FutureStructure

California Governor's Budget Puts Rising Cap-and-Trade Money Toward Affordable Housing, Transit

Gov. Jerry Brown's budget proposes $3.1 billion in cap-and-trade spending, more than ever before.

by / January 7, 2016
(Douglas Adesko)

California’s cap-and-trade money keeps growing.

After pulling in $257.4 million in the program’s first year, the 2012-13 budget year, California Gov. Jerry Brown on Thursday, Jan. 7, put forward a 2016-17 budget that now includes $3.1 billion in cap-and-trade spending — including some left over from last year. Brown set aside large chunks of the money for many of the same uses as previous years:

  • $500 million to the Air Resources Board to provide incentives for zero-emission and hybrid vehicles.
  • $500 million for the High Speed Rail Authority, which is pushing to build a new train corridor running up and down the state.
  • $500 million for the Strategic Growth Council (SGC), $400 million of which will go toward a program meant to focus affordable housing development in areas that reduce the need for driving, and $100 million of which will go toward an initiative to support multifaceted greenhouse gas reduction efforts in the state’s most disadvantaged communities.
  • $600 million to the State Transportation Agency for its Transit and Intercity Rail Capital Program.
  • $100 million to Cal Recycle for waste diversion.
  • $60 million to the University of California and California State University systems to support renewable energy and energy efficiency projects.

The cap-and-trade program works by the state selling "allowances" for companies to emit greenhouse gases. Companies with leftover allowances can then sell their extras to companies that exceed their allowances.

The amount of $3.1 billion would be more spent from the program's proceeds than ever before.

Brown's funding allocations for affordable housing and transit-oriented development adhere to a theme the state is beginning to embrace more and more: reducing the need for people to drive personal vehicles on a regular basis. The idea behind the SGC’s Affordable Housing and Sustainable Communities Program is, per its website, to encourage “infill and compact” development of low-income housing. That means putting new low-income housing in places where it is either close to most of the things its residents need or close to public transportation that can get them there. The ultimate goal is to reduce a metric called “vehicle miles traveled” associated with those places.

But the state also has begun focusing on the opposite side of that equation — trying to bring destinations closer to the places people live, or at least closer to transit. Right now that’s taking the form of state officials beta testing a “smart location calculator” developed by the U.S. Environmental Protection Agency, which gives a “location efficiency” score for different locations. State officials are planning on using the tool in the short term to try to site state government infrastructure in places that are easier to get to for the people who travel there regularly. In the long term, it might be used in some way to encourage the private sector to do the same.

The overall focus on greenhouse gas pollution has been something of a rallying cry for Brown, who has ramped up his environmental efforts during the past couple of years. Brown was one of the original founders of the “Under 2 MOU,” a pledge among subnational government entities to try to reduce greenhouse gas emissions, and pushed through a major climate package, Senate Bill 350, toward the end of 2015. The bill called for doubling the percentage of power coming from renewable sources, as well as doubling building energy efficiency standards. Brown took that message to Paris during the 21st Conference of Parties, which saw the world join together in the signing of a legally binding climate pact for the first time.

“I set a goal for 2030 and that goal is extremely challenging,” Brown said during a press conference announcing his budget proposal on Thursday. “We’re [emitting] something like 460 million tons of greenhouse gases every year in California; we’re trying to get down around 265 million tons. How we get there is what I’m working on, and it’s not just budget. It’s changing a lot of different things in the residential, commercial, industrial and agricultural sectors.”

Ben Miller Staff Writer

Ben Miller is the business beat staff writer for Government Technology. His reporting experience includes breaking news, business, community features and technical subjects. He holds a Bachelor’s degree in journalism from the Reynolds School of Journalism at the University of Nevada, Reno, and lives in Sacramento, Calif.