Convening Advances Path Forward for Investment Justice from the Greenhouse Gas Reduction Fund

By Adeney Zo, UCLA Luskin Student Writer, and
Colleen Callahan, Luskin Center

The Luskin Center convened 150 leaders in government, nonprofits, academia and the private sector on March 21 for a workshop designed to advance climate action in disadvantaged communities. California’s Greenhouse Gas Reduction Fund is expected to generate tens of billions of dollars over the next decade to mitigate climate change and create local benefits. Senate Bill 535 (de León) requires that 25 percent of these monies go to projects that provide benefits to disadvantaged communities in California.

“This may be the largest environmental investment opportunity that these communities will see for decades,” stated J.R. DeShazo, director of the Luskin Center as he opened the workshop held at UCLA.

But many questions exist about revenue allocation and implementation. The Luskin Center hosted convening supported the development of an analytical and equitable approach for this process. Participants helped identify and refine evaluative criteria to guide investment decisions and performance metrics to track results of the investments for accountability and transparency. A summary of recommendations for a performance metrics tool will be released by UCLA later this year. The convening was a partnership with the SB 535 Quad.

What’s at Stake

Collage1State Senator Ricardo Lara’s keynote address underscored what is at stake. Millions of Californians are struggling economically and breathing dirty air while climate change will exacerbate economic and environmental health risks. Charles Lee, a national environmental justice leader with the U.S. Environmental Protection Agency, put the event in a national context, stating that environmental actions in California become models for the rest of the nation.

“We are here to build on the momentum started by many of you in this room who organized to pass SB 535, and are now working to fulfill the State’s promise to invest cap-and-trade revenues to benefit California’s disadvantaged communities,” DeShazo added.

Among these leaders were Marybelle Nzegwu at Public Advocates, who introduced Senator Lara’s keynote address at the workshop, along with Bill Magavern, policy director of Coalition for Clean Air, and Mari Rose Taruc, state organizing director for the Asian Pacific Environmental Network. Mari Rose and Bill presented on the key laws in California including: AB 32, the Global Warming Solutions Act of 2006 that led to the cap-and-trade program, as well as SB 535 and AB 1532, which require that cap-and-trade revenues result in environmental, public health, and economic benefits for communities in need.

“We know the people in California that will be the most hurt by climate change are people with the least resources to face this problem,” stated Taruc. Yet as Magavern pointed out, the State has not yet defined what it means for an investment to “benefit disadvantaged communities,” and thus we need funding criteria and tracking mechanisms to verify that these investments are truly benefiting hard hit communities.

Implementation of a Landmark Law

Clifford Rechtschaffen, senior advisor for Governor Brown, spoke about the process and opportunities for SB 535 implementation. “We must make the disadvantaged community investment process inclusive, transparent, and accountable,” he stated while disclosing the State’s intent to hold public workshops on SB 535 implementation.

Rechtschaffen also discussed CalEnviroScreen, a tool the State developed to identify disadvantaged communities for the purpose of SB 535 implementation. “CalEnviroScreen can help the cap-and-trade program go to communities that most need it,” stated Rechtschaffen. Manuel Pastor, professor and director of the Program for Regional and Environmental Equity at USC, underscored the importance of this tool, which his research helped inform. The State’s tool measures cumulative risk, using a variety of environmental health and socioeconomic indicators.

Informing an Equitable and Performance-based Approach for Investment Benefits in Disadvantaged Communities

Collage 2Paving the way for the workgroups, Pastor then explained that each participant was grouped into one of six investment-sector focused sessions: 1) Sustainable Communities Strategies Implementation; 2) Low-Carbon Freight Transport; 3) Zero-Emission Passenger Transportation; 4) Energy Efficiency and Residential Weatherization; 5) Clean Renewable Energy; and 6) Community Greening and Forestry.

The charge for participants was to serve as policy analysts within their investment sector area. Pastor implied that the agenda for the workgroups was ambitiously aligned with a complex State process, but employed participants not to be intimidated by it. He spotlighted the important perspective of the environmental justice and community leaders in attendance.

The Greenlining Institute’s Vien Truong then made a presentation on “Criteria and Metrics.” Truong defined the terms as: “Principles capture broad goals, criteria are the objectives, and metrics are how we get there.” She proposed five criteria to drive funding allocation at the program level. The criteria were compiled by the UCLA Luskin Center and the SB 535 Quad, and derived from the relevant laws.

