California Air Resources Board

SACRAMENTO - The California Air Resources Board today adopted guidelines for state and local agencies to maximize the benefits to disadvantaged communities of investments funded by proceeds from the State’s cap-and-trade program.   

The Interim Guidelines were developed to address the requirements of Senate Bill 535 (De León) which directs state and local agencies to make significant investments that improve California’s most vulnerable communities. That investment comes from the proceeds of quarterly cap-and-trade auctions held by ARB.  

"The goal of this program is to ensure that California's most disadvantaged communities receive direct benefit from our commitment to cut global warming pollution,” said ARB Chairman Mary D. Nichols. “These guidelines provide accountability for investments that will improve quality of life for people living in low-income areas suffering from high concentrations of environmental contamination."  

The State’s portion of the proceeds of the cap-and-trade auctions are appropriated by the Legislature as part of the State’s annual budget.  For the current 2014-15 budget they total $832 million. Under SB 535, one-quarter of those proceeds are to be used for the benefit of the State’s disadvantaged communities, including at least 10 percent to be invested directly in those communities.  

This approach is the culmination of a continuing focus on disadvantaged communities as an essential underpinning of the State’s efforts to fight climate change. AB 32, for example, includes the determination of impacts on these communities as an essential statutory consideration for every climate program designed to reduce greenhouse gases.

To inform the overall process under SB 535, the State is using CalEnviroScreen (California Communities Environmental Health Screening Tool), a science-based tool that identifies communities most burdened by pollution from multiple sources and most vulnerable to its effects. The tool, developed by the Office of Environmental Health Hazard Assessment, ranks all 8,000 census tracts in the State on a scale of 1 to 100 with the higher numbers indicating communities with the highest burden and vulnerability. (A census tract encompasses roughly 4,000 people.)

Later this month the Secretary of the California Environmental Protection Agency will identify which of the 8,000 census tracts will be considered disadvantaged for the purposes of SB 535.

Three public workshops were recently conducted to gather input on ARB’s Interim Guidance document and CalEPA’s approach to using CalEnviroScreen to identify disadvantaged communities. More than 400 people attended the workshops in Fresno, Los Angeles and Oakland and a public briefing in Mecca, and the agencies also received multiple written comments.  

While ARB develops the overall guidance under SB 535, each agency receiving auction proceeds for investment remains responsible for administering its own program or programs, consistent with statutory direction and applicable ARB guidance. The decisions about how to design programs, select projects for funding, and implement projects rest with each agency, directed by its executive priorities and supported by its staff expertise.

ARB also developed guidance for an expenditure record that describes the proposed use of the monies. The expenditure record ensures that all expenditures of auction proceeds further the purposes of AB 32 and meet other statutory requirements.  It will also be a valuable tool for maintaining accountability throughout the life of the program.
 
The Interim Guidance document on investments to benefit disadvantaged communities adopted today, and the expenditure record, will be followed by a multi-stage public process over the coming months by ARB to develop full funding guidelines. These will include direction on metrics and quantification, as well as tracking and reporting for relevant projects. The full guidelines will also benefit from lessons learned in early implementation of the investment program and may include changes to the Interim Guidelines that will apply to subsequent appropriations.

To read the Interim Guidance document, click here.

To access CalEnviroScreen, click here.

To view the Cap-and-Trade expenditures in the 2014-15 Budget, click here.