Darrell Steinberg Supports Using Cap-and-Trade Funds for HSR

Apr 14th, 2014 | Posted by

State Senate President Pro Tem Darrell Steinberg today announced a new proposal to guide the use of California’s cap-and-trade revenues. It includes earmarking 20% of those revenues for the high speed rail project:

In addition to permanent funding sources for affordable housing and mass transit, the strategy (available here) also provides a permanent source of funding for highway and road rehabilitation to improve traffic flows and repair, to retrofit streets for cycle-lanes, and for the Governor’s High Speed Rail project, which is projected to reduce heavy emissions generated by air and road travel. Senator Steinberg’s proposed strategy identifies funding for green infrastructure projects and clean-vehicle programs, seed funds to assist clean projects, and rebates for consumers.

From the Cap-and-Trade Investment Strategy:

III. A permanent source of funding for High-Speed Rail. (20%)

a. Purpose: Ongoing source for construction of HSR.
b. Allocation method: Continuous appropriation. Could be securitized.

What that means is HSR would would be explicitly authorized as a recipient of 20% of the cap-and-trade revenues. And the California High Speed Rail Authority could borrow against those revenues, which is what the “securitized” reference means.

Securitization of cap-and-trade revenues for HSR would be a game-changer for funding. That means the state could borrow against expected future revenues and have a lot more money available now – maybe, just maybe, enough to build the Initial Operating Segment to Los Angeles.

What might those numbers look like? Cap-and-trade auctions brought in $1.4 billion in revenue in 2013. 20% of that is $280 million a year. If those revenues don’t grow, then that comes out to $4.76 billion by 2030. That’s a big help to the project’s finances but not enough to get the tracks through the mountains and into LA. If those revenues do grow, then so does the HSR share. If cap-and-trade brought in $3 billion a year, HSR’s share is $600 million annually and $6 billion over ten years (say, 2020 to 2030).

30 years is a standard length for a revenue-backed bond. So what if the state were willing to “securitize” 30 years of HSR revenue? That could mean $8.4 billion in revenue at current cap-and-trade revenues and $18 billion at the speculative $3 billion a year in cap-and-trade revenues, though perhaps less depending on how interest costs are paid. That latter amount just might get the tracks into the LA basin.

UPDATE: In fact, Sen. Steinberg’s plan actually includes a projection of $5 billion a year in cap-and-trade revenues. They peg HSR’s share at $878 million each year. Over ten years that’s $8.78 billion. Over 30 years, that’s $26.34 billion – enough to get the IOS built.

There’s a lot of ifs to those numbers and so I don’t want to overstate this. The cap-and-trade money alone, even securitized, may not be enough to build the IOS if revenues don’t grow to projections. But it’s a huge shot in the arm for the project and goes a long way toward resolving the financial and legal problems triggered by Congressional Republican hostility to HSR funding.

Sen. Steinberg’s plan appears to have broad support:

Attending the press conference in support of the strategy:
Robbie Hunter, President, State Building and Construction Trades Council of California
Jim Earp, Executive Director, California Alliance for Jobs
Ann Notthoff, California Director, Natural Resources Defense Council
Tom Adams, environmental activist and retired environmental lawyer
Shamus Roller, Executive Director, Housing California
Marina Wiant, Policy Director, California Housing Consortium
Joshua Shaw, Executive Director of the California Transit Association
Steve Heminger, Executive Director of the Metropolitan Transportation Commission
Bill Higgins, Executive Director, California Association of Councils of Governments
Chris McKenzie, Executive Director, League of California Cities
Mike McKeever, Executive Director of Sacramento Area Council of Governments (SACOG)
Joel Keller, Board President, Bay Area Rapid Transit (BART)
Jeanie Ward-Waller, California Policy Advocate, Safe Routes to School National Partnership

I’m especially pleased to see the NRDC listed here, filling in for the utter lack of leadership we’ve seen from Sierra Club California on this issue.

What’s not immediately clear is how much support this has in the State Senate. But my guess is that Sen. Steinberg would not have proposed this unless he had strong confidence that it had a majority. And since this plan merely allocates existing revenues, rather than creating new ones, it requires a simple majority for passage rather than a 2/3 vote. That gives me confidence that this can become law, especially since one would imagine Governor Jerry Brown would be pleased with this plan.

I gotta say, today was a good day.

  1. Alan
    Apr 14th, 2014 at 13:59

    Very good news! Let’s get it done!

    Zorro Reply:

    Agreed and the nimbies will hate this. Too bad. :)

  2. Tony D.
    Apr 14th, 2014 at 14:05

    If this means bond monies will be freed up for Caltrain electrification, then I’m happy!

  3. John Nachtigall
    Apr 14th, 2014 at 15:01

    I agree it is a significant step towards meeting the requirement of prop1a, especially if it is passed as a continuing source of funding.

  4. Alon Levy
    Apr 14th, 2014 at 15:20

    Serious question: what percentage of the cap-and-trade funds do you think should go to HSR?

