Transportation Priorities Jostle for CA’s Cap-and-Trade Revenue

A series of hearings in Sacramento have been revisiting California’s Global Warming Solutions Act, Assembly Bill (A.B.) 32, which calls for a statewide reduction in greenhouse gas emissions (GHGs) to 1990 levels by 2020. Two recent hearings have opened discussions of Governor Jerry Brown’s proposed spending plan for the revenue received so far from the state’s cap-and-trade program, implemented as part of A.B. 32, and another recent Senate hearing discussed the program’s impacts to date.

Mary Nichols, Chair of the California Air Resources Board, explains cap and trade.

The auction of cap-and-trade credits is producing money for the state, which, under A.B. 32, must be spent on helping further reduce GHG emissions. Last month, Governor Brown released his cap-and-trade expenditure plan for 2014-2015, in which he proposed to spend $850 million in expected revenue from the auctions. Of that, $600 million would be used for transportation-related projects and programs, with the lion’s share of that ($250 million) for high speed rail.

Other transportation categories include $50 million to Caltrans to expand and modernize existing rail; $200 million towards programs that encourage the use of zero-emission vehicles, including trucks, buses, and cars; and $100 million over the next two years to the Strategic Growth Council for Sustainable Communities programs, including plans that encourage compact and infill development near transit.

The governor’s plan does not include any funds for bicycling, walking, or transit other than what would fall under the above categories, even though these transportation modes offer a huge potential savings in GHG emissions.

At a Senate Transportation Committee hearing Wednesday, a long line of public advocacy groups spoke up for reshuffling the cap and trade funds, mostly in the direction of the respective group’s preferred emissions-reduction strategy (better transit, for example, or forest fire prevention given this dry year).

But only a few speakers questioned why so much money was being given to high speed rail. The Legislative Analyst’s report questioned the GHG benefits of California’s planned high speed rail, which would not have any effect on emissions until 2022 at the earliest, and would at best provide a modest contribution to GHG reductions.

“We need to fund GHG reductions in the near term,” said Catherine Phillips of the Sierra Club. “It doesn’t warrant spending 31 percent of the money on high speed rail. Many other programs will get you reductions sooner than will high speed rail.”

A Senate hearing in February, and yesterday’s Transportation Committee hearing, had the stated purpose of discussing the expenditure plan. At both hearings, however, much of the discussion centered on the way cap-and-trade works, which shows just how complex and difficult to understand the program is.

A.B. 32, passed in 2006, called for the state to meet its emissions reduction goals using regulation, incentives, and undefined “market mechanisms” to price emissions. The market mechanism that the state chose for regulating GHG emissions is cap and trade, which sets a cap on total emissions from all sectors, allocates a certain number of “GHG credits” to each emitter, and then auctions off the rest of the credits. This allows companies to buy or sell allowances according to their need to meet their emissions cap. The cap is supposed to decrease over time, enabling California to meet the 2020 GHG reduction goals.

The cap-and-trade expenditure plan will continue to wend its way through hearings, with the next full budget committee taking up individual pieces of it on April 10. It must be passed by the budget deadline on June 15.

Meanwhile, a joint hearing last week held by the Senate’s Committee on Environmental Quality and the Select Committee on Climate Change discussed proposed adjustments to A.B. 32, which requires that its scoping plan to be updated every five years.

At that hearing, Mary Nichols, chair of the California Air Resources Board, testified that California is on track to meet the 2020 goals. But beyond 2020, “We must accelerate the pace of emission reductions needed to avoid the worst impacts of climate change,” she said. “Emissions from 2020 to 2050 will have to decline several times faster than the current rate.”

That hearing also featured a lively debate over the economic effects of the cap-and-trade program between Dorothy Rothrock of the California Manufacturers and Technology Association and Professor Daniel Kammen of UC Berkeley’s Energy and Resources Group. Rothrock claimed that the cap-and-trade program costs industry too much, and may drive business out of state, while Kammen countered that the program is a boon for business and job growth, and that “the clean tech sector outperformed the California economy by more than a factor of three.”

Other potential changes to A.B. 32’s scope include:

  • A cap on fuel emissions is already set to start in January 2015, and the ARB is considering new rules on emissions from fuel shipping and storage, which have not been regulated, as well as “well stimulation” (fracking).
  • Water is also under the scope of A.B. 32. “From the perspective of global climate change, the massive amounts of electricity that we are using to move water around the state makes it important to look at it in a holistic way,” said Nichols. “We have to come up with policies that will help guide investments into water conservation, and, frankly, to look at pricing as a tool to incentivize more efficient use of water.”

Comments on the A.B. 32 scoping update are due by April 28, 5 p.m. here.

