November Cap-and-Trade Auction Goes Very Well

Nov 27th, 2016 | Posted by

Last week brought more silver linings to California amidst the gathering storm clouds of the Trumpocalypse, as demand rebounded for cap-and-trade permits:

Demand for California pollution permits rebounded in the latest carbon auction after plummeting earlier this year, state officials said Tuesday.

Still, the permits did not sell out, heightening uncertainty about the program’s future.

About 88 percent of the available credits were purchased at the quarterly auction held last week by California and its trading partner, Quebec, Canada. That’s an improvement from the 35 percent sold in August and 10 percent in May.

I don’t think that an 88% sell rate compared to 35% in August and 10% in may qualifies as “heightening uncertainty” – it’s quite the opposite. There’s still a legal case to deal with, but as Democrats now have 2/3 majorities in Sacramento, a governor absolutely determined to leave strong climate change policy as his legacy of 16 years in office, and a state ready to fight against Trump and the Republicans with everything it’s got, I’m bullish on the future of AB 32 and cap-and-trade.

Clearly, permit buyers are bullish too. And this bodes very well for the ability of California to fund high speed rail.

I’m Thankful for California Voters

Nov 25th, 2016 | Posted by

The votes are in – most of them, anyway – and Californians have delivered some big, if indirect, victories for high speed rail. Let’s review:

Prop 53 goes down to defeat. Prop 53 fell behind on election night, but it took two weeks of counting until defeat became official. The numbers as of November 25 are 49.1% yes, 50.9% no. This ensures that future high speed rail bonds will not be subject to constant public votes, which would make it harder to successfully sell those bonds. It’s a big defeat for HSR deniers, and a big win for Governor Jerry Brown.

Democrats retake a 2/3 supermajority in Sacramento. Democrats won back several Assembly seats they had lost in 2014, ensuring they picked up a 2/3 supermajority in the lower chamber. It took a bit longer for the Senate supermajority to be declared, but earlier this week Joshua Newman passed Ling Ling Chang and has secured the 27th Senate seat for Democrats. This doesn’t guarantee smooth sailing for Democrats, especially as the Assembly mod caucus remains intact. But it sure helps, and makes a renewal and extension of cap-and-trade a lot easier.

Local rail measures pass. HSR needs local rail connections to thrive, and voters north and south approved measures to address both. In LA, 70% of voters approved the massive Measure M package, which will help bring rail to many more corners of LA County – with the HSR station at LA Union Station at the hub of the system. Bay Area voters approved Measure RR to invest in much-needed BART maintenance, and Santa Clara County voters approved Measure B, ensuring BART will reach downtown San José and Santa Clara.

That’s the very good news. Unfortunately there’s bad news as well, and it starts as the top, as everyone knows.

Rail projects face a Trumpocalypse. Sure, Trump talks about infrastructure spending, but the combination of a Republican Congress and a lunatic right-wing president does not bode well for any federal money for rail, including high speed rail. You can pretty much kiss federal matching funds for urban rail goodbye. It’s possible that a deal can be reached to set up an infrastructure bank but I would not be surprised if Congressional Republicans refuse to allow it to loan to California HSR. Worse, the US Department of Transportation and the Federal Railroad Administration and the Surface Transportation Board will come under the control of right-wing ideologues, causing new headaches for California HSR. While one might try to find some comfort in positive things Trump has said about HSR, the fact is that this administration’s domestic policy is largely being run by Mike Pence, with a heavy assist from Reince Priebus (and thus Paul Ryan). So those key federal agencies are going to fall into very anti-HSR hands.

Anti-HSR Congressional Republicans survive. It’s not over yet, but Darrell Issa is hanging on by a hair in his race against Doug Applegate. Jeff Denham and David Valadao won more easily over their opponents. It would have been nice to see them lose their seats, removing big obstacles to HSR and putting Democrats closer to a renewed House majority.

The lessons of the 2016 election are clear, and they’re not new. It’s the same lesson as every election since 2010: California is on its own, and should start acting like it. HSR will have to funded solely from state and private sources.

In fact, everything that makes up a modern 21st century civilization in California, from public schools to health care to infrastructure, is going to have to happen on the state level now. Judging by this powerful anti-Trump statement from California’s legislative leaders, the state’s government is up to the task.

So who wants to talk about the 2018 governor’s race?

Thursday Open Thread

Nov 17th, 2016 | Posted by

Apologies for the long gap in posts. I’m not stunned into silence by Trump’s victory – I’ve been waiting for more CA election results so as to post a review of what happened and what it means for HSR. But with 3.4 million ballots left to count, such finality may be a few weeks away. So let’s keep the discussions going here, and I’ll post something tomorrow with a preliminary look at CA results.