    Derek Reply:

    First, rehabilitating highways and roads would encourage driving and thereby drive up greenhouse gas emissions. Using cap-and-trade funds for that purpose would subvert the entire purpose of cap-and-trade.

    If taxpayers are unwilling to vote themselves a gas tax increase for highway and road rehabilitation, they may choose to divest themselves of unnecessary (or less necessary) roads and traffic lanes. This would be in harmony with the spirit of cap-and-trade, and would free up more funds for HSR.

    Alon Levy Reply:

    Yeah, the part about spending cap and trade money on highways is painful. Next stop: spending alcohol tax money on grants to microbreweries.

    StevieB Reply:

    10 percent would fund basic transportation infrastructure like road and highway maintenance administered through competitive grants. Forty percent of the cap-and-trade revenue would go to affordable housing, including communities built around transit options; 30 percent would subsidize transit projects under Steinberg’s proposal.

    Read more here: http://blogs.sacbee.com/capitolalertlatest/2014/04/steinberg-proposes-california-cap-and-trade.html#storylink=cpy

    Nathanael Reply:

    Actually, I’d prefer spending alcohol tax money on grants to microbreweries.

    Microbreweries encourage beer tasting rather than “get drunk as fast as possible on whatever swill you can find”, so arguably they are an improvement over the beer-drinking status quo.

    Spending cap-and-trade money on highways really has no upside.

    Eric Reply:

    I don’t see why anyone would object to a highway improvement that improves safety without increasing capacity, if that were to be suggested.

    Drunk Engineer Reply:

    I don’t see why anyone would object to a highway improvement that improves safety without increasing capacity.

    Because most “safety” projects also improve traffic flow. Do you really think Caltrans builds new auxilliary lanes for the safety benefit?

    Robert Cruickshank Reply:

    20% to 30%. This is at the low end of the estimate but I’m satisfied with it. Especially since 30% goes to other mass transit, much of which will connect to HSR.

    As to the roads section, look at how it’s written: roads *and complete streets*. We had quite a list of bike projects we wanted to fund when I was on the Monterey County Bike and Ped Advisory Committee and little funding for it. This would create a new pot for that money. And that money is distributed “based on competitive GHG criteria” which may mean that very little of it goes to paving roads that aren’t complete streets.

    joe Reply:

    What do you think about Mark DeSauinier’s Bike Sales Tax?

    He’s been and will continue to be a gadfly for HSR including cap and trade. I thought his bike sales tax proposal was tone deaf and somewhat contradictory if he’s that adamant about cutting CO2 emissions.


    S.B. 1183, from Mark DeSaulnier (D-Concord), was amended to change its name from “Bicycle Tax” to “Local Bike Infrastructure Enhancement Act of 2014,” in an attempt to focus attention on the trails it is meant to support and away from the fact that it is a proposed tax. It is, however, still a tax on bicycles. It’s set to be heard in the Senate Transportation Committee on April 9. Expect to hear more about this one, and catch up on our introduction to the bill here.

    Bicycle Tax: Senator Mark DeSaulnier (D-Concord) has proposed S.B. 1183, which would allow local jurisdictions to set a tax on bike sales. Funds from the tax would go towards trail improvement and maintenance. Cyclelicious got this right, pointing out that while bike tax proponents argue that the tax would provide “political credibility that cyclists pay their way,” this is a “bankrupt excuse of an argument,” since road infrastructure is disproportionately bankrolled by non-drivers through general taxes.


    Nathanael Reply:

    A mass of sidewalk projects could be a very good use for the funding. I suggest they be built with that new carbon-negative concrete, however…

    Emmanuel Reply:

    I just think that CHSR needs to be a lot “greener” to qualify for more cap-and-trade funding. Just being a HSR system doesn’t make the cut. Here are some of the factors that would sway my support for more cap-n-trade funding for HSR:
    -HSR chooses an alignment that does not destroy habitats
    -HSR ensures that the power it draws will come from 100% renewable energy & the power grid built to deliver the electricity should absolutely avoid waste. Somewhere in a National Geography I read that 20% of our electricity is lost on its way to our homes just because our grid hasn’t been updated since Thomas Edison
    -The construction of any portion of HSR should take the CO2 emissions into consideration. It’s not enough to build something “green” when you pump millions of tones of greenhouse gases into the air. The ends don’t justify the means
    -There should be clear requirements towards cities on how stations should be designed if they were to receive cap-n-trade funding.

  5. morris brown
    Apr 14th, 2014 at 15:33

    Sorry for formatting error in previous post…

    Robert wrote:

    Securitization of cap-and-trade revenues for HSR would be a game-changer for funding. That means the state could borrow against expected future revenues and have a lot more money available now – maybe, just maybe, enough to build the Initial Operating Segment to Los Angeles.

    What is the difference between what Roberts says can happen and other debt issues, such as water revenue bonds.

