Cap and Trade Funding | Fund + Invest | Our Work

Cap and Trade Funding

California’s new Cap and Trade program for greenhouse gas emissions is an important source of transportation funding in the Bay Area and around the state.

MTC helps the Bay Area submit projects that will strongly compete against other regions for these funds.

Cars emitting exhaust

The Cap and Trade program reduces pollution by imposing limits on emissions — which become more stringent each year.

Major emitters must buy an allowance for every ton of carbon dioxide they release into the air.

And state law requires that this money be spent on projects that reduce greenhouse gas emissions.

Investment Strategy

Sixty percent of the Cap and Trade program’s ongoing revenues go for investment in Sustainable Communities and Clean Transportation. 

This includes:

  • High Speed Rail Project — 25 percent
  • Affordable Housing and Sustainable Communities — 20 percent
  • Transit and Intercity Rail — 10 percent
  • Low-Carbon Transit Operations — 5 percent

MTC Funding Framework for Cap and Trade: Download the background, framework and details.

Three Bay Area transit operators recently competed successfully to receive a total of almost $57 million in Cap and Trade auction funds:

  • San Francisco Muni — $41.2 million for light-rail fleet expansion
  • SMART — $11 million for rail-car acquisition
  • Capitol Corridor — $4.6 million for travel-time reduction project

How does the Bay Area stack up when it comes to clean air? Find out in Vital Signs.