“I do not view the new revitalized Republican Party as one based on a principle of exclusion. After all, you do not get to be a majority party by searching for groups you won’t associate or work with.” – Ronald Reagan From the CRP Platform “We support environmental policies based upon sound science that encourage innovation and application of new technologies through market based incentives whenever possible instead of regulation, taxation and litigation. Environmental regulations must be considered in light of the effects that they will have on workers and on the economy.” -------------Note: Protection and stewardship of the environment began under a Republican President and our conservative values align with the goal of conservation: safeguarding the natural resources to which our health and economy depend. • 1980s: Pres. Reagan used Cap and Trade to phase out leaded gas • 1989: Pres. GH Bush used Cap and Trade to reduce Acid Rain • 2005: Pres. GW Bush used Cap and Trade for the Clean Air Interstate Rule AB 398 is good policy fit HOOVER INSTITUTION Man chimug A Frr: Satin} George P. Nimitz 'I'I?wmm ii, Jun/Shun: luni tirirlut' July 17, 2017 Dear Governor Brown, Earlier this year, I joined James A. Baker, Henry M. Paulson, and Martin l-ieidstein top members of the Reagan and Bush administrations - to cail for smart climate action from Congress and the White House. We wrote that, "The opposition of many Republicans to meaningfully address climate change relleets poor science and poor economies, and is at odds with the party?s own noble tradition of stewardship." So I was heartened to learn that here in California, Republicans and Democrats are working together on extending our cap?and-tradc program. That?s far better than the alternative: Under the circumstances, this commonsense, free- market approach is the way forward. Passing this bill on a bipartisan basis is something on which Ronald Reagan. as with the Montreal Protocol, would be proud. Sincerely yours, George P. Slinltz The l-lonorable Edmund G. Brown, Jr. Governor State 01' California State Capitol, Suite 1173 Sacramento, CA 95814 STANFORD UNIVERSITY (?In I ?u..nIurrt. L: r. mlulintruiu CRP Platform in action We support environmental policies based upon sound science that encourage innovation and application of new technologies through market based incentives whenever possible instead of regulation, taxation and litigation. Environmental regulations must be considered in light of the effects that they will have on workers and on the economy. Encourage innovation Market-based incentives Alternative to regulation, taxation and litigation Reduces impact on workers and the economy Cap and Trade: How we got here AB 32 - In 2006, by a majority vote, Democrats passed the Global Warming Solutions Act that provided a choice of regulations or a cap and trade market to reduce GHG emission by 2020. Proposition 23 - In 2010, at the height of the great recession, California voters had a chance to temporarily repeal AB 32. The initiative failed by more than 23%. SB 32 - In 2016, again by a majority vote, Democrats passed SB 32. This dramatically expanded AB 32 through 2030 and empowered unelected bureaucrats at the California Air Resources Bureau to impose even more burdensome and costly regulations on California businesses to meet the new targets. Figure 1 SB 323 Requires Mere Greenheuee Gee Heduetiene by 2030 ??hd??ilEE Actual 450 - den - - 250 enae Target F'reieetien 1995 BEHEI EIEHE 3125 a lEhaIJ-ter ei 2015 :12. Parley}- Prejeetien irem Air Beard leased en aetiena that have been taken te achieve the 2112:] target. ntillien metric tens ei diet-tide equivalent. Who Wanted Cap and Trade Reforms? The same people who opposed AB 32 and SB 32 AB 398 rolled back taxes, cut regulations, and protected Californians from higher costs. This is why every major business group and industry in California supported it, including: • • • • • • • • • • • • California Chamber of Commerce California Business Roundtable Western States Petroleum Association (Chevron, Valero, Tesoro, etc…) California Manufacturers and Technology Association California Farm Bureau Federation Agricultural Council of California California Warehouse Association Western United Dairymen Sempra PG&E Boeing Cemex (partial list) The Cap and Trade Successes • Reduce Taxes, Fees, and Regulations by over $16 billion - Moved CA from command and control (SB 32) to a market-based cap and trade program • Establish Strong Cost Containment Features to Protect Ordinary Californians -Free allowances, offsets, “speed