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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, 2017. View the individual funds below. 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 budget includes 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 (AHSC)
PROGRAM AREA: TRANSPORTATION AND SUSTAINABLE COMMUNITIES

FUNDING LEVEL: 20% continuous allocation; $524 million through March 2017 (excluding portion for SALC program); 50% of funds must benefit disadvantaged communities
ADMINISTERING AGENCY: Housing and Community Development, GHG methodology by CARB, Program guidelines by the Strategic Growth Council
ELIGIBLE APPLICANTS: Local government, public housing authority, redevelopment successor agency, transit agency or transit operator, regional transportation planning agency (RTPA), local transportation commission, congestion management agency, Joint Powers Authority (JPA), school district, facilities district, university or community college district, developer or program operator

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Sustainable Agricultural Land Conservation (SALC)
PROGRAM AREA: TRANSPORTATION AND SUSTAINABLE COMMUNITIES

FUNDING LEVEL: Continuous allocation of 10% of Affordable Housing and Sustainable Communities funding
ADMINISTERING AGENCY: Natural Resources Agency, Department of Conservation, Program guidelines by the Strategic Growth Council
ELIGIBLE APPLICANTS: Counties and/or cities are eligible to apply as the lead applicant(s) in collaboration with other partners (e.g., agricultural organizations, land trusts, open space districts)

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Low Carbon Transit Operations Program (LCTOP)
PROGRAM AREA: TRANSPORTATION AND SUSTAINABLE COMMUNITIES

FUNDING LEVEL: 5% continuous allocation; $134.8 million through March 2017; 50% of funds distributed to agencies with disadvantaged communities must benefit disadvantaged communities

ADMINISTERING AGENCY: Administered by Caltrans in coordination with Air Resource Board (ARB) and the State Controller’s Office (SCO); GHG methodology by CARB
ELIGIBLE APPLICANTS: Local governments and transit agencies

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Transit & Intercity Rail Capital Program (TIRCP)
PROGRAM AREA: TRANSPORTATION AND SUSTAINABLE COMMUNITIES

FUNDING LEVEL: 10% continuous allocation; $380.6 million through March 2017; 25% of funds must benefit disadvantaged communities
ADMINISTERING AGENCY: California State Transportation Agency (CalSTA) and Caltrans
ELIGIBLE APPLICANTS: Public agencies, including joint powers agencies, that operate existing or planned regularly scheduled intercity or commuter passenger rail service or urban rail transit service, urban rail transit service or bus or ferry transit service (including commuter bus services and vanpool services)

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Low Carbon Transportation (LCT)
PROGRAM AREA: TRANSPORTATION AND SUSTAINABLE COMMUNITIES

FUNDING LEVEL: Annual allocation; $695 million through March 2017; Minimum 50% of funds must benefit disadvantaged communities
ADMINISTERING AGENCY: California Air Resources Board (CARB)
ELIGIBLE APPLICANTS: Federal, state or local government entities or agencies, California nonprofit organizations and California tribes; varies based on sub-program.

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High Speed Rail
PROGRAM AREA: TRANSPORTATION AND SUSTAINABLE COMMUNITIES

FUNDING LEVEL: 25% continuous allocation; $800 million through March 2017.
ADMINISTERING AGENCY: California High Speed Rail Authority
ELIGIBLE APPLICANTS: Funding is allocated directly to the High Speed Rail Authority

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Transformative Climate Communities (TCC)
PROGRAM AREA: TRANSPORTATION AND SUSTAINABLE COMMUNITIES

FUNDING LEVEL: $140 million through March 2017; 100% of funds distributed to top 5% of disadvantaged communities as defined by CalEnviroScreen 3.0
ADMINISTERING AGENCY: Strategic Growth Council
ELIGIBLE APPLICANTS: Nonprofit organizations, community-based organizations, faith-based organizations, community development corporations, local agencies, joint powers authorities, or tribal governments.  Applicants must demonstrate multi-stakeholder partnerships with local agencies, community-based organizations, labor groups, workforce investment boards and other stakeholders, as appropriate.

