XPost: ca.environment, alt.politics.democrats, alt.fan.rush-limbaugh
XPost: sac.politics, alt.politics.economics

https://smdp.com/news/environment/should-californias-climate-budget-pay- for-high-speed-rail-and-firefighters-newsoms-new-plan-triggers-fiery-
debate/

California Gov. Gavin Newsom wants to tap at least $2.5 billion from the state’s climate fund to pay for state firefighting crews and the long-
troubled high-speed rail project.

In his budget proposal unveiled last week, Newsom announced that he is
seeking to extend the state’s landmark cap and trade program, which is
funded by credits bought and sold by major polluters, through 2045. But
the allocation of the money is already triggering a fervent debate among
state lawmakers.

Large polluters, such as oil refineries and power plants, pay for their greenhouse gases through a market system of auctioned credits called cap
and trade. Over the past 11 years, almost $13 billion from cap and trade auctions has already been spent on electric vehicles, public transit,
clean energy and other projects to reduce greenhouse gases and adapt to
climate change.

The governor’s new plan would commit $1.54 billion of the 2025-26 climate funds, and more in later years, to pay for Cal Fire’s “fire prevention,
fire control, and resource management activities.” That would amount to
more than a third of the state fire agency’s $4.47 billion budget,
according to the governor’s proposed budget. Wildfires have grown more
extreme because of climate change, straining Cal Fire’s resources.

In addition, through 2045, the governor’s plan would earmark at least $1 billion a year of the climate funds to the California high-speed rail
project, which aims to connect Los Angeles to San Francisco. The project,
which has been beset with construction delays, cost overruns and fights
about the route for years, was allocated $407 million of cap and trade
money last year.

Combined, the firefighting and high speed rail costs could consume more
than half of the projected $4.8 billion that cap and trade would provide
in the next fiscal year.

Newsom’s proposal to extend California’s cap-and-trade program, which
expires in 2030, for 15 more years could spark one of the year’s most consequential fights in the Legislature over climate change.

The push to extend the program is bound to be contentious, particularly if Newsom seeks a two-thirds vote of the Legislature, as various groups
jostle for a slice of the funding. Watchdogs, policy analysts and
environmental justice advocates also have raised concerns about how the
program is structured and who benefits the most.

Many legislators have already expressed concerns about the use of climate
funds to pay for firefighters and high speed rail. Some lawmakers and
other critics and analysts say diverting the money would mean cutting
other priorities, such as the transition to electric vehicles.

“You’re going to have some tough choices,” said Helen Kerstein, who tracks
the cap and trade program for the nonpartisan Legislative Analyst’s
Office. “You can’t add $1.5 billion — and growing — and not take anything
away, at least in the near term, given current projections.”

Assemblymember Lori Wilson, a Democrat from Suisun City, said she is
concerned that using climate fund money to pay for Cal Fire’s activities
could crowd out spending that has already been promised to reduce
emissions from cars and trucks and fund mass transit.

Transportation “is the largest single source, but the hardest to
decarbonize,” Wilson said. “And the whole point is to transition, which is
why those investments (are) necessary.”

A coalition of environmental justice groups said the governor, by using so
much money for high speed rail and general fund expenses, is leaving
inadequate money “for extreme heat impacts, affordable housing, clean
drinking water, and other critical environmental programs that reduce greenhouse gasses and clean up contaminated air, water and soil that pose direct threats to public health.”

The cap and trade proposal came as California faces a $12 billion budget deficit. By proposing the cap and trade extension as an addition to the
budget bill, which moves through the legislative process faster than
standalone bills — Newsom could sidestep what might otherwise be a longer,
more contentious climate debate.

The move links the reauthorization of the program to broader budget negotiations — boosting the governor’s leverage but reducing legislative oversight and public input.

Assemblymember Cottie Petrie-Norris, a Democrat from Irvine, protested the governor’s moves at a committee meeting on Thursday.

“This is probably the most challenging budget situation the state of
California has faced in at least the last seventeen years. We are going to
be grappling with some very, very tough choices, very tough decisions,”
she said. “Trying to then layer in, and shoehorn in, the reauthorization
of our landmark climate cap and trade — cap and invest — program seems
kind of insane to me.”

Newsom’s proposed extension of the program — which he wants to rename “cap
and invest” — comes after President Donald Trump attacked it in an
executive order targeting blue-state climate initiatives. The order
singled out California’s cap and trade program as forcing businesses to
meet “radical requirements.”

Newsom framed his cap and trade proposal in the resistance language
reminiscent of clashes during the first Trump era. “California won’t bend
the knee to a federal administration hellbent on making America polluted again,” Newsom said in a statement.

