Why HSR Is a Good Use of Cap-and-Trade Funds


Posted on 08 January 2014

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By Robert Cruickshank

News that Governor Jerry Brown is planning to spend $250 million this year on high speed rail from cap-and-trade funds, presumably the floor for an annual amount of funding from that source, should be welcomed by California environmentalists and everyone concerned about climate change. But there are some strange criticisms being made:

“Inherent in AB 32 is that we need to act sooner rather than later,” said Kathryn Phillips, the Sierra Club’s California director. “The problem with taking that [cap-and-trade] money and applying it to high-speed rail is that we don’t anticipate that we’re going to get those benefits — reductions in greenhouse gas emissions — in the short-term. Given how urgent the problem is and has become, and how much we’re seeing the effects of climate change in this state, especially in water availability, it feels irresponsible to not apply that money to those programs that will get you greenhouse gas emissions reductions now.”

Bill Magavern, policy director at the Coalition for Clean Air, concurred. “We don’t think that high-speed rail should be getting a large proportion of the revenues,” he said, and suggested that “there are probably a number of legislators” who would agree with his group’s opposition to any sizable high-speed rail allocation.

Magevern and Phillips both cited other programs as more worthy of the cap-and-trade revenue due to their more immediate anticipated emissions reductions, with both mentioning electric vehicle subsidies as one area they expect to have more of an impact. Phillips also mentioned diesel emissions at the state’s ports and rail yards, as well as water efficiency measures. Magevern suggested weatherizing homes and operating assistance to local transit agencies across the state.

This is a really shortsighted view. It does nobody any good for carbon emissions to be lowered through 2020 only to rise again because short-term solutions have run their course. AB 32 was intended to be the start of a long-term, lasting reduction in California’s carbon emissions. With transportation being one of the primary contributors to those carbon emissions, California needs to prioritize the development of new transportation infrastructure that can dramatically reduce carbon emissions in a long-term way. High speed rail does that.

I’m all for electric vehicles, but environmentalists should not see them as a panacea. Electric cars have a maximum range these days of 100 miles. Adding in charging time, it would take perhaps as much as seven hours to drive a typical electric car from San Francisco to Los Angeles, if not more. For the foreseeable future, electric cars aren’t going to be a solution for those who want to drive across California. They are a useful tool within metropolitan areas, but not between them. HSR is the only option that can provide big carbon savings for intercity travel in California. It also helps address the serious air pollution problems in the Central Valley, which are largely driven by transportation. That’s something I would expect Magavern in particular to be excited about.

I would agree with these criticisms if Governor Brown were pledging to use all the cap-and-trade revenues for HSR. I love bullet trains but even I don’t think that would be appropriate. The Governor’s proposal would direct just 17% of the current $1.4 billion annual cap-and-trade revenues to HSR, leaving over a billion dollars available each year to invest in other forms of carbon reduction. It makes a lot of sense to take 17% of those revenues to invest in infrastructure that can provide carbon-free travel for the rest of the 21st century.

HSR is exactly the sort of thing that cap-and-trade was envisioned to fund. After all, it’s been in the California Air Resources Board’s AB 32 scoping plan for years. It still has it in its draft plan update from October 2013. CARB includes HSR as part of its ongoing measures to ensure that the reductions achieved by 2020 are lasting – the entire point of AB 32:

California’s regulatory programs and planning efforts provide a basic foundation to build lasting markets where automakers, suppliers, and fuel providers who make large, smart investments are handsomely rewarded for developing leading technologies, and where standards drive technologies to higher volumes, lower prices, and ultimately, to become market-winning solutions, rather than compliance approaches.

But additional, targeted financial and policy support and investment—including continued ZEV purchase incentives for electric and fuel cell vehicles—is needed to help during the transition, and to help local communities plan and build the active transportation and public transit alternatives (including integrated public transit and high-speed rail) that are increasingly in demand and necessary to meet ongoing emissions targets. The State has existing funding programs for many of these activities, but funding is limited, and will need to be enhanced or extended beyond currently allocated resources.

Governor Brown’s proposal fits with that approach. The notion that AB 32 and cap-and-trade is all about getting to the 2020 targets and nothing more is a gross misrepresentation of the intentions of the law and the overall approach to solving the climate crisis. The Governor’s proposal, then, is a good start that deserves strong support from California environmentalists and transit advocates.

This line of attack is being picked up in familiar and expected quarters. Rounding up the usual suspects, starting with Dan Walters of the Sac Bee:

While creating the new revenue stream might – emphasis, might – help persuade the court that there is a legally sufficient financial plan for the initial bullet train segment from the San Joaquin Valley into Southern California, as the law requires, the legality of such a shift is itself legally suspect.

The cap-and-trade law says that proceeds are to be used specifically to lower California’s greenhouse-gas emissions to 1990 levels by 2020, but the Legislature’s budget analyst, Mac Taylor, says bullet train construction would actually increase emissions “for many years” and a decrease, if any, would not occur until decades later.

Mac Taylor also opposes bullet train construction and his claim is based on a study he didn’t bother to cite. This is a specious claim that he makes, assuming that there’s no actual benefit to providing an electric train powered by renewables that has been proven to shift riders away from carbon emitting methods of travel everywhere else it operates. And if HSR wasn’t going to help meet the AB 32 goals, why did CARB include it in its scoping plan? I will take CARB’s analysis over the LAO’s any day when it comes to climate.

One could easily envision that bullet train opponents who have successfully challenged the project in court would make common legal and political cause with environmental groups, which have pledged to hold Brown accountable for spending the cap-and-trade fees as the underlying law requires.

This would be cynical in the extreme, and environmental groups should be very strongly dissuaded from doing anything so crazy. You don’t solve the climate crisis in drips and drops. You will also need major infrastructure projects that provide huge and permanent reductions in carbon emissions. HSR fits that bill perfectly.

The Press-Enterprise, which has editorialized against HSR in the past, takes up a similar line of thinking:

Raiding the state’s greenhouse gas receipts is not a feasible solution to the rail line’s funding gaps. The governor should already know this: The state’s legislative analyst reported in 2012 that using the greenhouse gas money for the rail line would be legally risky. Money from the cap-and-trade program is supposed to help reduce the state’s greenhouse gas emissions to 1990 levels by 2020. The “bullet train,” however, would not even begin operating until at least 2021, which deprives the state of a rationale for using the greenhouse gas money for the train. The state cannot credibly justify spending the cap-and-trade fee receipts on a project that cannot possibly help California meet the greenhouse gas law’s 2020 goal.

Again we see the LAO cited, again CARB, which actually knows what it’s talking about, is ignored.

There’s a deeper point here. AB 32 was not meant to simply reduce carbon emissions to 1990 levels by 2020 and then declare the climate crisis solved. We don’t just walk away from carbon reduction once the clock strikes midnight on January 1, 2021. AB 32′s basic purpose is to achieve a lasting and ongoing reduction in carbon emissions. HSR does that in ways that the smaller but still valuable things like electric charging stations and weatherization don’t match.


This article was originally published at Robert Cruickshank's California High Speed Rail Blog.