In the face of mounting climate challenges, California must double down on efforts to deliver investment to the people, places, and programs working tirelessly to avoid the worst impacts of climate change on communities. With every dollar more critical than ever, it’s time to focus on 1) retaining available in-State funding sources – like the energy efficiency budget and the Greenhouse Gas Reduction Fund – and 2) reforming funding processes to ensure resources are deployed effectively and equitably.

When the unprecedented windfall of federal funding came to communities in the last few years, I made it my business—as Statewide Best Practices Coordinator of the California Climate and Energy Collaborative (CCEC)—to help them access dollars to advance their energy and climate goals. Those of us who have been around a while had made a lot of the last boon of significant federal funding (through the Obama-era American Recovery and Reinvestment Act of 2009) and had observed the last Trump presidency’s approach to energy and climate issues. We knew that custodians of place-based sustainability programs and projects should get while the getting was good. In the process of helping communities track, shape, and pursue new funding programs (see details below), I listened closely. I became attuned to reasons why the dollars, while temporarily abundant, were often still inaccessible for most. Not only that, they could be extractive.

The Costs of Competitive Grants

Competitive public grants often use convoluted and expensive one-shot application processes that are oversubscribed, sometimes by up to 8 times the available funding, leaving hundreds of good proposals “orphaned.” This high application burden burns the limited capacity of far more communities than a program helps, leaving many worse off for having tried. And in the effort to get dollars to the most underserved places, applications often became even more complicated, ironically increasing the barriers to entry for the communities we had most intended to reach.

Despite band-aiding challenging grant processes with millions of dollars in technical assistance, I watched communities divert massive attention and resources from existing initiatives to bend themselves into a fundable pretzel—usually unsuccessfully—further draining already limited capacity. Most I talk to on a daily basis are desperate for relief from the grant boom-or-bust cycle. I wrote the report Better Funding to elevate a dialogue about the invisible costs to local and Tribal communities associated with application burden and other traditional public grant processes. The paper offered 70 recommendations to State and federal agencies mined from deep community engagement about how to ease funding deployment, ranging from basic solicitation changes to bold structural reforms that innovate beyond status quo competitive grantmaking.

A Changing Funding Outlook

Now, the outlook for energy and climate funding is shifting again. Even before the reelection of Trump, federal stimulus investments were largely awarded and winding down. Not only will available energy and climate dollars contract significantly, previously awarded federal dollars from agencies like EPA and DOE may be clawed back, making all that time spent applying a heart wrenching waste.

And sadly, the State of California was gradually coming to over-depend on continued federal dollars, looking outside itself to meet its aggressive climate ambitions. For example, Governor Newsom’s recent Executive Order N-5-24 could open the gates to decreasing if not dismantling the State’s only recurring and reliable funding for local and place-based building emission reductions and climate action strategies through long-standing energy efficiency programs—of all things—to lower utility customer bills. The Executive Order presumed agencies could replace ratepayer investment with federal dollars, a provision that did not age well only a week later when we woke up to an election shift back to a federal policy of climate denialism.

Local governments are the first to stand with the Governor to meaningfully address rising utility costs on customers and constituents. However, it’s important to consider that we will only make things worse by short-changing existing programs rather than addressing costly problems like climate-induced wildfire response and growing transmission and distribution expenses, which are largely responsible for increasing energy bills.

This misguided political move follows directly on the heels of legislative efforts like AB 3264, which proposed to evaluate and potentially cut long-standing ratepayer funded energy programs. In response, scores of environmental and climate justice organizations have advocated for other actions that will address the real drivers of the energy affordability crisis instead of scapegoating the only programs that can ease the energy affordability burden for customers and benefit California’s most underserved. In fact, regional stakeholders and experts will be elevating a productive conversation on “the real drivers of the energy affordability crisis” at our REACH IE event on December 5th (detailed below).

