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Bridging the Credibility Gap: The Oil Industry’s New Anti-Cap-and-Trade White Paper

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By Erica Morehouse

rp_erica-morehouse-287x377-228x3001.jpgMore Americans, these days, understand the threat climate change presents in the present and in the future, and support taking action. Over 64 percent of Americans and 67 percent of Californians support curbing carbon pollution from existing power plants which the Environmental Protection Agency (EPA) is proposing to do through the Clean Power Plan. The EPA's proposal would set specific reduction targets for each state. In California and other states that are already acting to reduce climate pollution, the early assessments seem to be an upbeat "yes, we can meet those targets and probably exceed them." You wouldn't know that after reading a recent white paper released by Latham Watkins recently on behalf of the Western States Petroleum Association (WSPA), though.

The white paper purports to identify "design flaws" in California's cap-and-trade program. Some of the technical adjustments to the cap-and-trade program suggested in this paper are worthy of careful consideration. In fact, some have been addressed in part or are being considered through the regulatory process at the Air Resources Board. So there doesn’t seem to be any real reason to sound the alarm bells on California’s program at this point in time.

The WSPA white paper, however, takes a much more disingenuous approach by trying to create an alarmist tone and sense of urgency around these complex and technical issues. The timing of the white paper release, a mere 11 weeks before the cap-and-trade program is set to expand to control pollution from transportation fuels, provides a clue as to why a group that represents soon-to-be-regulated companies wants to create a news story around "flaws" in the cap-and-trade program.

The Clean Power Plan analysis in the white paper veers even further out of the realm of reasonable critique. It points out that the new Clean Power Plan may not give California "credit" for early actions on climate change that occur before 2014; but fails to mention that early analysis suggests California is already on track to meet the 2030 reduction target EPA has proposed, and could probably do even more. The analysis also points to the way EPA calculated targets for state reductions, noting the agency’s method is different than what California and other states have used in setting their GHG caps. In suggesting that this makes California's cap-and-trade program inconsistent with a federal program, the white paper ignores the fact EPA's proposal specifically calls out California and the Regional Greenhouse Gas Initiative states as successful examples other states could follow and explicitly allows them to translate from EPA's method to their own.

Details and facts do matter. While we can’t and shouldn’t prematurely declare victory, a disingenuous and deceptive analysis undermines the overall effort to get things right. Where is the line between constructive critique and self-interested undermining?


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