Unpacking Last Year’s Climate Bond: Surprising Insights and What They Mean for You – Legal Planet

Last year, California took a significant step by approving a climate bond worth $10 billion, known as Proposition 4. This bond focuses on issues like safe drinking water, wildfire prevention, drought preparedness, and clean air. However, many might expect it to also emphasize new clean energy projects, which isn’t the case.

In January, the Governor proposed a plan for implementing these funds. About 27% of the total bond will be allocated in 2025-2026, but the Legislature might adjust this. Some discussions have arisen about multi-year spending plans, which could shift priorities. The state’s financial situation adds another layer of complexity to these decisions.

People may be surprised to find that the bond leans more towards climate adaptation—how to cope with climate change—rather than mitigation, which focuses on reducing greenhouse gas emissions and building clean energy infrastructure. Here’s a quick look at the main funding priorities:

• Safe drinking water, drought, and flood resilience: $3.8 billion
• Wildfire and forest resilience: $1.5 billion
• Coastal resilience: $1.2 billion
• Extreme heat mitigation: $450 million
• Biodiversity solutions: $1.2 billion
• Sustainable farms and ranches: $300 million
• Park access and creation: $700 million
• Clean air programs: $850 million

The California Natural Resources Agency will oversee the bond’s implementation, along with various state agencies. Since federal funding options are limited, this bond will be crucial for California’s climate projects, particularly for vulnerable communities.

An important aspect of the bond is its focus on equity. At least 40% of the funds must benefit disadvantaged communities, with 10% specifically for severely disadvantaged groups. This is significant, as these communities often bear the brunt of climate impacts. The definitions are clear:

• A “disadvantaged community” has a median income lower than 80% of the area’s average.
• A “severely disadvantaged community” falls below 60% of the area’s average.
• A “vulnerable population” faces higher risks from climate change and lacks the resources to adapt.

Additionally, up to 10% of all funds can go toward technical assistance for these communities, ensuring they can access the support they need for project implementation.

When it comes to energy infrastructure, funding from the bond includes:

• $50 million for the California Energy Commission’s Long-Duration Energy Storage Program to enhance grid reliability.
• $135 million for grid resilience projects benefiting disadvantaged communities.
• $325 million for publicly financing transmission infrastructure to support clean energy goals.
• $475 million for improvements to port facilities, including those related to offshore wind.

In total, the climate bond represents a strong commitment to resilience efforts. However, it doesn’t significantly increase funding for clean energy infrastructure, despite the demand for such initiatives. Energy experts have suggested another bond focused on climate mitigation is necessary, akin to the recent federal Inflation Reduction Act. But with California currently facing a budget deficit, it remains uncertain if this will happen anytime soon.

As we move forward, the outcomes of this bond will be crucial, especially for vulnerable populations who rely on these projects. Community awareness and involvement will be key to ensuring these funds are used effectively.

For more details on California’s climate initiatives, you can refer to the California Legislative Analyst’s Office [here](https://lao.ca.gov/Publications/Detail/4958).

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