  • voltairesmistress

    Much as I would like more of A.B. 32’s proceeds directed toward infill development, commuter rail, and bicycling, Gov. brown is making the right political calculus right now. HSR, if it is to survive, must get funds from somewhere, and other sources are at least temporarily blocked by lawsuits and legislators. There is the ideal, and there is realpolitik. This situation is the latter.

  • CharliePeters

    BP-DuPont GMO fuel affect the beef?

  • CharliePeters

    Shell GMO fuel affect the water?

  • Cap and trade money isn’t nearly enough to keep the dumb high-speed rail project alive. Besides, Judge Kenny is likely to rule against the project later this Spring, making the point moot.

  • Oh please … what are you smoking?

  • mememine

    32 years of climate blame and needless CO2 panic and CO2 death threats to billions of innocent children is the democrat’s Iraq War without a real enemy. How can it not be judged as a pure war crime in the history books? You doomers blindly exaggerated sciences consensus of “uncertainty” and nothing beyond; “could be”. Prove me wrong.
    Without a scientific consensus of “certainty” (like smoking and cancer and their “proven evolution), a progressive’s “belief” in certainty of a crisis is no better than how Bush fear mongered his false wars.

  • voltairesmistress

    Just read some of your comments from your Disqus profile. Boy, are you busted. Hateful, raunchy, disrespectful comments. Worst of all, devoid of thought or content. Please get off this transportation blog, since it is meant for policy discussions, not bloviation.

  • Bloviation? Sweetheart, that has to do with speech … not the written word. Next, I could give a rats ass what a S.F. dweller like you thinks … because you and your ilk are why I left CA. I have no use for you socialist types. Now keeping to form and not wanting to disappoint you … GFY!

  • I think that voltairesmistress is being realistic and practical.

    It speaks volumes that HSR has gotten negative publicity yet the $200 million to assist mostly single occupant vehicles – and all private at that, doesn’t get a peep. Are we that much in love with electric vehicles that we neglect to recognize that they are just another flavor of the private automobile?

    Need I remind folks that the first pedestrian fatatily caused by a motor vehicle was when an electric taxi mowed down a streetcar passenger, Henry Bliss, who just alighted from an (electric-powered) streetcar in Manhattan in 1899?

  • It speaks volumes … about you from Farcebook

    Alliance for a Livable Palo Alto, Reviving California, Silicon Valley Bicycle Coalition, Central Valley Air Quality (CVAQ) Coalition, John King, Grand Boulevard Initiative, Palo Alto High Speed Rail, Le Boulanger, Friends of Silicon Valley Bus Rapid Transit, Pizza My Heart, Planetizen, Bicycle Solutions, Jim Beall, Carriage House Art Studio, Planned Parenthood Action

  • Nathanael

    Global warming is proven and it’s happening now, and it’s causing massive problems with crop failures. It is proven to be caused by CO2 emissions. Ocean acidification is proven and it’s happening now, and it’s causing massive problems with the ocean food chain.

    You can check with any actual scientist.

    Face the facts.

  • CB

    Right, but who cares what organisations Irvin is associated with?

    How might that change the truth of what he says?

    If you don’t like Governor Brown’s plan, what would you suggest he do instead?

  • Brown’s Master Plan …

  • BBnet3000

    A guy advocating against private automobiles on Streetsblog is a member of the Bicycle Coalition? Mind blown.

  • Hey all. I deleted the comment with the bad word in it. It’s one thing to disagree, even forcefully, even ridiculously…but I thought the last comment was over the line.

  • Carol Ann

    Please help First Responders ask federal administrations to consider adding secondary containment to rail tank cars used to transport chlorine gas, providing lifesaving safety to First Responders and the public they serve. See First Responders Comments at PETITION C KIT.

  • CB

    You think Jerry Brown wants to start something called the “Kalifornia Peoples Farm Collective”, and your proof of this is a photoshopped picture?

    What is the point of posting anything at all if you aren’t interested in being taken seriously?

    What do you get out of it?

    Do you not care that people think you’re a joke?

  • uN

    Nevada, you good old boy, a lot has happened since this post of yours. Your hero cliven Bundy, the welfare king and rancher said something many folks don’t like. There is going to be a conference in Oakland, you know, right down the street from the African american Muslim bakeries. They need you there, Mr. Nevada so they can better understand how cliven Bundy and the rest of your posse thinks and how ya all roll. They also want you to explain to them how all you welfare ranchers ride high on your horses, calling Americans welfare cheats and other bad names when in fact it is the Nevada cattle ranchers who won’t acknowledge the existence of the US government and should be run out of town. You have a challenge, giving your speech in Oakland but I know you can do it. One piece of advice though, keep a low profile on your racist leanings and your unpatriotic thoughts…


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