September 26, 2019

Governor Newsom signed an executive order on September 20 directing the Department of Finance, the Department of Transportation and the Department of General Services to take action to advance emissions reduction goals and incorporate climate resiliency strategies in several state programs, including pension investments, transportation programs, and state-owned facilities. The full text of the executive order is available online.

According to the Administration’s press release, the Department of Finance has been directed to “create a Climate Investment Framework to leverage the state’s $700 billion CalPERS, CalSTRS and UC Retirement Program portfolio to drive investment toward carbon-neutral technologies.” The Department will collaborate with the Office of Planning and Research and the Department of Human Resources to develop a proactive investment strategy reflecting economic and environmental risks of climate change as well as a timeframe for shifting investments with growth potential based on reducing emissions and adapting to climate change.

In the transportation sector, the order directs the California Air Resources Board to develop new grant criteria to encourage greater production and deployment of low-emission cars and to strengthen regulations designed to achieve greenhouse gas emissions reductions. The order further directors the California State Transportation Agency, where feasible, to leverage competitive grant programs, as well as the state’s share of maintenance and capital improvement funding for highways, to encourage housing development, manage congestion, provide alternatives to driving, and achieve the state’s Climate Change Scoping Plan objectives.

The affected state transportation funding amounts to approximately $5 billion annually. While there is flexibility in the state’s share of the State Transportation Improvement Program (STIP), state and federal law have already established performance management requirements for the state highway system. These goals are incorporated in the Caltrans Transportation Asset Management Plan. Achieving these established milestones will likely preclude drastic changes to the types of projects advanced within the State Highway Operation and Protection Program (SHOPP), which is the largest component of the $5 billion total. CSAC will closely monitor any proposed changes to discretionary grant programs to ensure that new criteria do no disadvantage county projects.   

Finally, the executive order directs the Department of General Services (DGS) to “identify opportunities to lower emissions and mitigate climate risk from the state’s owned and leased assets,” which consist of 19 million square feet of buildings and over 51,000 vehicles. DGS has also been directed to prioritize the purchase of environmentally preferable goods.