Steinberg proposal would throw monkey wrench into cap and trade

by Brian Leubitz

Cap and trade is far from perfect. And if you ask many economists, you’d find a carbon tax as a solid alternative. However, a muddy mix of the two? Well, that raises more questions than it answers.

And, so we have Sen. Steinberg’s proposal:

Next year for the first time, transportation fuels will come under the program: oil companies will have to account for the emissions from Californians’ cars and trucks. The cost of buying additional pollution permits is one that companies are almost certain to pass along to consumers.

Steinberg’s plan would make it more direct, as a tax that we pay at the pump. His reasoning is that while drivers will pay more for gas either way, with a tax the increase is more predictable and transparent.

“What people in California also need is pollution cuts,” said Tim O’Connor, director of the Environmental Defense Fund’s California Climate Initiative. He said that while he supports some of the ideas behind Steinberg’s proposal, he’s concerned it could undermine California’s efforts to charge for the right to pollute, and to reduce greenhouse emissions overall. (KQED / Molly Samuel)

The bill seems far from complete, and will likely get a lot of revisions. But, today is the deadline for bills to be filed, and so here we have something. Now, generally when the Western States Petroleum Association is happy, as they have said they are eager to listen to these changes, it should draw attention.

Whether these changes would go anywhere involves a lot of questions for a system that was just about to start in earnest next year. This will surely change, but environmentalists will want to keep a keen eye on this bill.

Added sugar leads to profound health risks

by Brian Leubitz

Last year, under a flood of beverage industry money, two proposed sugary beverage taxes were easily defeated in Richmond and El Monte. However, Californians are still wary of the health risks that they present. To wit:

California voters endorse a proposal to require beverage companies to post a health-warning label on sodas and sugary drinks to alert consumers that their daily consumption contributes to diabetes, obesity and tooth decay. Statewide 74% of voters back this requirement, of whom 52% do so strongly. Support is bipartisan, with large majorities of Democrats (80%), Republicans (64%) and non-partisans (75%) endorsing the idea.

The poll also finds continuing support among the statewide voting public to tax the sale of sodas and other sugary drinks and use its proceeds for school nutrition and physical activity programs for kids. Two in three voters (67%) favor this proposal. The results are similar to a Field Poll completed in late 2012, which found 68% of voters statewide supporting such a tax. (Field (PDF))

Unfortunately, the beverage industry isn’t keen on leaving anything to chance. And now San Francisco, led by Supervisors Scott Wiener, Eric Mar and Malia Cohen, are looking to put exactly such a measure on the ballot for November. The statewide poll found that within the San Francisco Bay Area, 78% of residents favor a soda tax to fund school nutrition and physical activity programs to reduce diabetes. San Francisco voters support it, but will all that Coke and Pepsi money be enough to confuse the issue.

Look, there are clearly some issues with the regressiveness of the sugar beverage tax. I don’t have the exact figures on this, but one would expect to see that under the proposed measure, low to middle income San Franciscans would pay a far larger share of the tax than for other taxes. However, that is also the case with tobacco taxes, yet we tolerate those. The fact is that while sugary beverages have not yet been proved to be as dangerous as tobacco, they carry very severe health risks. The Boston Public Health Commission has some startling statistics.

One, 20-oz bottle of regular soda has about 16 teaspoons of sugar.

Teens consume twice as much soda as they do milk.

On an average day, 80% of youth consume a sugary drink.

A single, 20-ounce bottle of regular soda has about 16 teaspoons of sugar.

The average person consumes almost 100 pounds of sugar a year, with the single biggest source being sodas.

The American Heart Association recommends that the maximum daily intake of added sugars be no more than 4.5 teaspoons for teens aged 12-19.

Did you know, health costs of obesity in the United States are $147 billion annually? That’s like buying everyone in the U.S. an iPad.

Economists call such taxes a case of “internalizing externalities.” In other words, the government has been subsidizing these beverages, in the form of health care, for years. It is now time to include those costs in the price of the beverage.

Target is targeting our privacy. There’s a big red bullseye, a target – like the one on the shirt I’m wearing today – that Target and Neiman Marcus, who chose not to show up to answer questions today, have put on us because they haven’t done enough to protect our private financial data. And the reason is that there’s no financial incentive to do so.

110 million Americans had their personal financial information breached. That ‘s one out of two adult Americans. I was in Sacramento today to testify in front of a joint California Assembly committee hearing investigating the breach. And yet Target did not send a single representative to Sacramento today to answer questions about the largest data breach in American history?

The fact that Target didn’t show up today tells us all we need to know about how sorry Target is and how committed it is to our privacy.

