This page last reviewed May 14, 2013

Cap-and-Trade Auction Proceeds

This page contains information about the Administration’s activities to develop investment plans and other materials to support California’s use of the State portion of the proceeds from the auction of allowances under the Air Resources Board’s (ARB or Board) Cap-and-Trade Regulation to support Assembly Bill (AB) 32, the California Global Warming Solutions Act of 2006.


In 2012, the Legislature passed and Governor Brown signed into law three bills – AB 1532 (Pérez, Chapter 807), Senate Bill (SB) 535 (De León, Chapter 830), and SB 1018 (Budget and Fiscal Review Committee, Chapter 39) – that establish the Greenhouse Gas Reduction Fund to receive auction proceeds and to provide the framework for how the auction proceeds will be administered.  SB 535 further requires that 25 percent of the proceeds that will be expended benefit disadvantaged communities and at least 10 percent of the proceeds expended be invested in projects located within those communities.

Current Activities

In January 2013, the Proposed State Budget for 2013-14 included a brief discussion of Administration priorities for investment, emphasizing investments in the transportation and energy sectors from which large reductions in GHG emissions are possible.  In addition, areas to be examined during the planning process include sustainable agriculture practices (including the development of bioenergy), forest management and urban forestry, and the diversion of organic waste to bioenergy and composting. 

In February 2013, the State held public workshops to solicit public input during the development of the first investment plan.  Following the subsequent release of a draft investment plan, ARB conducted a public hearing to discuss the draft plan on April 25, 2013.  

The Administration has completed a three-year investment plan for the cap-and-trade auction proceeds.  The investment plan identifies the State's greenhouse gas emission reduction goals and priority programs for investment of proceeds to support achievement of those goals.

Related Activities

Disadvantaged Communities:  for information on the tool that the California Environmental Protection Agency is using to inform the identification of disadvantaged communities for investment, please see the Office of Environmental Health Hazard Assessment’s webpage on the California Communities Environmental Health Screening Tool (CalEnviroScreen) at:

On April 24, 2013, the final maps and ZIP codes that indicate disadvantaged communities were released.  

The communities shown in blue on these final maps show those areas of the state that had overall CalEnviroScreen scores in the 90th to 100th percentile.  These areas and ZIP codes have been identified as disadvantaged communities, consistent with the requirements of SB 535 and AB 1532.


April 2013 Board Meeting

In April 2013, ARB held a public hearing in Sacramento on the draft Cap-and-Trade Auction Proceeds Investment Plan.

February 2013 Public Meetings

In February 2013, the State held public workshops to provide input on the development of the draft Cap-and-Trade Auction Proceeds Investment Plan for Fiscal Years 2013-14 to 2015-16. The workshops were held in Fresno, Sacramento and Los Angeles; each workshop covered the same topics. 

May 2012 Public Consultation

In May 2012, ARB hosted a Public Consultation on Investment of Cap-and-Trade Auction Proceeds.  

Staying in Touch

To receive electronic notices of future meetings and availability of materials, you can sign up for a new listserve on the investment of Cap-and-Trade auction proceeds at: