Hundreds of millions of dollars from California’s auctions of carbon emission credits are being tapped by the Brown administration to help finance the $68 billion high-speed rail project.
The first-year installment, $250 million contained in the 2014-15 budget approved Sunday by the Legislature, will begin flowing to the bullet train beginning July 1. In subsequent years, a fourth of the auction money will go to the train. The budget requires the governor’s signature to take effect.
The auction program, which went into effect in January 2013, generated some $525 million the first year.
Dependent on state and federal funding, the proposed bullet train would link northern and southern California through the central valley, with the entire project to be completed by 2029. The project has run into a number of legal and political roadblocks, including GOP opposition from Rep. Kevin McCarthy, a Bakersfield Republican and a contender to become House Majority Leader, second in leadership only to House Speaker John Boehner.
Tapping the cap-and-trade funds for the bullet train drew cautious support from clean-air advocates.
“We prefer the investments in cleaner trucks, buses and cars, public transit, transit-oriented affordable housing, low-income energy assistance, and urban forestry,” said Bill Magavern of the Coalition for Clean Air. ” But HSR (high speed rail) does arguably further the goals of AB 32, because it will eventually reduce emissions from long-distance travel, and it has been in the AB 32 scoping plan since 2008.”
The auction program, which went into effect in January 2013, generated some $525 million the first year and total now about $850 million. It is likely to tally higher proceeds as the value of the emission credits – or “allowances” – increase in value. In cap-and-trade, the credits can be bought, sold or traded to allow companies that emit greenhouse gases to continue operating while they gradually ratchet down on their emissions. State law requires the global warming gases to be cut to 1990 levels within the next six years. The auctions were viewed as a better means of controlling greenhouse gases and avoiding market disruption than merely ordering companies unilaterally to cut their emissions.
The law requires that proceeds from the auctions further the goals of limiting greenhouse gases.