Latest news with #CamillevonKaenel
Politico
29-05-2025
- Automotive
- Politico
Musk is still stinking up the EV pool
With help from Camille von Kaenel, Thomas Frank and Kelsey Brugger THE MUSK EFFECT: Elon Musk played a key role in killing California's electric vehicle mandate — and he's still a thorn in the side of Democrats as they try to get their EV ambitions back on track. A new national poll conducted by the Electric Vehicle Intelligence Report just before Senate Republicans voted last week to revoke California's vehicle emissions rules — shared exclusively with POLITICO — shows how much Musk and Tesla have complicated the EV landscape for Democratic voters. While liberal voters — the most likely buyers of EVs — leaned toward both supporting requirements for car companies to sell more electric models and keeping California's ability to set stronger-than-federal emissions standards, they don't like the credit-trading system state officials devised to make that happen. More than half of Democrats surveyed — 56 percent — said they oppose 'allowing carmakers to sell their extra credits to other carmakers' that don't hit their sales targets, while only 20 percent said they support the concept, according to the poll from Democratic consultant and pollster Evan Roth Smith. Republicans and independents also balked at the idea, with fewer than 30 percent in both categories saying they support credit sales. Tesla has already contributed to stagnating EV sales in California, which saw slightly fewer purchases over the first three months of 2025 compared to the same period last year. While registrations of EV models by other makers jumped 14 percent, Tesla plunged by just over 21 percent, canceling out any gains. Market experts say the results are in part due to the complicated nature of EV sales regulations. But they also point to a string of stories highlighting the fact that California's rules undoubtedly helped turn Tesla into an EV behemoth. That's because the state's mandate requires automakers who don't meet their sales requirements to buy credits from those that sell more, offering Musk's company a lucrative revenue stream as the dominant player for over a decade. 'I think what it's really about is hostility to Tesla and how they've been benefiting from this,' said Dan Sperling, director of the Institute for Transportation Studies at UC Davis and a former member of the California Air Resources Board. 'They just see it as Tesla getting a boondoggle deal.' Musk's rise to the role of Trump's top fundraiser, adviser and architect of the administration's slash-and-burn of the federal workforce has made Tesla — his largest and most public-facing company — the target of Democratic outrage. The eccentric billionaire has since hinted that he'll step back from politics, as Tesla's revenues have plummeted amid sales contractions in Europe and California, America's biggest car market. But Smith said the damage has already been done, and California officials now need to go on the offensive to create daylight between Musk, Tesla and the larger EV market. 'We have the president of the United States selling Teslas from the White House,' Smith said. 'So if Democrats want to preserve a political environment where they can enact real climate policy around EVs, they have to be a little more courageous and play a similar game.' Gov. Gavin Newsom has signaled he's thinking about playing hardball. Newsom said in November that he'd push to restore state EV tax credits if the Trump administration does away with a $7,500 federal incentive, as the 'megabill' passed by House Republicans last week would largely do. (It would cap benefits for companies that already have a large market share or have received substantial state support, i.e. Tesla). Newsom spokesperson Daniel Villaseñor, when asked about the tax credit proposal, pointed to a press conference last week where the governor said he's still waiting to see what happens in the Senate and that lawmakers should assess impacts on the state budget. Smith said now is the time for Democrats to dig in. 'I don't think Democrats should be shy about this,' he said. — AN Did someone forward you this newsletter? Sign up here! JUST CHECK ZILLOW: Angelenos with federal disaster loans to repair and rebuild homes destroyed in the January firestorm are borrowing $310,000 on average — six times more than the average borrowed by other disaster victims nationwide between 2017 and 2024, according to an analysis by Tom Frank of POLITICO's E&E News. That's partly because the Biden administration increased the maximum Small Business Administration loan for home repairs after a disaster to $500,000 from $200,000 in July 2023, the first such increase since 1994. But it's also because the Los Angeles recovery is just so expensive, with the January fires hitting high-end real estate and causing more damage than floods and high winds. For comparison, other states have also seen their average disaster loans increase, but not by as much: In Florida, the average disaster loan in 2025 has been $65,000, compared with $47,000 from 2017 through 2024. In North Carolina, the average in 2025 has been $55,000, compared with $36,000 from 2017 through 2024. — TF, CvK NOT SO LAST-RESORT: The growth of California's insurer of last-resort, the FAIR Plan, has not slowed despite the rate hikes regulators are approving for other private insurers to entice them to do more business in the fire-prone state. FAIR Plan President Victoria Roach told lawmakers in Sacramento today her organization, which is actually a pool of private insurers required by state law to provide back-up insurance, is on track to grow by 40 percent in number of customers this year and 60 percent in total value insured, which is similar growth to last year. 