But some state lawmakers are already questioning key parts of the plan. Assemblymember Steve Bennett, a Democrat from Oxnard, questioned during
the hearing Thursday whether revenues from cap and trade could
realistically cover all of Newsom’s promises.

“So, in a sense you’re proposing more money than we’re saying we have?” Bennett, chair of the committee, asked Newsom administration officials
from the state Department of Finance.

Bennett was also openly skeptical of continuing to use cap and trade money
to pay for the high-speed rail project, which has ballooned to a cost of
$128 billion. “We need to… make sure we don’t have a train to nowhere,” he said.

Through 2030, 25% of all cap and trade money is earmarked for high speed
rail under state law. A bill in the Assembly authored by a Republican that would eliminate that earmark has not moved forward.

Newsom said at his budget briefing Wednesday that his “commitment (to high speed rail) is firm.”

“Real tracks are being laid…so I want to get it done,” Newsom said.
“That’s our commitment. That’s why it’s still reflected in the cap and
trade extension.”

Several other lawmakers also raised concerns about the governor’s budget
math and were skeptical of relying on a funding stream that is supposed to shrink over time as California reduces its carbon emissions.

California Transit Association Executive Director Michael Pimentel said
the governor’s plan was “silent on the importance of continued climate investment” into mass transit.

“To combat climate change, improve air quality, and address the
affordability crisis faced by everyday Californians, state leaders must
stand up to protect and maintain continued investment in clean, efficient,
and affordable public transit projects and services,” he said.

A contentious history
California launched its cap-and-trade program in 2013 as a key tool for slashing greenhouse gas emissions. Created under the 2006 Global Warming Solutions Act, the system set a declining cap on emissions from major
polluters and allowed businesses to buy and sell permits, creating a
market for emissions.

By 2017, then-Gov. Jerry Brown faced a critical inflection point. The
program was set to expire in 2020, and Brown sought to extend it through
2030. But the path to reauthorization was anything but smooth.

The political lift came in securing a two-thirds vote in the Legislature,
the threshold that would help inoculate the program from legal attacks,
given that California voters expanded the definition of a tax in 2010.

That supermajority required bipartisan support, and Brown courted moderate Republicans with concessions: tax breaks for manufacturers, fee waivers
for rural residents and spending assurances.

Newsom’s proposal would maintain many of the program’s most controversial provisions. Those include free emission permits for the oil and gas
industry, a price ceiling mechanism and the use of carbon offsets, which
have drawn criticism over concerns about their effectiveness. The
governor’s proposal leaves most of the details up to the discretion of the
Air Resources Board, which oversees the cap and trade program.

One key issue is the number of free allowances to industry, including the
oil and gas industry. Newsom’s proposal could extend many of those
giveaways through 2045, said climate expert Danny Cullenward, vice chair
of an independent advisory cap and trade committee.

Cullenward told CalMatters that the market will likely begin shifting from
a surplus of pollution permits to a scarcity. That will raise emissions reductions and state revenue, but also potentially increase consumer
costs, with key decisions left to the Air Resources Board.

“It’ll bring in more money to the state, but it’ll also have higher
consumer price impacts,” Cullenward said. “That’s going to be a key
issue.”

The cap and trade debate is unfolding amid growing concern over
affordability in California — a theme running through nearly every aspect
of the state’s climate policy. A new report from the Legislative Analyst’s Office raised questions about how much the program could cost
Californians. For instance, the cap and trade program could add 74 cents
to the cost of gasoline if credits rise to their highest levels, amounting
to about an additional $700 a year for the average California household,
the report said.

Of the $12.8 billion spent so far, nearly $9.2 billion has been invested
in projects that benefit disadvantaged communities that are designated as
a priority, according to the air board.

But environmental justice advocates have long criticized the program for failing to reduce local pollution in those communities, which often bear
the cost of higher gasoline prices, too. Because cap and trade allows
companies to comply with greenhouse gas limits by buying credits, they can continue operating in low-income neighborhoods without reducing emissions there.

Advocacy groups have asked the Legislature to reject a plan similar to the governor’s that would largely leave the program unchanged.

“Our communities, who bear the disproportionate burden of some of the
worst air quality in the state, and the nation, are also predominantly communities of color,” Connie Cho, senior policy advisor for the Asian
Pacific Environmental Network, said at a state Senate hearing earlier this month.

“We believe it is not only possible, but absolutely necessary, to achieve
and balance all three: climate, health equity and affordability through
the cap and trade program as the cost of living rises to a fever pitch.”


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Under Barack Obama's leadership, the United States of America became the
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