Lawmakers have proposed spending more than $7.5 billion in cap-and-trade auction revenue – much more than the $3.09 billion proposed in the governor’s budget for 2016-17. All of these proposals are active and are being considered at a time when expenditures of auction revenue are under scrutiny. The auction operates as a tax, generating revenue for programs that serve the general public. However, it was not approved by a two-thirds majority of lawmakers, as the California Constitution requires for any tax increase.
Under AB 32 (Chapter 488, Statutes of 2006), California must reduce its greenhouse gas (GHG) emissions to 1990 levels by 2020. The California Air Resources Board (ARB) is responsible for implementing this law, and has adopted a number of regulatory programs, including the Low-Carbon Fuel Standard, renewable energy standards, and the cap-andtrade program (which they designed to include a revenue-raising auction).
Read Study