Cap and Trade Advocacy

Many important regional projects use Cap and Trade funding to reduce greenhouse gas emissions. MTC helps its partner agencies submit funding proposals that will compete against others from around the state.

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Photo by Chris Leboutillier/Unsplash

California’s Cap and Trade program reduces pollution by imposing limits on current greenhouse gas emissions. It is also an important funding source for Bay Area transportation projects that reduce future greenhouse gas emissions.

MTC advocates for transportation projects from Bay Area cities and counties, so they can better compete for Cap and Trade dollars that help meet regional climate goals.

Download the background and details in MTC’s Funding Framework for Cap and Trade.

Cap and Trade Program Overview

Major emitters must buy an allowance — through an auction process — for every ton of carbon dioxide they release into the air. State law requires that auction proceeds 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%
  • Affordable Housing and Sustainable Communities — 20%
  • Transit and Intercity Rail — 10%
  • Low-Carbon Transit Operations — 5%

State law also requires 10% of Cap and Trade funds to be spent within disadvantaged communities.

The California Air Resources Board oversees the Cap and Trade program.

Investments made with Cap and Trade auction proceeds include the California High Speed Rail system and a statewide Transit and Intercity Rail program.