Study: Cap-and-Trade-Funded Projects Overstate Benefits to Disadvantaged Communities

Image: UCI Community Resilience Projects
Image: UCI Community Resilience Projects

Across the street from the Santa Ana Regional Transportation Center sits the four-story Depot at Santiago, a 70-unit mixed-use affordable housing development currently under construction. Also near this construction site is the Logan neighborhood, Santa Ana’s longtime refuge for low-income Mexican immigrant communities.

The Depot is the first and only affordable housing development in Orange County being funded with cap-and-trade dollars from the Greenhouse Gas Reduction Fund (GGRF). The site’s close proximity to public transit, the area’s high pollution burden, and the lack of local affordable housing helped it qualify for $3.9 million from the Affordable Housing and Sustainable Communities program.

There are not many cap-and-trade projects like the Depot — with direct, measurable benefits for disadvantaged communities — in California, and this is true as well for Orange County. This is important because the law calls for 25 percent of GGRF dollars to be spent within disadvantaged communities, and an additional 25 percent to be directed toward low-income households. A recent study released by the University of California Irvine’s Community Resilience Projects took a deeper look at the local impacts of cap-and-trade-funded projects in Orange County, and concluded that they may provide fewer benefits to vulnerable communities than they claim to.

One reason for this could be Orange County’s preference for multi-county projects. From 2012 to 2016, Orange County received $88.6 million from the GGRF. Most of that money — 86 percent of it — went to four regional transportation projects. Roughly half, about $43 million, was used to purchase ten fuel-efficient locomotives for Metrolink, and some $2.3 million was used to buy five natural gas buses for OCTA’s rapid bus fleet. In addition, $1.6 million went to Amtrak’s Pacific Surfliner transit transfer program, and $129,000 was spent on expanding a Perris Valley bus line.

The issue with this, according to the study, is that purchasing buses or investing in transit “is likely to have a more diffuse impact on individual disadvantaged communities because the nature of the investment is not directly place-based.” While documents and applications claim that more than $54.9 million in GGRF dollars are being spent to benefit Orange County’s disadvantaged communities, the impact — of lower emissions, for example —  only occurs while the buses and trains are passing through the area. Other causes of emissions or health and economic burdens, such as high volumes of traffic, proximity to industry, lack of access to transit, or lack of affordable housing near transit hubs, remain unaffected.

The study’s authors calculate that, instead, only $7.5 million of the funds should be considered directly benefiting Orange County households and cities.

“We must be careful not to assume that dollars spent on multi-county investments will have the same local impact as dollars that are invested solely in a single disadvantaged community,” they write.

For both single and multi-county projects, Orange County spent $54 million. Yet, for single-county projects, Orange County only spent $7.5 million. Image: UCI Community Resilience Projects
$54 million was spent on both single and multi-county projects that purport to benefit disadvantaged communities in Orange County–but only $7.5 million was spent on single-county projects. Image: UCI Community Resilience Projects

Orange County is not alone on this issue. In San Bernardino, roughly ninety percent of all GGRF projects that claim to benefit disadvantaged communities are multi-county projects, while in Riverside the portion is eighty percent. Los Angeles and San Diego are both investing between thirty and fifty percent of their GGRF dollars in multi-county projects.

Neighboring counties that have favored single-county projects in disadvantaged communities were Imperial (90 percent of projects), Los Angeles (56 percent) and San Diego (62 percent).

Potential GGRF projects are ranked according to a number of factors, including a score for the disadvantaged communities they purport to serve. The score comes from CalEnviroScreen, a state tool that aggregates environmental and population data for every census tract to identify communities with the greatest pollution burdens and health vulnerabilities. Los Angeles has the highest number of disadvantaged communities, with a population of 4.3 million living in those areas. That is more than double the number of people living under similar conditions in Orange, Riverside, San Bernardino, Imperial, and San Diego counties.

The study also points out that a recent update to CalEnviroScreen reduced the number of officially disadvantaged communities in Orange County, from 86 census tracts to 69.

  • Kris Fortin

    Bc legislation was passed so that low-income communities benefit, that state has an obligation to fund projects that will help alleviate impacts of pollution to these communities. The study argues that if the state makes it a priority, as it should since low-income communities bare the brunt of most environmental problems, it should follow through on its aim to benefit them. But its main criticism looks at what constitutes addressing the problem. Does an affordable housing project do more for a community than a locomotive? It depends, and I think it sucks to pit the two types against one another. But if a community/census tract has a high pollution burden, and the proposed solution has a diffuse impact, it’s valid to question if that project really does address the problems.

    Specific programs in GGRF are wholly underfunded. While picking at which benefits we should and shouldn’t expect, this program also continues to work with one-hand tied behind it’s back.

  • oceanstater

    a takeaway for me is that some seem to feel that a project is better if ONLY low income people benefit in preference to a project that everyone benefits from. That seems silly.

  • Okay, so a mere $225 million goes to the dumb high-speed rail project. I stand corrected. And I also learn that it’s not a transportation project but a jobs program for “disadvantaged communities”!

  • Melanie Curry

    Once again, the editor messed up

  • Kris Fortin

    thanks for the catch!

  • The very website that you’re linking to clearly says that the $900mn will be split up between four programs, of which HSR is only one. Furthermore, the HSR program has an aggressive target of making sure that individuals from disadvantaged communities are able to find work on the project. Last i checked, getting a job is a huge benefit.

  • Roughly half, about $43 million, was used to purchase ten fuel-efficient locomotives for Metro…

    Presumably Metrolink is the one with the new locomotives, not Metro.

  • How does spending $900 million on the dumb high-speed rail project benefit “disadvantaged communities”?


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