There are other legislative actions that will make a big impact on California’s climate funding outlook. In 2025, policymakers will consider reauthorization of the state’s cap and trade policy, which generates roughly $4 billion annually for the Greenhouse Gas Reduction Fund, the state’s other most reliable emission reduction funding stream. While California’s revenue forecast isn’t likely to sustain the tens of millions in climate investments prompted in 2021 and 2022 by a particularly good budget year, climate practitioners are hopeful about the recent passing of Proposition 4. This measure authorized $10 billion in bonds to support projects to reduce climate risks and impacts as follows:

• $3.8 billion for safe drinking water and water resilience
• $1.95 billion for wildfire prevention and extreme heat mitigation
• $1.9 billion for protection of natural lands, parks, and wildlife
• $1.2 billion for protection of coastal lands, bays, and oceans
• $850 million for clean energy
• $300 million for agriculture

Stepping Up: Reform and Action

With the funding landscape in flux, it’s more important than ever to do more with what substantial resources we still have. To continue to invest in the people, places, and programs that are working to avoid the worst impacts of climate change on our communities, California has to step up even more to retain the dollars we have and reform funding processes so we divert fewer resources on ineffective deployment.

Fortunately, we have already begun. Following the growing momentum driven by Better Funding and other recent reports, here’s how CCEC is keeping our nose to the grindstone on funding access: 

Continue to help communities access the dollars that remain

• Created a funding resources webpage
• Host a monthly Local Energy Resources Network (LERN) meeting to help our network more easily navigate and shape available funding and other assistance opportunities
• Provide regular guidance and templates to our network on being strategic about tracking, selecting, and pursuing the right opportunities

Collaborating across sectors to substantially reform funding deployment

• Facilitate a Statewide Funding Solutions Workgroup with over 40 thought-leading organizations to shepherd and pilot alternative approaches to significantly transform, sustain, and streamline the currently disorganized marketplace of funding and assistance programs. The group is developing a vision document—an addendum to Better Funding—to more clearly outline how to pilot bold solutions like a State-led central funding queue with regional-based engagement and project scoping support.

Building a better coordination bridge between local, Tribal, and State agencies to co-create solutions to key statewide systems-level barriers impeding progress on place-based energy and climate goals, including funding access and overcoming barriers to local climate action

• Created State & Local Energy and Climate Coordination (SLECC) which is co-facilitated by the Strategic Growth Council and has active participation from nine State and federal agencies. With over 300 participants, it has met seven times over the last 18 months to coordinate on statewide barriers and solutions.
• As an extension of SLECC and the Statewide Funding Solutions Workgroup, CCEC is hosting regional convenings with State agencies and regional partners focused on coordinating and leveraging available funding and assistance, as well as State-community engagement. These convenings are intended to set the stage for sustained communication and technical assistance hubs called Regional Energy and Climate Hubs (REACH CA), which can support funding access and ultimately accelerate progress on energy and climate goals. Our first event, REACH Inland Empire, is planned for December 5th in collaboration with State and community-serving partner organizations.
• Not only are Tribes key invitees of the REACH meetings, Morongo is hosting our first event on their lands. More coordination is taking place between Tribes and regional agencies like Regional Energy Networks (RENs) to identify how to unlock regional assistance opportunities for Tribes thoughtfully and respectfully.

A Call to Action

As it has been for decades, California communities and agencies will continue to pave the trail on climate change in the years to come. To avoid the worst impacts of climate change on our shared constituents, we need sustained, reliable, and accessible investment. As Governor Newsom meets with the legislature for a special session on December 2 to safeguard California’s climate policies from federal rollbacks, I encourage our State leaders to double-down on their climate commitments and investments, reconsidering any short-sighted cuts to fundamental energy efficiency and emission reduction programs that are now less likely to be recoverable by federal grants.

