Cap and Trade Revenue to Fund High Speed Rail?

Liberals and good government advocates frequently decry citizens’ mistrust in government, especially in California. Over the last decade and a half, numerous surveys have confirmed that voters distrust government on several levels including waste, corruption and lack of responsiveness to legitimate public needs.

The recent criminal exploits – both actual and alleged – of three California state senators is going to add fuel to the fire of outrage on the part of voters when it comes to their attitudes about government.

But outright corruption certainly isn’t the only cause of voter angst. Even if conduct falls short of criminality, the “pay to play” culture in Sacramento leaves most voters feeling like penniless souls standing outside of the expensive restaurant (Chez Capital) looking in through the window at all the politically connected fat cats being fed scrumptious meals.

And nothing frustrates knowledgeable voters like being fed outright falsehoods by our elected leaders. On this latter count, let’s add the absurd contention by the Brown Administration that the diversion of $250 million of “cap and trade” revenue to the High Speed Rail project will help California advance its climate change agenda.

For the purpose of this article, let’s assume that anthropogenic climate change is real, meaning that activities of man are having a global impact on weather. (Of course, some of us can still actually distinguish between correlation and causation, but that’s beside the point).

As most people know, California’s response to climate change was AB 32, itself subject of ongoing litigation. At the core of AB 32 is the requirement that Greenhouse Gas (GHG) emissions be reduced 80% of 1990 levels by 2050. The agency charged with implementing AB 32, the California Air Resources Board (CARB) has created a “cap and tax” program that sucks hundreds of millions of dollars out of the private sector economy annually.

But CARB’s program has created a “cache of cash” that has politicians salivating like a Pavlov puppy. Brown’s desperate attempt to fund HSR – even for a short period of time – has him gazing longingly at the money that CARB has generated, supposedly to pay for programs that actually reduce GHGs.

And make no mistake, California’s High Speed Rail project is in trouble. After a series of hostile court rulings and the unwillingness of Congress to throw good money after bad, the most famous boondoggle in California history appears to be hanging on by a thread. But for reasons unknown, Governor Brown has doubled down on the “Train to Nowhere.”

Keeping in mind that everything we’ve been told about the HSR project has been exposed as a lie (from total cost, trip times, availability of revenue from the federal government and private investors, ridership projections, etc.) Brown now heaps on another whopper: HSR is a legitimate project for use of cap and tax funds because it will reduce GHG.

But no one, and we mean no one, actually believes this. The Legislature’s own Legislative Analyst stated that “we find that there is significant uncertainty regarding the degree to which each investment proposed for funding would achieve GHG reductions.” And in a report issued just last week, the Reason Foundation blows the doors off the contention that HSR will reduce GHG emissions. Indeed, the very construction of the project will generate a vast amount of GHG: “High-speed rail (HSR) construction will create substantial GHG. HSR, which is forecasted to begin operations in 2022, cannot reduce GHG emissions before AB32’s 2020 horizon and the project’s construction must [itself] purchase credits through the cap and trade program.”

When pundits wonder why Californians don’t trust government, Brown’s plan to divert a potentially illegal source of revenue to a potentially illegal public works project probably qualifies as Exhibit A.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

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