Senate President Pro Tempore Darrell Steinberg (D-Sacramento) announced a proposed plan to create a permanent spending strategy for cap-and-trade revenue [PDF] that prioritizes investments in affordable transit-oriented housing, transit expansion, and CA High-Speed Rail. Unlike the Governor’s plan for this year’s budget, Senate Bill 1156 also proposes investments in “complete streets” and transit operations.
Calling the plan a “long-term investment strategy in greenhouse gas emissions,” Steinberg said he wanted to spark a “healthy debate” about how the state should spend the revenue collected via the state’s cap-and-trade system created under A.B. 32, California’s Global Warming Solutions Act.
“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,” Steinberg said in a press release.
Steinberg’s staff emphasized that the plan provides a permanent funding stream for affordable, transit-oriented housing and mass transit, which are key to reaching the goals of A.B. 32 yet lack stable sources of funding.
The proposal replaces a bill Steinber introduced in February to replace cap-and-trade with a carbon tax. Steinberg acknowledged that the carbon tax proposal was “not that popular.”
A.B. 32 requires California to reduce greenhouse gas emissions to 1990 levels by the year 2020, and calls for the California Air Resources Board to create a market system for helping achieve those reductions. In response, CARB created a cap on emissions from GHG producers and an auction system to allow those who don’t meet the cap to buy emission “credits” from those who do. This cap-and-trade system currently applies to the state’s manufacturing sector, and is scheduled to include fuel producers next year.
Meanwhile, the auctions are producing revenue, which by law must be spent on further reducing GHG emissions to help California reach A.B. 32’s the goals.
Steinberg’s proposal was well-received by transit advocates.