In July, the Air Resources Board (ARB) released a concept paper related to the Second Investment Plan for cap-and-trade auction revenues. (The ARB’s first investment plan was released in 2013.) The investment plan is meant to identify general strategies for allocating auction proceeds over the next three years, and the ARB’s concept paper is the first step in the public process of developing the final investment plan.

The concept paper identifies spending options in three broad categories: (1) transportation and sustainable communities, (2) clean energy and energy efficiency, and (3) natural resources and waste diversion. The paper also provides, among other things, a “needs assessment,” which identifies the types of projects that should be considered for additional funding within each category of spending. Below, we discuss the importance of the investment plan for making spending decisions, and we identify issues to make the plan a more useful document for policymakers.

http://www.lao.ca.gov/Publications/Detail/3298