Revenues from California’s carbon Cap-and-Trade Program flow into communities across California, particularly those disproportionately affected by poverty and pollution. The funds are invested in programs, collectively called California Climate Investments, which advance low-carbon transportation, sustainable communities, clean energy, natural resource conservation, and waste diversion. Since 2014, the legislature has appropriated more than $9 billion in California Climate Investments designed to reduce greenhouse gas (GHG) emissions while providing local environmental, public health and economic co-benefits.

The Luskin Center for Innovation (LCI) is the leading academic research center informing and analyzing California Climate Investments. Our aim is to help California meet its goal to maximize co-benefits across the state and particularly in historically under-served areas affected by pollution and poverty. We both evaluate and help inform equitable and effective California Climate Investments.

Evaluating the Progress and Results of Investments

Evaluation of the Transformative Climate Communities Program Investments 

(current project)
Researchers include: J.R. DeShazo, William Eisenstein, Colleen Callahan, Emma French, Silvia R. González, Jason Karpman, Bo Liu, Britta McOmber, and Kelly Trumbull

The Transformative Climate Communities Program (TCC) may be the most innovative, comprehensive, and equitable experiment in community-scale climate action, ever. State funding via California Climate Investments, along with leveraged funding, supports community-led development and infrastructure projects in clean transportation, affordable housing, renewable energy, energy efficiency, urban greening, and more. TCC is a high profile program dedicated to empowering communities most impacted by poverty and pollution to choose their community vision, strategies, and projects to enact transformational change – all with data-driven milestones and measurable outcomes.

LCI developed the first plan to assess the progress and results of investments in communities awarded TCC grants by the Strategic Growth Council. We are now implementing that plan in three TCC Round 1 communities — Fresno, Watts, and Ontario that collectively are receiving TCC grants of about $133 million — to assess change over time toward community-defined goals. Building upon our work for Round 1, we are developing two updated iterations of our evaluation plan for the communities of Northeast San Fernando Valley (Round 2 grantee – $23 million) and the City of Stockton (Round 3 grantee – $11 million), and will be implementing the plan in those communities as well.

Employment Benefits from California Climate Investments and Co-Investments

(2018 report)
Authors: J.R. DeShazo, Jason Karpman, Weilong (David) Kong, and Colleen Callahan

LCI completed the first-ever study of the statewide employment outcomes from California Climate Investments. See the article in Capitol Weekly. We found that for every $1 million the state spends in California Climate Investments, 8.8 jobs are supported in California. This can be compared to 1.6 jobs for every $1 million invested in the oil and gas industries.

Design and Implementation of the Clean Cars 4 All (EFMP Plus-Up Pilot) Program 

(2017 report)
Authors: Gregory Pierce and J.R. DeShazo

Informed by research from LCI, the California Air Resources Board (CARB) introduced the Enhanced Fleet Modernization Program (EFMP) Plus-Up pilot program to better integrate vehicle retirement and replacement incentive programs in support of low- to moderate-income households. LCI researchers then studied how the EFMP Plus-Up pilot was implemented. This report describes lessons learned from the first year of operation in the San Joaquin Valley Air Pollution Control District and South Coast Air Quality Management District. LCI’s analysis supported a geographic expansion of this program, now called Clean Cars 4 All.

Increasing Clean Vehicle Rebates for Low– and Moderate-Income Drivers 

(2016 paper)
Authors: Tamara Sheldon, J.R. DeShazo, and Richard Carson

More Californians can now afford clean vehicles, in part thanks to research involving the LCI. The researchers assessed the performance of alternative rebate designs for PEVs and compared these alternatives in terms of cost-effectiveness and equity. They found that providing progressive rebate levels based on consumer income levels would provide benefits within those performance criteria. These findings helped inform the adoption of California’s progressive rebate system in which low- and moderate-income drivers receive an additional $3,000 to $6,500 in financial incentives to purchase a clean vehicle. Additionally, income rules for most rebates limit eligibility to households with less than $500,000 in annual income.

Informing Equitable and Effective Investments

Making Justice40 a Reality for Frontline Communities

(2021 report)
Authors: Colleen Callahan, Daniel Coffee, J.R. DeShazo and Silvia R. González

President Biden’s Justice40 Initiative aims to “address the disproportionate health, environmental, economic and climate impacts on disadvantaged communities.” This report provides a framework that federal officials could use to maximize Justice40’s impact. Drawing from analysis of state-level climate programs seeking to address environmental justice, the authors identify key areas of focus for the initiative: investing to provide resources for the people who need them most, empowering communities to make local policy and investment decisions, and holding government agencies and contractors accountable for furthering environmental justice goals.

Guide to Greenhouse Gas Reduction Fund Program Designs, Expenditures, and Benefits

(2015 report)
Authors: Jeffrey L. Rabin, Colleen Callahan, and J.R. DeShazo

State proceeds from California’s carbon Cap-and-Trade Program flow into the Greenhouse Gas Reduction Fund (GGRF) and then are appropriated by the Legislature as California Climate Investments. This report provides a guide to California Climate Investments, focusing on programs most targeted to benefit disadvantaged communities. The report provides an overview of each program and then analyzes program investments based on recent funding levels (inputs) before and after the GGRF. Additionally, the authors put forth a framework to systematically assess program inputs, outputs, outcomes, and impacts. They also make recommendations to enhance benefits from the investments.

Investment Justice through the Greenhouse Gas Reduction Fund: A Framework 

(2014 report)
Author: Colleen Callahan (see report for list of the many other contributors)

Senate Bill 535 (de León), signed into law in 2012, requires that 25 percent of proceeds in the Greenhouse Gas Reduction Fund go to projects (now referred to as California Climate Investments) that provide benefits to disadvantaged communities in California. LCI organized a working summit (see below) and as an outcome produced a report that proposes a framework for planning and implementing California Climate Investments to help maximize benefits in communities affected by pollution and poverty.

Government agency and climate equity leaders speak at an Investment Justice Workshop hosted by LCI.

Climate Equity Workshops 

(2014 – current)
Lead organizer: Colleen Callahan, with collaborators

In 2014, LCI hosted the first major statewide gathering to inform implementation of California Climate Investments in disadvantaged communities. Nearly 200 government leaders, climate equity advocates, researchers, and executives of nonprofits and business associations participated in the working summit, which involved providing advice in investment sector specific breakout groups. Since, then LCI has co-hosted or participated in annual Los Angeles region and statewide climate equity convenings in collaboration with the California Climate Equity Coalition.