What will happen to $2 billion meant for California water, air, wildfire efforts?
The fate of roughly $2 billion annually that was intended to help reduce wildfire risk, promote clean water and build affordable housing, along with other efforts across California, is uncertain as the Legislature races to pass a state budget by Monday.
Recent changes to what used to be known as the state’s cap-and-trade program by the California Air Resources Board are behind that funding uncertainty.
The program, which is now called cap and invest, places an emissions limit on businesses in the state and then allows those companies to buy and sell permits to keep emitting carbon dioxide. Money from those sales has been dedicated to fund efforts aimed at reducing greenhouse gases. But the annual amount generated is now expected to be cut in half, according to the Legislative Analyst’s Office, which advises the Legislature on policy and fiscal matters.
Lindsay Buckley, a spokesperson for the air board, said in a statement the program has generated billions of dollars of revenue for greenhouse gas reduction efforts over the last decade and that the reduction of money that would go to those efforts in the future is in large part due an increased effort to reduce utility bills for Californians.
“The program was never designed to maximize auction revenue,” Buckley said.
Still, environmental groups are unhappy and in a recent letter to state budget leaders urged the Legislature to stop the air agency’s actions, saying that the greenhouse gas reduction programs at risk of losing funding “represent necessary and comprehensive investments that will ensure our communities can continue to reduce emissions and meet the future impacts of climate change as equitably as possible.”
Katie Valenzuela, a consultant to Communities for a Better Environment, one of the groups that signed onto the letter, said: “We cannot reach our climate targets without those programs in place.”
Part of their dissatisfaction is that the air board’s changes come less than a year after the Legislature altered how the gas emission reduction fund money was distributed. The lawmakers created a tiered system that meant programs on the top of the list would get funded before those on the bottom.
After the air board’s recent changes, the legislative analyst estimates the programs currently on the bottom of the tier — which include the Affordable Housing and Sustainable Communities Program, the Safe and Affordable Drinking Water Fund and Cal Fire efforts to improve forest health and reduce fire risk — could receive no money.
That hasn’t sat well with legislators. Senators, in a recent budget proposal, called for no distribution of greenhouse gas reduction money at all without a guarantee that the fund receive at least $5.7 billion and that no programs would receive reductions in money over the next two fiscal years.
During a hearing late last month, state Sen. Eloise Reyes, D-Colton, who chairs a Senate budget subcommittee on the environment said: “A deal is a deal. If the very basis on which we negotiated extension of this program last year has vastly shifted, we need to revisit the GGRF funding framework and ensure legislative priorities are prioritized.”
Gracyna Mohabir, a senior regulatory advocate for California Environmental Voters, said the Senate subcommittee “took really courageous action.” The Assembly also did not accept keeping the current funding structure, which could leave certain programs at risk.
It is unclear how Gov. Gavin Newsom, and his administration, view the pushback. Spokesperson Anthony Martinez did not address it directly, in response to an emailed question, but defended the changes to the cap-and-invest program.
“That is not a retreat from climate leadership,” Martinez said. “It’s how California keeps leading while the federal government is retreating.”
