Investing Cap-and-Trade Revenue in California Communities

Equity leaders across the state are preparing for an opportunity to allot greater benefits from cap-and-trade revenues for investment in California’s disadvantaged communities. These revenues, generated by quarterly auctions held by the Air Resources Board, are deposited into the Greenhouse Gas Reduction Fund with the goal of reducing California’s greenhouse gas emissions to 1990 levels by the year 2020.

The 2014 state budget allocated $130 million of the Greenhouse Gas Reduction Fund to the Strategic Growth Council to develop and administer the Affordable Housing and Sustainable Communities (AHSC) program. Additionally, SB 862, accompanying legislation recently signed into law, requires that 50 percent of AHSC funds — $65 million this year—be utilized to provide housing opportunities for lower-income households.

Over the next few months, the Strategic Growth Council will refine the Affordable Housing and Sustainable Communities program. To maximize the program’s equity potential, community leaders are urging the Council to establish a robust grant review process, solicit community feedback in a meaningful and deliberate way, and provide technical assistance to underresourced applicants to help develop high-quality grant proposals. Grant proposal support is critical, since disadvantaged communities often lack the experience, resources, and capacity to submit competitive proposals despite overwhelming needs.

Equity advocates have also recommended that the Council prioritize projects that meet multiple needs of disadvantaged communities, consider the specific needs of rural communities, and require all affordable housing projects to include provisions to prevent displacement. Other recommended guidelines for grant proposals include rewarding jurisdictions that already have policies to maximize greenhouse gas reductions or co-benefit policies, such as those that target hiring for disadvantaged residents.

In addition to the Affordable Housing and Sustainable Communities program, state and local agencies must make significant Greenhouse Gas Reduction Fund investments in “disadvantaged communities.” The Air Resources Board is currently holding public workshops to help finalize criteria to help define a “disadvantaged community.” The California Environmental Protection Agency has also developed CalEnviroScreen, a screening tool that identifies disadvantage based on 19 environmental and demographic indicators. Some equity coalitions, concerned that CalEnviroScreen does not qualify certain marginalized communities as “disadvantaged,” are developing alternative tools and measures.

Click here to read Public Advocates’ primer on the Greenhouse Gas Reduction Fund.

Click here for Strategic Growth Council and Air Resources Board meeting dates.

>>>Read the rest of the California Equity Quarterly Summer 2014 issue.