SAN FRANCISCO -- For months, hundreds of community members and advocates participated in workshops throughout California to figure out how to spend millions generated through the state’s cap-and-trade program. Just when the groups finally hammered out an investment plan that would start to pump money back to communities, Gov. Brown proposed Tuesday to divert that money to the general fund.
Part of Brown’s May budget revise, advocates say the move is a setback for communities facing the greatest health threats from climate change.
“Communities of color were the ones that defeated Prop 23 [the so-called Dirty Energy Prop], carried margins electing Gov. Brown. This is the wrong time to not be making good on the promise of improving environment, health and job creation in these communities,” said Ryan Young, legal counsel for the Greenlining Institute, which sponsored legislation (SB 535) that directs a quarter of the cap-and-trade auction proceeds to disadvantaged communities.
The governor is proposing a one-time loan of $500 million from a greenhouse gas reduction (GHG) fund – where auction money is deposited – to the general fund. The figure is the projected auction revenues for 2012 to 2014. So far, the first two auctions – one last November and one in February – generated about $140 million.
Gov. Brown’s office deferred questions to the state Dept. of Finance and the California Environmental Protection Agency (CalEPA).
In a statement, the Dept. of Finance called the loan “appropriate” and “fiscally prudent,” saying the agencies need more time “to design and develop their programs to ensure that … [they] maximize long term greenhouse gas reductions.”
“We felt it was premature,” said CalEPA spokesperson Jim Marxen. “We don’t know how much money we’re going to have. [The $500 million] is a projection … plus three additional auctions. As [the money] comes into [the GHG reduction fund] it will be loaned to the general fund.”
He added that the Air Resources Board (ARB), the agency tasked with implementing A.B. 32, will update the “Scoping Plan” by the end of the year.
“We can make a better decision with that info,” he said.
Mari Rose Taruc, state organizing director for the Asian Pacific Environmental Network (APEN), said she was “heavily disappointed” by the governor’s move.
“I don’t know what more vetting they could have done,” said Taruc, referring to the ARB’s process to craft an investment plan. “[They held] three workshops across the state … multiple hearings on this issue. [There were] lots of opportunities for public comment. It doesn’t make sense.”
APEN advocates on behalf of Southeast Asians and other residents in Richmond, Calif. who live near the Chevron oil refinery and face health impacts from pollution. Taruc said community members were very “excited about” and engaged in the ARB’s workshops to craft an investment plan, because they want healthy and prosperous communities.
She said the governor is diverting funds that are specifically intended to address climate change and “toward pollution reduction.” The impact of those funds would be diluted in the general fund, she said.
The state says it will pay back the loan with interest, but has not specified when it would do so.
“There were some win-win programs [in the investment plan],” said Young, the lawyer for the Greenlining Institute, including “low income energy efficiency…[and] restoring transit options for low income communities.”
Young said the governor’s decision isn’t necessary, pointing to the state’s budget surplus of $2.8 billion this fiscal year, and he called it “the wrong move.”
“We want to see tangible benefits starting now when the program is starting off. It’s precedent setting to do that,” he said. “Buy loaning these monies out, it really shortchanges these communities.”