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Governor Calls on Legislature to Extend Cap and Trade

January 17, 2017

Gov. Jerry Brown’s $177.1 billion proposed budget for the 2017–18 fiscal year, released Jan. 10, calls on legislators to extend the state’s cap-and-trade program past 2020 and dangles disbursements from the Greenhouse Gas Reduction Fund as a reward.

Brown is asking Democrats in the Legislature to exercise their supermajority to get a two-thirds vote on a bill writing the cap-and-trade program into law and rendering a lawsuit against the program moot. If the bill is passed, he indicated he would expend $2.2 billion from the GGRF, which is financed by the cap-and-trade auction proceeds.

Brown proposes to allocate $363 million to CARB for low-carbon transportation projects. Although this is less than what the governor proposed last January, it’s equal to what was eventually allocated in the current budget bill. In addition, Brown proposes allocating $95 million to reducing short-lived climate pollutants, with some of that money going to the Department of Food and Agriculture’s dairy digester projects, and $142 million to the Transformative Climate Communities Program.

The governor’s proposed budget reflects a possible economic downturn as well as uncertainties about federal funding. It aims to “temper spending growth based on the lower revenue projections, rather than cut existing program levels.” With the state’s fiscal year beginning July 1, the proposed budget will be hotly negotiated in the coming months.

“Just as we were committed to supporting the extension of the Low Carbon Fuel Standard, the Coalition plans to be extremely involved in the fight to extend the cap-and-trade program,” said Coalition President Thomas Lawson. “We will also ensure that the NGV industry gets its fair share of any monies expended from the GGRF in 2017–18.”

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