    Without a 2/3 vote of the legislature to approve a bond measure ballot, followed by a majority vote of the California voters to approve, this cannot be accomplished.

    Mike Reply:

    The Legislature has in the past found some “creative” ways to turn general obligation bonds (which require voter approval) into revenue bonds (which do not). Used to happen a lot with prison construction bonds. I believe the Leg used to say that their appropriation to a prison construction fund is “revenue” that backs the bond, which is not otherwise backed by the full faith and credit of the State of California and its General Fund. Perhaps the same game would be afoot here.

    Robert Cruickshank Reply:

    Yep, if CA Dems get their 2/3 majority back then they can simply pass the revenue bond using cap-and-trade revenues and correctly point out that doing so does not use taxpayer dollars.

    morris brown Reply:

    @ Robert Cruickshank

    At least now is spelled out a requirement for a 2/3 majority vote in the legislature. Also, still in the courts is the question of whether the Cap and Trade “revenue” are a tax or not. If eventually indeed ruled as a tax, plenty of implications, including the need to go to the ballot for voter approval.

    joe Reply:

    The Question has been answered. Cap and trade is not a tax.

    The decision is under appeal but that means the case will be determined well after the Cap and Trade is budgeted this summer and the project moves forward.

    Emmanuel Reply:

    You think that Democrats would support cap-and-trade for HSR, but there are many good arguments that this money could be spent on projects that reduce greenhouse gases even more than HSR and much sooner as opposed to late 2020s…

  6. Ted Judah
    Apr 14th, 2014 at 20:02

    Not to piss in the punch bowl but:

    Cap and trade is probably a declining revenue source, much like tobacco. Securitization could be a good option but the type of companies interested are sophisticated players.

    I think this is a good opportunity to switch to IOS North and build track from San Jose to Bakersfield. Plugging in the poorest parts of the state to Silicon Valley would obviously have some benefits and allow the Northern California Unified Service to get off the ground.

    It will be way easier to get more federal dollars to serve that system with LA than the reverse…

    StevieB Reply:

    As the sale of allowances is programmed to decline in order to reduce greenhouse gasses the value of those allowances at auction may increase. The revenue therefore may increase each year.

    Ted Judah Reply:

    Although it’s impossible to do it justice in short response like this, be aware cap and trade is the darling of firms like Goldman Sachs that essentially want to use it as a new asset class to leverage derivatives against.

    However, if you look at tobacco tax revenues, you will see that the more you charge for access when demand is assumed to be inelastic, the more demand falls. I know it seems counter-intuitive, but that is because while greenhouse gas emissions in California are not a necessity. It is very possible to shift a lot of pollution to other states and import energy back into the state, (as an example).

    John Nachtigall Reply:

    that is not what happened in the EU (the largest such program in existance)


    In March 2012, according to the periodical Economist, the EUA permit price under the EU ETS had “tanked” and was too low to provide incentives for firms to reduce emissions. The permit price had been persistently under €10 per tonne compared to nearly €30 per tonne in 2008. The market had been oversupplied with permits.[51] In June 2012, EU allowances for delivery in December 2012 traded at 6.76 euros each on the ICE Futures Europe exchange, a 61 percent decline compared with a year previously.[52]

    StevieB Reply:

    Approximately 350 of the states largest emission sources will be covered in the California cap and trade program. The cap on the aggregate emissions of covered sources will decline to the target levels by 2020. Some of the emission allowances will be allocated and some able to be purchased. A company will determine whether reduction or purchase of allowances is more economical. The Air Resource Board can adjust the amount of allowances allocated to change the price range of purchased allowances. Operation of the system requires competent management of allowances and California can benefit from the mistakes of other trading systems.

    adirondacker12800 Reply:

    a carbon tax would do the same thing.

    Derek Reply:

    Call it a “climate change mitigation and cost recovery fee” so it doesn’t require a 2/3 vote.

    Paul Dyson Reply:

    It will be interesting to see in a few years if there is any industry left here to pay the fee, tax, whatever you want to call it…

    synonymouse Reply:

    Sri Racha to Cleveland!

    Derek Reply:

    As long as we use the revenue to investment in California, companies will continue to be born here.

    Paul Dyson Reply:

    But not companies that would pay this fee.

    Nathanael Reply:

    You don’t need carbon-polluters in California. Every industry can operate carbon-neutral now, except steelmaking. And you never had big steelmakers in California anyway.

    Nathanael Reply:

    And sure, yeah, it’s a declining revenue source. It’ll still raise a lot of money in the next 10 years.

    Paul Druce Reply:

    You don’t need carbon-polluters in California. Every industry can operate carbon-neutral now, except steelmaking. And you never had big steelmakers in California anyway.

    Oil refineries and cement making?

    adirondacker12800 Reply:

    For as long as I can remember people have been screaming about how this that or the other thing is making wherever business unfriendly. Saint Ronnie for one. That was 40 years ago. Yet people keep moving to California and California incomes keep rising.

    synonymouse Reply:

    Rich people seeking a sunny sand box for la dolce vita, wunderkinder and dirt-poor immigrants move to California. Forget any middle class.

