As climate activists know all too well, 1988 is the year Dr. James Hansen spoke before Congress and warned them of the dangers of global warming.
What they studiously ignore is that simultaneously Tom Steyer was persuading the Yale University endowment to invest $300 million in his two-year-old enterprise, Farallon Capital.
Rather than participating in the development of the Clean Air Act amendments of 1990 that introduced market-based credit swaps for pollution, Steyer was applying his mental abilities to credit and liquidation strategies for private equity investors in the era of leveraged buyouts following the crash of 1987,
This led to a restructuring of the global economy—for the worse and he eventually amassed billions of dollars in personal wealth.
Meanwhile, environmental protection was being monetized. The amendments led to creation of unified air basins such as the South Coast Air Quality Management District and San Joaquin Valley Air Pollution Control District across the state.
They initiated a cap-and-trade system for criteria pollutants, a group of gases and solids emitted by stationary, area and mobile sources which combine to form ozone and PM2.5 particulate pollution.
These largely overlap with greenhouse gas emissions; toxic air emissions, acid rain and stratospheric ozone depletion were also addressed, with the last two actually working.
In the air basin-wide pollution credit trading system, stationary source polluters subject to regulation can earn emission reduction credits—to be sold and traded like a commodity on the market—by exceeding a rule’s requirement or by installing new cleanup equipment before the rule is approved. These have proven to be disincentives to rulemaking.
Under industry pressure, rulemaking is delayed and regulations diluted, creating two paths to bogus credits. Far worse are the grandfathered credits banked by county regulators prior to formation of the unified districts.
Efforts by advocates and the California Air Resources Board to eliminate these and other false credits, particularly those of the major oil and methane extractors, eventually fell apart, more than 30 years after their creation—because they’re very valuable.
The failed model of cap and trade is the basis for the state air board’s approach to greenhouse gas reductions. They’ve taken pollution credit trading to other states and Canadian provinces, and the world is following suit. As governor, Steyer would seek to take it all “to scale.”
Who knows? Maybe it all could have worked back then. Maybe a trading scheme could have been developed to fund alternative energy, clean transportation and more to reduce greenhouse gas emissions in time to avoid catastrophe. That ship sailed a long time ago, mostly in service to globalization.
Yet climate activists and organizations, from Bill McKibben and Jane Fonda to the Sierra Club and Natural Resources Defense Council, are enthusiastically backing Steyer, clinging to this proven failure.
Even McKibben admits time has run out, commenting recently on a Democracy Now broadcast that the best we can hope for is to shave a few “tenths of a degree” off the inevitable increase in global average temperatures.
That’s meaningless once we’ve crossed the 2.0°C increase threshold, which is on track to happen in the 2030s, and 3.0°C won’t be far behind.
Our efforts—and the next governor’s—must now be focused on preparing for our uncertain future. We must put aside false hopes and not delay needed action.
So, who to vote for?
My former brethren at the National Union of Healthcare Workers, for whom I have the utmost respect, have endorsed Katie Porter for governor. My long-time colleagues in the environmental justice movement, whose dedication to the cause is unparalleled, are backing Xavier Becerra.
Nobody I trust is backing Steyer.