'The growth just keeps going,' said Roach. 'It shows that the market is in an unhealthy state right now.' What's more, those newcomers aren't just coming from high fire risk areas, which private insurers ditched first because of historic wildfire losses. They're also now increasingly coming from what Roach called 'normal suburban tract homes,' with the FAIR Plan's highest growth this year so far in low fire risk areas. — CvK PUT A FORK IN IT: California air regulators have settled a lawsuit with the propane industry that challenged a rule banning the sale of new gas-powered forklifts. The Western Propane Gas Association announced the details of the settlement Wednesday, a day after the California Air Resources Board issued an advisory encouraging companies to voluntarily report their progress at phasing in electric forklifts, but saying the agency wouldn't retroactively hold them responsible if the rule is enforced in the future. CARB approved the rule in June, but never received an EPA waiver that would make it enforceable. State officials agreed in the settlement to not enforce the regulation before getting federal approval, to name a new deputy executive director to serve as a liaison for the forklift industry and to hold three public workshops with WPGA. — AN PERMITTING SHERPA: The Trump administration has tapped a top energy and environment staffer for former House Speaker Kevin McCarthy to lead its efforts to speed up permitting for major projects. Emily Domenech is the new executive director of the Permitting Council, a federal agency tasked with modernizing the permitting and review process for large infrastructure projects. She was most recently a lobbyist at the firm Boundary Stone Partners, Kelsey Brugger reports for POLITICO's E&E News. Domenech told Kelsey her role is to 'sherpa' major projects through multiple agencies, and pointed to mining projects as a top focus. The agency added 10 mining projects, some of them contentious, to its public dashboard of projects earlier this month. — AN — Get ready for the first heat wave of the year. — Attorney General Rob Bonta sued the Trump administration over cuts to National Science Foundation research. — The San Diego Water Authority is proposing to hike its discounted water rate for farmers because of lagging demand.
Politico
23-05-2025
- Automotive
- Politico
Congress to Musk: It's not you, it's us
Presented by With help from Camille von Kaenel WAIVING GOODBYE: Congress has an unintentional message for Elon Musk as he starts pulling back from politics: Don't let the car door hit you on the way out. Tesla is arguably one of the biggest losers of Senate Republicans' vote Thursday to revoke California's nation-leading clean vehicle requirements. Tesla made a lot of money in the early years of California's rules, which require automakers to sell increasing percentages of zero-emission cars or else buy credits from others who are selling more of them (i.e., mostly Tesla, in the early days of EVs). While Tesla's never disclosed exactly how much it's made from California's Advanced Clean Cars rule, which the Senate voted along party lines (with the notable addition of Michigan's Elissa Slotkin) to revoke federal permission to enforce, the program is widely credited with having kept the company out of bankruptcy in its early years. 'Tesla simply would not have existed as a company had not these rules been applied,' Gov. Gavin Newsom pointed out Thursday after the vote, in announcing plans to sue once President Donald Trump signs the resolution. That's on top of the megabill that House Republicans passed simultaneously Thursday, which would remove pretty much all federal tax credits for electric vehicles, including the $7,500 credit for new EVs. California's rules are even more important because 11 other states follow them, representing roughly a third of the country's auto market. Government incentives still made up some 43 percent of Tesla's net income as of the first 9 months of last year, as Corbin Hiar reported earlier this year for POLITICO's E&E News. It's a fitting denouement for an awkward partnership that never made sense for Musk's automotive interests (his space interests, of course, are another story). Trump's stumping for Tesla on the White House lawn didn't reverse the company's flagging sales. There's no evidence that Tesla ever lobbied Congress to keep the waiver or the tax credits, although it did lobby California regulators last year to keep another trading program for low-carbon transportation fuels that generates even more-lucrative credits. Tesla's not a member, though, of the auto industry's main trade group, the Alliance for Automotive Innovation, which put out a fairly nuanced statement praising the repeal. 'The problem really isn't California,' said John Bozzella, the group's president and CEO. 'It's the 11 states that adopted California's rules without the same level of readiness for EV sales requirements of this magnitude.' And California's rules were only set to become more lucrative for EV makers as they ratchet down on the way to 2035, when all new-car sales are supposed to be zero emissions. But the key to understanding any Musk method may be in the rise of other automakers. 