    Jimmy Fallon did a bit last week on the rich protesting the super-rich. Funny.

    synonymouse Reply:

    Oh I forgot cartel guys tapping a fat market for various and sundry vices.

    adirondacker12800 Reply:

    Just because people don’t want to live in your Ozzie and Harriet fantasyland doesn’t mean they aren’t leading happy productive lives.

    synonymouse Reply:

    I am certain Elon, and Mark, and Larry, and Eric & Sergei are quite content.

    Oh, and I forgot carpetbaggers.

    EJ Reply:

    Because all of California is just like either 1) San Francisco, or 2) A Northern Californian’s stereotype of LA.

    adirondacker12800 Reply:

    Yes California is so dystopian that rich people move there…

    Paul Dyson Reply:

    Y’all are missing the point. Would we see growth or even the continued presence of enterprises that would pay this fee? How much does Oracle pay? Or Google? It’s no good relying on these funds if they are going to diminish. Am I missing something?

    Paul Druce Reply:

    Y’all are missing the point. Would we see growth or even the continued presence of enterprises that would pay this fee? How much does Oracle pay? Or Google? It’s no good relying on these funds if they are going to diminish. Am I missing something?

    Missing quite a bit. Rather hard for refineries to move, for instance, since there hasn’t been a new one with a capacity greater than 100K barrels per day since 1976 (Garyville, LA). Electric plants really aren’t going to be moving either. Nor, I imagine, are cement factories terribly prone to relocation.

    synonymouse Reply:

    Yeah, cement plants do close. Santa Cruz.

    Yeah, generating stations do close. San Francisco.

    If I were the big oil co.’s I would sell the Bay Area refinieries to some small fly-by-nites and bail. But that’s just me.

    Ted Judah Reply:

    The fact is this discussion sidesteps the inconvenient truth that California tried something not so dissimilar about 15 years ago and got rolling blackouts, a recalled Governor, and Petro-crats in DC who were very unsympathetic.

    I would venture Tesla’s decision to place their GigaFactory in CA has 99% to do with this levy. They recognize arbitrage is going to raise the cost if business for no good reason and are staying away.

    Paul Dyson Reply:

    Paul Druce: Small refineries have closed (Bakersfield, Ventura) and existing ones out of state have significantly added capacity. Numerous cement works have closed and with new mercury standards the rest will soon follow. There is plenty of cement capacity in other states and indeed around the world. Cemex built an import terminal at the Port of West Sac which has yet to receive any material. At the height of the boom we were importing cement from China and Thailand. Electric plants are closing (San Onofre not a good example of course) but old oil fired ones have gone. Electricity can easily be imported from out of state or will be generated from wind or solar, at least that is the plan. So we are intent on diminishing the sources of carbon and at the same time building a business plan on using carbon fees to build a railroad. Something doesn’t add up.

    Reedman Reply:

    To be pedantic, SF closed a generating station, but built an extension cord under the Bay to get power from further away.

    Joe Reply:

    Energy intensive activities always seek cheap power. The cap and trade is about fees to incentivize low carbon power. It’s going to help CA transition.

    Remote Columbia Falls MT has an aluminum plant. It’s there for the Access to low cost hydro-electricity.
    Now with deregulation, they can sell their power and decided to cut production.

    Tesla is looking to setup a factory closer to the raw materials which is why I think NV will win.

    Nathanael Reply:

    Carbon-negative concrete has been invented. You don’t need all the carbon-positive cement plants any more.

    Paul Druce Reply:

    Paul Druce: Small refineries have closed (Bakersfield, Ventura) and existing ones out of state have significantly added capacity.

    And existing ones in state have added capacity as well. Note also that refineries could only “relocate” to other locations within PADD 5 because of oil transport issues; that’s Alaska, Arizona, California, Hawaii, Nevada, Oregon, and Washington.

    At the height of the boom we were importing cement from China and Thailand.

    Isn’t that to be expected with a boom? And California remains either the first or second largest producer of cement in the country.

    Electric plants are closing (San Onofre not a good example of course) but old oil fired ones have gone.

    The old oil fired ones haven’t made any sort of economic sense in better than 30 years.

  7. joe
    Apr 14th, 2014 at 21:32

    Revenue estimates for 2015-16 fall between 2 and 13 Billion.

    See LAO report Figure 4 Page 13 as Taken from the Air Resources Board. They are not criticizing the figure or data.

  8. morris brown
    Apr 15th, 2014 at 07:58

    Robert wrote:

    What might those numbers look like? Cap-and-trade auctions brought in $1.4 billion in revenue in 2013.

    Now I don’t know where Robert got this number, but just published in the Sac Bee is:


    Under AB 32, the 2006 law that created California’s cap-and-trade program, industry must purchase permits for generating the type of emissions blamed for global climate change. After six auctions, the program has generated $663 million for the state so far, according to the California Air Resources Board. Steinberg’s office projects the permits could soon bring in $3 billion to $5 billion a year.