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Woodsmoke Reduction Program
PROGRAM AREA: CLEAN ENERGY AND ENERGY EFFICIENCY

FUNDING LEVEL: $5 million through March 2017
ADMINISTERING AGENCY: California Air Resources Board (CARB)
ELIGIBLE APPLICANTS: Low-income residents, residents located in areas highly affected by woodsmoke and households whose wood-burning device is their sole source of heat

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Low-Income Weatherization Program
PROGRAM AREA: CLEAN ENERGY AND ENERGY EFFICIENCY

FUNDING LEVEL: Annual budget allocation; $174 million in through March 2017; 100% of funds must benefit disadvantaged communities  
ADMINISTERING AGENCY: California Department of Community Services & Development. GHG methodology by CARB. 
ELIGIBLE APPLICANTS: Local government agencies and California non-profit organizations

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State Water Efficiency and Enhancement Program (SWEEP)
PROGRAM AREA: CLEAN ENERGY AND ENERGY EFFICIENCY

FUNDING LEVEL: $58.1 million through March 2017
ADMINISTERING AGENCY: California Department of Food and Agriculture
ELIGIBLE APPLICANTS: Public agencies, public utilities, federally recognized or state Indian tribes on California’s Tribal Consultation List, nonprofit organizations, mutual water companies and investor-owned utilities regulated by the California Public Utilities Commission

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Dairy Digester Research and Development Program (DDRDP)
PROGRAM AREA: CLEAN ENERGY AND ENERGY EFFICIENCY

FUNDING LEVEL: Annual budget allocation; $61.1 million through March 2017
ADMINISTERING AGENCY: California Department of Food & Agriculture (CDFA)
ELIGIBLE APPLICANTS: Existing milk producers and dairy digester developers are eligible for this program

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Water-Energy Grant Program
PROGRAM AREA: CLEAN ENERGY AND ENERGY EFFICIENCY

FUNDING LEVEL: Annual budget allocation; $50 million through March 2017; Additional consideration to disadvantaged communities
ADMINISTERING AGENCY: Department of Water Resources
ELIGIBLE APPLICANTS: Local agencies, joint powers authorities and nonprofit organizations. 

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Sustainable Forests
PROGRAM AREA: NATURAL RESOURCES AND WASTE DIVERSION

FUNDING LEVEL: Annual budget allocation; $82 million through March 2017
ADMINISTERING AGENCY: CalFire
ELIGIBLE APPLICANTS: Cities, counties, qualifying districts, or nonprofit organizations

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Wetlands and Watershed Restoration
PROGRAM AREA: NATURAL RESOURCES AND WASTE DIVERSION

FUNDING LEVEL: Annual budget allocation; $30 million through March 2017
ADMINISTERING AGENCY: Department of Fish and Wildlife
ELIGIBLE APPLICANTS: Public agencies, Federally recognized Tribes and qualified nonprofit organizations

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Urban Greening Grant Program
PROGRAM AREA: NATURAL RESOURCES AND WASTE DIVERSION

FUNDING LEVEL: Annual budget allocation; $80 million through March 2017; A minimum of 75% funds must benefit disadvantaged communities
ADMINISTERING AGENCY: California Natural Resources Agency
ELIGIBLE APPLICANTS: Cities, counties, special districts, nonprofit organizations, or an agency or entity formed pursuant to the Joint Exercise of Powers Act

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Healthy Soils Program
PROGRAM AREA: NATURAL RESOURCES AND WASTE DIVERSION

FUNDING LEVEL: Annual budget allocation; $7.5 million through March 2017
ADMINISTERING AGENCY: California Air Resources Board (CARB)
ELIGIBLE APPLICANTS: Farmers and ranchers (incentives) and partnerships between agricultural operations/industry groups, academia, non-profit organizations and/or resource conservation districts (demonstration projects)

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Waste Diversion
PROGRAM AREA: NATURAL RESOURCES AND WASTE DIVERSION

FUNDING LEVEL: Annual budget allocation; $71 million through March 2017
ADMINISTERING AGENCY: CalRecycle
ELIGIBLE APPLICANTS: Government entities: cities and counties, regional or local sanitation agencies, waste agencies and joint power authorities, private, for-profit entities and nonprofit organizations (except private schools) registered with the federal government

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