California Carbon Revenue Goes to Transportation
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California governor Jerry Brown (D) today proposed spending about $600mn of carbon allowance auction revenue on transportation programs as part of his 2015-16 budget plan.
The funding would represent the majority of the expected $1bn in revenues under the state's greenhouse gas cap-and-trade program.
Most of the transportation funding, $250mn, would go to the state's $68bn high-speed rail project, which held its official ground-breaking ceremony this week. That is in line with an agreement Brown reached with lawmakers last year to earmark one-quarter of future cap-and-trade revenue for the project.
Other major recipients of funding would be the Air Resources Board's low-carbon transportation programs, which would get $200mn and transit and intercity rail under the state Department of Transportation, which would get $100mn.
Brown's proposal also earmarks $200mn in cap-and-trade revenue to sustainable development programs. The remaining $200mn would go to an assortment of energy and natural resource programs, such as energy efficiency upgrades and forestry.
The $1bn would be in addition to $870mn the state has raised from the nine quarterly auctions held to date. Most of the allowances are sold on behalf of utilities, which must use the revenue to benefit their customers, but a portion is sold directly by the state. At the November 2014 auction, the first jointly held by California and Quebec, about 11.5mn of the 33.9mn vintage 2014 and 2017 allowances sold were state-owned. Most of the state allowances, 9.3mn, were for 2017.
According to Brown's proposal, the state is on track to meet its target under AB 32, the state's climate law, to reduce emissions to 1990 levels by 2020. Brown plans to work with the legislature to develop a 2030 target that is "consistent with" achieving an 80pc reduction below 1990 levels by 2050, according to the budget plan.
The state constitution requires approval of a budget by 15 June.
News Release provided by:
Argus Media Ltd