    It would be nice to get an accurate number.



    Auction Revenue

    Although a significant number of emission allowances will be freely allocated in California’s program, many will also be sold at auction. The first year of auctions generated over $525 million in revenue for the state. The state anticipates annual auction revenue to rise over time. On September 30, 2012, Governor Jerry Brown signed two bills into law, establishing guidelines on how this annual revenue will be disbursed. The two laws do not identify specific programs that will benefit from the revenue, but they provide a framework for how the state will invest cap-and-trade revenue into local projects. California’s first quarterly cap-and-trade GHG allowance auction took place on November 14, 2012. About 29 million greenhouse gas allowances, each representing one metric ton of carbon dioxide, were auctioned off in this first auction to more than 600 approved industrial facilities and electricity generators.

    joe Reply:

    1.4B seems to be the sum of 2012 and 2013 or 1,100 M and 300 M


    While the initial auction at the end of 2012 turned in somewhat disappointing results, 2013’s auctions gained a head of steam; to date, more than 324 million carbon allowances have been traded. Each credit is an allowance for one ton of carbon emissions.

    But it’s the cash value of those carbon allowances that was watched most closely through 2013 around the state Capitol. ARB officials say all told, carbon credits issued and bought in the year were valued at almost $1.1 billion.

  9. Tony D.
    Apr 15th, 2014 at 09:16

    BTW, any chance this development could finally get private/foreign investment going on the project? (Anyone?)

    John Nachtigall Reply:

    How would any private (or for that matter public) investor make money?

    They could make money running the trains for a fee, but if you had to invest say 10 billion in the system, how would you make a profit. There isn’t anything to make money on except for the real estate and that would be drowned out by any co-investment in the infrastructure

    Keith Saggers Reply:

    They get a long lease (66 years or 99 years) on the system, then they start selling tickets.

    John Nachtigall Reply:

    i dont think the economics work out if they make any kind of substantial up-front investement.

    Lets say they invest 10 billion. But you have to invest that as they build the system, so lets say 10 years before it is finished.

    So they run they system and get the profit. The first 5 years there is no profit because ridership is building (like in every other HSR system).

    So starting year 16 you start to see ROI. Even if you are pulling in 200-300 million a year in profit (which would be fabously sucessful) you are never going to catch the curve on ROI because you could have invested that 10 billion and got a return starting day 1 instead of year 16.

    there is just no way for a private investor to make money on this system if they have to invest up front.

    Ted Judah Reply:

    You got it backwards. A carrier can’t make money building the infrastructure hoping to recoup the cost. But a manufacturer can recover its initial investment by locking in proprietary technological standards. Microsoft does not make the bulk of its money by selling devices or operating systems, but by setting specifications for other licensees to use Windows.

    Like an airline or cruise ship, the operator is going to break even on passenger transport costs while turning profits on supplementary revenue streams like advertising, food, parking, etc.

    John Nachtigall Reply:

    Your ignoring the math. They have to invest billions now to build the system and get millions later. You can’t make money that way. The profits from running the system will never recoup the investment, especially when you have to wait so long for the return to start.

    It’s the magnitude of the profits, not where they come from, that is the issue.

    Ted Judah Reply:


    You are presuming this would be a design-build-operate arrangement when I think that’s probably what will not happen.

    Alstom, Kawasaki…etc…. will put money toward construction if we buy their technology and it is proprietary. Then, instead of the operator being affiliated with the manufacturer, it will be someone else (maybe a US airline) that lease from the State the rolling stock needed to do the HSR service. The operator can turn a profit because it is the State that securitized the up front investment from the manufacturer in exchange for ongoing payments for rolling stock.

    John Nachtigall Reply:

    By definition to make money the manufacturer would have to “invest” less money than they sell in equipment. The operator in your scenario does not contribute anything to infastructure.

    So in the end, in your scenario, they essentially get a discount on the trains. They need someone to invest 30 billon. That is 2 orders of magnitude different than what you are talking about

    StevieB Reply:

    You are arguing what is in the business plan which does not anticipate private investment until construction of an operating segment is completed at which point an operating concession is to be sold.

    Derek Reply:

    Private investors would build small towns along the future line in order to make a profit and create demand for the train, just as they did back in the 1800s. Then the train line would arrive and create even more demand for real estate in the town.

    John Nachtigall Reply:

    Certainly one way of making money, but there is a hitch in that plan also.

    So step 1 is invest 10 billion in infrastructure.
    Step 2 is buy land along route, but that land is not free, you have to buy that also, even if you use emanate domain. Now since this is not an old western movie, you can’t “screw the widow” out of the deed for pennies and since everyone knows the route of the train you have to pay market rates.

    Now if you build ultra swanky buildings you can get a 25% return.


