California Gov. Gavin Newsom’s proposed budget cuts include canceling billions of dollars in climate change spending, a blow to environmental advocates who look to the state as a stopgap for the Trump administration’s weakening of federal protections.
In January, Newsom proposed a $12 billion “climate budget” that, over the next five years, would offer incentives for companies to convert to electric vehicles, give low-interest loans to businesses to clean up their practices and spend billions on projects preparing for floods, droughts and wildfires.
But Thursday, Newsom proposed eliminating most of the foundation for those programs to balance a budget that will have an estimated $54.3 billion deficit. The economic downturn has been brought by a statewide stay-at-home order to limit the spread of the coronavirus. The order has closed most businesses for two months, putting more than 4.5 million people out of work and sending state tax collections plummeting.
The proposed cuts come as the state is battling the Trump administration over water quality and auto emissions, among other environmental issues.
“At a time when the Trump administration is mounting an unprecedented assault on environmental and public health protection, it’s absolutely devastating and horrifying,” said Kassie Siegel, director of the Climate Law Institute at the Center for Biological Diversity.
The Newsom administration says the cuts represent “unprecedented times” that have forced the state to “make sacrifices that we didn’t think six months ago we would have to do.” The administration chose to protect programs to clean up the air in disadvantaged communities and to provide safe drinking water.
“All the leaders around the world from Germany to Denmark to Japan are all suffering similar economic fates,” said Jared Blumenfeld, secretary of the California Environmental Protection Agency. “What California is doing is prioritizing and making sure, as the governor said, our values come first.”
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The biggest cut was scrapping a proposal to borrow $4.75 billion to prepare the state for climate-change disasters like sea level rise that threatens the coastal cities and devastating wildfires that have destroyed tens of thousands of buildings and killed more than 100 people.
That proposal could be revived in the Legislature, where lawmakers view it as a type of economic stimulus to create jobs during a coronavirus-induced economic downturn. But they would first have to convince Newsom not to veto it over cost concerns.
Newsom canceled a $250 million contribution to the “climate catalyst fund,” aimed at jump starting investment in technology to help clean up private sector polluters.
But the most ironic impact is on the state’s “cap and trade” program, which requires big businesses to purchase credits that allow them to pollute. Coronavirus-related closures since mid-March have shut down most businesses and kept cars off the road, leading to a dramatic improvement in air quality. But it’s also reduced the demand for credits, meaning the state is likely to make less money when it sells them.
That means less money for a host of programs offering incentives for companies to convert their diesel-powered fleets — one of the largest sources of air pollution — to electric vehicles.
“The good news is emissions are decreasing. However, there is a lot of funding that has occurred in the past that may not occur in the future as a result of that,” Blumenfeld said.
The Newsom administration canceled a plan to hire 53 more people to regulate the state’s oil and gas industry. The cut surprised environmental advocates because the new employees would have been paid for not by state income tax collections, but by fees paid from the oil and gas industry itself.
“Oil and gas won,” said Kathryn Phillips, director of Sierra Club California. “But people who breathe and live near ports are losing.”
State Oil and Gas Supervisor Uduak-Joe Ntuk said the economic downturn and “historically low demand for oil and gas” has impacted operators, “many of whom are facing layoffs and cutbacks.
“Requesting additional fees during this crisis would be a difficult challenge,” he said. “We all need to stretch our limited resources, and CalGEM is committed to continuing its critical core enforcement and regulatory work with its current resources.”