Cap and Trade Resource Center

Overview

Cap and Trade

Recent actions by the California Legislature and the Administration of Governor Brown promise to accelerate state efforts to address climate change. Cap and trade is one key strategy that California is implementing to achieve the greenhouse gas (GHG) emission reduction goals set in the state law. This resource center provides an overview of cap and trade, the funding available to local governments and each of the current cap and trade funds as of August, 2016. View the individual funds below, or download the full brochure here. Click here to download the overview infographic.

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What is Cap and Trade?

The California Global Warming Solutions Act of 2006, AB 32, is a multi-year program to reduce Greenhouse Gas (GHG) emissions in California to 1990 levels by 2020. One key strategy to achieve this goal is a ‘cap and trade’ market system. The ‘cap’ creates a limit on carbon dioxide equivalent emissions, while a corresponding number of allowances within the cap can be ‘traded.’ The allowances are purchased by utilities and businesses at quarterly auctions. Over time, as the cap lowers, businesses that aggressively reduce emissions can trade their surplus allowances to firms that find it more expensive to reduce emissions.

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Funding for Local Governments

The State of California’s 2014-15 and 2015-16 budgets and the Governor’s proposed 2016-17 budget include a variety of new and existing grant programs using AB 32 cap-and-trade auction revenues to fund local government sustainability efforts. While these cap and trade funding programs are administered by a variety of individual state agencies, the goal of the cap and trade program is to advance both the State’s AB 32 GHG reduction goals as well as the goals in local Climate Action Plans and other sustainability programs and projects in communities.

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Affordable Housing and Sustainable Communities Program
PROGRAM AREA: TRANSPORTATION

FUNDING LEVEL: 20% ongoing allocation; $565 million through June 2016; 50% of funds must benefit disadvantaged communities.
ADMINISTERING AGENCY: Strategic Growth Council.
GHG methodology by CARB. Program guidelines by the Strategic Growth Council.

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Low Carbon Transportation
PROGRAM AREA: TRANSPORTATION

FUNDING LEVEL: Annual budget allocation; $325 million through June 2016;
At least 50% of funds must benefit disadvantaged communities
ADMINISTERING AGENCY: California Air Resources Board (CARB)

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Transit & Intercity Rail Capital
PROGRAM AREA: TRANSPORTATION

FUNDING LEVEL: 10% ongoing allocation; $265 million through June 2016; 25% of funds must benefit disadvantaged communities.
ADMINISTERING AGENCY: California State Transportation Agency develops guidelines, scores applications, and makes recommendations. Funding allocated and program administered by California Transportation Commission

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Low Carbon Transit Operations
PROGRAM AREA: TRANSPORTATION

FUNDING LEVEL: 5% ongoing allocation; $145 million through June 2016;
50% of funds must benefit disadvantaged communities. 
ADMINISTERING AGENCY: Caltrans. GHG methodology by CARB.

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High Speed Rail
PROGRAM AREA: TRANSPORTATION

FUNDING LEVEL: 25% ongoing allocation; $850 million through June 2016.
ADMINISTERING AGENCY: California High Speed Rail Authority

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Energy Efficiency in Public Buildings
PROGRAM AREA: ENERGY EFFICIENCY

FUNDING LEVEL: One-time allocation; $20 million in 2014-15 budget
ADMINISTERING AGENCY: California Energy Commission (CEC); Governor’s proposed 2016-17 budget would transfer administration to the Department of General Services.

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Low-Income Weatherization Program
PROGRAM AREA: ENERGY EFFICIENCY

FUNDING LEVEL: Annual budget allocation; $145 million in through June 2016; 100% of funds must benefit disadvantaged communities. 
ADMINISTERING AGENCY: California Department of Community Services & Development. GHG methodology by CARB.  

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Climate Smart Agriculture
PROGRAM AREA: ENERGY EFFICIENCY

FUNDING LEVEL: Annual budget allocation; $75 million through June 2016
ADMINISTERING AGENCY: California Department of Food and Agriculture

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Water-Energy Efficiency
PROGRAM AREA: ENERGY EFFICIENCY

FUNDING LEVEL: Annual budget allocation; $70 million through June 2016
ADMINISTERING AGENCY: Department of Water Resources 

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Sustainable Agricultural Land Conservation
PROGRAM AREA: NATURAL RESOURCES

FUNDING LEVEL: Ongoing allocation; $45 million through June 2016
ADMINISTERING AGENCY: Natural Resources Agency and Department of Conservation. Program guidelines by the Strategic Growth Council.

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Sustainable Forests
PROGRAM AREA: NATURAL RESOURCES

FUNDING LEVEL: Annual budget allocation; $42 million through June 2016; 100% of funds must benefit disadvantaged communities.
ADMINISTERING AGENCY: CalFire 

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Wetlands Restoration for Greenhouse Gas Reduction Program
PROGRAM AREA: NATURAL RESOURCES

FUNDING LEVEL: Annual budget allocation; $27 million through June 2016
ADMINISTERING AGENCY: Department of Fish and Wildlife 

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Waste Diversion
PROGRAM AREA: NATURAL RESOURCES

FUNDING LEVEL: Annual budget allocation; $31 million through June 2016
ADMINISTERING AGENCY: CalRecycle 

Commands