Beyond just retaining dollars, now is exactly the right time for State leadership to take decisive action to re-engineer and pilot more streamlined ways of deploying our still-ample resources to local and Tribal communities, many of whom stand ready to ramp up efforts to implement energy, land use, and climate projects, programs, and policies in line with State goals. There are vast opportunities to strategically coordinate across public, philanthropic, and private capital sources to empower communities to stay focused on this important work, rather than spending their limited time scrambling for a smaller pool of grants.

Many of us are eager to work side by side with State leadership to activate a culture of reflection and reform to deploy California’s place-based climate dollars more effectively so remaining funds reach the places that need them and can use them best. This is the challenging work that will lead to true cost efficiencies and pay lasting dividends to the people of California. As the election reminds us, it’s back on California to get it done.

Policy Corner

California Must “Think Globally, Act Locally” to Combat Climate Change Impacts

Despite the election returns, a significant amount of federal funding remains available under the Bipartisan Infrastructure Investment Act (BIIA) and the Inflation Reduction Act (IRA) for climate-related projects and programs. That funding will help underwrite continuing important efforts to advance clean energy, improved transportation, and other infrastructure investments that will reduce greenhouse gas (GHG) emissions over the next several years. However, the prospect that the next President and Administration will be hostile to tackling the climate crisis means that, more than ever, the old adage of “think globally, act locally” will apply. In California, turning that adage into reality will require taking advantage of new resources, available funding approaches, and innovative thinking.

Thanks to the approval by the voters of Proposition 4, new resources will include $10 billion in bond funds for a range of important purposes including groundwater replenishment, forest and wildfire resilience, community and state parks, extreme heat mitigation, sea level rise reduction, and clean energy development. Some areas that stand out in particular are:

• $200 million for the Multibenefit Land Repurposing Program (MLRP) through the Department of Conservation (DOC)
• $386.25 million for groundwater recharge, storage, conjunctive use, and Sustainable Groundwater Management Act (SGMA) implementation through the Department of Water Resources (DWR)
• $1.205 million for fire prevention and improving forest health and resilience through the California Natural Resources Agency (CNRA) and its departments
• $415 million to increase resilience of beaches, bays, watersheds, and other areas through the State Coastal Conservancy
• $50 million for Extreme Heat and Community Resilience Program through the Office of Land Use and Climate Innovation (LCI)
• $150 million for the Transformative Climate Communities Program (TCC) through the Strategic Growth Council (SGC)
• $200 million for neighborhood parks through the Department of Parks and Recreation (DPR)
• $200 million for reducing climate change impacts in outdoor recreation areas through CNRA and its departments
• $325 million for clean energy transmission projects through the California Infrastructure and Economic Development Bank (I-BANK) or the California Energy Commission (CEC)

While it will take some time for the bonds to be sold and funding to become available through the designated state departments and agencies, it is not too early to begin planning to pursue these opportunities.

Legislation signed into law in 2022 offers the option of creating funding for climate-related projects at the local level. SB 852—authored by Senator Bill Dodd and sponsored by CivicWell and the State Insurance Commissioner—permits cities, counties, or special districts, either alone or in combination, to establish Climate Resilience Districts (CRDs). These districts can raise revenue through tax increment financing and voter-approved supplemental property taxes, property benefit assessments, or fees in accordance with all statutory and constitutional requirements. CRDs have the authority to plan and implement projects to address climate change either through mitigation or adaptation. SB 852 gives communities and regions the means to focus resources on the most urgent aspects of climate change as determined locally. The bill also creates the ability to channel local, state, federal, and private funds in a coordinated manner within a jurisdiction or across jurisdictional boundaries to have the greatest and most effective impact.

In addition to taking advantage of existing possibilities to generate local funding through approaches such as CRDs, the upcoming times necessitate new and innovative ways of addressing climate change. Coordinating state programs and funding to achieve greater and more holistic results may offer one such opportunity.

In the uncertain times ahead, one thing is sure. Our resolve to continue to meet the challenges of reducing global warming, addressing environmental equity, and creating sustainable communities must only grow stronger.