Sacramento has a problem with Cap-and-Invest, the “climate change” premium that adds at least 20 cents per gallon to the price of fuel in California.
It makes energy, fuel, shipping, construction, farming and running a business more expensive.
Then Sacramento pretends to be shocked that California is unaffordable.
The California Air Resources Board is trying to redesign the state’s emissions-trading program, formerly known as “Cap-and-Trade,” and now rebranded as “Cap-and-Invest.”
Environmental groups say CARB’s proposed changes weaken the program. Oil and gas interests warn tougher rules could destabilize California’s fuel supply. Labor, housing, transit and climate-spending interests worry about losing money for their favored programs.
This is California climate policy’s central contradiction being exposed in public.
If the program is strict, it raises costs. If it is softened, activists say it fails.
If revenues fall, the spending interests built around carbon-auction money, which is raised by selling emissions permits, panic.
At its core, Cap-and-Invest is a government-created market for permission to emit carbon. Regulated companies must buy allowances. Those allowances cost money. The state collects the proceeds.
That means higher prices for gasoline, natural gas, electricity, shipping, construction, manufacturing, food and retail goods.
California Post News: Facebook, Instagram, TikTok, X, YouTube, WhatsApp, LinkedInCalifornia Post Sports Facebook, Instagram, TikTok, YouTube, XCalifornia Post Opinion California Post Newsletters: Sign up here!California Post App: Download here!Home delivery: Sign up here!Page Six Hollywood: Sign up here!
The political genius is that Californians rarely see the cost directly. There is no line on the grocery receipt or gas pump that says “Sacramento climate surcharge.”
Consumers pay more. Businesses pass along what they can. State government collects billions without the accountability of a direct tax increase.
Since the program launched in 2013, it has pulled more than $28 billion from California’s private economy, averaging roughly $4 billion a year. Sacramento is now structurally dependent on that revenue to fund billions in annual spending commitments.
That is why calling it “investment” is so slippery.
Sacramento is not investing its own money. It is extracting money from the private economy by making energy and production more expensive, then recycling the proceeds into favored programs.
Republican State Senator Tony Strickland put it bluntly: Democrats’ idea of affordability was extending “a hidden tax that drives up costs on everything from gas to groceries.” He called it “economic sabotage.”
That is closer to the economic reality than anything Sacramento wants to say out loud.
You cannot make carbon more expensive without making life more expensive. Carbon is embedded in the modern economy. Punishing its use means punishing mobility, production, construction, agriculture, logistics and household energy use.
California’s climate political class talks about ambition, leadership and moral example.
California can reduce emissions. What it cannot do is move the needle on global climate change by punishing residents inside one state’s economy.
The state accounts for only a tiny fraction of global greenhouse gas emissions, while the largest sources of future emissions growth lie beyond Sacramento’s jurisdiction.
China, India, global manufacturing, global shipping and coal-heavy industrial expansion do not answer to CARB.
The gas price is real. The utility bill is real. The grocery bill is real. The construction cost is real. The damage to the business climate is real.
Californians are being asked to pay real costs today for climate benefits that are, at best, globally marginal.
It is ideological theater with a household bill attached.
That is why the affordability politics are getting harder for Democrats to manage. Gasoline prices, utility bills, housing costs, insurance premiums and everyday consumer prices are crushing families.
Defending a program premised on raising costs is a brutal sell in a state already famous for being too expensive.
Cap-and-Invest is not an isolated environmental rule. It is part of a governing philosophy that treats private economic activity as a permanent revenue base for Sacramento’s ambitions.
The state raises costs, captures revenue, redistributes money through politically favored programs, then acts surprised when ordinary Californians say they cannot afford to live here.
Cap-and-Invest is a hidden tax and a permanent revenue platform. Once the money stream became large enough, Sacramento built a political economy around it.
The beneficiaries are familiar: government agencies, public-sector unions, transit bureaucracies, politically connected nonprofits and favored industries.
Working families, commuters, small businesses, farmers, builders and consumers get the bill.
The poster child is high-speed rail, California’s famous train to nowhere, fueled in part by billions collected through this scheme.
The honest answer is not to rename the program, rebalance it or hide the cost more effectively.
California should stop pretending it can regulate the planet by making Californians poorer.
Californians know is that they can’t afford a program that, while idealistic, makes everything more expensive in their lives.
Jon Fleischman, a longtime strategist in California politics, writes at SoDoesItMatter.com.
