Democrats in California needed to pass cap and trade to find out what’s in it. At least that’s the take-away from state Senate president Darrell Steinberg’s epiphany in the Los Angeles Times this week.

Cap and trade is “asking the trading market to enter directly into the energy segment again and that brings back bad memories,” Mr. Steinberg said, harking back to the state electricity crisis in 2001. That crisis culprit was a hasty change in state law, which energy traders exploited. “When you’re allowing for trading beyond our borders,” the state Senate leader added, “you may be reducing pollution in another state or country, but that doesn’t reduce pollution in California.”

Maybe Mr. Steinberg has forgotten that the 2006 state law that created the cap-and-trade program was entitled the “Global Warming Solutions Act”—not the “California Air Pollution Reduction Act.”

Cap and trade’s actual purpose was to raise revenue for the state by auctioning permits to emit carbon and to indirectly subsidize California green businesses. Refiners, fuel suppliers, manufacturers and other energy-intensive industries must adopt green technologies to comply with the emissions cap or buy permits from the state and “greener” companies.

Mr. Steinberg’s real beef seems to be that out-of-state businesses are again gaming California’s quarter-baked policies. The California Air Resources Board allows in-state businesses to comply with the cap by buying “offsets” from out-of-state enterprises such as forest conservation projects and methane digesters. The offsets, which are cheaper than permits, were intended to help businesses and prevent a jobs exodus.

California this year also merged its cap-and-trade program with Quebec’s. The state’s goal all along was to broaden cap and trade to neighboring jurisdictions. But the upshot is that money is flowing from California businesses to out-of-state green companies. Meantime, energy costs will rise when the cap hits fuel suppliers next year. “I worry about what it could do to energy costs,” said Mr. Steinberg.

It’s nice to see the politicians who passed cap and trade admitting reality, but the complaints mean nothing unless Mr. Steinberg is willing to push for repeal.