Cap-and-Trade Renewal Passes, But With Concerning Provisions

As has been widely reported, on July 18, the Legislature passed the climate bill AB 398 which extends the state’s cap-and-trade program through 2030. The extension was approved by a two-thirds majorities in both houses, a margin sought by Governor Brown to stave off potential constitutional challenges. Revenues from the cap-and-trade system are deposited into the Greenhouse Gas Reduction Fund, which in turn funds in part or in whole several programs that the National Partnership advocates for due to their ability to fund active transportation. This includes a portion of the Active Transportation Program, as well as critical grant programs for transit capital and affordable housing that can include active transportation in eligible projects. We are relieved that allocations to these programs will be extended along with the cap-and-trade system, as early negotiations indicated that legislators were considering ending those investments in favor of returning cap-and-trade proceeds to residents in the form of vouchers. Securing a two-thirds majority, however, required compromises that we fear may drastically weaken the state’s ability to reach its greenhouse gas emissions reductions targets, and exacerbate inequities and environmental injustice. Most problematic is the ban on local Air Resources Boards limiting or regulating polluting industries such as oil refineries in their districts. The extension of cap-and-trade does little to nothing to change the status quo in which such environmental hazards are disproportionately located in low income communities and communities of color.

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