The Good - Holding Polluters Accountable for their Actions
The Bad - Sidelining Key Climate Funding and Advancing Environmentally Destructive Water and Gas Projects
What We're Keeping Our Eyes On - Newsom’s Handout to the Insurance Industry and CalGEM’s Regulatory Oversight
This Edition's Highlights
- The Good: Newsom took steps to hold polluters accountable, including calling a special legislative session to address oil & gas price-gouging, and filing a lawsuit against five major oil companies
- The Bad: In his initial budget proposal the Governor cut funding for key environmental programs. He also supported environmentally destructive projects such as the Delta tunnel, Sites Reservoir, and several polluting gas plants in Southern California.
- What We're Keeping Our Eyes On: CalGEM has a new leader, and we'll be working closely with them in 2024 to ensure they appropriately regulate the oil and gas industry. Earlier this year, Newsom and the CA Department of Insurance announced a deal with insurance companies to keep them operating in the state. So far, it hasn't been effective.
2023 marked the beginning of Newsom’s second term. With it came an emphasis on climate action in a way we hadn’t seen in his 4 years prior. Not all of it was good, but there were a few positive highlights:
The year began with the Governor calling a special session to tackle the state’s gas price gouging crisis. Through legislative hearings, Californians learned how the oil and gas industry was making record profits while California families were getting gouged at the gas pump. Following these hearings, the Governor worked with the legislature to create a new oversight agency which will monitor and provide for more transparency in gas pricing.
On the topic of accountability, the Governor also signed SB 253, a critical piece of legislation that mandates large corporations operating in California disclose pollution associated with their operations. Sponsored by our friends at California Environmental Voters, the bill will help hold polluters accountable for damage they’ve caused to the state and is already influencing national legislation and that in other states.
Lastly, the Governor partnered with Attorney General Bonta to sue five of the world's largest oil companies and an industry trade group for allegedly engaging in a decades-long campaign of deception regarding the climate crisis. Holding this industry accountable is necessary and important, and we’re excited to work with the Governor in 2024 to build on this and phase out fossil fuels altogether.
However, those good moments can’t outweigh the Governor’s not-so-environmentally-friendly actions in 2023. And boy, were there many.
It started with the Governor’s budget proposal in January, where he suggested delaying and/or reducing funding for key programs including economic assistance for Californians struggling with their utility bills, advancement of rooftop solar and storage in communities with high pollution, and support for equitable building decarbonization. Sierra Club California and our environmental justice allies worked with the legislature to ensure much of this funding was retained in the final budget. That said, with a large budget deficit projected for 2024, this money will be on the chopping block once again. We hope that the Governor does not prioritize cutting this crucial equity funding once more.
Speaking of the budget process, Newsom also tried to use it to jam through a poorly-thought out infrastructure package that we’ve come out strongly against. Fortunately, this effort received significant pushback from the legislature. Sierra Club California supported the legislature’s leadership to remove and constrain the worst parts of the package.
In August, the Governor ordered his administration to prolong the life of three polluting gas plants in Southern California. Environmental justice groups and Sierra Club California pushed back on this at two venues, the California Energy Commission and the State Water Board, both tasked with approving stalling. All three plants are among the highest in the state for toxic emissions and displayed some of the highest operating failures during 2022’s historic extreme heatwave between August 31 and September 9, according to a recent analysis.
Lastly, we’ve long criticized the Governor’s water policy over the years, and 2023 was no different in that regard. We were disappointed but not surprised when the Governor gave his very vocal support for water projects that will harm California’s rivers, ecosystems, and communities that depend on them, specifically, the Delta Tunnel and Sites Reservoir. Newsom advanced both of these projects, first by certifying Sites for CEQA streamlining, which completely subverts the purpose of this landmark environmental law. Earlier this month, the Governor’s water management agency released a final environmental impact report that does not adequately take into account alternatives to the project. They will certify the document in the days ahead. With both Sites and the Delta tunnel, the Governor has ignored significant concerns raised by the communities and tribal nations that will be impacted by these projects.
These are just a few of the environmentally harmful projects the Governor has supported in 2023. It’s clear that his rhetoric on climate leadership doesn’t always match his actions. If you’d like to see how he and the rest of the legislature fared during this year’s session overall, you can find that information in our annual Report Card.
Oil & Gas oversight: CalGEM, the state oil & gas agency, has a new leader. We’re looking forward to working with them to better monitor and regulate the harmful industry, especially as it relates to idle and abandoned wells. Sierra Club just released a report on this topic and we’re excited to engage with the administration in a productive manner that addresses these critical issues.
Newsom’s handout to the insurance industry: Earlier this year, Newsom issued an executive order urging Insurance Commissioner Lara to take regulatory action to address the issue of insurance companies leaving California due to climate change-related risk. The CA Department of Insurance announced that the state and wildfire insurance companies reached an agreement that would allow the companies to raise rates in accordance with catastrophe modeling, and pass the expense of wildfires, floods, and other climate-related natural disasters on to consumers.
Unfortunately, this deal is a short term band-aid on a long term problem. Climate-related natural disasters in California will only become more common as the climate crisis intensifies. This agreement won’t guarantee homeowners can keep their insurance policies, nor will it address the root cause of the problem the industry faces: as climate-related disasters worsen, it will become increasingly financially untenable for them to operate anywhere in California. Despite this agreement, insurance companies will continue to leave the state, and homeowners will inevitably lose their coverage.
We would urge the Governor and Commissioner Lara to instead look to develop long-term solutions that protect Californians’ public health and defend the environment. This starts with greater investments in disaster-prone areas. Newsom could advocate for the legislature to allocate increased funding for disaster prevention in the state budget, which can be used to bolster emergency response capabilities, and implement proactive measures to reduce risks in areas where climate-related disasters are common. While the state’s 2023 budget included hundreds of millions of dollars in flood protection, the budget also only had 25 million for defensible space funding and 12 million for home hardening programs. Both of these are proven solutions to decreasing risk associated with wildfires.
California’s devastating fire seasons, massive floods, and crippling winter storms over the past several years serve as stark reminders that we must act swiftly and decisively to protect our residents from the inevitable challenges posed by the climate crisis. It's past time for our state government to prioritize the long-term public health of Californians and build a more resilient, sustainable future for the state and the companies that operate in it.
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