'All the car companies are building a lot of capacity to start selling more EVs and buying less credits from Tesla,' said Gil Tal, director of the University of California, Davis' EV Research Center. 'The credit machine was kind of winding down for Tesla because all the OEMs are trying to meet these goals.' 'I think Tesla expected this,' said Dan Ives, a research analyst at Wedbush Securities specializing in tech and electric vehicles. 'It's the end of an era. They're in a position of strength where their future is less about selling cars and more around autonomous and robotics.' — DK ABOUT THOSE TAX CREDITS: House Republicans' proposed two-stage repeal of the electric vehicle tax credit would benefit some smaller automakers and those late to release electric models, POLITICO's James Bikales reports. The proposal would repeal the $7,500 credit at the end of the year — except for manufacturers that have sold fewer than 200,000 EVs since 2009. Those companies would be allowed to continue claiming the credit through the end of 2026. Tesla, General Motors, Stellantis, Ford, Toyota, BMW, Nissan and Hyundai all have passed the 200,000 threshold, while Kia likely will in the coming months, according to Loren McDonald, chief analyst at EV analytics firm Paren. But others, such as Rivian, Mercedes-Benz, Audi, Honda, Volvo and smaller manufacturers, would be able to claim the credit for another year. Did someone forward you this newsletter? Sign up here! HAPPY SUSPENSE: Friday is Suspense Day, the Sacramento custom celebrated with coffee and frantic spreadsheet cross-referencing during which lawmakers rapid-fire advance, kill or significantly amend hundreds of bills before the day's end deadline to approve measures with significant price tags. Some bills we're watching, like Assemblymember Lisa Calderon's AB 942 to reduce subsidies for longtime rooftop solar customers, have already made it through. But most are coming down to the wire. The $12 billion budget deficit projected by Newsom last week, along with his past track record of citing budget limitations to veto bills, will add pressure to the already high-stakes negotiations between lawmakers. Here's what we're watching (and as always, tip us off to what you are, too.) The energy biggie: Sen. Josh Becker's big energy affordability proposal, SB 254, will eventually need support from two thirds of his colleagues in a full floor vote because of its urgency clause — and he'll need them to be OK with a price tag the Newsom administration estimated in the hundreds of millions or even billions of dollars. Agency overload: State regulators have increasingly said they already have too much on their plate, an argument that's found traction to kill bills before. And the trend is popping up again. The California Air Resources Board, which is already staffing up to enforce the greenhouse gas disclosures required by 2023's SB 253, is facing the prospect of 'significant additional workload' with another climate disclosure bill: AB 405 by Assemblymember Dawn Addis, which is targeted at fashion sellers. Another example: the California Energy Commission suggested that a bill by Sen. Aisha Wahab, SB 332, to restructure executive compensation at investor-owned-utilities to promote safety would take at least twice as long to implement as the bill's current timeline and cost at least $18 million. How many firefighters: State lawmakers have so far enthusiastically supported proposals to expand the California Department of Forestry and Fire Protection's peak staffing year-round, though Newsom made no such sign in his budget proposal last week. SB 581, a proposal by Senate President Pro Tem Mike McGuire would reclassify seasonal firefighters as permanent for $175 million annually. A similar proposal, AB 252, by Assemblymember Jasmeet Bains could cost more than twice as much because it reclassifies seasonal firefighters at a higher level. — CvK COUNT YOUR DATA: Texas and Virginia have California beat in total number of expected data centers, according to an analysis by Catherine Allen, Rosmery Izaguirre and Claudine Hellmuth. The AI supercomputers come with growing thirst and hunger: Data centers are projected to use up to 9 percent of the nation's electricity by 2026, double their share in 2023. California has 277 data centers that are operational and 35 others planned or under construction; Virginia, meanwhile, has 372 already up and running and another 192 in the works. Read the full subscriber-only data analysis here. — CvK STAY CURRENT: Can't get enough of this newsletter? You'll want to keep tabs on editor Debra Kahn's new reported column on the conversations, conflicts and characters animating the energy, environment and climate debates (It's called Currents.) In her first-ever edition, published Thursday, Debra unpacks how Australian politics have moved beyond climate wars in a way the U.S. just can't crack. She writes: 'Australian Prime Minister Anthony Albanese's trajectory holds lessons for not only how to win on climate-friendly energy policies, but how to hold power while executing on them.' — CvK — The number of trees that died in California last year hit a 10-year low, though the number is still above normal. — Speaking of Elon Musk: He's building a 'Tesla diner' in Hollywood with superchargers and movie screens. — The California Water Commission is concerned about delays besetting a project to build a new dam near Pacheco Pass in Northern California.
