbon credits to meet California’s radical requirements,” wrote Trump.
California’s Low Carbon Fuel Standard, under which producers of fuels that emit more than a steadily tightening standard must buy credits from producers of fuels that emit less than the standard, may also be targeted under the act.
The state’s cap-and-trade and LCFS programs make up a significant portion of the cost of gasoline in California, with cap-and-trade adding 42 cents and LCFS currently adding 11 cents to the cost of each gallon of gasoline.
California Gov. Gavin Newsom slammed Trump’s order as a “glorified press release,” saying the state’s programs target “harmful pollution” and including a black-and-white archival picture of an individual walking around in a gas mask.
“This is the world the Trump Administration wants your kids to live in,” said Newsom. “California’s efforts to cut harmful pollution won’t be derailed by a glorified press release masquerading as an executive order.”
California Republicans said the emissions regulations are a major driver of the state’s skyrocketing cost of living.
“From driving to work to cooling your home to feeding your family, Democrats’ cap-and-trade scheme has made every part of life more expensive,” said Assembly Minority Leader James Gallagher, R-East Nicolaus, to The Center Square. “I’m grateful the Trump administration is pushing back on this expensive mandate to bring California energy costs under control.”
California’s cap-and-trade program has historically generated $4.4 billion in annual revenue, but auctions have been yielding over 20% less revenue than anticipated, according to the state-funded Legislative Analyst’s Office.
The primary recipient of the state’s cap-and-trade program, receiving a statutorily required 25% of revenue, is the decades-long high speed rail project set to connect the Central Valley communities of Merced and Bakersfield by 2033 at a cost of $35 billion.