California HSR 2016 Election Preview

Nov 7th, 2016 | Posted by

The 2016 election will be pivotal for the future of California’s high speed rail project. Here’s what you need to watch for on election night in terms of impact on HSR:

Who wins the White House? Barack Obama has been every bit the friend of HSR we hoped he’d be back in 2008. Although Donald Trump has occasionally said decent things about HSR and federal infrastructure spending, you shouldn’t believe a word of it. If he wins, and if Congress stays in GOP hands, they’ll unleash a further and deeper attack on HSR. But if Hillary Clinton wins, she can be expected to continue supporting HSR – and potentially promoting massive new federal infrastructure investment that could help HSR.

Who controls Congress? When Republicans seized control of the House in 2010, it put a halt to any hope of new federal HSR funding. Democrats are in a good position to take control of the US Senate. The House is a longer shot, but Democrats could make big gains there this year. If Democrats take the White House and the Senate, at minimum, it would bode well for a federal infrastructure spending deal – perhaps via an infrastructure bank. Obama and Joe Biden have previously suggested an infrastructure bank could help fund HSR.

If Democrats do make gains in Congress, many of the pickups could come in California, where the Republican Party faces an extinction-level event due to a massive voter registration surge and widespread voter dislike of Trump and his party. Here are the key Congressional races being fought in California:

• CA-10: I would love nothing more than to see Jeff Denham finally lose. He supported HSR in the State Senate, then flipped and opposed it in the US House. He’s been a major thorn in the side of HSR and getting rid of him would be a big boost to HSR’s fortunes. Democrat Michael Eggman stands a good chance of winning here.

• CA-21: David Valadao has also been an important anti-HSR voice in the Valley, even though his constituents desperately need the clean air and jobs it would bring. Emilio Huerta is running a strong campaign against Valadao and a voter turnout surge could lift him to victory.

• CA-49: Darrell Issa has also worked to undermine HSR, holding hearings designed to make HSR look bad. He is facing an extremely strong challenge from Democrat Doug Applegate, and polling has shown this race to be very close.

• Democrats also have a shot at winning CA-25, with Bryan Caforio running against incumbent Steve Knight. If the California Republicans face a Trumpocalypse, they could also lose CA-39 (Ed Royce) and maybe even CA-48 (Dana Rohrabacher).

Will Democrats regain supermajorities in Sacramento? Control of the state Legislature is not in doubt. Republicans have not held majorities in both houses since 1970. But Democrats stand a chance of winning a 2/3 supermajority in both houses, though the path is slightly easier in the Assembly than in the Senate. One thing to keep in mind is that there is a caucus of moderate Democrats in the Assembly who are not necessarily friends of HSR, though they’re less likely to want to kill it than are Republicans.

The path to a renewed Democratic supermajority runs through six Assembly seats in SoCal, including AD-65, where Democrat Sharon Quirk-Silva is trying to reclaim the seat that Republican Young Kim took from her in 2014. In the Bay Area, Republican Catherine Baker – who also won for the first time in 2014 – is facing a stiff challenge from Democrat Cheryl Cook-Kallio. There are also key intraparty battles among Democrats, such as Karina Cervantez Alejo vs. Anna Caballero in AD-30 in the Salinas Valley and Eloise Gomez Reyez vs. Cheryl Brown in AD-47 in San Bernardino, as well as Bill Dodd vs. Mariko Yamada in SD-3 and Jane Kim vs. Scott Weiner in SD-11.

Will Proposition 53 fail? Gov. Jerry Brown has put his popularity on the line to stop this bad initiative. Will he prevail?

Will voters pass local rail funding initiatives? The Bay Area is voting on Measure RR to finally invest in desperately needed maintenance for BART, and LA is voting on Measure M to finally fund a massive expansion of Metro Rail. Both initiatives face opposition from corporate centrists (like State Sen. Steve Glazer) and from anti-tax Republicans. Someday, future generations will look back on people like Sen. Glazer and shake their heads at the penny-pinching shortsightedness that has kept California stuck in traffic, stuck in smog, and stuck with high CO2 emissions.

Some of these races may not be decided on election night. And California’s glacial pace of counting ballots means some races and propositions may not be decided until nearly Thanksgiving. LA County’s previous rail funding initiative, Measure J, just barely failed to reach the 66.7% mark in 2012, a result that took days to determine.

And once this is done, the real fun begins: the 2018 election cycle and the battle to succeed Jerry Brown!