Democrats Have Lots of Ideas on Spending Cap-and-Trade Cash

Senate leader Kevin de León says cap-and-trade money can't be spent on highways.  (Max Whittaker/KQED)

Having money to spend isn't exactly a problem in Sacramento. But when there's cash, there are competing priorities -- as evidenced by the 2015 battle over where to spend cash from California's growing cap-and-trade fund.

At issue is more than $2 billion in revenue already raised from cap-and-trade auctions, money paid by California companies for credits to offset their greenhouse gas emissions.

Legislative Democrats agree the money needs to be spent in ways that reduce those emissions, but they have different ideas on what the best projects would look like. And it appears likely that whittling down their list of ideas before the legislative session ends on Sept. 11 will take some serious negotiations.

Gov. Jerry Brown included a list of priorities in his May budget proposal, including spending money on energy-efficiency upgrades to private and public buildings; handing out rebates for water-saving appliances; restoring wetlands and watersheds; and increasing waste diversion.

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Lawmakers have weighed in with a long list of their own. The California Taxpayers Association, which opposes the cap-and-trade program, tallied a whopping $4.8 billion cap-and-trade wish list from lawmakers.

Some Democrats want to use cap-and-trade money for public transit needs.
Some Democrats want to use cap-and-trade money for public transit needs. (Sara Bloomberg/KQED)

Among the proposals: A group of Bay Area and Los Angeles Democrats wants to spend an additional $100 million each year from the cap-and-trade fund on public transit improvements.

Assemblyman David Chiu, D-San Francisco, said the proposal would benefit Californians from all socioeconomic backgrounds.

"The parameters of the cap-and-trade program were to use those revenues for things that will directly reduce greenhouse gases," Chiu said. "We know that 40 percent of our emissions are coming from the millions of cars we have on our streets. And thinking about ways to be creative in supporting transportation modes that millions of California use to get more cars off the roads and reduce our gas emissions and reduce congestion -- all of that makes a lot of sense."

Chiu and his allies aren't the only ones with ideas. Other proposals run the gamut: Building sustainable and affordable housing; reducing wildfire emissions; creating more open space; and even making ports more energy efficient.

Wildfires release greenhouse gas emissions into the air.
Wildfires release greenhouse gas emissions into the air. ( Justin Sullivan/Getty Images)

One issue that has risen to the forefront is how much money should go to disadvantaged communities that have taken the brunt of pollution -- and how to define such communities.

Assemblywoman Autumn Burke, D-Los Angeles, represents a region that includes wealthier communities like Marina Del Rey, and more working-class enclaves, such as Inglewood. She says the state's current formula for defining "disadvantaged" may not capture some deserving communities.

"I still think the definition of a disadvantaged community needs to be worked at with a finer-tooth comb," she said. And, she added, many of the environmentally-friendly incentives and programs offered to California residents in the past -- such as fuel-efficient car subsidies and solar rebates -- have mainly benefited the wealthy.

"I just want to see equality," Burke said. "I have a district that’s diverse, not just racially but economically, and I just want to see parity -- I want to see the disadvantaged portions of my community have access to funds and have clean air, just like the western portion of my district."

Republicans have priorities of their own for the money. State Sen. Bob Huff, R-San Dimas, wants to use  about $1.9 billion of the cap-and-trade funding to fix the state's roads and highways. Earlier this summer, the governor called a special session aimed at finding ways to fix the state's crumbling infrastructure.

“This transportation crisis requires that we look at everything,” said Huff.

Huff's bill will be heard in a Senate committee Tuesday. But it's not expected to go far; Democrats have scoffed at the idea that cap-and-trade money could legally be used to fix roads used by polluting cars.

"The proposal is  not a real proposal," said Senate President pro Tem Kevin de León, D-Los Angeles. "You'd have litigation almost immediately because there’s no nexus with regards to carbon reduction of (greenhouse gas) and other criteria pollutants and filling a pothole. So it’s not a serious proposal.”

Democrats can go it alone: They need only a simple majority in each house of the Legislature to approve a plan to spend the money. But Democratic lawmakers' priorities are as varied as their districts, and they will also need to bring the governor on board with any final plan. And if they want to do it in 2015, they don't have much time.