California Air Resources Board

California Climate Investments

California Climate Investments puts billions of dollars to work reducing greenhouse gas (GHG) emissions, strengthening the economy, improving public health and the environment, and providing meaningful benefits to the most disadvantaged communities, low-income communities, and low-income households.

Cap‑and‑Trade Auction Proceeds

Funding for California Climate Investments comes from Cap-and-Trade auction proceeds.

The State’s portion of the Cap-and-Trade auction proceeds are deposited in the Greenhouse Gas Reduction Fund (GGRF) to be used for California Climate Investments. The Cap-and-Trade Program page has the most current information on allowance auctions and proceeds.

Five agencies receive approximately 65 percent of the proceeds from each quarterly Cap-and-Trade auction through continuous appropriations. Additional legislation identifies other transfers and obligations from the GGRF, including a transfer to offset a suspended manufacturing tax and use fee and replacement of a fire prevention fee in State Responsibility Areas. The Legislature appropriates remaining available funds through the annual budget process.

Investment Plan

The Investment Plan guides the investment of Cap-and-Trade auction proceeds to help California achieve its GHG emission reduction goals while realizing additional health, economic, and environmental benefits.

Funding Guidelines

State law requires CARB to develop guidance for all state agencies that receive appropriations from the GGRF for California Climate Investments programs. Administering agencies use these Funding Guidelines to design and implement programs that facilitate greenhouse gas emission reductions, benefit disadvantaged communities and low‑income communities and households, and provide transparency and accountability regarding the use of funds. CARB releases Investment Targets for Administering Agencies to identify program-level investment minimums to benefit disadvantaged communities, low-income communities, and low-income households for California Climate Investments programs funded in each fiscal year.

Benefits to Priority Populations

At least 35 percent of California Climate Investments must benefit disadvantaged communities, low-income communities, and low-income households, collectively known as priority populations. 

Greenhouse Gas and Co‑benefit Quantification Methodologies

As part of providing guidance to administering agencies, CARB develops quantification methodologies supported by empirical research to estimate project‑level greenhouse gas benefits along with other project co-benefits. Administering agencies must use a CARB quantification methodology and report expected project benefits to CARB if a quantification methodology exists for that project type. The co‑benefits resulting from GGRF investments provide significant value to the state beyond greenhouse gas emission reductions, including air pollutant emission reductions, the construction of affordable housing units near transit, improved resiliency of California’s natural and working lands, and more.

Reporting

CARB requires administering agencies to report project status and expected benefits semi‑annually. CARB relies on agencies to provide accurate project‑level data, but supports agencies’ project tracking and reporting efforts by supplying program‑specific reporting templates and aggregating the data reported. Project reporting provides transparency on the use of Cap‑and‑Trade auction proceeds and project outcomes, including benefits to priority populations and expected environmental, economic, and public health benefits.

The California Climate Investments Annual Report to the Legislature on Cap-and-Trade Proceeds is released each spring and describes the status of funded programs and lists the projects funded. It also provides estimates of the greenhouse gas (GHG) emissions reductions expected from project investments and provides key statistics on benefits to disadvantaged communities, demand for funding, leveraged funds, fiscal data, and program accomplishments.