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Curtis Alling

Heather Phillips

Honey Walters

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Cap-and-Trade Revenues May Offer Funding for Local Government GHG Reduction

The California Air Resources Board’s first auction of greenhouse gas (GHG) emission allowances under the Assembly Bill (AB) 32 Cap-and-Trade Program is occurring today (November 14, 2012). The Cap-and-Trade Program is estimated to generate up to $1 billion in revenue during the first year and more in future years. Auction revenues are deposited into a Greenhouse Gas Reduction Fund for appropriation by the Legislature. The 2012-2013 State Budget includes authority for the State to spend at least $500 million in auction proceeds.  The revenue provides a new and potentially significant funding source for local government GHG reduction programs. 

AB 1532 (Pérez), signed into law by Governor Brown on September 30th, requires that the money in the Greenhouse Gas Reduction Fund be spent on the achievement of GHG emission reductions in California. Investments to achieve GHG reductions may include:
  • energy efficiency and renewable energy projects
  • goods movement and transportation infrastructure projects
  • water and resource conservation, forestry, and sustainable agriculture projects
  • land use planning projects
  • solid waste diversion projects
  • programs by local and regional agencies, nonprofits, and local governments
  • research and development projects.
The State will develop a framework for the distribution of funds. At least two public workshops will inform the framework development, as required by AB 1532. Preference for funding will be given to GHG reduction projects that have economic, environmental, and public health co-benefits; include climate change resilience or adaptation co-benefits; promote in-state job creation; and direct investment toward disadvantaged communities. Senate Bill (SB) 535 (De León), a companion bill to AB 1532, requires that at least 25 percent of the money be spent on projects that help disadvantaged communities. These are communities specified as disproportionately affected by environmental pollution or other public health hazards, or by socioeconomic disadvantages. At least 10 percent must be spent on projects specifically within those communities.

Local governments with adopted Climate Action Plans or GHG Reduction Plans that include specific actions to reduce GHG emissions may be well positioned to compete for State funds.  With the enactment of AB 1532 and SB 535, the Cap-and-Trade Program offers a potential opportunity for California communities to have reliable, ongoing funding of local government planning and project actions for GHG reduction.   

If you have questions, please contact Heather Phillips, Honey Walters, or Curtis Alling at Ascent Environmental, Inc. in Sacramento.


Ascent Environmental, Inc. is a forward-looking environmental and natural resources consultancy.  We apply our extensive climate action planning, natural resources, CEQA, and NEPA experience in our environmental practice with the goal of providing personal service and high quality results to our clients on their most important projects.
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