    In 2013, the building sold its final unit, generating US$750 million in total sales, a 125 percent return on the estimated US$600 million in development costs.[19]

    Personally I don’t think you can get that kind of return outside of SF but I am trying to be nice. So best case you need to invest another 40 billon in land and construction to get a 50 billon return after sales.

    So 50 billon in and 15 years or so later you get 50 billon back. People with 50 billon don’t make those kinds of deals. They invest in bridges and parking systems with immediate returns and better percentages.

    I’m really not trying to be mean, I just don’t see how private investors in the infrastructure ever get the return

  10. synonymouse
    Apr 15th, 2014 at 13:11
  11. joe
    Apr 15th, 2014 at 18:21

    Transit Union and Sierra Club Join Forces for Earth Day and Beyond

    Transit is important, “not only to people who ride it but also to everybody who breathes oxygen in the world,” said ATU President Larry Hanley. That’s why the union is strengthening its coordination with the Sierra Club.

    “They completely get the importance of mass transit,” he said. “It’s just that we haven’t found ways to formalize our public relationship in the past. That’s what we’re going to do now.”

    “We’re working with elected officials and candidates for public office to get out and ride transit with us, to organize riders to contact Congress for a better transit bill,” Hanley said, referring to the pending reauthorization of the MAP-21 transportation bill. They’re also planning a rally May 20 on Capitol Hill, after which members of the ATU and the Transport Workers Union will visit Congressional offices. Sierra Club locals and other community groups from around the country will support that event with phone calls to their representatives.

    Maybe the California Chapter it’s Lobbying Arm can turn it around and start endorsing all forms of public transit.

    Jerry Reply:

    Is there a Transit Day?

    joe Reply:



    On June 19, 2014, American Public Transportation Association (APTA), and public transportation systems across the country will celebrate the 9th Annual National Dump the Pump Day.

    In these tough economic times with high gas prices, everyone is looking for a way to save money. National Dump the Pump Day encourages people to ride public transportation (instead of driving) and save money.

    Riding public transit is an economical way to save money, particularly when gas prices are high. The latest APTA Transit Savings Report shows that a two person household that downsizes to one car can save – on the average – more than $9,900 a year.

  12. morris brown
    Apr 15th, 2014 at 23:09

    Appellate court rules against the Authority and AG

    The 3dr district appellate court has just ruled 3-0 and summarily denied the request for a writ, sought by the Authority, which would have denied the petitioners in the Tos et. al vs. the Authority in Sacramento Superior Court (Judge Kenny) from going ahead with the trial on the second part of the case (the 526a, declaratory relief part)

    The Petition for Extraordinary Writ of Mandate or Other Appropriate Writ is denied. The standard of review for a judgment on the pleadings is the same as for a judgment following sustaining of a demurrer; we look only to the face of the pleading under attack. [Citations.] . . . All facts alleged in the complaint are admitted for purposes of the motion and the court determines whether these facts constitute a cause of action. [Citations.] (Hughes v. Western MacArthur Co. (1987) 192 Cal.App.3d 951, 954-955.) The parties’ motions for judicial notice are denied. RAYE, P.J. (RoBu)

    So Tos et. al. should soon have a trial date set to hear the very important claims under 526a.

    jonathan Reply:

    I wonder what Joe and Alan have to say about that!

    morris brown Reply:


    Joe will reply this is a victory for the Authority and again shows the incompetence of attorneys for the opponents of the High Speed Rail project.

    adirondacker12800 Reply:

    They aren’t incompetent, they know how to grift a mark when they see one.

    morris brown Reply:

    @adirondacker12800 who writes:

    They aren’t incompetent, they know how to grift a mark when they see one.

    Dictionary meaning of grift:

    To engage in swindling or cheating.

    So sir you are now claiming the Attorneys and and plaintiffs in Tos et al, with the cooperation of the 3rd district Appellate court, are engaging in swindling and / or cheating.


    adirondacker12800 Reply:

    The lawyers are billing by the hour. The more billable hours the more bling they can buy when it’s all over.

    John Nachtigall Reply:

    I agree Morris. There will be some comment about “Laurel and Hardy”.

    joe Reply:

    It’s not a victory for the Authority. Judge Kenney’s decision to hold trial was appealed. Since Kenney’s decision allows Tos to move forward, they benefit.

    Laurel & Hardy still botched the lawsuit amendment. By failing to include the Legislature as a party and recognizing the mistake too late. The Legislature’s Appropriation is still valid. Kenney could make no ruling against the Legislature.

    The State’s battles are with Kenney’s finding of law and not the Tos legal team.

    synonymouse Reply:

    This ruling does not bode well for PBHSR. That the current scheme does not comply with Prop 1a is so in your face the only way for the courts to let it move ahead unaltered would have been to have not taken up the case in the first place.

    Since the legislature cannot change a voter initiative it will have to go back to the electorate. Seems to me that it is the easiest out for the court. Change Prop 1a to conform to the plan rather than vice versa.

