OMG, New Grab for CARB’s Cap & Trade Slush Fund

Russ Steele

The Fresno Bee has the story: State’s ‘cap-and-trade’ program could provide funds for high-speed rail

A new financing strategy is a centerpiece of a revised business plan that state leaders will unveil Monday in Fresno for the proposed high-speed train system.

Rather than rely on uncertain future federal transportation funds, money from the auction of air-pollution credits — the state’s “cap-and-trade” program — can provide a “backstop” source of money for the California High-Speed Rail Authority, authority chairman Dan Richard told reporters Saturday.

How well is this going to work out. The real issue is not building the high-speed rail line it is the cost of ownership, the maintenance and logistics needed through the life of the project. There is no way for the fare structure to pay for these cost, so once the high-speed rail taps the cap & trade slush fund it will before ever.  Over time the HSR will demand more and more from the cap & trade slush fund.

As CARB sucks more and more slush funds from business they will soon migrate to states with out AB-32 taxes and there will be fewer and fewer people who can afford to, or need to, ride the HSR. At some future date a political leader with the political cajones will pull the plug on this gigantic failure.

 

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About Russ Steele
Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.

2 Responses to OMG, New Grab for CARB’s Cap & Trade Slush Fund

  1. Dixon Cruickshank says:

    I read this after my earlier post – but had it anyway

  2. Loren Kaye, President of the California Foundation for Commerce and Education

    Even a generous interpretation of a “fee” would not permit [CARB] reaching into a GHG emitter’s pocket to finance a hefty portion of the now-$68 billion rail system.

    After all, a plausible case must be demonstrated that spending on high-speed rail would mitigate the “adverse societal impacts” from the greenhouse gas emissions, per the Supreme Court’s Sinclair Paint decision.

    But according to the Air Resources Board in its AB 32 scoping plan, high-speed rail will account for a reduction of only 1 out of a total 174 million metric tons of CO2 equivalent  – or 0.575% of the total statewide requirement (Measure T-9).

    In other words, the effect of high-speed rail on reducing greenhouse gasses in California is less than a rounding error. This will be an insufficient legal basis for using auction revenues to finance high-speed rail.

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