The breakout sessions that followed were designed to allow participants to refine the criteria and propose corresponding metrics. Each group discussed programs in their investment sector for which the criteria and metrics could be applied. Each of the six sessions began with presentations from State agency leaders who spoke about existing programs eligible for funding from the Greenhouse Gas Reduction Fund, per the State’s current Investment Plan. The groups then identified whether there were programs in their investment sector not on the table that should be eligible for funding in future three-year investment cycles. Finally, each group provided recommendations on how programs could best be implemented to benefit disadvantaged communities.

Recommendations and Next Steps 

Collage 3After hours of discussion, the six groups came back together. Colleen Callahan, deputy director of the Luskin Center, facilitated a panel in which a representative from each group summarized their discussion. Common themes across the groups included the importance of transparency and authentic community engagement; and leveraging of complementary programs across sectors. Proceedings from these discussions will be included in a report that the Luskin Center will release later this year.

To close out the workshop, a panel of government agency leaders shared how their agencies will approach the opportunity that SB 535 presents. Arsenio Mataka, assistant secretary of environmental justice and tribal affairs at Cal/EPA, summarized the workshop’s importance: “Our goal is helping communities with a sense of hopelessness. If we do our job to meet our requirements to reduce GHG, we can achieve investment justice.”

Hector De La Torre, board member of the California Air Resources Board, emphasized the need to show immediate results to fend off law suits. “We need to show the money is going to the things the law says it will go to,” De La Torre said. Chief Ken Pimlott, director of the California Department of Forestry & Fire Protection, proposed that urban forestry could be a solution to the need for immediate results. “The state has a proven track record investing in urban forestry, and we can show results through projects in urban forestry,” Pimlott said.

Catherine J.K. Sandoval, commissioner of the California Public Utilities Commission referred to the importance of selecting appropriate existing programs to fund and in the longer-term, even updating or adding new programs to best address the needs of disadvantaged communities.

Linda M. Wheaton of the California Department of Housing and Community Development emphasized the importance of the convening, stating,“It is time to take advantage of collaboration to develop inclusive and sustainable communities.”

J.R. DeShazo closed the workshop with a call for continued collaboration. He invited attendees to provide additional comments and review the post-workshop report. This report will contain recommendations for the State to achieve investment justice from the Greenhouse Gas Reduction Fund, to ensure that the investments combat climate change while providing tangible local benefits to hard hit communities.


LA’s Rooftop Solar Program Delivering Promised Results, Finds Luskin Center

LOS ANGELES—Los Angeles’ groundbreaking new rooftop solar energy program is delivering on its promise to bring cost-effective, clean power to tens of thousands of LADWP customers, and is ready for a significant expansion that would bring even greater benefits to Angelenos, according to a new report issued today by J.R. DeShazo, Director of UCLA’s Luskin Center for Innovation.

Under the feed-in-tariff (FiT) program, the design of which was informed by previous research from the Luskin Center, electric power generated by solar rooftop installations on office and retail buildings, warehouses and apartment complexes is sold to the Los Angeles Department of Water and Power (LADWP) for use by its residential and business customers.

After numerous interviews with primary stakeholders, including solar developers and participating property owners, the UCLA researchers evaluated the initial two phases of the program, representing about 40 megawatts (MW) of solar power. These two allocations received a total of 256 program applications. Based on the successful rollout, the research team concluded that the “FiT 100” is on track to deliver 100 MW of carbon-free energy by 2015 – enough to power more than 21,000 homes annually.

Importantly, the program is also on track to deliver on the jobs, economic and sustainability goals outlined when city officials approved the program in 2012. And the cost of power – averaging 15 cents per kilowatt-hour – is lower than any other similar FiT program in North America.

“The Los Angeles Business Council has been one of the strongest advocates for a viable feed-in-tariff program to produce 100 megawatts of solar electricity,” said L.A. City Councilmember Mitchell Englander. “Together the City of Los Angeles and the LABC have made great strides towards our efforts to reduce the City’s dependency on coal, moving away from centralized generation toward a more distributed model while creating thousands of local jobs in the process. Although the first and second tranches were successful, this study highlights an opportunity to make the process more user-friendly and cost-efficient in the future.”

