Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Ggrf Reauthorization topic
No spam. Unsubscribe anytime.
Assembly subcommittee opens broad review of GGRF reauthorization, data and policy choices
Summary
A California Assembly Budget subcommittee heard analysts, academics and state agencies on how to reshape the Greenhouse Gas Reduction Fund (GGRF) in a reauthorization that will affect program design, who receives allowances and whether funds should be continuously appropriated.
Chair Robert Rivas (Chair Bennett in transcript) opened a Budget Subcommittee No. 4 hearing that framed reauthorization of the Greenhouse Gas Reduction Fund (GGRF) as a once-in-a-decade decision on how California should spend auction proceeds from the state cap-and-trade program.
The hearing brought prepared briefings from the Legislative Analyst's Office (LAO), academic panelists and staff from state agencies, and more than 20 public commenters. The LAO warned revenues are volatile and urged members to weigh tradeoffs between stable, statutory continuous appropriations and legislative oversight. LAO analyst Helen Kerstein told the committee that GGRF receipts have varied from roughly $2 billion to $5 billion annually and that program design choices — including how many allowances are given away for free — will materially affect the fund available to the legislature.
Economist Kyle Meng of UC Santa Barbara told members the cap-and-trade market itself is the most cost-effective means of reducing emissions in regulated sectors and that GGRF spending should prioritize reductions not already driven by the price signal. "When it comes to using GGRF to cut emissions directly, the caveat is that it should prioritize reductions that the carbon market itself would not incentivize," Meng said. He recommended funding innovative or high-cost technologies (for example, large-scale carbon removal) and using some revenue to address electricity affordability that he said is a major headwind to household adoption of electric vehicles and heat pumps.
Danny Cullenward (transcript: Danny Colin Ward) of the University of Pennsylvania and the Independent Emissions Market Advisory Committee presented scenario-based estimates for total allowance value over 20 years ($132 billion to $311 billion in his scenarios) and emphasized that how allowances are allocated among GGRF, utility customer benefits, and industrial assistance will determine how much discretionary revenue the legislature controls.
Panelists and LAO repeatedly urged the committee to weigh three core choices: (1) program design and pricing rules that determine long-term allowance value; (2) how many allowances are retained for GGRF versus given away for utility or industrial relief; and (3) which statutory allocations should remain continuously appropriated versus reserved for annual budget decisions. LAO warned continuous appropriations increase certainty for recipients but reduce legislative flexibility and oversight.
Public commenters and panelists pushed a range of priorities, including proposed continuous appropriations for nature-based solutions, agricultural climate practices, the Affordable Housing and Sustainable Communities program (AHSC), and wildfire resilience. Several witnesses urged the committee to consider directing some permanent revenue to electricity affordability. Meng said an illustrative $1.2 billion annual allocation dedicated to lowering retail electricity prices could lower bills by 20–35% for low-income households with the three major investor-owned utilities, and 10–15% statewide if deployed seasonally for summer peaks.
The subcommittee did not vote on any specific allocation during the hearing. Instead members asked the administration and agencies for follow-up information, including more granular sectoral revenue breakdowns, program-by-program spend-versus-expended accounting, and specific milestone plans for major recipients of GGRF proceeds. Chair and members repeatedly requested more consistent, project-level performance and expenditure reporting to judge whether statutory continuous appropriations remain appropriate.
Why this matters: Reauthorization will determine the state—s fiscal and policy approach to climate investments for the coming decade. The committee faces technical choices about how market design affects revenues and political choices about which programs receive predictable, statutory support and which should be set annually by the Legislature.
What comes next: LAO and panelists offered to provide tables and scenarios the committee requested and CARB staff said detailed expenditure and award records are publicly available on the California Climate Investments website. Members asked agencies to deliver additional, program-level implementation metrics ahead of further hearings.
