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Regions May Get More Climate Mandates, But Little Funding

Sometime this year or next year, Congress will probably pass a climate change bill that tries to mimic SB 375's link between transportation patterns and reducing greenhouse gas emissions. And the bill will probably generate billions of dollars by capping emissions and placing a market value on them.

But will Congress use the money to invest in the transportation improvements and land use changes required to reduce automobile travel and hence emissions?

Probably not. The Waxman-Markey bill, which passed the House in June (see CP&DR Environment Watch, September 15, 2009), sets aside roughly 1% of climate change revenues for transportation. The Senate bill recently introduced by John Kerry of Massachusetts and Barbara Boxer of California adds a little money for transportation, but not a whole lot.

So, not unlike California, the federal government may soon be in the business of arm twisting local governments into pursuing smart growth strategies. And, like California, the feds are not likely to come up with the money required to build the necessary public transit systems.

All of which underscores an important and often-overlooked point about the federal climate change bill: It's not really about reducing emissions. It's really about the biggest new source of money the federal government has seen in a long time.

The money is coming along at the exact time that the federal government is stumped about how to fund transportation not just public transit but highways too. Gas tax revenue is on the decline and Congress has used general fund money to prop up the federal Highway Trust Fund twice during the last year, including a $5 billion bailout just a couple of weeks ago. House transportation guru James Oberstar (D-Minnesota) wants $500 billion for the six-year reauthorization of the transportation funding act, but nobody knows where the money is going to come from.

Meanwhile, public transit advocates are losing the money battle in the climate change bill. This means MPOs and local governments may soon be faced with a big new mandate to reduce automobile travel in the climate change bill, not the transportation bill and not much money with which to do it.

Part of the reason that regional planning advocates are having a tough time squeezing money out of the climate bill is that there's so much competition. The other reason is that the climate bill appears to be moving forward with little regard for what the transportation bill might say.

The money will come from the sale of greenhouse gas emission "allowances," which will have market value because overall emissions will be capped and gradually ratcheted down under the climate change bill. Many allowances will be given to current polluters, such as electricity generators, which will be able either to use them or sell them to other polluters, whichever is more profitable. (This is what is known as the "cap-and-trade" program.) Other allowances will be retained by the government and sold to generate money for various purposes, including transit. (Some allowances would be distributed to other government agencies, such as states.)

The battle over allowance revenue has been going on for several years on Capitol Hill. Other vested interests have gotten the jump on public transit and smart growth advocates, including the coal industry and in particular advocates of alternative-fuel vehicles. The smart growth approach has clearly been a sideshow. Meanwhile, public transit and smart growth advocates have had to fight a separate war on the transportation reauthorization bill.

The Waxman-Markey bill would permit states to use up to 10% of their allowances on transportation, but this would not be mandatory. The Kerry-Boxer bill goes farther by requiring states to use 10% of their allowances on transportation. Kerry-Boxer also creates a potential funding source for public transit. Some federal allowance sale revenue would be deposited into a fund known as the state "Climate Change Response and Transportation Funds." First call (10%) on these funds would be for coastal states dealing with sea-level rise; then a small portion (1%) would go to Indian tribes. After that, half of the remaining money would go to public transit. (The best description of these provisions can be found on Streetsblog.)

The kicker, of course, is that nobody yet knows how many allowances will be sold to provide revenue for this fund or how much money will result.

The question of how to link transportation planning with air pollution regulations has vexed regional planners for a long time. But it gets even more complicated with climate change legislation at the federal level.

Transportation and air pollution are linked, of course, by the fact that the burning of transportation fuels causes air pollution. That's why metropolitan planning organizations such as the Sacramento Area Council of Governments must make "conformity" findings so ensure that transportation funding decisions conform to the local air quality plan.

Senate Bill 375 seeks to reduce a particular type of pollution emissions greenhouse gases and it gives the California Air Resources Board considerable power. But it's not linked to other air quality laws. The state's metropolitan planning organizations are required to create what is known as a "sustainable communities strategy," which amounts to a land use scenario and a set of transportation policies supporting that land use scenario that will reduce travel enough to meet the greenhouse gas emissions reduction target set by the state. Still, because it's a state law, SB 375 recognizes that it can't operate in conflict with the federal transportation law. That's the whole reason for the "alternative planning strategy" under SB 375. If an MPO can't create a sustainable communities strategy that meets the emissions reduction targets because the strategies must be realistic according to the regional transportation plan then the MPO must create an alternative strategy that is not binding.

At the federal level, however, it's possible that climate-related transportation directives may be approved separately from federal transportation policy, and that's giving MPOs fits. The MPO provisions in the climate bill may be written as an amendment to the federal transportation law, which is tied to the Clean Air Act (CAA), even though transportation reauthorization is being considered separately. In June, MPO leaders from around the country wrote to Waxman and Markey expressing concern: "Creating a new parallel transportation process under the CAA, led by EPA, would create major difficulties in the transportation planning process." Among other things, the MPOs noted that one result could be that the climate bill will permit citizen lawsuits against MPOs on climate issues something the MPOs clearly don't want to allow.

It is unlikely that a federal climate bill will be passed this year. But passage next year is likely. There is no question that the result with be an SB 375-style process mandated federally. The big question is whether there will be any money to fund the mandates.