In particular, the programs CARB has designated as “Tier 3” could lose their funding if carbon market revenues fall. That amounts to hundreds of millions of dollars for affordable housing, low-carbon transit, and clean air and drinking water for low-income communities.
At Friday’s meeting, board members grilled CARB staff for hours over this risk. Rajinder Sahota, CARB’s deputy executive officer for climate change and research, asserted that analyses from environmental advocates and the state’s Legislative Analyst’s Office, which predict the MDI program could lead to billions of dollars of lost carbon-market revenue, have overestimated the likely financial impacts.
But Kyle Meng, a professor at the University of California at Santa Barbara who co-authored an analysis that found the MDI could lead to $2.3 billion less for the GGRF and $1.7 billion less for the California Climate Credit from 2027 to 2030, pushed back against those assertions in a social media post after Friday’s vote.
“Seeing such voodoo economics coming from the agency tasked with governing the world’s second most valuable carbon market was disappointing, to say the least,” Meng wrote.
Sanchez agreed at Friday’s hearing to insert several last-minute amendments, which were proposed by other board members to forestall the risk of MDI undermining state carbon-reduction targets or throttling carbon market revenues.