    Of course PB could try a surprise end run away from Mojave.

    adirondacker12800 Reply:

    the last one was going to be the end of it all. and the one before that. and the one before that. and the one before that.
    Why would PB want to not go through Mojave. It’s more work and more billing for them.

  13. morris brown
    Apr 16th, 2014 at 09:33

    Examining the theme of this thread:

    Darrell Steinberg Supports Using Cap-and-Trade Funds for HSR

    it should be noted that his new proposal is sharply at odds with what he was proposing just a very short time ago.

    In a speech to the Press Club on Feb 20 2014, Steinberg was strongly supporting a new Carbon Based Fuel tax and at the same time hammering away that Cap and Trade funding had many problems.

    A video of Steinberg’s full speech, as well as a transcript can be viewed on his home page at:


    An excerpt of his speech can be viewed at:


    and the text from this part of the speech I copy below.

    Pretty amazing change in his position. Did the lose of the 2/3 Democratic majority in the State Senate have anything to do with this sudden new position?


    (from Steinberg’s Feb 20th speech to the Press club)…

    Cap and Trade is funding projects and programs that achieve our climate goals. Its cost to Californians has thus far been modest if negligible. That is great and should continue.
    But cap and trade is about to grow in a big way.

    Next year, in 2015, the Cap and Trade system will expand from covering polluting industrial plants to include carbon-based fuels.

    Many of us recall the state’s energy crisis and other instances where good and well-intended public policies led. to serious crises. I am concerned that bringing fuels under Cap and Trade leaves consumers vulnerable to anti-competitive behavior and Wall Street traders, which have led to unpredictable price spikes and shortages in the past.

    The energy crisis and the mortgage and financial crisis of 2008 both were caused by unregulated trading and market manipulation. We must be mindful of the law of unintended consequences.

    I am not alone with my concerns. A 2008 Congressional Budget Office report cautioned that, quote, “C02 allowance prices could affect energy prices, inflation rates, and the value of imports and exports. Volatile allowance prices could have disruptive effects on markets for energy and energy-intensive goods and services.”

    In 2013, a report by California Air Resources Board warned that these allowances create, quote, “the potential for a wide-range of price outcomes.11 In other words, there is a real risk of spikes and wild fluctuations in gas prices.

    If these forewarnings materialize next year, California’s hard-working low-and-middle income families,whose budgets are hand-to-mouth, will suffer most.

    And if gas prices spike and fluctuate wildly, I am concerned that the climate change skeptics will use the crisis to unravel AB 32 and weaken our essential climate goals.

    Today, I am proposing strengthening our state’s climate policy through 2050. And I propose that we acknowledge and embrace the clear connections between climate change and poverty as we build on our state’s stellar record of environmental leadership.

    I propose four key principles:

    1. Set aggressive targets in statute, beyond 2020, to break our fossil fuel addiction and reinforce the climate goals of AB32 through 2030 and 2050.
    2. Continue Cap and Trade for polluting industrial plants, known as stationary sources. But replace of Cap and Trade’s current 2015 expansion into the fuel economy with a broader, more stable, and more flexible Carbon Tax of a similar amount on these same fuels;
    3. Return most of the Carbon Tax revenues to poor and middle-income California families, through an Earned Income Tax Credit;
    4. Inject the remaining Carbon Tax revenues into a multi-billion dollar 21st Century development of California’s mass transit infrastructure, to reduce traffic and pollution from cars that use gasoline.

    Nothing in my proposal will roll back, or otherwise weaken, any greenhouse gas reduction requirements,including the low-carbon fuel standards.

    There will be critics on my left, and naysayers on my right. But there is a moral and economic imperative to act. Our failure to do so will be seen through the eyes of our children and young people: the new generations of Californians who will confront these issues as the rest of us move off the public stage.

    On the issue of climate change, we have no choice: we must reduce the amount of carbon we put in the air, and that will come with a price.

    Under either a Carbon Tax or Cap and Trade applied to fuel, consumers will pay more at the pump. That’s necessary. Higher prices discourage demand. If carbon pricing doesn’t sting, we won’t change our habits.

    On the issue of how this requirement is achieved, we have a choice: and I believe a carbon tax is a better choice than Cap and Trade for fuels.

    Under Cap and Trade, no one can tell us whether fuels will trade at 10 cents or 40 cents a gallon in 2015, at any given time and without warning.

    A carbon tax is stable. A carbon tax is significantly less vulnerable to gaming. A Carbon Tax is

    Under my proposal, the price of carbon fuel is projected to rise gradually and predictably, starting at an estimated 15 cents a gallon in the first year. In 2020, the year current AB 32 targets end, it is estimated that the Carbon Tax will cost 24 cents a gallon, which is still lower than the upward price risk under Cap and Trade at 40 cents a gallon. It isn’t until 2029 that a carbon tax on gasoline is estimated to pass the upward price risk of Cap and Trade.

    My attempt here is to stoke a debate. I care about Cap and Trade versus Carbon Tax, and reasonable people can differ.

