California’s cap-and-trade program is under scrutiny from state lawmakers who are concerned revenue collected from the program isn’t finding its way to disadvantaged communities.
The program, signed into law by Governor Arnold Schwarzenegger in 2006 as part of California s landmark environmental bill AB 32, is supposed to help lower harmful greenhouse gas (GHG) emissions in California to 1990 levels by the year 2020.
Assemblyman Adam Gray (D-Merced), who sought a state audit of cap-and-trade in 2014, says he wants to evaluate the efficiency of the program.
“Until we get some real clear answers on what metrics we’re using in advance of spending money, and if it’s going to be effective, it’s going to be hard to convince a lot of folks in our region and other parts of the California legislature to continue to just kind of blindly hand over pots of money,” said Gray.
Supporters of the initiative forecasted the law would benefit California by combatting harmful greenhouse gases, while creating jobs and generating revenue for some of the state’s poorest communities. Under cap-and-trade, the state sets limits on emission levels, then holds quarterly auctions for high-end polluters who are free to buy and sell GHG allowances on the open market.
The first auction took place in November 2012 where CARB raised $289 million. That same year, lawmakers introduced legislation requiring 25 percent of funds collected from cap-and-trade be allocated to projects within disadvantaged communities, with at least 10 percent being spent within those communities.
Senate President Pro-tem Kevin De Leon, who introduced the legislation, says the bill wasn’t perfect, but wants to ensure climate change dollars will go to the most polluted communities.
“I introduced SB 535 in 2011 to ensure our disproportionately impacted communities benefit from investments in clean energy,” he said. “These investments will bring energy savings, quality jobs, and environmental benefits where they are needed most.”
CalEPA identifies disadvantaged communities as areas disproportionately affected by environmental pollution with concentrations of low-income residents. Cities include, Los Angeles, Fresno, San Joaquin Valley, Riverside, and San Bernardino, all regions with large concentrations of African-Americans.
The state’s 2014-15 budget earmarked $272 million for CARB to use in communities according to criteria established by several implementing agencies. Projects include new and expanded local rail and bus transit systems, affordable housing, high-speed rail and low-carbon transportation, including passenger zero-emission vehicle rebates.
According to CARB’s 2016 annual report, $2.6 billion was appropriated between March 2014 and December 2015 to implement emission reduction programs. CARB says it can account for $912 million in implemented funds, $850 million of which has been allocated to high-speed rail.
Responding to lawmaker concerns, CARB said there are metrics it uses to measure GHG levels and it is generating data on its programs.
“Although dollars per ton of GHG is one metric, it’s a multiplicity of metrics for individual measures,” said Richard Correy, executive officer of CARB. “We go to cleaner vehicles and it reduces exposure near ports. The ports have made tremendous progress to exposures down 70 to 80 percent, acknowledging that as part of the benefits and investments is important.”
Assemblymember Jimmy Gomez (D-Los Angeles), who introduced legislation requiring more cap-and-trade revenue be spent in disadvantaged communities, remained skeptical.
“There’s a feeling that a lot of our environmental laws are based on a trickle-down environmental policy,” Gomez said. “What we’re trying to do is change that by shifting how the programs are structured so [low-income Californians] can see the direct benefits of cap-and-trade.”
Assemblymember Jim Frazier (D-Oakley) praised CARB for their work on the ports, but called for more transparency on how taxpayer dollars will be spent, including the benefits of each program.
“We have to be able to explain to our constituents that they’re getting value,” said the chair of the Assembly Transportation committee. “I’ve got to know how much it costs and if it’s performing well. We can actually partner in saying, let’s go somewhere else on this one. Let’s double up on another program.”
