States like California face sobering budget shortfalls, and their governors and legislatures are grappling with how and where to make cuts. These debates cast a spotlight on the critical importance of state budgets to an equitable clean energy future.
State funding is one of the most important tools governments have to respond to the climate crisis. Legislative funding decisions, along with agency program design decisions, determine which climate and energy programs to fund, and how. They are essential to ensuring that historically marginalized and under-resourced communities have access to the essential building blocks of a decarbonized society: energy-efficient electrified homes, fossil-fuel free mobility options, more accessible affordable housing, and clean electricity and storage.
In a recently published issue brief, Climate Justice Funding Lessons from California: Program Design and Engagement Opportunities, we outline the major determinants of funding program resources and design and spell out how advocates can influence them — beginning with the budget process. Active engagement in the state budgeting process will be essential to defend vital programs from budget cuts and influence future allocations.
However, opportunities to influence investments and shape funding programs do not start or end there. The issue brief also illuminates agency investment plans, which determine how agencies plan to spend discretionary funds. Lastly, the issue brief discusses how agencies develop the detailed program guidelines that determine key parameters, like eligibility, permissible projects, and project management requirements. Advocates’ participation in all of these decisions is essential to ensure that the programs meet the needs of their intended recipients.
California’s Budget Crisis and its Implications for Climate Justice Funding
Consider the current budget woes in California. Lower-than-expected tax revenues this year have led to a $27.6 billion budget shortfall. On May 10, the governor’s office unveiled the revised budget for the 2024–2025 fiscal year, which details how the governor will address this year’s shortfall and next year’s projected deficit of $28.4 billion. The budget proposes significant cuts to clean transportation and equity programs and building decarbonization programs that are intended to address the state’s largest sources of greenhouse gas emissions and air pollution. The governor’s proposal to balance the budget includes shifts or delays in funds from the Greenhouse Gas Reduction Fund, which holds the funds from the state’s cap-and-trade allowance auctions. These reductions and delays could seriously undermine the state’s climate and pollution reduction goals.
Legislative committees will continue to deliberate on the budget until voting to send a final budget back to the Governor by June 15. Until then, there is time to influence these critical budget decisions. Our issue brief provides an overview of the budget process and how to participate.
Beyond the Budget: Agency Funding Decisions and Program Design
While the budget is, of course, critical to the fate of essential funding programs, climate justice advocates should also have their eyes on additional decision points that shape funding and program design. As our issue brief describes, the legislature sometimes gives agencies a degree of discretion over their funding. Agency investment plans determine how to allocate these funds. By participating in agencies’ investment planning processes, advocates can influence the emergence of new programs and the flow of the funds to existing programs. Our issue brief provides a number of California examples and explains the differing opportunities for participation offered by a variety of agencies.
As any applicant for funding knows, agency requirements are often long and complex. Another critical intervention goes back to the source: program guidelines and handbooks. While many factors are determined by statutory requirements, advocates can nonetheless influence key parameters, including eligibility, acceptable projects and activities, and a wide range of other elements. Our issue brief describes the kinds of requirements determined in program guidelines and highlights several examples demonstrating opportunities for participation in their development.
Additional Resources on Climate Justice Funding Programs
CPR’s Climate Justice Program has conducted in-depth research on California’s climate justice funding programs, research intended to not only strengthen California’s programs, but provide lessons for other states as well as the federal government. Additional resources include:
- Climate Justice Index. The Index describes funding processes, provides agency organizational charts, and includes a range of information on numerous California funding programs.
- Funding a Clean and Equitable Energy Transition: Lessons from California. This seven-part report series, published in November 2023, analyzes funding governance: how California agencies make decisions about who and what to fund, focusing on both high-level frameworks and on intended recipients’ on-the-ground experience.
Upcoming budget cycles, investment planning, and program development and design processes in California and other states are critical opportunities for advocates and the public to defend and shape climate justice programs. Our issue brief offers detailed guidance as to where, when, and how concerned citizens can make their presence felt in state-level decision-making. Their participation will be essential to a clean and equitable clean energy transition.
