The state\u2019s higher-than-expected tax revenue tallied yesterday was good news for lawmakers but questions about how much the California Air Resources Board\u2019s delayed carbon cap-and-trade auction may reduce the state deficit is a big unknown, admitted Senate President pro Tem Darrell Steinberg (D-Sacramento). \u201cHow much value will it bring in? I don\u2019t know,\u201d he told Current. A major factor in revenue projections in the upcoming state budget is whether income would be ratcheted down after the Air Board\u2019s postponement of its first auction (Current, March 30). The Air Board instituted a three-month delay--from August to November--of the first carbon auction under AB 32, the state\u2019s greenhouse gas reduction law. Gov. Jerry Brown factored the auction\u2019s revenues into the initial 2012-13 budget blueprint. He estimated $1 billion in annual revenue from a carbon auction. \u201cIs it a good number? Is it too low?\u201d Steinberg pondered April 19. The Legislative Analyst\u2019s Office estimated earlier this year that the Air Board auction would reap between $600 million and $3 billion a year. Not only are the carbon market revenue projections unknown--given it is a new market and that European carbon prices continue to fall--but also murky is the political question of how the revenue is to be spent. There are currently six bills addressing the allocation of the cap-and-trade revenue. They range from Sen. Fran Pavley\u2019s (D-Agoura Hills) SB 1572, which states only that the money produced by an auction is to further the purposes of the state\u2019s greenhouse gas reduction law, to AB 1532 by Assembly Speaker John Pérez (D-Los Angeles). His measure specifies that the Air Board is to develop a three-year investment plan that identifies expenditures that are to be appropriated by the Legislature. The plan, the first one due next April, is to direct funds towards greenhouse gas reduction measures, creating jobs, and improving air quality. Many expect the Pérez bill to be the successful allocation vehicle. AB 1532, amended April 17, also directs the governor and Department of Finance to submit proposed revenue expenditures. The bill is scheduled for an April 23 hearing in the Assembly Natural Resources Committee.* * * * * As the Air Board lowers the bar in its low carbon fuels contest, the more contestants limbo down the more emission reduction credits they get to sell for a profit to the oil industry. The industry needs those credits to offset carbon released from burning its products. As the prime providers of natural gas and electricity for the state\u2019s growing clean-fueled vehicle fleet, utilities are the presumptive winners. That\u2019s got California Public Utilities Commission regulators busy figuring out what they should do with their prize money. CPUC referees face plenty of differing ideas about how to best put the cash to work. Sempra natural gas utilities last month suggested sharing the proceeds to help natural gas vehicle owners with the cost of installing fueling equipment at their homes and businesses (Current, April 6, 2012). Electric utilities proposed using their prize money to provide rate relief to electric vehicle owners. Environmental groups want the money used for a variety of purposes that subsidize and publicize the glory of electric cars and other clean-fueled vehicles. But like a skunk at the Luau, the Division of Ratepayer Advocates April 6 told the CPUC that those who can\u2019t afford to join in the festivities--that is, can\u2019t afford electric vehicles--shouldn\u2019t be foresaken. DRA policy advisor Cheryl Cox suggested that 90 percent of utility low carbon limbo prize money be rebated to all ratepayers because they are going to face higher electricity costs due to the state\u2019s climate change law. DRA suggested the other 10 percent of the cash be used to help establish financing mechanisms that make it affordable for residents and businesses to invest in energy efficiency improvements on their premises. A decision is not due until October. * * * * * In a report that cuts to the core of California\u2019s economy, Greenpeace April 17 said that increased reliance on cloud computing is driving up use of fossil fuel to power data centers, some of which alone consume as much power as 180,000 homes. Data centers, according to Greenpeace, are responsible for 2 percent of worldwide greenhouse gas emissions. Some companies, like Yahoo and Google, are consciously trying to clean up the cloud, but others like Oracle are industry laggards. The solution, according to Greenpeace, lies in the policy arena. Policies that enable information technology giants to cut their carbon footprint allow them to: -Build large onsite renewable energy generating facilities at their data centers; -Directly enter power purchase agreements with renewable energy suppliers; -Invest directly in renewable energy supplies that feed the grid; and -Invest in offsetting power usage in surrounding communities by funding energy efficiency measures. All of these options are better than having the companies rely on purchasing renewable energy credits to offset their carbon footprints, according to the report.