Cap and Trade Auctions and Why they help Our Communities


With the California Air Resources Board set to hold its first auction of carbon emissions permits under the state’s cap-and-trade program today, recently-signed legislation finally guarantees that a significant proportion of the proceeds will benefit low-income, highly polluted communities. This is a big win for California communities of color.

Environmental, public health and civil rights advocates as well as business worked incredibly hard to help make sure SB 535 (DeLeon) and AB 1532 (Perez) became law. Both groundbreaking pieces of legislation would provide a framework for ensuring that proceeds from the auction will help to reduce pollution and provide economic opportunities in communities with the greatest need. Both bills were signed into law by Gov. Jerry Brown on Sept. 30.

AB 1532 establishes a public process and framework for allocating monies in the Greenhouse Gas Reduction Fund, which will be created with revenues from the cap-and-trade program. It requires that monies in the Fund be used to achieve feasible, cost-effective reductions of greenhouse gas emissions in through investments that also maximize economic, environmental, and public health benefits.

SB 535 requires that 25 percent of the Fund go towards projects that would benefit areas disproportionately affected by pollution and suffering from high concentrations of unemployment, low levels of homeownership, high rent burden, and low levels of educational attainment.  In addition, at least 10 percent of the Fund must be allocated to projects located in disadvantaged communities for programs to reduce pollution and develop clean energy.

For the past 3 years, we've pushed for ways to make sure people who are most vulnerable to climate catastrophe are first in line to be protected from its most devastating effects.

An amazing coalition came together to make this happen including: The Asian Pacific Environmental Network, Coalition for Clean Air, Greenlining Institute, National Association for the Advancement of Colored People (NAACP). We are honored to have thrown down with these awesome groups and excited to follow the news of the US’s first Cap and Trade program.