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January 10, 2014
Editorial: Use cap and trade auction proceeds wisely

Thumbnail image for High_Speed_Rail_Station.JPG(Jan. 10 - By the Editorial Board)

In budgetary flimflam last year, Gov. Jerry Brown raided the first $500 million of cap-and-trade auction proceeds. That money was supposed to go to the Greenhouse Gas Reduction Fund to reduce emissions to 1990 levels by 2020 - and by 2050, to 80 percent of 1990 levels.

Now, with his 2014-15 budget proposal, he is trying to make amends. Good. He proposes to repay $100 million this year, and the rest within the next few years. He should commit to no more raids.

For 2014-15, Brown proposes spending $850 million in auction proceeds: $600 million for transportation, $140 million for energy and $110 million for forestry, agriculture, water pumping and waste going to landfills.

These first investments from the Greenhouse Gas Reduction Fund are important and the state should get this right. The biggest controversy is whether half of the funds Brown proposes for transportation should go to rail - $250 million for high-speed rail and $50 million for connecting existing rail to high-speed rail. The other half would go toward transit, housing near stations, incentives for zero-emission vehicles and other projects to reduce miles traveled in cars.

Certainly, Brown is right to devote the bulk of the $850 million to transportation. "Transportation is the single largest contributor to greenhouse gases, and reducing transportation emissions should be a top priority," he says.

One question raised by Brown's proposal is whether high-speed rail would be the best way to get emissions reductions in the transportation sector.

California is projected to add 20 million people between 2010 and 2050. High-speed rail promises much lower emissions than expanded air travel and car travel.

But with much of the system not up and running before 2020, how will high-speed rail contribute to the 2020 target?

Jeff Morales, CEO of the California High-Speed Rail Authority, promises near-term reductions. The project, for example, plans to eliminate diesel trains on the the San Francisco Peninsula by electrifying CalTrain by 2019. And as high-speed rail construction proceeds in the Central Valley, the project is committed to zero emissions: requiring contractors to use the cleanest possible "Tier IV" equipment; recycling concrete and steel, sending none to landfills; planting thousands of trees in the Central Valley; and replacing diesel pumps with electric pumps. How much of that happens remains to be seen with a project that has been plagued by promising too much.

His main contention is that we have to look beyond 2020, as the Air Resources Board did in its May 2013 investment plan. With the state on target to meet the 2020 target with existing state strategies, the need is to go further: "Reaching the 2050 goal (80 percent below 1990 levels) will require far-reaching new approaches to how we plan our communities, how we move people and freight, how we power our state, how industries produce their products, how successful we are in treating waste as a source of energy, and how well we preserve California's lands and natural resources that sequester carbon," the board said.

High-speed rail is part of that.

Some environmentalist groups would like to see the money be spent on electric vehicle subsidies and diesel reductions at ports and railyards. Beyond transportation, they'd like to see funds go to water efficiency measures and weatherizing homes. Brown proposes to spend $200 million for zero-emissions cars, trucks and buses, $80 million for weatherizing homes and $20 million for water efficiencies.

This is a good debate to have; the amounts for each sector can be adjusted. But no one should doubt that the biggest emissions problem to solve is transportation. That's where the bulk of auction proceeds should go. It's reasonable to include high-speed rail in the mix.