California has a reputation for being at the vanguard of environmentalism and climate change. The state’s creation of the Cap-and-Trade Program is a prime example. It sets limits on the emission of greenhouse gases (GHGs) and uses market forces to achieve those limits in the most cost effective way. The proceeds from the sale of emission licenses are then invested in proven GHG reduction strategies that benefit all Californians.
The evidence shows that California’s Cap-and-Trade Program has been a huge success to date and has become a model elsewhere in the United States as well as internationally. The only catch is that the program is currently authorized only until 2030, and uncertainty over its continuation is decreasing program funding and effectiveness. To address this, state leaders have proposed to extend the program through 2045 and signaled that they may want to make some changes in the process.
As Governor Newsom and the California Legislature move to extend the Cap and Trade Program and reprioritize the investments, three programs in particular deserve continued priority support. The Affordable Housing and Sustainable Communities (AHSC) program, the Transit and Intercity Rail Capital Program (TIRCP), and the Low Carbon Transit Operations Program (LCTOP) have collectively reduced GHG emissions by over 36 million tons in the last ten years, equivalent to the annual emissions of the entire country of Sweden.
AHSC makes housing affordable: By building affordable housing near transit, AHSC saves low-income households over $10,000 in rent per year plus more in transportation costs, which is enough to pay for food for a year to help a low-income family stay out of poverty.
AHSC is a good investment: Every dollar invested in AHSC from cap-and-trade revenue is matched by four dollars from other public and private sources, and 70% of the affordable housing approved under this program has already been built or is under construction. Fifty-six of the funds have been invested in communities most in need of environmental protection and economic opportunity.
AHSC reduces traffic for everyone. A new report from the California Housing Partnership and Enterprise Community Partners found that AHSC alone has led to 512 million fewer miles driven since its inception by enabling residents to live close to public transit and avoid driving for most of their trips.
Public transit investment is vital to our regions. Cap-and-Trade’s transit programs, TIRCP and LCTOP, provide crucial funding to improve service and expand public transit systems that are still recovering from the decline in ridership they experienced during the pandemic. Many Californians don’t regularly ride public transit, but everyone benefits from reduced pollution and congestion on our roadways. The BART system in the Bay Area saves 1.2 million miles of driving every day. Without public transit, our roads would be endlessly clogged, and people who can’t afford to drive would be left without a way to get around.
Public transit creates jobs and affordable travel options. Major investments in public transit also provide high-quality jobs throughout the state and provide essential benefits to disadvantaged communities. Each dollar invested through TIRCP provides five times the value thanks to federal matching funds, while 94% of LCTOP dollars are invested directly in low-income and disadvantaged communities.
We call on Governor Newsom and the California Legislature to continue long-term commitments to these critical and successful programs. We further encourage the Governor and Legislature to improve the Cap-and-Trade Program by eliminating free emission allowances for the fossil fuel industry that are counterproductive to the program’s goals and harm sensitive communities.
Climate, housing, and transit are three of the most critical challenges facing California. By preserving continuous funding for AHSC, TIRCP, and LCTOP, the governor and legislature have the opportunity to address all three simultaneously and comprehensively. That sounds like a perfect trifecta to us.
ABOUT THE AUTHORS
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Matt Schwartz is the president and CEO of the California Housing Partnership. |
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Jeanie Ward-Waller is the lobbyist for Transform and the former deputy director of planning and modal programs at Caltrans. |