    Putting a price on carbon fuels is essential to salvaging our environment. For climate policy to work, it has to sting. I am concerned about who we sting. I say we return the majority of the money to the people who can least afford to foot the bill and who are already suffering most from climate change. My carbon tax proposal will be used to alleviate the financial burden of carbon pricing among low and middle-income families.

    Derek Reply:

    With a carbon tax (climate change mitigation and cost recovery fee), the tax/fee will be stable but emissions will vary. Cap-and-trade is the opposite. Which is better?

    adirondacker12800 Reply:

    If cap and trade works the way it’s supposed to work emissions will vary. As people use less fossil fuel the recovery will go down. It’s the same thing with a carbon tax. As people switch away from fossil fuel the recovery will go down. the legislature can raise taxes. Virtuous circle, it will make the price go up which will make non fossil alternatives more attractive..

    The Pollutealot Corp. buys x tons of cap and trade. Their ancient boiler springs leak and they decide to go get a super efficient model. How do they and the state calculate how much carbon they saved. By examining their fuel usage. It’s an elaborate system that could just as easily be implemented with a carbon tax.

    Joe Reply:

    The goal is to reduce emissions to a specific level so I prefer the approach designed to reduce emissions to those set targets. That intent to regulate the emissions to achieve the goals also makes cap and trade a regulatory fee and not a tax.

    Steinberg’s endorsement of cap and trade is very significant advancement for those of us, including him, wanting to doing something about emissions now. It’s the positive flip side of Morris’ observation that Steinberg has compromised his position on cap and trade.

    BTW any complaining that this market based solution behaves like a market is like complaining that water is wet.

    adirondacker12800 Reply:

    It’s a bureaucrat’s wet dream. Taxing fuel achieves the same goal and hits everyone. The bureaucracy is in place. It’s cheap and effective. Why not use it?

    joe Reply:

    Yes it is easier. Bureaucrat’s run our Gubberment but revenue’s a Legislative responsibility.

    The carbon tax requires 2/3 vote and that’s a bridge too far. Implementing it NOW undermines cap and trade markets and the current political alliances.

    Cap and trade’s a fee to regulate carbon emissions which in CA means it needs only a simple majority. That’s why we have it.

    I prefer a carbon tax personally but the Dems decided to take the market approach and that happens to be achievable and (like ACA/Romney-Care) uses the GOP’s market based rhetoric to achieve a goal. That messes with the Conservative dogma since they don’t have any alternatives except the Constitution (which they are using to stop cap and trade) and freedom to burn coal.

  14. morris brown
    Apr 16th, 2014 at 11:37

    Fresno Bee article on Appellate court’s denial of a writ:


    Appeals court denies high-speed rail petition

    synonymouse Reply:

    Evidently PBHSR’s strategy has wound down to dilatory. They appear to be afraid of going to trial and will try to gain time to spend whatever money they can commit.


  15. Reality Check
    Apr 16th, 2014 at 12:23

    Atherton resident and long-time Caltrain/HSR critic:
    To Caltrain: Don’t electrocute our trees

    Joe Reply:

    Here is the draft of MP’s comments on the DEIRDRE for Caltrain.

    It’s pretty whiny about the demand Caltrain restrict the ROW and simultaneously don’t block traffic with more trains. Also whiny about Blended HSR CEQA being done separately.

    Also complains that Caltrain doesn’t measure traffic using the same approach as Menlo Park – even a city council member had to comment that the approaches vary by peninsula city so what the heck is Caltrain supposed to do?

  16. Keith Saggers
    Apr 16th, 2014 at 13:56

    An elevated viaduct near Madera will likely be one of the first major pieces of tangible construction for California’s proposed high-speed rail line, with work starting as early as next month.
    Jim Laing, a project manager for Tutor Perini Corp., talked about the construction plan Monday afternoon at an industry forum for engineering students, professors and professionals at California State University, Fresno. Sylmar-based Tutor Perini, Zachry Construction of Texas and Pasadena-based Parsons Corp last summer won a contract for just under $1 billion from the California High-Speed Rail Authority to design and build the first 29-mile stretch between Madera and Fresno of a statewide bullet-train line.
    Monday’s daylong forum and workshops were part of a professional series that Fresno State’s engineering program is organizing for students, professors and industry experts, said Ram Nunna, dean of the university’s Lyles College of Engineering.
    Nunna said his goal is for Fresno State to play a leading role in research for America’s fledgling high-speed rail industry and train graduates who have bullet-train expertise as the technology spreads across the nation.
    The reporter can be reached at (559) 441-6319, tsheehan@fresnobee.com or @TimSheehanNews on Twitter
    Read more here: http://www.fresnobee.com/2014/04/07/3865619/valley-high-speed-rail-construction.html##storylink=cpy

  17. synonymouse
    Apr 16th, 2014 at 18:54

    Free Rizzo – nothing but a fat fall guy:


    RICO Jerry Brown and the High Desert real estate developers. Now that’s corruption. Never see the cops going after the kingfish.

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