While cap-and-trade funds stay mired in debate, businesses feel the hit

For more than two decades, Dianne Franklin’s logging business hummed in harmony with the power plant next door.

Her employees cut and processed trees from forests surrounding Mt. Shasta and sent biomass waste — giant mounds of wood chips — to her neighbor, which burned the byproducts to generate electricity. The plant piped steam her way to dry planks of wood used to build homes and furniture.

But early this month, Franklin got an ominous notice: The plant, Burney Forest Power, would shut down in 60 days. With no market for her waste product and no steam to dry her wood, there’d be no need for new logs, trucks to transport them or operators to run the mill. Pink slips for her 120 employees were all but certain.

There could have been a lifeline for California’s struggling biomass plants, and by extension, companies such as Franklin’s. The state’s landmark cap-and-trade program, in which businesses purchase permits to pollute, has generated billions of dollars in revenue — all of which must be spent on ways to reduce greenhouse gases. That could mean building the bullet train, weatherizing old homes or supporting biomass, which Gov. Jerry Brown’s administration endorsed in a report this year as offering environmental and economic benefits.

But for two consecutive years, Brown and top state lawmakers have been at a standstill on how to spend cap-and-trade money. More than a billion dollars sits unallocated, as climate policy emerges as the most politically fraught issue consuming the Capitol in a state that prides itself on its environmental leadership.

In back-to-back years, the Legislature has considered ambitious proposals to boost renewable energy, slash gasoline use and broaden the state’s signature greenhouse gas emission goals. Through it all, the unspent money has hovered as potent leverage for Brown and legislative leaders, dangling the possibility of loosening the cap-and-trade purse strings to entice lawmakers who have balked at backing aggressive new climate laws.

Now, with two weeks left in the legislative session, there has been a renewed push to spend at least a portion of the auction revenues. But lawmakers see missed opportunities in jump-starting the efforts to reduce greenhouse gases.

“It’s not like a savings account that we put in the bank and wait for retirement,” said Sen. Fran Pavley (D-Agoura Hills). “Climate change is urgent now.”


Read the entire article at LATimes.com