Politico
21-05-2025
- Automotive
- Politico
Zombie waiver walking
Presented by With help from Camille von Kaenel, Nicole Norman and Jordain Carney WAIVING GOODBYE: Senate Republicans are about to kill California's vehicle emissions rules, and state officials are going back to the drawing board. Democrats' threats of future retribution for overruling the Senate parliamentarian didn't stop Senate Majority Leader John Thune from teeing up votes Tuesday to roll back California's zero-emission sales mandates for cars and heavy-duty trucks, ending a monthslong game of 'will he, won't he' that kept the automotive world on edge. Next come the inevitable lawsuits once President Donald Trump signs the resolutions. Attorney General Rob Bonta has been ready for this since at least March. 'We don't think it's an appropriate use of the Congressional Review Act, and we're prepared to defend ourselves if it's wrongfully weaponized,' he told us back then. California leaders are still thinking about what to do after that. Lindsay Buckley, a spokesperson for the California Air Resources Board, said the agency isn't deterred by an impending vote that 'does not change CARB's authority,' which includes a federal requirement to reduce pollution levels that are among the highest in the nation. 'CARB will continue its mission to protect the public health of Californians impacted by harmful air pollution,' she said in a statement. But losing the power to dictate automakers' sales targets is undoubtedly a knee-capping of a major tool in the state's climate policy kit. And CARB hasn't detailed what exactly its next steps will look like. Former CARB Chair Mary Nichols said state and local governments still have multiple options at their disposal that don't require federal approval, including electrification incentives and taxes on fossil fuels reforms that push residents and businesses to invest in EVs. Craig Segall, a former CARB executive director, said there's also nothing stopping the agency from starting to develop new emissions rules that would be approved by a future Democratic administration. He said the demise of the EV sales mandates could actually have a silver lining for clean transportation advocates by forcing California, which risks losing federal highway funding if it doesn't reduce pollution, to rethink its strategy and invest more into alternatives like public transit. 'What this opens up, I hope, is the conversation more broadly around what is our transport decarbonization strategy,' Segall said. California's loss this round could also reopen the window for state officials to negotiate with automakers. That's what happened after Trump's EPA undid an earlier EV waiver during his first term. And while California now has less leverage, car companies already have an incentive to build EVs for growing markets in Asia and Europe. 'What [automakers] wanted was some relief on the sales mandate; they wanted to stop buying credits from Tesla,' Nichols said. 'But when it comes to the types of cars that they're making, those decisions are made years in advance.' But the odds of that sort of deal materializing quickly aren't looking great. The Alliance for Automotive Innovation, which represents major automakers, didn't immediately respond to requests for comment on the impending Senate vote, but the group has lobbied lawmakers for months to kill the waivers. Worse for California is that Stellantis, which had previously aligned itself with state officials, isn't running to defend the rules. The world's fifth-largest automaker, which owns brands like Chrysler, Jeep and Dodge, inked a deal with California last year to follow the state's EV sales targets even if the mandate goes away, but directed questions to the Auto Alliance when asked about Thune's move Tuesday. Newsom used the moment to take a jab at Trump, who's made China the top target of his trade war, and accuse the Senate of ceding the car industry to America's biggest economic competitor. Chinese automaker BYD surpassed Tesla as the biggest EV producer last year, marking the first time Elon Musk's company didn't hold the top spot. 'Will you side with China or America?' he asked in a statement. — AN Did someone forward you this newsletter? Sign up here! ABOUT THOSE THREATS: Sen. Alex Padilla — speaking to POLITICO ahead of Senate Democrats' pleas from the floor Tuesday afternoon to spare the waiver — talked about his attempt to hold up EPA nominations in protest of the CRA maneuver and Democrats' vows to inflict payback. This interview has been edited for length and clarity. Republicans seem to think you're bluffing. Is your party actually willing to play hardball, and do you have targets in mind for when Democrats are in power? What goes around, comes around. If they do this and set a new precedent, then you better believe when the majority shifts again, Democrats will not be shy, will not hold back on combing through a whole lot of other agency decisions for the same treatment. What is objecting to four EPA nominees really going to do? What more will your party do to make Republicans feel pain for their decision, and is leadership willing to take those steps? We had a long, late meeting [Monday] night in Sen. [Chuck] Schumer's office with a number of Senate Democrats with a twofold agenda. No. 1: What else can we do here at this late stage in the game? What Hail Marys do we have in the back pocket to try to keep this from happening? But No. 2: Starting to think, if the Republicans go through with this and are successful, then what are our next steps? What was the discussion like? Were there any targets that stood out immediately in your discussion with the leadership and other Democrats? There's a growing list of potential CRAs that we may bring, and we don't have to wait until we're back in the majority to bring them. There are some CRAs that we would likely bring in