Cap-and-trade workshops just the beginning for new funding programs

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At the beach in August? Still time to weigh in on cap-and-trade guidelinesFor many Californians, August means sun, surf, and family vacations. But for those of us involved in figuring out how to best spend proceeds from the state’s cap-and-trade climate program, it was a very busy month.

During the final weeks of summer, the state held a flurry of public workshops to allow stakeholders a chance to craft the guidelines that will inform which projects and programs ultimately receive funding from cap-and-trade. The workshops were held by the agencies responsible for the administration and oversight of the three key programs that will distribute the bulk of cap-and-trade revenues: the Affordable Housing and Sustainable Communities, Low Carbon Transit Operations, and Transit and Intercity Rail Capital. State leaders have a short timeline to create final guidelines by the end of this year, so they can begin selecting – and funding – projects and programs by next spring.

Motivated by how important these guidelines are to keeping California an affordable and wonderful place to live, a diverse crowd of advocates and officials chose whiteboards over surfboards and came out to participate in the August workshops. At nine different sessions across the state, they shared their opinions and expertise on how to ensure that cap-and-trade proceeds are invested to make California cleaner, healthier, and affordable by maximizing greenhouse gas reductions and benefits to the economy, public health, and the environment.

Here’s a rundown of the three key programs, and what we think the agencies should prioritize in the guidelines and project selection process.

Affordable Housing and Sustainable Communities Program (AHSC)

In the June budget, state leaders set aside $130 million this year, and 20 percent of annual funds through 2020, to invest in projects that give Californians more housing and transportation options to support achievement of SB 375 climate protection goals. The Strategic Growth Council, which brings together various state agencies to promote sustainable communities, strong economies, and social equity, will be in charge of overseeing the program and will work with numerous other agencies to identify and select projects through a competitive process.

While the budget provided broad definitions of the types of projects and programs that are eligible for funding – including increasing transit ridership and biking and walking, protection of agricultural land and open space, and affordable homes – there is still a lot of work to be done over the coming months to ensure that investments in each of these areas achieve greenhouse gas (GHG) reductions and provide significant economic, environmental, and public health benefits to our communities. This is a challenging and unprecedented effort to fund projects that would integrate these different priorities and create healthy, affordable, and climate-friendly communities.

Another critical aspect of this program is a budget requirement that at least 50 percent of the program funds benefit disadvantaged communities. For a variety of reasons, households in these communities are the most vulnerable to the impacts of climate change. Historically, they have borne the cost of pollution disproportionately and lived in communities that are geographically isolated or lack access to economic opportunity.

The Transit and Intercity Rail Capital and Low Carbon Transit Operations Programs

The budget also sets aside $50 million this year, and 15 percent of annual cap-and-trade proceeds annually through 2020, for public transportation capital and operations. These programs are intended to support the expansion of world-class transit systems throughout the state that connect communities to jobs, services, housing, and other key destinations.

The Transit and Intercity Rail Capital Program will receive $25 million this year, and 10 percent each additional year, to be invested in rail and bus transit, regional commuter rail, and connections to transit. Projects in this program will also be selected on a competitive basis, and at least 25 percent of these funds must be designated to serve disadvantaged communities throughout the state.

However, expanded infrastructure alone will not be enough to achieve our GHG reduction goals. It will require efficient, frequent, and affordable public transportation. Five percent of annual cap-and-trade proceeds will be set aside to support increasing transit ridership and provide better transit options for communities through the Low Carbon Transit Operations Program. After the massive loss of operations funding during the recession this is a big step forward as we seek to provide households with high-quality transit service on which they can depend. Unlike the previous programs, the state will distribute funds for this program by formula to transit agencies.

What’s at stake in the next few months

TransForm and our allies in the Sustainable Communities for All Coalition are already working hard so that these programs provide more transportation and housing choices to Californians, especially low-income households and disadvantaged communities. The workshops marked a launching point to begin building support for some of the major issues that need to be addressed in each of these programs.

With final guidelines for investing cap-and-trade proceeds expected by the end of this year and project selection following soon after, we will urge state agencies to focus on the following goals in cap-and-trade investment decisions:

Enhancing affordability and protecting against displacement

As demonstrated by our report, Why creating and preserving affordable homes near transit is a highly effective climate protection strategy, protecting against displacement is critically needed to achieve GHG reductions, promote economic development, and reduce congestion.

While the vast majority of low-income households still own cars, their car ownership declines and their transit ridership increases at much higher rates than higher-income households when living near good public transportation. Ensuring that low-income households have access to affordable homes near transit is a proven way to maximize transit ridership and GHG reductions while reducing household costs for those who need it most.

Making room for transit passes

Free and discounted transit passes should be a consideration for funding from the AHSC and the transit programs. Currently, the budget language doesn’t refer to transit passes specifically as being eligible for funding but does make reference to “ridership programs.”

Throughout California, transit pass programs have demonstrated great potential in getting people out of their cars. San Francisco, San Diego, and numerous universities and community colleges throughout the state have established successful programs. In addition to reducing GHGs, transit passes provide affordable access to educational opportunities, jobs, healthcare, and other needed services. Cap-and-trade proceeds can help expand existing programs and establish new ones to reduce climate pollution now, and spur a whole new generation to ride and support transit expansion.

Making our streets safe for biking and walking

Often people must walk or bike on streets that are dangerous just to get to public transportation. This is a barrier that reduces transit ridership and discourages people from healthy and active transportation. Prioritizing and funding projects that incorporate bicycle and pedestrian infrastructure and programs will help maximize climate benefits and make our communities healthier and safer.

Ensuring geographic equity

Because the Transit and Intercity Rail Capital and AHSC programs will be administered by the state on a competitive basis, there is no guarantee that each region will receive an overall amount of funding that is in proportion with its population. Each region will need to achieve its AB 32 and SB 375 goals in order to reach our overall GHG reduction goals. In the absence of new federal or state funding for transit improvements, the cap-and-trade program will provide much-needed resources for public transportation throughout California. As the state draws up its guidelines, geographic equity should be a major consideration and goal in awarding funding to projects and programs.

The various state agencies in charge of these programs have stated that their goals are to release draft guidelines in October, and final guidelines by December. In the wake of these workshops, the state is seeking continued input to inform this process and they want to hear from YOU – so if you were among those at the beach this August, now’s the time to weigh in.

To learn more about this process and how you can provide input to the state contact Ryan Wiggins.

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TransForum is the blog of TransForm, California's leading transportation advocate. For more about our work, including ways you can take action and contribute, visit TransFormCA.org.