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Cap-and-Trade Negotiations on Hold as Legislature Passes State Budget Bill

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June 20, 2016

State legislators last week passed a $122.5 billion budget bill for 2016–17, effective July 1. Gov. Jerry Brown is expected to sign off on the general budget, but negotiations continue on several issues that will be addressed in trailer bills, including how to spend cap-and-trade auction funds and extending AB 32.

The governor’s proposal to allocate $500 million to accelerate the transition to low-carbon vehicles remains in the budget, despite the disappointingly low revenue generated by the last cap-and-trade auction. How much of that Low Carbon Transportation and Fuels investment the state will direct toward incentives for purchasing heavy-duty natural gas trucks is still up for debate.

“The Legislature and the governor need to hear from all parties who care about clean air to ensure that the programs that California has started, such as offering truck incentives, continue. These are necessary to allow us to reach our climate goals in 2020 and beyond,” said Coalition President Thomas Lawson.

calbuget2Lawmakers could decide to delay spending accumulated cap-and-trade funds, as they did last year. Because proceeds from the last auction were $590 million less than the government expected, they may allocate just a fraction of the governor’s proposal—or nothing.

“It’s important to advocate for spending the cap-and-trade auction funds on low-carbon transportation projects in the coming year,” said Lawson. “Call, write, email, or fax your representatives and the governor to underscore the importance of extending AB 32 and the Low Carbon Fuel Standard program.”

The Legislature will begin hammering out the trailer bills this week, but, according to Lawson, they’ll start with the noncontroversial topics. He expects to be advocating for the $500 million in low-carbon transportation funds until almost the end of the legislative session.

Gov. Brown has until the end of June to sign the budget, but legislators can hash out the trailer bills until the session ends in September.

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Photos: Top, budget chairs Kevin de León, D-Los Angeles, and Mark Leno, D-San Francisco; below, Senate President Pro Tem Darrell Steinberg, D-Sacramento, right, receives congratulations from Sen. Kevin de León.

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