Bipartisan cap-and-trade support benefits agriculture

California’s legislators often introduce policy without considering its impact on the agriculture industry, failing to recognize the myriad unique regulatory and financial burdens that we face as we feed not only our state and nation, but a significant part of the world. As the makeup of the California Legislature has become more urban, those who sit in elected positions often fail to consider the full impact of their actions, relative to the family farms that put fresh food on our tables.

Thankfully our local legislators, Senator Tom Berryhill and Assemblyman Heath Flora, understand the challenges agriculture faces and are willing to negotiate with their urban counterparts, so we can continue providing affordable, healthy food. On Monday night, our local legislators supported AB 398, the most cost-effective approach to meet our state’s climate mandates while promoting a thriving economy and keeping costs down for consumers.

Last year, the Legislature passed Senate Bill 32, which extended California’s goals to reduce greenhouse gas emissions (GHG) to 40 percent below 1990 levels by 2030. It is an ambitious goal which will not happen without significant increased costs to agriculture.

Unfortunately, the market-based mechanism called “cap and trade”, which was developed to help businesses reduce GHG emissions in the most cost-effective way, was not included in SB 32 and would expire in 2020. New policy was needed to make sure the economic flexibility of cap-and-trade was extended to match the 2030 climate requirements in SB 32, or the financial impacts to agriculture could be disastrous.

The cap-and-trade program was developed in 2011 to provide the most cost-effective and flexible way for large stationary sources to meet the required GHG reductions as stipulated in AB 32. Cap and trade allowed businesses to select strategies that best suited their unique needs, at a cost significantly less than they would have faced with direct “command and control” measures. This allowed for GHG reductions, while giving businesses options instead of a one-size fits all approach.

Over the course of the last couple months, Governor Brown has urged lawmakers to extend the cap-and-trade program. After weeks of negotiations, AB 398 was introduced. Republicans, Democrats, environmentalists, businesses, and agriculture groups eventually came together to support the bill. It was an intensely negotiated bill, where no one got everything they wanted, but a bipartisan compromise was reached and the extension of cap and trade was the best option for helping businesses comply with SB 32.

As air quality standards continue to be ratcheted down, farmers and ranchers are being encouraged or mandated in some cases to upgrade or replace all kinds of equipment and vehicles. But many growers only use their equipment a couple months during the year to plant or harvest. Replacing such low-use equipment and trucks does not pencil out. AB 398 establishes priority areas for investment from the cap-and-trade auction funds, which include agriculture. Stationary and mobile sources such as agricultural equipment, dairy digesters and food processing upgrades could qualify for these funds.

If California wants to become the fifth largest economy in the world, we can’t forget that overly burdensome regulations can slow the economy, stunt growth, reduce the number of available jobs and drive up consumer prices.

Without AB 398, California would have faced a regulatory gauntlet of direct command-and-control, to enforce strict regulations to meet the state’s climate goals, resulting in drastically higher costs to businesses and consumers. Luckily, our Central Valley legislators stood firm in supporting a cap-and-trade program that provides flexibility to California businesses and support for the agriculture industry while minimizing costs to consumers.

AB 398’s bipartisan support is a symbol that compromise is possible, even in California where Central Valley farmers often feel excluded from the rest of the state, and especially Sacramento. Senator Berryhill and Assemblyman Flora, thank you for supporting agriculture and the businesses that are the economic engines in your districts.

This story was originally published July 28, 2017 at 10:41 AM with the headline "Bipartisan cap-and-trade support benefits agriculture."