California Air Resources Board

Dear Chair Randolph,
We appreciate this opportunity to provide feedback on the items discussed at the July 10, 2024, Cap-and-Trade workshop.
California Farm Bureau (CAFB) is an innovative, service-based organization dedicated to being the foremost advocate, protecting the future and quality of life for all California farmers and ranchers. CAFB protects California’s diverse farming and ranching legacy and enables the whole agriculture community to thrive. With over 29,000 members, CAFB is California's largest agricultural association.
California family farmers bear an oversized burden of the state’s energy policies due to the nature of the industry. It is with this background in mind that we comment on the proposed changes to the Cap-and-Trade program in hopes of finding solutions that do not negatively impact farmers and ranchers as it is already heavily regulated.
Separately, we appreciate CARB working early and diligently to reauthorize Cap-and-Trade prior to its 2030 deadline to avoid market uncertainty. The CAFB supports Cap-and-Trade as it achieves climate targets at the least-cost and without direct government intervention, allowing the market to direct investment into sectors and technologies that can reduce emissions most efficiently and affordably.

We support a 48% target
We reject any notion that a stricter 55% target needs to be achieved. This is unrealistic and will be absolutely detrimental to already impacted consumers.
Meeting the 48% emission reduction target by 2045 is both ambitious and essential for California's environmental and economic future. This goal represents a decisive commitment to combating climate change, addressing the urgent need to reduce greenhouse gas emissions and mitigate the adverse impacts of global warming. Achieving this target will not only advance California’s leadership in environmental stewardship but also drive innovation and growth in clean energy technologies, creating new economic opportunities and jobs. Farmers and ranchers across the state stand ready to do their part so long as the goals are feasible and attainable.
It was said during the workshop, and it is true that California is only a small part of the world’s emissions. With balance being a critical piece of making Cap-and-Trade work, it is crucial that CARB not overreact and try to solve the world’s emissions with this realignment.
The Cap-and-Trade system, with its market-based approach, offers a flexible and cost-effective pathway to reduce emissions, allowing businesses to find the most efficient ways to cut their carbon footprint. Anything greater than 48% will prove too difficult to meet and likely end in failure.

Free Allowance Credits Remain Essential
As CARB considers various options for the removal of allowances from the system, we encourage CARB to minimize the reduction in free allowance credits. Free allowance credits under the Cap-and-Trade system play a crucial role in easing the transition for industries that are highly vulnerable to competition and bear significant energy costs. Allocating these credits helps to mitigate potential economic shocks. This approach is particularly important for sectors such as manufacturing and agriculture, which could otherwise face substantial financial pressures from higher energy prices. Often a target for activist groups, free allowance credits protect consumers by allowing industries to gradually adapt to more stringent environmental regulations while still contributing to the overall reduction in greenhouse gas emissions. This balanced approach supports both environmental and economic stability, fostering a more sustainable transition to a low-carbon economy.

Option 1 Provides the Most Certainty and Assurance
Any decision by CARB should take into account the realities of technology, the best available science, and the cost associated with any plan and the ramifications that it will have on Californians. Currently, California’s electricity prices are the second highest in the country. Any increased emission reduction targets will result in higher energy prices felt by all Californians.
While the agriculture industry is not alone in paying its share, it is not lost on us that we often take on an oversized burden of the cost without much way to pass the costs down the chain to the consumer.

Sincerely,

Steven Fenaroli
Political Affairs Director, California Farm Bureau