CSAC Bulletin Article

Senate Releases Cap and Trade Proposal

August 18, 2016

The State Senate released their latest Cap and Trade proposal this week, totaling approximately $1.2 billion in spending for a variety of different programs aimed at reducing greenhouse gas (GHG) emissions in California. The plan does include funding for a number of CSAC priorities, including waste diversion, transportation, and tree mortality as well as funding for a new local climate program aimed at disadvantaged communities.

However, the allocation amounts differ widely from the Governor’s proposal and CSAC is concerned to see lower amounts dedicated to certain key programs, such as forest health and tree mortality, down to just $20 million from the Governor’s proposed $150 million.

As the Legislature nears the end of the Legislative session, this is the first attempt at closing a deal on cap and trade auction revenues after the Legislature punted decisions on this issue outside of the budget process in June. According to the Legislative Analyst Office (LAO), there is roughly $1.4 billion in revenue available for appropriation.

The allocation plan and the cap and trade program have been under a heightened level of scrutiny as the last carbon-permit auction yielded lower than expected revenues, bringing in only $10 million as opposed to previous auctions that generated hundreds of millions. Another auction was held earlier this week and it is anticipated that the Assembly is awaiting the results prior to the release of their own proposal.

In addition, the cap and trade program and the Administration’s ability to move beyond 2020 has garnered attention as legislature leadership continues to push SB 32 (Pavley), the bill that would codify the Governor’s 2030 targets.

The following is a breakdown of the Senate’s proposal included in AB 1613:

Investment Category

Department

Program

Amount

Continuous Appropriation

High Speed Rail Authority

High Speed Rail Project

NA

 

Transportation Agency

Transit and Intercity Rail Capital Program

NA

 

State Transit Assistance

Low Carbon Transit Operations Program

NA

 

Strategic Growth Council

Affordable Housing & Sustainable Communities

NA

50 percent in reduction in Petroleum Use

Air Resources Board

Low Carbon Transportation & Fuels

$150

 

CalTrans

Low Carbon Road Program

$0

 

Transportation Agency

Transit and Intercity Rail Capital Program

$100

 

Energy Commission

Biofuel Facility Investments

$0

Local Climate Action

Strategic Growth Council

Transformational Climate Communities Program

$180

Short-Lived Climate Pollutants

Air Resources Board

Black Carbon Woodsmoke

$5

 

Air Resources Board

Refrigerants

$0

 

Cal Recycle

Waste Diversion

$40

 

Dept. of Food & Agriculture

Climate Smart Agriculture- Healthy Soils

$20

 

Dept. of Food & Agriculture

Dairy Digesters

$55

Safeguarding California/Water Action Plan

Dept. of Food & Ag & Water Resources

Water and Energy Efficiency

$30

 

Energy Commission

Drought Executive Order- Water and Energy Technology Program & Appliance Rebates

$15

 

Dept. of Fish & Wildlife

Wetlands and Watershed Restoration/CalEcoRestore

$30

Safeguarding California/Carbon Sequestration

CAL Fire

Healthy Forests

$20

   

Urban Forestry

$30

 

Natural Resources Agency

Urban Greening

$20

Energy Efficiency & Clean Energy

Department of General Services

Energy Efficiency for Public Buildings

$0

 

I Bank

California Lending for Energy and Environmental Needs Center

$50

 

Conservation Corps

Energy Corps

$10

 

Department of Community Services and Development

Energy Efficiency Upgrades/Weatherization

$100

 

University of California/California State University

Renewable Energy & Energy Efficiency Projects

$10

TOTAL

   

$1.17 B

 

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