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June 6, 2013
Editorial: State should use carbon funds to cut emissions

California_Greenhouse_Gas_Tanker.jpg

(June 6 -- By the Editorial Board)

Voters have sent a clear message on California's leadership role in reducing energy emissions and costs.

By a 22-point margin, voters in 2010 rejected an oil industry-led voter initiative that sought to roll back implementation of the landmark Assembly Bill 32, the California Global Warming Solutions Act of 2006 that would reduce greenhouse gas emissions to 1990 levels by 2020. The money from four cap-and-trade auctions a year - February, May, August and November - is supposed to go into the Greenhouse Gas Reduction Fund. The first three auctions have raised $256.9 million, ready to be distributed for projects.

Also by a 22-point margin, voters in 2012 supported Proposition 39, which would put half of the proceeds from eliminating tax loopholes for out-of-state corporations - about $500 million a year for five years - into a Clean Energy Job Creation Fund for efficiency programs in public buildings.

Californians have a right to expect that the monies raised will be spent for the intended purposes.

However, Gov. Jerry Brown is proposing to betray Californians by raiding both the Greenhouse Gas Reduction Fund and the Clean Energy Job Creation Fund - unless legislators stop him between now and the June 15 budget deadline.

Brown is proposing to take $500 million from the Greenhouse Gas Reduction Fund and put it into the state's general fund. He is calling this a "one-time loan" from auction proceeds for 2012-13 and 2013-14.

Before a dime is spent on reducing greenhouse gas emissions, the money would be used for other purposes, going against everything AB 32 proponents told Californians. The aim of cap and trade is not, they assured voters, to raise money for the state to solve its budget problems. That money, they insisted, can go only toward energy efficiency, clean and renewable energy generation, transmission and storage, and projects in disadvantaged areas disproportionately affected by pollution.

The state has had six years to craft a comprehensive strategy for next steps that new money could buy and should not squander the opportunity. The projects spelled out are exactly what California needs to boost jobs now and reduce emissions - such as retrofits for utilities and large industrial plants, charging stations for electric vehicles, and efficiency upgrades in low-income and middle-income homes.

The state doesn't need "more time" to flesh out projects; it needs political will to avoid diversions and lobbyist-driven pork barrel projects.

The Legislative Analyst's Office has said that "revenues from the cap-and-trade auctions must be used only to mitigate greenhouse gas emissions or the harms caused by greenhouse gas emissions."

Then there is the $500 million-a- year Clean Energy Job Creation Fund. Brown wants to count the money as general revenue, which means 40 percent automatically would go to fund school operations.

The LAO concludes this would be "directly contrary to what the voters were told in the official voter guide as to how the revenues would be treated." And all so unnecessary. After five years, the Clean Energy Job Creation Fund goes away and the money goes into the general fund.

Proposition 39 proponents want to focus the full $500 million a year for energy efficiency projects in public schools with above-average energy consumption in economically disadvantaged communities, distributed on a competitive basis. Districts would have to prove that projects actually reduce utility bills.

Brown, however, wants to spread a smaller amount on a per-pupil basis statewide regardless of need, diluting the funding so much that the state would not get the big utility bill reductions that Prop. 39 advocates intended. Moreover, this doesn't jibe with Brown's much-touted philosophical view that dollars should go to where they are needed most.

Legislators considering proposals for using the Greenhouse Gas Reduction Fund and the Clean Energy Job Creation Fund must ask: Will the money go to projects that permanently, verifiably reduce greenhouse gas emissions and increase energy efficiency?

If not, that's an improper use they should reject.

Californians should insist that the governor and legislators back off these two raids.

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