In addition to clear environmental benefits, the installation of the first 40 megawatts is on course to generate 862 jobs, and the full 100 MW program is expected to create more than 2,000 jobs – 1,370 direct jobs plus 785 more indirectly related to the program, according to the UCLA study. The FiT 100 is also expected to deliver approximately $300 million in direct investment in the City of Los Angeles by solar companies and other businesses involved in the program.

Once the full FiT 100 program is in place, the UCLA research team estimates that as many as 2.7 million tons of greenhouse gases will be displaced from the environment every year. “Imagine taking away the emissions from about half a million cars annually. That’s what this solar program is on track to deliver by replacing dirty, coal-fired power with clean, renewable solar power,” said Evan Gillespie, Western Region Deputy Director of the Sierra Club.

“Rooftops of office buildings, warehouses and apartments within the Los Angeles basin are proving to be outstanding sites for solar power plants,” according to Brad Cox, Chairman of the LABC Institute. “With about 10,000 acres of rooftops in Los Angeles, we think the sky is the limit for the solar FiT program.”

“The UCLA findings on the FiT program’s launch provide the hard economic and environmental data that city officials need to justify expanding the program,” said L.A. City Councilmember Paul Koretz “We have the potential to scale this program like no other city in America, and the environmental and economic benefits will be impressive in their size and scope for decades to come.”

The CLEAN LA Solar Coalition, spearheaded by the Los Angeles Business Council, has long touted the benefits that the solar FiT could bring to diverse communities throughout Los Angeles. The UCLA analysis confirms that applications received for the first two waves of the program came from each of L.A.’s 15 City Council districts, with the largest number coming from the sun-rich San Fernando Valley and others coming from South Los Angeles. The FiT is seen by many as a geographic complement to the LADWP’s existing net metering solar program, whose participants are largely on LA’s west side.

“Every community should benefit from this rooftop solar program, and so far it’s clear that effective rooftop solar can create opportunities in every part of the city,” said Manuel Pastor, Director of USC’s Program for Environmental and Regional Equity. The FiT’s early installations show the diversity of opportunity throughout the city. In June 2013, residents celebrated the first FiT connection atop an apartment building in North Hollywood. In December, a solar array was activated on the roof of Southern California Trophy Company’s 20,000-squarefoot-production facility in downtown Los Angeles, and most recently a 500-KW installation on a warehouse in Chatsworth. Numerous other projects are set to go live in 2014.

While acknowledging the strong rollout of the FiT, the UCLA research team also identified ways to improve several aspects of the program, especially as it scales to 100 MW and then to 600 MW. To incentivize small projects, the LADWP should consider differentiating the tariff paid to small and large project categories, potentially improving the financial viability of small projects. Another solution, according to the report, may be to increase the size range for a small project.

The study recommends several areas for possible improvement as the program expands. To create more certainty for solar companies and building owners, the LADWP should anticipate costs to connect the new solar arrays to the electrical grid. Also, the city’s Building & Safety Department should issue clearer guidelines and a resources manual to make the permit process more streamlined and efficient.

Also, the UCLA study suggests that the LADWP extend its FiT contracts from 20 to 25 years. Doing so will help the utility secure renewable energy for a longer time period, and assist solar developers in improving financing terms. The team also believes that greater awareness of the program would incentivize more building owners to make their rooftops available for solar projects.

“Los Angeles is quietly building the model, commercially-scalable rooftop solar program in the country, yet very few building owners know about it,” said Mary Leslie, President of the Los Angeles Business Council. “The solar firms did a good job of approaching building owners in the first two phases, but we think it’s critical for the city to build greater awareness so more building owners can evaluate if this solar program is a good fit. The more they know about it, the faster the program can grow and meet its full potential.”

At LABC’s request, the USC Program for Environmental & Regional Equity is evaluating how the FiT can maximize its economic impact locally, especially on hiring and investment in low-income communities. The USC study is scheduled to be released at the 2014 LABC Sustainability Summit in April.

For more information about the LADWP Feed-in Tariff Program, please visit 

For more information about the Los Angeles Business Council and the CLEAN LA Coalition that worked to bring this program together, please visit

For the full report Click Here.