Cap-and-trade loan in state budget deal irks environmentalists

by Jeremy B. White Originally appearing in Sacramento Bee Gov. Jerry Brown and California lawmakers have cleared the air by announcing a budget accord, but environmental groups are choking on a piece of the deal that would borrow half a billion dollars intended for programs to curtail greenhouse gases. California's fledgling cap-and-trade program auctioned off its first permits in November, following through on a landmark 2006 law, and has raised about $236 million to date, according to the Air Resources Board . Those proceeds are supposed to flow into programs to reduce emissions. But the governor wants to shift $500 million generated by the auctions into the general fund. Brown defended the move Tuesday at a news conference by saying "we don't think we're quite ready yet" to start allocating the money. "We're the most aggressive in the western hemisphere in terms of our clean energy goals," Brown said. That has drawn the ire of environmental groups and questions from lawmakers who worry the governor is undercutting the greenhouse gas law's intent, or at least unnecessarily delaying implementation. "It's a disappointing and shortsighted decision. It's bad for the health and economies of our most disadvantaged communities," said Bill Magavern , policy director at the Coalition for Clean Air , noting that areas in California -- particularly in the Central Valley -- have some of the worst air quality in the United States. Magavern also cited a statement from the Legislative Analyst's Office that, because the move constitutes a special fund loan, it would add to the "wall of debt" that Brown has committed himself to paying down. Annie Notthoff , the California director at the Natural Resources Defense Council , noted the loan's effects on related projects: "It's great to have a balanced budget on time in California, ... but I think it's penny wise and pound foolish to put off the investment in climate programs that can help save us money in the long run." While Sen. Jim Beall , D-San Jose, referred to the transfer as a "hold my nose and cast my vote" component of an otherwise promising budget blueprint, he seconded the governor's contention that the framework for spending the carbon auction revenue isn't yet in place. "I'm disappointed that we weren't able to start some of the programs, but they don't appear to be ready to start the programs," said Beall, adding that "the clock is ticking" to reach the 2006 bill's target of reducing emissions to 1990 levels by 2020. "The bread's not baked," Beall said. "It's still in the oven." That's not to say the state has made zero progress. California has already worked towards cutting down on greenhouse gases by imposing a ceiling on the amount companies can emit, and the new clean air initiatives would bolster that intent. "The cap that is the design feature included in the cap and trade program is what actually reduces greenhouse gas emissions, " said Tiffany Roberts , a senior analyst for energy and climate change at the Legislative Analyst's Office. "So anything we would have gotten in terms of using that $500 million is going to be in addition to what is achieved by that cap."

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Cap-and-trade loan in state budget deal irks environmentalists

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