the coming weeks, months, if Republicans go through with this. You advocated for ending the filibuster in 2021 to pass voting rights legislation. Is your concern now politically expedient? At least when we were debating and taking a vote on abolishing the filibuster specifically for voting rights, we said that's what we were doing. Republicans today are on the verge of this nuclear option, but they're in denial about the filibuster precedent that they're about to set. — AN DELTA WARS: Stae Sen. Jerry McNerney is laying down the gauntlet against Newsom's budget proposal to fast-track the controversial Delta tunnel. McNerney said Tuesday he has the votes to defeat Newsom's bid last week to speed up the permitting for a tunnel underneath the state's main water delivery hub, the Sacramento-San Joaquin Delta, if it came to that. McNerney said his next move is convincing Senate President Pro Tem Mike McGuire and other legislative leadership to take his side — though he acknowledged they may be reluctant to go against Newsom, who sees the tunnel as a key climate adaptation project he wants to get permitted before he leaves office. 'People don't like to cross the governor, and this is very important to him, apparently,' said McNerney. Newsom spokesperson Tara Gallegos said, 'Today's press conference demonstrated why this fast track is necessary, as it is clear that misinformation will continue to delay and obfuscate this critical project.' — NN, CvK DIRTY WATER UNDER THE BRIDGE: Don't blink or you'll miss it, but a California Democrat is thanking the Trump administration for an effort to protect the environment. Rep. Scott Peters of San Diego thanked U.S. EPA administrator Lee Zeldin in a congressional hearing Tuesday for his attention to the San Diego region's problems with raw sewage flowing across the international border from Mexico, closing beaches and polluting military training sites. Zeldin seized on the issue this spring, including by touring San Diego last month and pressing Mexico to do more to stop the pollution. There's at least one concrete result so far: The U.S. EPA and the International Border and Water Commission announced Tuesday they are planning to speed up a planned expansion of the South Bay International Wastewater Treatment Plant along the Tijuana River, finishing a first phase of the project in 100 days instead of the originally scheduled two years. — CvK I'VE GOT MY EYE ON YOU: Speaking of rules that don't have a waiver: The California Air Resources Board settled a lawsuit against their zero-emission truck purchasing rule for fleets last week, signaling their commitment to repealing the regulations that they started walking back in January, right before Trump took office. CARB reached an agreement with the Specialty Equipment Market Association — which sued over the rule last year — to repeal requirements under the Advanced Clean Fleets regulation that larger fleets and those serving ports phase out purchases of diesel trucks. The case will be suspended until CARB follows through with their end of the deal. 'This is a necessary agreement,' said Karen Bailey-Chapman, the senior vice president for public and government affairs at SEMA. 'This agreement brings closure to California's attempted overreach beyond its borders and the seriousness of the implications to our nation's system of interstate commerce.' CARB did not immediately respond to a request for comment. — NN BACK TO THE LAND: Newsom on Tuesday named Sacramento attorney Matthew Read to serve as chief counsel in his Office of Land Use and Climate Innovation (formerly Office of Planning and Research). Read previously worked at the pollution-awareness group Breathe California, for the Strategic Growth Council and in the office of Sacramento City Councilmember Steve Hansen. — State Farm is asking for an 11 percent rate hike for next year — on top of the 17 percent emergency rate hike Insurance Commissioner Ricardo Lara approved last week. — Nichols, the former CARB chair, says to look at what subnational governments are doing on forests. — The dairy industry is touting its expected avoidance this year of 5 million metric tons of methane, two-thirds of the way to its state-set goal of reducing livestock methane emissions 40 percent below 2013 levels by 2030.
Politico
16-05-2025
- Business
- Politico
David Alvarez needs convincing
Presented by With help from Camille von Kaenel and Eric He LEERY OF LCFS: Assemblymember David Alvarez is stepping into one of California's trickiest climate policy arenas. The San Diego Democrat is co-chairing a new Assembly committee devoted to studying the low-carbon fuel standard, the hot-button trading program for transportation emissions that the California Air Resources Board amended last year amid a flurry of debate over how much it would raise gasoline prices. Assembly Speaker Robert Rivas convened the committee last month as part of his push to address 'the biggest cost drivers for Californians.' The LCFS made the list, alongside child care, nutrition and housing. Alvarez spoke with POLITICO about his plans for the committee, the economic challenges of phasing out fossil fuels and the need to focus on disadvantaged communities. This interview has been edited for length and clarity. Why are you focusing on LCFS now, when it was last year's fight? It's generally an approach by the speaker, who has a focus on looking at everything we do in California and trying to be responsive to the cost of living, and we haven't really done that with LCFS. It was created under [Gov. Arnold] Schwarzenegger, and then has been interpreted by CARB on their own without any legislative direction. It's grown into a multi-billion-dollar-a-year program, of which the state sees no revenue, as an exchange between private parties, but there's a cost associated with that. This is costing Californians in many ways, and so we have to