California Gov. Gavin Newsom is proposing to cancel billions of dollars in climate spending to help close the financial gap created by the COVID-19 crisis.
Pandemic Changes Priorities
In January, before the coronavirus pandemic hit, Newsom offered a $12 billion “climate budget” in which he proposed issuing low-interest loans to businesses for being more eco-friendly, subsidizing companies’ conversion of their commercial vehicle fleets to electric vehicles, and spending taxpayer money to prepare infrastructure and services for droughts, floods, and wildfires expected to increase because of climate change. On May 12, Newsom proposed eliminating the climate budget to balance the state’s overall budget, which is facing an estimated $54.3 billion deficit at present.
The largest proposed cut would scrap a plan to borrow $4.75 billion to prepare the state for sea level rise and wildfires, which Newsom has blamed on climate change.
Controversial Climate Catalyst Fund Nixed
Newsom also canceled a proposed $250 million contribution to the “climate catalyst fund,” which he had said would jump-start investment in technology to help private businesses reduce pollution and carbon dioxide emissions.
From the start, the climate catalyst fund faced opposition by the California Legislative Analyst’s Office (LAO), which said in a statement the program was too large in scope and failed to serve a clearly identifiable critical purpose.
“The administration has not adequately justified the proposal, particularly because the administration has not demonstrated that it will be able to identify such projects,” the LAO stated. “Furthermore, these funds could be used for other legislative priorities, and existing state programs support many of the same projects that the administration has indicated might be funded through the Climate Catalyst loan fund.”
In a statement, a Newsom spokesperson said the climate budget cuts were required by “unprecedented times” forcing the state to “make sacrifices that we didn’t think six months ago we would have to do.”
The state and local governments’ pandemic responses have forced many businesses to close their doors and keep employees at home, which, although it has reduced emissions, could pose budget problems for the state because of the reduced tax revenues, Jared Blumenfeld, secretary of the California Environmental Protection Agency, told KTLA News.
“The good news is emissions are decreasing,” said Blumenfeld. “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.
“What California is doing is prioritizing and making sure, as the governor said, our values come first,” Blumenfeld told KTLA.
Emma Kaden (EKaden@heartland.org) is an assistant editor at The Heartland Institute.
PHOTO: Gage Skidmore via Flickr.