Legislature Approves Greenhouse Gas Reduction Plan with Permanent Funding for Mass Transit

June 15, 2014

(Sacramento) – California’s Legislature today approved a long-term plan to reduce greenhouse gas emissions through strategic allocation of future revenue predicted under the state’s Cap and Trade program. The proposal, designed and championed by Senate leader Darrell Steinberg and the Senate Democratic Caucus, will direct 60 percent of future Cap and Trade revenue toward transit-oriented infrastructure and 40 percent to natural resources, low carbon transit and clean energy.

The Assembly and the Senate approved the proposal on a 53-23 and 22-12 vote respectively, with the plan now heading to California’s Governor for his consideration. Governor Edmund G. Brown Jr. signaled his support for the budget agreement in a statement of June 13, 2014.

“The single largest source of greenhouse gases in California comes from the transportation sector. With Californians are logging more vehicle miles annually than ever before, we’re on track to break the 400 billion miles barrier by 2020,” Senator Steinberg said. “Building new mass transit options near homes and commerce will dramatically reduce emissions and implementing this long-term strategy would be a huge victory for our environment, our economy, and the people of California.”

Under AB 32 of 2006, California created the nation’s first benchmark for greenhouse gas emission reductions and from it, the Cap-and-Trade program that allows companies to sell unused emissions to the biggest polluters. Cap and Trade has helped put California on course to meet its climate goals for 2020 but there is currently no long-term strategy to reinvest the revenues that could total between three and five-billion dollars every year.

“This package, including progress towards a state rail transit system, offers an historic investment opportunity for public transportation and our communities depending on enhanced and cleaner mobility options,” Joshua Shaw, Executive Director of the California Transit Association said. “Expanding and improving transit service will provide significant greenhouse gas emissions reductions and other co-benefits, especially in disadvantaged communities throughout the state, helping achieve the goals of AB 32 (Pavley), SB 535 (de León) and SB 375 (Steinberg).”

Beginning in 2015, the strategy seeks to make aggressive inroads against greenhouse gas emissions, which not only contribute to climate change but are responsible for localized ozone pollution. Six California cities make up the top ten of the nation’s worst ozone-polluted regions, according to a recent report by the American Lung Association. Another recent report by the environmental advocacy group Transform demonstrated that planning communities around transit, homes, and commerce is a powerful and durable greenhouse gas reduction strategy, directly reducing driving while creating a host of economic and social benefits.

"Senator Steinberg took tremendous leadership in laying out the long-term spending plan for Cap and Trade. There will be tens of thousands of people that will live in affordable homes near transit because of this year's budget deal,” said Shamus Roller, Executive Director of Housing California. “For those individuals and families it will mean less money spent on housing and transportation and more money spent on food, education and healthcare. Housing California truly appreciates the work Senator Steinberg has done to tackle climate change and improve the lives of working families."

“The Cap and Trade investment plan recognizes the ongoing importance of sustainable communities at the neighborhood, local and regional level. The ongoing investment in transit, housing, and neighborhood infrastructure will yield transforming changes that will revitalize communities across the state and reduce carbon emissions,” said Bill Higgins, Executive Director of the California Association of Councils of Governments. “We appreciate the leadership of Senator Steinberg; first in authoring SB 375, and now for his leadership in working with the Administration and Assembly to craft this plan. We now look forward to partnering with the state and the Strategic Growth Council to assure that the best projects are selected in a way that honors the plan’s commitment to disadvantaged communities. “

SUMMARY: A Long-Term Investment Strategy for Cap-and-Trade Revenue

1. Long Term Funding for Low Carbon Transportation, Energy, and Natural Resources (40%)

a. Low Carbon Transportation: Funding a comprehensive vision for cleaning up the state’s cars, trucks, buses, and freight movement to meet federally mandated clean air requirements and California’s long-term greenhouse gas reduction goals.

b. Energy: Energy efficiency and renewable programs for low-income and commercial/industrial users, projects for agricultural energy, green bank funding for both commercial scale technology deployment and clean tech innovation.

c. Natural resources and Waste Diversion: Urban forestry and parks in disadvantaged communities. Water efficiency infrastructure projects, forestry and landscape issues, wetland development, waste diversion and recycling.

2. A permanent source of funding for transit, affordable housing, and sustainable Communities (35%)

a. Transit (15%): Funds capital projects and operations for bus and rail transit, intercity rail, commuter rail

b. Housing (10%): Affordable housing in infill and transit-oriented development based on greenhouse gas performance criteria and level of service to low income residents.

c. Sustainable Communities (10%): Supports regional sustainable communities strategies including investments in affordable housing, transit-oriented development, land use planning, active transportation, high-density mixed use development, transportation efficiency and demand management projects.

3. A permanent source of funding for High Speed Rail (25%): Ongoing source for construction and operations.