determine what is the point that's worth the return on that investment, that is worth it from California's consumer standpoint. What will this committee produce? I think for sure, at minimum, a report. We should at least be considering whether there is any legislative authority that should be inserted into this program that has been 100 percent driven by regulators. How concerned are you about the Energy Commission considering a profit cap on refiners and requiring them to keep more supplies on hand if they go down for maintenance? I was pretty vocal during the special session last year and continue to be that this cannot come at the expense of consumers. That's the directive they received from the Legislature, and it's the expectation that I would have going forward. The Valero refinery in Benicia is likely going to close. Should the Legislature respond? I think everybody should be rethinking the policies that we implement when they lead to closures, and, ultimately, what it leads to in terms of cost to consumers, absolutely. As far as more directly saying, 'No more closures,' I don't see that. How do you legislate no more closures? It's a private industry, and they do respond to their shareholders. I think we just should be very mindful that there are repercussions to all the actions we take. Going forward, whatever comes before us, I think there will be a new lens through which we see legislation, and that's going to be, 'Is this going to cause potential closures, loss of supply that then leads to increasing costs?' And if so, it's going to be a much more difficult lift for a legislator who's trying to do that. Is there an interest in rolling back Energy Commission rules if they prove to be a cost burden or cause refinery closures? I know it's top of mind to the Energy Commission and Vice Chair [Siva] Gunda. I'm expecting to have a more at length conversation with him on this topic. I think it'd be fair to say they're not underestimating the concern of Valero, and what is otherwise happening. I think they have expressed themselves in a way that this is not being taken lightly; it's being taken seriously. Thirty-five House Democrats, including a couple in California, joined Republicans last week in voting to roll back CARB's vehicle electrification rules last week. What do you think of them? Who has access to these vehicles? I think you may be seeing some waning of interest, because for the average middle class family, certainly the lower income family, the realities of an electric vehicle serving their needs when of those families are commuting many, many miles for employment because it's become unaffordable to live in the urban core centers of communities, that's an issue. Then you have communities like mine which are urban, but they are older, more middle class and lower income, where, again, access to electrification is just unrealistic. We need to analyze the reality of where we can get to, and aim for that. Whatever percentage it is, by whichever year, that is realistically accomplishable. Something that I'd like to hear from CARB is, 'We can do this, and these are the strategies on how we're going to get there and that are measurable,' and have outcomes that are more accountable on a more regular basis, not when there's a scoping plan every five years. — AN Did someone forward you this newsletter? Sign up here! SORRY SCHOOLS: Gov. Gavin Newsom is pushing a proposal to fund programs designed to reduce electricity use during grid emergencies with money earmarked for school heating and air conditioning upgrades. A budget bill released by the Department of Finance this week would redirect any unused funds in the CalSHAPE school facilities program to programs that incentivize residents to reduce their power during emergencies, POLITICO's Eric He reports. School advocates are not happy. Mitch Steiger, a legislative representative for the California Federation of Teachers, slammed the bill during a climate budget hearing Thursday. 'The bill is actually just going to eliminate the CalSHAPE program that funds badly-needed HVAC and plumbing upgrades in public schools,' Steiger told lawmakers. 'It will give kids cancer and will force kids to learn in classrooms that are over 90 degrees,' he added. — EH, AN AT THE SHORE: Rivas on Friday shook up the Coastal Commission, the high-stakes agency overseeing coastal development, appointing Monterey County Supervisor Chris Lopez. Lopez replaces the board's current chair, Santa Cruz County Supervisor Justin Cummings. Rivas and Lopez, longtime allies whose districts overlap, cast the move as giving rural, inland farmworker communities more of a voice in coastal issues. The change comes at a crucial time for the Coastal Commission, which has come under close political scrutiny in recent months by both President Donald Trump and Newsom over its decision to reject SpaceX's plan for increased rocket launches off the coast and its role overseeing coastal building in the wake of the Los Angeles fires. — CvK STUCK IN NEUTRAL: California's electric vehicle sales are stalled, and that's complicating matters for officials backing the state's EV mandate. Battery-electric and plug-in hybrid vehicles accounted for 23 percent of all new car sales between January and March, according to data released Friday by the California Energy Commission, a nearly 1 percent decrease compared to the same period last year. Tesla's sharp decline — sales dropped by more than 21 percent — is the main culprit for the overall sales slump. Registrations of EV models by other makers jumped by 14 percent, and automakers like BMW and Honda are gaining on Elon Musk's high-profile company, which failed to account for at least half of the state's EV sales for the first time since the commission started collecting data. Automakers, car dealers and the oil industry are pushing to delay or nix California's mandate, which phases out sales of new gas and hybrid models by 2035, saying the leveling off of EV sales require the course change. State officials also acknowledge that EV sales have slowed, but argue the market is still on track. 