{"id":18375,"date":"2012-01-19T14:51:11","date_gmt":"2012-01-19T22:51:11","guid":{"rendered":"http:\/\/blogs.kqed.org\/climatewatch\/?p=18375"},"modified":"2012-01-19T14:51:11","modified_gmt":"2012-01-19T22:51:11","slug":"california-expects-1-billion-from-carbon-trading","status":"publish","type":"post","link":"https:\/\/ww2.kqed.org\/climatewatch\/2012\/01\/19\/california-expects-1-billion-from-carbon-trading\/","title":{"rendered":"California Expects $1 Billion From Carbon Trading"},"content":{"rendered":"

And that’s just for starters — but how that money will be spent is still up in the air<\/strong><\/p>\n

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California's cap and trade program will kick into gear when the state holds its first emissions allowance auction, in August.<\/figcaption><\/figure>\n

There might be more money in the first year of California’s cap-and-trade program than expected. Governor Brown’s 2012-2013 budget includes $1 billion in revenue from the state’s cap-and-trade program,<\/a> ramping up this year as part of California’s 2006 climate legislation, known as AB 32.<\/p>\n

That might seem surprising since 90% of initial permits to emit greenhouse gases will be given away to industry. But number-crunchers at the Legislative Analyst’s Office (LAO) say that selling just ten percent of allowances at auction could generate that much cash<\/em>. The price for an emission allowance has not been set<\/a>, but projections range from $10-$40 per credit, which means that the state might garner even more than $1 billion in the bargain.<\/p>\n

While more money couldn’t hurt a cash-strapped state like California, there are still some concerns about how this new revenue will be spent.\u00a0Tiffany Roberts, Senior Fiscal and Policy Analyst for Energy and Climate Change at the LAO, explained to me that there are legal restrictions on how revenues from cap and trade can be used. “These revenues can’t go to fund general tax purposes,” Roberts said. “They have to be used either to mitigate greenhouse gas emissions or to mitigate the adverse effects of greenhouse gas emissions.”
\n[module align=”left” width=”half” type=”pull-quote”]”These revenues can’t go to fund general tax purposes.” — LAO[\/module]
\nThat means this revenue won’t help much with underfunded needs like schools and people with disabilities. However, the Brown budget indicates that $500 million of the total cap-and-trade revenue would supplant existing general fund outlays for programs that meet the requirements of AB32. That could potentially free up some general fund money for other programs, but the Governor’s budget provides none of those details.<\/p>\n

The Governor’s budget indicates that he’s looking to spend in four broad categories:<\/p>\n