bumps,” and price ceilings developed with industry partners to protect consumers • Reduce Bureaucracy - Eliminate double regulation by state and local air boards (Pre-emption) Tax Cuts (Over $3 billion) • Repeal the Fire Tax - Eliminate illegal and unfair tax on rural Californians • Extend and Expand the Manufacturers Sales and Use Tax Exemption -Strengthen economic development, bolster business climate, and encourage manufacturing investment and employment across the state  Consumer Energy Rebate - Maintain climate dividends that reduce Californians energy bills every year Cap and Trade bottom line The less costly alternative Stock Costs Fuel Costs Total Costs* Gross State Product Job Losses Personal Income By 2030 SB 32 Implement Existing Law Cap&Trade Plan $18.5 billion $6.5 billion $1 billion -$5.7 billion $19.7 billion $3.5 billion -$40 billion -$13.2-$22.5 billion -271,600 -67,700 to -104,100 -$27.5 billion -$6.4 billion to -$4.2 billion Difference (savings) $12 billion $6.7 billion $16.2 billion $17.5-$26.8 billion 167,500 to 203,900 $21.1-$23.3 billion Lower fuel and equipment costs Saves jobs Keeps $21+ billion in the economy Bottom-line Outcome Reduces equipment costs by $12 billion Reduces the cost of fuel by $6.7 billion Cuts $16.2 billion of taxes, fees and regulations Retains $18 - $27 billion in the state's economy Saves 167,000 - 203,000 jobs Puts $21+ billion back in the pockets of Californians Who opposed Reforms? Radical environmental justice groups and progressive Democrats • • • • • • • • • • California Environmental Justice Alliance Californians for a Carbon Tax Center for Climate Protection Leadership Counsel for Justice and Accountability Center on Race, Poverty and the Environment Food and Water Watch Sierra Club Center for Biological Diversity Bay Area Pollution Control Agency Our Revolution Contra Costa County • • • Communities for a Better Environment Vote Climate Organizing for Action Tri-Valley We also divided the Democrat coalition (labor vs. enviros, enviros vs. enviros) • • HJTA – Were they really opposed? “Housing being inserted into the cap and trade discussion has been intriguing to witness. I've been authorized by Jon Coupal to make the following request in exchange for our neutrality. “HJTA Wants (in no particular order:) “1. Full and complete portability of property and the transfer of a Proposition 13 base anywhere in California, regardless of age, both for buying property of greater than, or less than value. The California Association of Realtors would also be required to sign off on any language. I think with this, they could support cap and trade just for what that might be worth. Obviously, this would have to be a constitutional amendment. “2. Insert the provisions of AB 1378 (Holden, 2015) into the same Constitutional Amendment. The language will have to be tweaked slightly to adapt it to the Constitution. “3. Adoption of SB 609 (Vidak) from the current session. “4. The language tweak that we want on the SRA language, and complete and full reimbursement of taxpayers since the tax was enacted. “In exchange for that, HJTA is prepared to, assuming our Board of Directors and the Realtors approve: “1. Take a neutral position on cap and trade “2. Take a neutral position on SB 3 (Beall) “In addition, HJTA is also prepared to at least entertain discussions on SB 2, but only if it is tied to a corresponding increase in the homeowners exemption, and only if that figure is permanently adjusted annually for inflation.” Source: HJTA’s David Wolfe letter to Assembly Republican Staff ACA 1 An opportunity to Kill High Speed Rail . cnuronmms MAY BE ABLE TO VOTE ml mum To save his climate change program, Jerry Brown sacri?ced his bullet train ?aniFran-ti?m {Eh mnitlt Lo cal Brown?s cap-and-trade deal could eventually kill high- speed rail By Kurtis Alexander Jul}- 21= 201}r Good politics AD 60 Cervantes & AD 65 Quirk-Silva Strategy: hit from the right and left to collapse their support. We hit them on the right for raising the gas tax (SB 1), thereby rallying the center/right for our candidate. We hit them on the left for failing to protect the environment, thereby de-motivating Bernie Sanders voters (which are key elements of their political base). What are we doing to change this? STATEWIDE REGISTRATION TREND BY DECADE: 1980-2017 60.0 50.0 40.0 30.0 20.0 10.0 0.0 Dem % Rep % NPP/DTS % Other % 1980 53.2 34.7 9.4 2.7 1990 49.5 39.3 9.0 2.2 2000 45.4 34.9 14.4 5.3 2017 44.8 25.9 24.5 4.9 The electoral challenge – The road to 41 Average Republican registration of our 25 