Revenue from California's greenhouse gas emissions trading program would be used as a permanent source of funding for affordable housing, water efficiency projects and a variety of transportation projects, including high-speed rail, under a new plan outlined by State Senate President Pro Tempore Darrell Steinberg (D).
Unveiled April 14 at a news conference in Sacramento, the plan replaces a proposal Steinberg announced in February to impose a carbon tax on transportation fuels rather than bring them under the scope of the emissions trading program, as is scheduled in 2015.
The new proposal for investing cap-and-trade revenue would allocate $1.75 billion for affordable housing and sustainable communities; $1.31 billion for transit; $878 million for high-speed rail; $439 for street projects; $200 million for natural resources, water and waste projects; $200 million to deploy electric vehicles; and $10 million to fund a green bank.
Also, the plan would allocate $200 million to rebate “climate dividends’’ to consumers.
All the money would be required to be spent in accordance with the Global Warming Solutions Action of 2006 (A.B. 32) and other statutes mandating that revenue proceeds be used to reduce greenhouse gas emissions, according to Steinberg.
Carbon Tax Proposal Opposed
Steinberg's carbon tax proposal was hugely unpopular with fellow Democrats and the environmental community. The Natural Resources Defense Council, Environmental Defense Fund and other environmental groups said pulling the transportation fuels out of cap-and-trade would compromise the program. Republicans and some business groups also were critical of the tax idea.
Environmental advocates are supportive of Steinberg's latest proposal.
In an April 14 statement, NRDC's California advocacy director Ann Notthoff called Steinberg's new plan “a positive change in direction.’’
NRDC supports increased investments in sustainable communities “designed to offer transportation choices, increase efficiency and save Californians money,’’ Nottoff said.
Lauren Faber of Environmental Defense also commended Steinberg's plan, but said the proposal “is consistent with the fund metrics and priorities developed through the investment plan and the public process that preceded it.’’
“I am thrilled to stand with a broad coalition of good environmental stewards, advocates for social justice, experts in transit-oriented development, and the working men and women of California,’’ Steinberg said, according to a transcript his office released. “This strategy is designed to achieve the objectives of A.B. 32 through significant reductions in greenhouse gas and the direction of public and private investment to California's low-income and disadvantaged communities, which are disproportionately burdened by air pollution and the effects of climate change.’’
State Sen. Fran Pavley (D), a co-author of A.B. 32, said she looked “forward to working with Senator Steinberg’’ and others as the plan moves through the legislative process. Steinberg called the proposal “a long-term investment strategy’’ for the cap-and-trade revenue.
Gov. Jerry Brown's proposed fiscal year 2014-15 budget also includes a spending plan for an estimated $5 billion in cap-and-trade revenue. The governor's plan also would use some of the revenue to help finance the high-speed rail project and help fund water efficiency and transit projects.
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