If you are as offended by this as I am, I have a t-shirt for you to wear too.

The reason Target won’t face legislative questions today is the same reason that our personal financial information and data is at such grave risk: there is no price to pay. There are few financial penalties to companies like Target when our personal data is taken.  

Beyond public embarrassment, Target has little financial incentive to care.

We, the consumers, pay the consequences but we have no remedies.

According to the Committees’ own staff research, 1 in 4 consumers whose personal information that is taken becomes a victim of identity theft. 1 in 4 victims of a data breach is also a victim of identity theft. If these numbers apply to Target, that would potentially create more than 25 million identity theft victims.  

There’s a harm. The retailers had a role in creating that harm. And yet they have no liability under California law for what they have or have not done to safeguard the sanctity of our personal information.

The problem with privacy violations is that unlike thefts of money or property the law does not recognize a harm and does not provide a remedy.

As the Committees’ staff research states: consumers have no remedy under the law for the loss of financial privacy suffered through these data breaches, and the 1 in 4 risk of id theft they face.  Zero remedies.

So why would retailers invest in greater security, or meet voluntary industry standards, or move away from risky magnetic strip technology?  

If they don’t have to pay a price they don’t have an incentive to change.  And that leaves our private financial information with a big bullseye on it.

What can we do?

We need a California financial information act that mirrors our Medical Information Privacy Act.    

When there is a data breach of our medical information, the drug company, hospital or medical center is liable to the consumer for $1,000 per violation.  

Guess what?  Medical data breaches are fewer and farther between. When they occur companies pay a big price.

The same should be true for our financial data. We need a California Financial Information Privacy Act

It would:

• Change notification standards to be immediate.
• Write minimum-security standards into the law so that they are no longer voluntary.
• Set limits on the time data can be retained. And limits on what information can be collected and retained
• Most importantly: create a private right of action. Put a price tag on retailers’ mistreatment of our private financial information.

Until there is a price to pay, Target and other retailers will continue to make us targets.

If you are as offended as I am by Target’s absence today in Sacramento, please share our Target design online to show your displeasure.

When a company as big as Target won’t provide a single representative to answer questions about the largest data breach in American history, it is time for California to step up and deliver on the promise in Article 1 Section 1 of our state constitution: Privacy is an inalienable right.

Posted by Jamie Court, President of Consumer Watchdog.

Triple-A has been American drivers’ friend almost since U.S. roads linked the nation together. It has rescued families from flat tires and worse. It has planned millions of family vacations and sold well-regarded auto insurance. It has always skewed toward older drivers and welcomed their devoted renewal of memberships. Its employees got good benefits and stayed with the organization.

For all those reasons, it’s a shock to hear that-at least in Northern California-AAA is dumping senior employees like so much excess baggage, according to a lawsuit filed by 10 of them. At AAA’s California State Auto Club branch, successful veteran insurance agents report being fired or forced out and replaced with younger, cheaper hires and call center employees.

Drivers who have kept up their AAA memberships for decades should be steamed about this on principle. But there are practical reasons to be angry, especially for drivers with AAA auto, home or boat insurance.

The laid-off AAA insurance agents are the people you would have called if you had a policy question or problem with a claim. Or if you wanted to add your child to a policy. Or maybe just for advice-for instance about whether a rental car is covered or whether your auto insurance is good in Canada.

Where are you going to get that help now? Who you gonna call?

Your file would likely become a “house account,” often with no agent assigned. Maybe the call center kid can find your file, put you on hold and hunt for a manager to help him figure it out. The hourly workers answering the phone won’t know you from Adam.

If the same thing is going on at other AAA chapters, it’s not likely the public will know unless more lawsuits emerge.

The “why” of these dismissals is not complicated. Insurance agents get bonuses when they sell new policies and smaller yearly payments from the insurance company as policies are renewed. The agents are expected to earn your loyalty and keep you in the fold.

The senior agents service up to thousands of policies built up by sales over the years. This takes time, so they may sell fewer new policies.

By dismissing the agents, CSAA gets to keep their yearly servicing payment.

CSAA’s bet is that you won’t care enough to endure the thrash of taking your business elsewhere. The fact that anyone laid off at age 50 is unlikely to ever find a comparably paying job? Not AAA’s problem.

Layoffs off of older, higher-paid employees are nothing new in modern corporate culture. But this is a case when the fallout also harms the customer in a direct way. It’s worth thinking about before you dial the number on the AAA insurance brochure you got in the mail.

Posted by Judy Dugan, Research Director Emeritus for Consumer Watchdog