Governor’s Budget Notes Sustainable Agricultural Solutions to Climate Change


Beginning this year, as part of the state’s new cap and trade program, the first permits to emit greenhouse gas emissions — otherwise known as “allowances” — will be distributed by the state. Despite recommendations to the California Air Resources Board from an outside advisory group of economists and policy experts that all allowances be sold at auction, most of the allowances will be given free of charge to large GHG emitters.

The state has chosen to auction only a small percentage of allowances. Even this small percentage will generate hundreds of millions of dollars in revenue in the first years of the program and several billion in later years.  Auction revenue will then be available for investment in our communities to meet the challenges of climate change and to achieve the emission reductions goals of the state’s climate change law, AB 32.

How to allocate cap and trade revenue will be debated in the legislature this year.  Governor Jerry Brown recently released his budget proposal, which makes clear that revenue from cap and trade must be used for activities that reduce greenhouse emissions and meet the objectives of AB 32.  The investments will spur innovation, create jobs, and usher in new opportunities in our communities. These investments come at a crucial time for the state, which faces high unemployment and declining revenues.

In his budget, Governor Brown outlines areas of cap and trade revenue investment, including: “funding to reduce (GHG) emissions associated with water use and supply, land and natural resource conservation and management, and sustainable agriculture.”

This acknowledgement of the value of sustainable agriculture in the climate change debate is a significant step forward.

Since we began our work together nearly three years ago, as a coalition of sustainable agriculture groups, farmers and science advisors, the California Climate and Agriculture Network has advocated for cap and trade revenue investments in agriculture.  University researchers, the UN Food and Agriculture Organization, USDA and other organizations have all found that sustainable and organic agriculture offer some of the best opportunities to reduce greenhouse gas emissions and support a sustainable food supply.  But in the early days of our work, few in the state had considered the possibilities of how sustainable agriculture might contribute to meeting the objectives of AB 32. CalCAN and our partners have worked together to change that.

Governor Brown’s forward thinking budget proposal on cap and trade revenue, which also includes investments in clean and efficient energy, low‑carbon transportation, and sustainable infrastructure development, puts California on a path toward tackling one of our most significant challenges – climate change – while supporting healthy, vibrant communities for all.

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