Spending California's Cap-and-Trade Revenue: Understanding the Sinclair Paint Risk Spectrum

UCLA Emmett Center on Climate Change and the Environment, March 2012

UCLA School of Law Research Paper No. 12-17

27 Pages Posted: 25 Jun 2012

See all articles by Cara Horowitz

Cara Horowitz

Emmett Center on Climate Change and the Environment at UCLA School of Law

Michael Rhead Enion

California Air Resources Board

Sean B. Hecht

University of California, Los Angeles (UCLA) - School of Law

Ann E. Carlson

University of California, Los Angeles (UCLA) - School of Law

Date Written: March 25, 2012

Abstract

This paper assesses legal constraints on AB 32 auction revenue allocation that derive from the statute itself or from California’s constitutional restrictions on the use of regulatory fees (embodied in Proposition 13). Based on our findings, we make recommendations about the relative risks of approaches to allocating AB 32 state auction proceeds. The aim of our paper is to inform decision making on revenue allocation; as such, we do not address broader questions about the legality of the cap-and-trade program as a whole, but focus on questions that are affected by allocation decisions.

In general, we conclude that the safest proposals, from a litigation risk perspective, are those that are primarily aimed at funding greenhouse gas reductions; those that achieve other goals explicitly endorsed by AB 32; those where these conclusions are supported by a factual record developed by the Legislature or by CARB; and those that avoid direct allocation of money for revenue purposes unrelated to AB 32.

Keywords: Sinclair Paint, California, cap-and-trade, AB 32, auction revenue, emissions trading, climate change

Suggested Citation

Horowitz, Cara and Enion, Michael Rhead and Hecht, Sean B. and Carlson, Ann E., Spending California's Cap-and-Trade Revenue: Understanding the Sinclair Paint Risk Spectrum (March 25, 2012). UCLA Emmett Center on Climate Change and the Environment, March 2012, UCLA School of Law Research Paper No. 12-17, Available at SSRN: https://ssrn.com/abstract=2091571

Cara Horowitz (Contact Author)

Emmett Center on Climate Change and the Environment at UCLA School of Law ( email )

385 Charles E. Young Dr. East
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Los Angeles, CA 90095-1476
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Michael Rhead Enion

California Air Resources Board ( email )

1001 I Street
Sacramento, CA 95814
United States
919-322-2467 (Phone)

Sean B. Hecht

University of California, Los Angeles (UCLA) - School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States

Ann E. Carlson

University of California, Los Angeles (UCLA) - School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States
310-206-9496 (Phone)
310-206-1234 (Fax)

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