'California's clean vehicle market continues to show strong sales, and we are undeterred by this period of limited growth, which is a normal, anticipated part of the technology adoption cycle,' said Liane Randolph, chair of the California Air Resources Board. — AN THE DELTA IN THE DELTA: Environmental groups have a new message for the California state agencies they're leaning on to deliver stronger protections for endangered species in the sensitive Sacramento-San Joaquin River Delta: You can't trust the feds. In a letter to the State Water Resources Control Board on Friday, a collection of eight groups detailed a series of examples from the past few months of federal water managers choosing to pump more water out of the Delta than their state counterparts, which the groups said harmed endangered species of fish. In one example, the federal government failed to match the state, which reduced its pumping last month in line with a deal brokered with water agencies three years ago to reduce water use and pay for habitat conservation. (For the true water wonks out there, those are called the 'voluntary agreements.') The environmental groups argue that the fed's inaction is sufficient grounds for the board to reject the 'voluntary agreements.' The board is considering adopting them this year as it updates its water quality rules in the Delta region. The Bureau of Reclamation 'cannot be allowed to exploit seeming ambiguities' in the 'voluntary agreements,' they wrote. 'Clear, understandable, and enforceable rules must be established.' The board, the Bureau of Reclamation and the Department of Water Resources did not immediately respond to a request for comment Friday afternoon. — CvK — An Arizona swing district that supplies power to California could be a roadblock for the GOP megabill. — We need to be cautious about overestimating the risks of nuclear power, but not ignore them entirely, warns the author of a book on how nuclear energy became a hot climate change topic. — You may want to act fast if you're planning to use federal tax credits to help install solar panels.
Politico
20-03-2025
- Business
- Politico
Climate with a side of trade
With help from Camille von Kaenel and Alex Nieves TARIFF DIPLOMACY: Gov. Gavin Newsom's latest international agreement is a climate pact, with heavy trade subtext. While Newsom typically touts his climate MOUs as a way to show the world that California is a serious partner on climate action regardless of what happens at the federal level, the pact his administration inked with the Mexican state of Sonora on Monday is acting more as a counter on tariffs. At a moment when President Donald Trump's whiplash of tariff announcements have thrown entire industries into uncertainty and led the U.S. to the brink of a trade war with its top international trading partners, Newsom put the states' collaboration into stark relief against federal actions. 'The conversation we just had illuminated that contrast, the relationship to Sonora, the relationship to California, our relationship to this moment, and our relationship to the moments that are being advanced in Washington, D.C.,' said Newsom to Sonora Gov. Alfonso Durazo Montaño at the signing. 'There couldn't be a greater contrast.' In many ways, the document California signed with Sonora on Monday is standard fare as climate memorandums of understanding go. The agreement, in the works since 2023, describes a broad, nonbinding intention to 'collaborate on clean energy' research and development. 'This is all about sharing best practices and government-to-government education,' said Bryan Early, chief of staff to state energy commissioner Andrew McAllister and adviser to California Energy Commission Chair David Hochschild, who signed the MOU alongside Council for the Sustainable Development of Sonora Executive Director Francisco Acuña. But references to supply chain resilience, expanding regional renewable access and strengthening economic ties show California wants to stay close to its top trading partner, which represents 18 percent of California exports and 13 percent of its imports. 'With the United States taking a more hostile view to our neighbors on trade policy, it becomes even more important to have that subnational dialogue going,' said Ethan Elkind, director of University of California, Berkeley's climate program at the Center for Law, Energy and the Environment. The signing comes at a fraught moment for trade between the U.S. and Mexico. Auto manufacturing, where the United States imported 14 percent of its cars from Mexico in 2024, and where U.S. automakers stepped in two weeks ago to secure a monthlong pause on Trump's 25 percent tariffs on goods from Mexico and Canada, has been caught in the crosshairs. So have electricity imports, where Canada briefly levied a 25 percent retaliatory tax on its electricity exports to northern U.S. states last week before both sides backed down. The most explicit reference to trade in the new agreement is a plan 'to aid the State of Sonora in exploring exporting renewable energy into the United States.' Sonora, which contains vast expanses of desert and has been working on a plan with Mexico's federal government since 2022 to transform into an energy development hub, 'has one of the highest solar potentials on planet earth,' said Early. 'This agreement could help move the needle in terms of bringing Mexico more into the fold here in the West in terms of decarbonizing our energy grid,' he said, with reference to California's efforts to create a broader West-wide energy market to improve grid reliability and efficiency. Sonora is also one of the first states where Mexico will produce its own electric vehicles, President Claudia Sheinbaum announced in January, which could be operative in cross-border efforts to strengthen supply chains. Durazo also touted semiconductor manufacturing at a pre-signing lunch with the California Chamber of Commerce. 