Last week the California Air Resources board staff report recommended climate-friendly transportation to receive the largest share of Cap and Trade funding. This could create additional funding for transit starting in 2015.

The CARB staff report concludes that since transportation generates the largest share of greenhouse gases and other air pollutants, it makes sense to invest funds in lower-carbon transportation.

Investments in Sustainable Communities and Clean Transportation can include:

• Rail modernization and system integration (including high speed rail)
• Public transit with connectivity to rail; expanded transit and ridership programs and infrastructure
• Livable communities and transit-oriented development
• Active transportation (biking and walking)
• Development and implementation of plans for Sustainable Communities Strategies (e.g., general and specific plans to implement SCS)
• Low-carbon freight equipment
• Zero-emission passenger transportation; plus necessary fueling/charging infrastructure

The report’s conclusions are praised by Transform which has been conducting a campaign to urge the funds to be spent on transit and land use supporting transit.

A 3-year investment plan will be incorporated into the Governor’s May budget update, which is scheduled to be debated and finalized by the legislature in June.

Carbon auctions for electricity and large industrial sources began in November 2012. In its first year, the auctions are expected to bring in about $600 million. Most of this revenue from energy production are distributed as rebates to electricity customers. $84 million from industrial sources will go to a fund that the State Legislature and Governor will appropriate.

Cap and trade revenues for transportation fuels will start in 2015. The decision about how to allocate these funds is being made now. There will be a public hearing on the funding strategy at the next California Air Resources Board meeting, April 25 starting at 9am. The hearing is the first item of regular business, and will be webcast here.