Transit riders, housing advocates and environmental groups rallied at the state Capitol on Monday, warning that changes to California’s Cap-and-Invest program could reduce funding for public transit, affordable housing and clean-water projects by nearly $2 billion a year.
The coalition, joined by several Democratic lawmakers, wants the Legislature and Gov. Gavin Newsom to pass Senate Bill 1216 before the Legislature begins its final recess Aug. 31. The bill would stop the state from issuing a planned incentive for refineries and other manufacturers until several reviews are completed. State agencies would have to find that the incentive is consistent with California’s emissions targets, would lower retail gasoline prices, and would leave enough money for designated public programs.
The rally was organized by the Transbay Coalition, Streets for All, Housing California, Move California and several other transit and environmental groups. Speakers included state Sen. Jesse Arreguín, D-Oakland, state Sen. Dave Cortese, D-San Jose, state Sen. Catherine Blakespear, D-Encinitas, and state Sen. Scott Wiener, D-San Francisco. Assemblymembers Damon Connolly, D-San Rafael, and Mark González, D-Los Angeles, were also in attendance.
Greenhouse gas allowances
Cap-and-Invest requires major polluters to obtain permits, known as allowances, for releasing greenhouse gases — pollution that traps heat in the atmosphere and contributes to climate change. The state sells some allowances at auctions and uses the proceeds for projects intended to reduce pollution and help communities.
The California Air Resources Board, also known as CARB, adopted amendments to the program in May that are expected to take effect Sept. 1. Rally organizers said the changes could leave less auction money for transit, housing, safe drinking water and programs serving heavily polluted communities.
Organizers also object to CARB’s planned Manufacturing Decarbonization Incentive. Under the program, eligible manufacturers and refineries could receive additional emissions allowances for projects that replace polluting equipment or otherwise reduce greenhouse gas emissions.
The allowances carry market value and are intended to help companies finance the projects. CARB estimates that the incentive could provide companies with allowances worth about $4 billion in total.
CARB offered a different account of the funding changes.
“The Manufacturing Decarbonization Incentive is not in effect and has had no impact on auction proceeds,” CARB Communications Director Lindsay Buckley said in an email.
Buckley said the current shift in funding resulted from directing more allowances toward electricity-bill credits through the California Climate Credit.
Making cost-cutting a priority
At a Friday news conference, Newsom said reducing costs for consumers was a priority when officials revised Cap-and-Invest. CARB Chair Lauren Sanchez said lawmakers had directed the agency to prioritize affordability.
Sanchez also rejected claims that the amendments weakened the program. She said CARB removed 118 million allowances from its overall allowance budgets, reducing the number of emissions permits available and making the program’s emissions cap more stringent.
“We cannot leave people stranded at the side of the road. And that is what’s going to happen if we do not change course and prioritize transit, housing and clean air and climate in this budget.”
State Sen. Jesse Arreguín
Connolly called on legislative leaders to work with Newsom to restrict the manufacturing incentive and protect funding for public programs.
As for funding for transit, Arreguín said many Bay Area residents rely on BART and buses to reach work, school and other destinations.
“We cannot leave people stranded at the side of the road,” Arreguín said at the rally. “And that is what’s going to happen if we do not change course and prioritize transit, housing and clean air and climate in this budget.”
Organizers said more than 220 people had registered for the rally. Participants were scheduled to meet with lawmakers and legislative staff after the event.
