AB 32 (Pavley), the California Global Warming Solutions Act of 2006, established California as a global leader on reducing greenhouse gas (GHG) reductions. One element of California’s climate action strategy is the world’s first economy-wide cap on emissions and a market mechanism to put a price on carbon. The Governor’s 2014 -2015 budget proposes to use $850 million of Cap and Trade proceeds. With billions of dollars expected for the Fund in the near future, this revenue brings both the opportunity and the responsibility to make wise investments.
SB 535 (de Leόn) requires that the California Department of Finance allocate 25 percent of the money in the Greenhouse Gas Reduction Fund to projects that provide benefits to disadvantaged communities, and to allocate at least 10 percent to projects located in these communities. Cal-EPA developed the CalEnviroScreen to identify disadvantaged communities at a zip code level for funding allocation purposes.
AB 1532 (Pérez) mandated that the Department of Finance, in consultation with the Air Resources Board and other State agencies, develop a three-year investment plan. This was submitted to the Legislature in May, 2013 and creates a general roadmap for utilizing auction proceeds. Details and annual budget appropriations will be determined in the legislative and budgeting process each year.
AB 1532 also mandates that moneys [in the Greenhouse Gas Reduction Fund] must be used to facilitate the achievement of reductions of GHG emissions in this state and complementary goals including to maximize economic, environmental and public health benefits to the state. How this happens exactly is yet to be determined.