Assembly seats: 38.9% (only 2 of our seats require minority votes to win) Average Republican registration of next 16 seats to reach 41: 29.2% (at least 14 of these seats require minority votes to win) If we won those seats, the Sabrina Cervantes seat would be the MIDDLE of the caucus, not the left. No Party Preference is above Republican registration in 39 Assembly seats today. It will be 41 by the end of the year. How are we going to win seats like Rudy Salas and Susan Eggman (long-term Democrat seats in Central Valley)? This must be our goal. The Democrats’ opportunity to gain seats is far greater than ours. (BTW: This should scare you.) AD Member Party Dem GOP NPP Other GOP>Dem 16 Baker R 41.10% 29.10% 25.60% 4.20% -12.00% 36 Lackey R 40.30% 33.00% 21.00% 5.60% -7.30% 40 Steinorth R 40.30% 33.80% 21.00% 4.90% -6.60% 77 Maienschein R 32.00% 33.90% 29.30% 4.80% 1.90% 76 Chavez R 33.10% 34.40% 26.90% 5.60% 1.30% 38 Acosta R 35.00% 36.50% 23.20% 5.20% 1.60% 33 Obernolte R 34.10% 37.00% 21.90% 7.00% 2.90% 35 Cunningham R 35.70% 37.00% 21.70% 5.60% 1.40% 55 Chen R 32.70% 37.10% 26.10% 4.10% 4.40% 72 Allen R 33.10% 38.00% 24.70% 4.20% 4.90% 60 Cervantes D 38.60% 35.10% 21.80% 4.40% -3.50% 32.50% 22.00% 5.70% -7.20% 8 Cooley D 39.80% 65 Quirk-Silva D 40.60% 31.90% 23.70% 3.80% -8.80% 44 Irwin D 41.90% 31.70% 21.70% 4.80% -10.20% 21 Gray D 45.30% 31.00% 19.00% 4.70% -14.30% 66 Muratsuchi D 40.90% 30.70% 24.00% 4.50% -10.20% 41 Holden D 44.40% 28.50% 22.30% 4.80% -15.90% 61 Medina D 47.90% 26.80% 20.90% 4.40% -21.10% 31 Arambula D 47.50% 26.70% 21.30% 4.40% -20.80% 9 Cooper D 46.20% 26.70% 22.50% 4.60% -19.50% CRP Polling The CA Republican Project Poll shows: Over 353,000 Republicans (7%) are considering leaving the Party due to its position on climate change. ***If they do, Republican registration will be below that of NPP. (Source: CA Republican Project Poll, January 30, 2017) CRP Polling Public Opinion Groups Republicans must win if we are to grow In May 2016, the CRP and the Senate and Assembly caucuses surveyed over 13,000 voters and asked them if they agreed or disagreed with this statement: ”Stopping global warming is very important, even if it means less economic growth.” Not even the majority of our own party disagrees, but every group we need to win overwhelmingly agrees. (Source: CRP Statewide Issue Poll - May 2016 - 13,000 Interviews) The demographics we must win support cap and trade • 86% of Democrats agreed • 75% of Independents agreed • 83% of Latinos agreed • 85% of Asians agreed • 80% of Millennial voters (18-34) agreed • 82% of Women agreed (Source: CRP Statewide Issue Poll - May 2016 - 13,000 Interviews) CRP Polling More reasons Cap and Trade is good politics On the issue of climate change • This issue provides the most opportunity to move the public in our direction • “Denying climate change to Californians . . . is a death sentence to the state party.” • “…the issue is quite important to voters, even rising to one of the reasons GOPers are considering leaving the party.” (Source: CA Republican Project Poll, January 30, 2017) Summary Meets the test of the Republican principles • We acted on CRP and outside data (polling, growing party) • We achieved Republican outcomes (lower taxes, less regulation) • We changed the narrative on CA Republicans and the environment (which has been dramatically undercut by those not informed of the realities) Smart politics Takes the biggest step our polling tells us will help grow the Party Precedent This is about far more than policy and politics Precedent: • Should the CRP Board opine on policy votes by legislators after the fact? • Should the CRP Board engage in caucus leadership decisions? • Will the CRP Board comment on officeholders/candidates who deviate from the Board’s idea of what a Republican should believe? (Path to citizenship, job killers, life, etc.?) If so, where does this logically lead? The bottom line Are we interested in being data-driven, adapting to the California that exists, growing the Party and increasing our relevance OR Blindly adhering to an unrealistic but comfortable view of California that is costing us registrants, votes and elections? -----Change is not an option. It is an imperative. This is what I (and others) are doing. Die-hard conservatives thought that if I couldn't get everything I asked for, I should jump off the cliff with the flag flying-go down in flames. No, if I can get 70 or 80 percent of what it is I'm trying to get ... I'll take that and then continue to try to get the rest in the future. – Ronald Reagan