'Sonora has a lot of initiatives on battery production and minerals,' said Gil Tal, director of UC Davis' EV Research Center. 'California, for example, has the Salton Sea initiative for lithium manufacturing. So it will be really important to coordinate minerals manufacturing and processing and so on. That's part of the story here.' It's unclear what an agreement to strengthen regional energy networks and EV supply chains could do in the face of Trump's tariffs, which major U.S. automakers said would wipe out their profits entirely. 'It's not a remedy for a big issue, but it could help a little bit,' said Tal. 'Under this really weird tariff situation California will be able to help the EV industry by keeping the momentum, keeping solid demand for these vehicles.' — BB Did someone forward you this newsletter? Sign up here! TRASH TALK: Democratic lawmakers aren't happy with Newsom's directive this month to restart draft recycling rules. Assemblymember Steve Bennett called the move 'a significant issue for the Assembly' today in a budget hearing with administration officials. SB 54 overhauled how plastic gets recycled in the state by requiring the producers themselves to reduce and pay for the recycling of single-use plastic packaging. But Newsom ordered CalRecycle restart its rulemaking implementing the bill in order to minimize costs following pushback from producers and retailers. 'This is a deadline that's not been met, and about the only people I can find that are okay with the deadline not being met are people from industry,' Bennett said today. 'We're being left in the dark in terms of what the problem is, and the implication is that it's just not that big of a deal. And I don't think that that's the impression that CalRecycle should be leaving.' CalRecycle deputy Mindy McIntyre, filling in for Director Zoe Heller, told the lawmakers the agency needed more time to review feedback and was still aiming to follow statutory deadlines. She said redoing the rules by summer would be 'very ambitious.' — CvK CARB IN THE CROSSHAIRS: Senate Democrats today blocked GOP Sen. Brian Jones' proposal to roll back the California Air Resources Board's November changes to its emissions market for transportation fuels, but not without also taking some jabs at the climate agency. Jones' SB 2 failed in its first policy hearing, getting yes votes only from two Republicans and moderate Democrat Sen. Melissa Hurtado. Jones argued the Nov. 8 amendments to the low-carbon fuel standard would raise gas prices too much. 'I am sympathetic to the critics of LCFS, and particularly to the November amendments, and also in general, there have been various concerns about CARB that are expressed across the board,' Sen. Catherine Blakespear said to Jones. 'But voiding the November amendments, which is basically what your bill does, would just keep the status quo of LCFS, and I don't think it would solve any of the problems that are being talked about.' — CvK A PATH TO PIPELINES: Players in the carbon capture and removal space are watching AB 881, a bill Assemblymember Cottie Petrie-Norris amended Monday to create a path to lift the state's carbon dioxide pipeline moratorium. The amendments were still not in print at the time of publication, but POLITICO reported last night that the new bill would direct the state fire marshal to develop carbon dioxide pipeline safety regulations and allow the state to lift its pipeline moratorium once they're in place. The moratorium was established as part of a negotiation with environmental justice groups in 2022 under Sen. Anna Caballero's SB 905. Under that law, it can't be removed until the federal Pipeline and Hazardous Materials Safety Administration updates its pipeline safety regulations. But the Biden administration released those draft regulations on Jan. 10 just days before leaving office, without any time to finalize them. And it's unclear whether the Trump administration will delay the regulations, redraft weaker ones or fail to take any action at all. — BB SUNNY SAN DIEGO: California Democrats invited EPA Administrator Lee Zeldin to visit a wastewater treatment plant that treats sewage flowing across the U.S.-Mexico border into San Diego today. Reps. Scott Peters and Juan Vargas and Sens. Alex Padilla and Adam Schiff sent Zeldin the letter after he called the pollution from Mexico 'unacceptable' in a social media post this month. Zeldin's office didn't immediately return a request for comment. 'Since 2018, more than 100 billion gallons of toxic sewage, trash, and unmanaged stormwater have flowed across the United States-Mexico border into the Tijuana River Valley and neighboring communities, forcing long-lasting beach closures and negatively impacting the local economy, environment, and health of U.S. military and Homeland Security personnel,' the lawmakers wrote. 'EPA served as an important advocate for this issue in the last Trump Administration and we hope the agency will continue to do so once again.' — CvK FISH AND FARMER: Westlands Water District — the country's largest irrigation district now at the center of Trump's promises to deliver more water — has appointed Brad Cavallo its new science adviser. Cavallo, most recently a fisheries consultant, has worked for the California Department of Fish and Wildlife as well as the Department of Water Resources. — CvK — North Coast geothermal energy interests are pushing three bills to streamline permitting. — CalMatters digs into the high cost of fixing Lake Tahoe, from wildfire to housing to water pollution. — A long read: The full story of how the Klamath dams came down.
