Comment Log Display

June 21, 2012

Mary D. Nichols, Chairman
California Air Resources Board
1001 I Street
Sacramento, CA 95814

Re: AB 32 Cap and Trade Program Auction Proceeds Investment Plan

Dear Chair Nichols and members of the California Air Resources
Board: 

Thank you for hosting the public consultation on the investment of
AB 32 cap and trade auction proceeds on May 24, 2012.  Water
related energy use in California consumes 19 percent of the state’s
electricity, 30 percent of its natural gas, and 88 billion gallons
of diesel fuel every year.  It is logical to conclude that cap and
trade auction revenues should flow to address this single largest
consumer in the state. On behalf of the Santa Cruz Integrated
Regional Water Management partner agencies, who include: the Cities
of Watsonville and Santa Cruz; Central, Scotts Valley and Soquel
Creek Water Districts; the County of Santa Cruz; and the Resource
Conservation District of Santa Cruz County, we offer these ideas
for how to address the two questions posed by the Board: 

(1) How can California effectively invest the auction revenues to
advance the goals of AB32 including long-term, transformative
efforts to improve public health and develop a clean energy
economy?

a)	In terms of water management there are many places that the
state can invest to achieve transformative change: 

•	Agricultural and urban water use efficiency programs 

•	Infrastructure to reduce energy and water use for water and
wastewater management. For example, energy efficient pumps,
membranes and systems.

•	Low Impact Development (LID) techniques can be used to mitigate
future flooding, benefit water quality, provide urban greening and
provide relief from heat island effects. The state should continue
to provide grants and technical support for LID at the local
level.

•	The portfolio approach to Integrated Regional Water Management
(IRWM) has been very successful. The scope of IRWM can be expanded
to bring energy utilities and transportation managers into the
conversation so that water, energy, and transportation/land use are
considered within the same collaborative, stakeholder driven
approach that includes a focus on GHG reductions. Cap and trade
auction revenues can be made available to efforts to support
regional priorities utilizing the IRWM process or a similar
process.

b)	Engage the California State Coastal Conservancy and other state
conservancies in identifying and funding open space, wetlands and
forest acquisitions and restoration projects with a climate
benefit. These projects could become part of a statewide climate
change adaptation or mitigation strategy. The State Conservancies
should participate more fully in the Integrated Regional Water
Management Program in order to identify and also promote
environmental projects with a climate benefit. An example of this
is the acquisition and restoration of coastal wetlands to provide a
buffer against sea level rise, sequestration of carbon and a bank
of biodiversity and habitat.

c)	Through the Department of Conservation, make funding available
to Resource Conservation Districts, counties and others to a)
accelerate adoption of sustainable agricultural practices, and b)
facilitate economic valuation of ecosystem services. It is
important to have a clear understanding of the economic value that
functioning ecosystems contribute in order to assess impacts
attributable to climate change, and to engage stakeholders in
finding real solutions. For example, if agri-businesses do not
value the economic benefit provided to them by natural pollinators,
how can they be expected to engage in efforts to protect
pollinators’ habitat in the face of climate change? Transformative
should mean moving to a system that is sustainable.  Recognizing
payments for ecosystem services is one way to achieve this.

d)	Empower local leadership by providing funding for local pilot
programs that can be replicated. For example, the City of
Watsonville and the Resource Conservation District of Santa Cruz
County are collaborating on development of a program to identify
local carbon offsets with multiple benefits (environment, jobs,
public health, economy) for the voluntary carbon market. More seed
funding and operating support is needed to implement innovative
efforts like these at the local level. Buyers of credits have an
interest in investing in the local economy; therefore, local
agencies need to identify local carbon offset projects that are
cost-effective and multi-benefit.

(2) What criteria should be prioritized in the plan for investment
of auction funds and why? 

a)	Coastal areas and the Bay-Delta should be a priority for
investment because these will be most directly affected by sea
level rise, storms and flooding. Coastal resources and
infrastructure threatened by climate change include: transportation
systems, agriculture, water and wastewater treatment, outfalls and
pipelines, aquifers, electric utilities, fisheries and wetlands and
many other human needs such as homes, schools and businesses. The
state should make funds available through Integrated Regional Water
Management for regions to prioritize addressing these
vulnerabilities.

b)	Projects that demonstrate a collaborative approach of agencies,
businesses, and stakeholders working together should be a priority.


c)	Project proponents showing early actions and/or a history of
past performance should be priority.

d)	The water sector should be priority due to the potential to
achieve multiple benefits with a single investment.

The Santa Cruz IRWM Steering Committee thanks you for this
opportunity to provide comments on behalf of the Santa Cruz IRWM
partner agencies. If you would like more information please contact
Karen Christensen at (831) 464-2950 or
kchristensen@rcdsantacruz.org.