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Funding for Local Governments


The State of California’s budget includes a variety of new and existing grant programs using state 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 and SB 32 GHG reduction goals as well as the goals in local Climate Action Plans and other sustainability programs and projects in communities.

Summary of Funding Programs

Since 2013, the state has allocated nearly $3.4 billion in Cap and Trade proceeds to support existing and pilot programs that will reduce GHG emissions and meet SB 535 goals to benefit disadvantaged communities. These expenditures are intended to reduce emissions by modernizing the state’s rail system including high‑speed rail and public transit, encouraging local communities to develop in a sustainable way with an emphasis on public transportation and affordable housing, increasing energy, water, and agricultural efficiency, restoring forests in both urban and rural settings and creating incentives for additional recycling. The Legislature and the Governor agreed to permanently allocate 60 percent of future auction proceeds to public transit, affordable housing, sustainable communities and high‑speed rail on an ongoing basis. The remaining 40% of auction proceeds are annually allocated in the state budget.

Funding for these programs is identified as either an “ongoing” or “one-time” appropriation in the description of each program. This online resource center provides an overview of 13 individual cap and trade programs – related to transportation, clean energy, and natural resources – that either directly or indirectly benefit cities and counties implementing local sustainability plans and goals, along with examples of the types of projects funded in whole or part through the Greenhouse Gas Reduction Fund. The programs are administered by a variety of state agencies. The following list provides links to descriptions of each of the individual programs.




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