CARB Investment Plan Workshop

On Tuesday, February 19, 2013, the first of three CA Air Resources Board (CARB) workshops to discuss the development of an auction proceeds Investment Plan (Plan) was held in Fresno, CA. A second workshop was held Monday, February 25, 2013 in Sacramento. The workshops are designed to solicit public input regarding the development of the first Plan for use of the auction monies collected from the sale of allowances in the AB 32 Cap-and-Trade Auctions.

A draft release of the Plan is expected by late April 2013 to be followed by CARB workshop hearings tentatively scheduled for April 24 & 25. The Department of Finance, legislatively tasked with developing the plan under AB 1532 (Perez), will then submit the final plan to the Legislature in May 2013 for final approval. Expectations are that the governor will sign the Plan in June 2013. Funding will be appropriated to state agencies by the Legislature and governor through the annual Budget Act, consistent with the Plan. According to state representatives, initial use of the auction funds will be directed toward the state budget and used to fund existing programs that meet AB 32 limitations on the use of funds. In the future, expenditure of the auction funds will be used to fund new qualifying programs.

CLFP attended both the Fresno and Sacramento workshops. CLFP was the only industrial stakeholder to make a presentation at either event. Though billed as a "workshop" these events are actually "listening tours" at which a number of state department representatives, eligible for auction money for the development of programs, took suggestions from the public. The panel included senior representatives from Governor Brown’s Office, Department of Finance, the Energy Commission, Cal EPA the State Department of Transportation and Housing, the Water Board with Chair Mary Nichols herself representing CARB.

The majority of the three-hour workshop was dedicated to public testimony from a variety of low-income, renewable, and county advocates seeking subsidies pursuant to SB 535 (De Leon) or SB 375 (Steinberg). SB 535 requires that specified percentages of auction proceeds be dedicated to low-income or "disadvantaged" communities. The Legislature has directed that 25 percent of all auction proceeds must be directed toward low-income or disadvantaged communities. In addition, 10 percent of the 25 percent must be directly invested in low-income communities. SB 375 (The Sustainable Communities and Climate Protection Act of 2008) requires CARB to develop regional greenhouse gas emission reduction targets for 2020 and 2035 for each region covered by one of the state's 18 metropolitan planning organizations (MPOs).

In addition to CLFP, other representative groups speaking included:

American Lung Association

City of Visalia

Mayor of Madera

The Audubon Society

Environmental Defense Fund (EDF) and Natural Resources Defense Council (NRDC)

Health Officer for Fresno County

California Rural Legal Assistance (CRLA)

John Diener of Red Rock Ranch

Southern California Gas Company

League of California Cities

Tree Fresno

American Farmland Trust

In all, nearly 40 speakers provided their arguments for funding at the Fresno event. At Sacramento, 90 speakers made their pitch. Due to the large number of speakers, CARB limited each speaker to three minutes (one minute in Sacramento) in order to prevent a marathon session.

At the workshops, CalEPA displayed a series of maps that denoted the "disadvantaged communities" as identified by the California Communities Environmental Health Screening Tool (CalEnviroScreen). According to the CalEPA, the CalEnviroScreen will be used by the Environmental Justice (EJ) division of CalEPA to gather existing environmental, health and socio-economic data to compare the cumulative impacts of environmental pollution on the state’s communities. Food processors are affected as the CalEnviroScreen highlights the Hwy 99 corridor which includes most of the state’s food processing facilities.

Due to time constraints placed on speakers, CLFP presented three items for consideration by the panel:

Auction proceeds should be exclusively available to regulated entities for the compliance period in which they were collected. Any remaining funds may be released in a subsequent compliance period for subsidizing or investment in non-regulated, non- industry projects.

The Plan should provide for the creation of a steering/advisory committee or oversight board with significant regulated industry representation. Food processors must have a seat at the table.

The Plan should provide for allowance buy back by the steering/advisory committee to aid in cost controls and ensure available reserve market credits for regulated entities.

CLFP will be submitting more detailed comments to CARB on important aspects of the Plan.

Other recommendations/requests for funding consideration presented by the audience included:

Investments in Active Transportation Infrastructure (bike paths/walking lanes)

Investments in van pooling and ride share programs

Installation of renewables on state facilities

Investment in natural gas infrastructure and support for transition to compressed natural gas (CNG) as major transportation fuel

Support for electric vehicle development through funding of infrastructure for electrical recharging stations throughout CA

Grant programs and low interest loan programs for cities to use in smart infill development

Increased funding for sustainability research through UCs.

Call to increase the tonnage on trucks in Ag and rural areas to 105,000 lbs on nine axles to cut down on trips in and out of those areas

Investments in urban forestation

State water project investment aimed at reducing water transportation costs.

Farm land preservation

Fund the Conservation Ag Systems Innovation Center programs to get farmers to utilize conservation measures

Fund CEQA studies for growth in rural communities. Create a $10 million prize to support carbon reduction innovation

Article contributed by John Larrea, Government Affairs Director