The state’s cap-and-trade auction, the only ongoing funding source, is a complete washout.
A few, short weeks ago, I reported that President Trump’s Secretary of Transportation halted the transfer of millions of dollars in funding for the California bullet train, our governor’s legacy project.
However, those monies were not the sole source of funding. The main source of ongoing support for the train is the income from the cap-and-trade auctions that California sponsors.
It appears as if the all the air (carbon dioxide included) has gone out of the cap-and-trade market:
Just hours before the report was issued, results of the state’s latest cap-and-trade auction of greenhouse gas emission allowances – the only source of ongoing bullet train funds – were released and once again it produced almost no money.
…A $9.95 billion bond issue that voters approved nine years ago was on hold for years because of lawsuits, and project managers have searched, so far in vain, for other sources of money for the $64 billion project.
In desperation, Brown and the Legislature gave the project 25 percent of cap-and-trade auction proceeds, and officials have been weighing a construction loan secured by auction money. However, recent auctions have generated very scant returns, and without a reliable revenue stream, securing a loan would be impossible.
The plunge in auction interest has been attributed to a glut of state-issued allowances and uncertainty about the program’s legality and future. Brown wants the Legislature to reauthorize it beyond the current 2020 expiration date, but so far has been unable to muster enough votes.
I would like our Legal Insurrection readers to consider that the California cap-and-trade was installed as part of the 2006 “Global Warming Solutions Act”. A little more than 10 years later, the set-up is failing spectacularly.
Former President Barack Obama was planning to install a similar system with his “Clean Power Plan“. President Trump has derailed these regulations entirely.
Elections have consequences…and, when we look back in a few years, these may be among the most significant for Trump’s presidency.
The state’s cap-and-trade washout has left the train project fiscally stranded, especially after the termination of the grant money. Not surprisingly, the bureaucrats in charge of the bullet train construction are a wee bit upset at the Republican congressional delegation from California, who prepared a letter requesting that President Trump nix the grant money that was fueling the project.
The state’s high-speed rail authority board verbally assaulted the state’s Republican House delegation Wednesday, blaming it for the delay of a grant that would have benefited California’s bullet train project.
The commentary came at a rail authority board meeting, where members sharply criticized a letter by California’s 14 Republican congressmen that asked Transportation Secretary Elaine Chao to withhold a $647-million grant until a financial audit of the bullet train project can be conducted.
…“This was an unbelievable, irresponsible act on the part of these members of Congress,” said rail authority board Chairman Dan Richard.
At Wednesday’s board meeting, Richard said the Republican letter was based on “matters that were demonstrably untrue.”
The Republican members, he said, “acted against the interests of their own constituents. It is shocking to me.”
In fact, the Republican congressional members are acting in the best interest of the state’s voters who are now clamoring for infrastructure funding be directed toward the repair of dams and roads. After contending with the Oroville Dam crisis, California water officials have recently discovered damage at another key state reservoir.
If the bullet train is derailed because of the failure of a key aspect of the “Global Warming Solutions Act”, it would mean its trip to Karma is complete.