Gov. Brown and lawmakers unveil proposal to extend California climate program

After weeks of back-and-forth between environmentalists and business interests, Gov. Jerry Brown and legislative leaders introduced a proposal Monday to reauthorize California's cap and trade program, the centerpiece of the state's efforts to battle climate change.

The plan consists of two separate bills: AB 398, which would extend the life of the program until 2030 and modify how the cap-and-trade market operates, and AB 617, which aims to address concerns about air quality in communities by increasing monitoring and imposing stricter penalties on polluters.

The proposal would make several significant changes to how the current system operates, including giving the California Air Resources Board the authority to set a ceiling on the price of carbon — which determines how expensive emissions permits are — as a way to guard against price spikes at the pump. It would also decrease the amount of offsets, in which businesses pay for environmental projects in California and throughout the country to ease the cost of complying with the program, and require that half of such projects take place in California, a mandate that doesn’t currently exist.

Businesses would get a boost by the continuation of free allowances, or permits to pollute that are meant to keep California companies competitive with those in states without such regulation. Many of those allowances were set to expire, but under the proposal, they would be extended into the program's new phase.

Brown is seeking a two-thirds vote on the cap-and-trade bill, which would guard the program against potential legal challenges. The measure includes several provisions to lure Republicans, whose support could be pivotal for supermajority approval, including a repeal of a fire prevention fee that the GOP has attacked as an illegal tax and an extension of a tax credit for manufacturers.

The second measure on local air pollution would require a majority vote. The proposal, which aims to address concerns from environmental justice advocates, would require companies to retrofit their equipment to comply with the state's environmental goals.

The bills were introduced at the close of the business day Monday, paving the way for a potential Thursday evening vote.

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