{"id":451279,"date":"2026-09-02T17:48:10","date_gmt":"2026-09-02T17:48:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/451279\/"},"modified":"2026-09-02T17:48:10","modified_gmt":"2026-09-02T17:48:10","slug":"oaklands-rapid-tempo-line-lost-millions-in-cap-and-trade-dollars","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/451279\/","title":{"rendered":"Oakland\u2019s Rapid Tempo line lost millions in cap-and-trade dollars"},"content":{"rendered":"

Six years after its launch, AC Transit\u2019s controversial<\/a> TEMPO rapid-transit bus has become a critical part of Oakland\u2019s transportation network, carrying an average of 15,500 people each weekday on its route from San Leandro to downtown Oakland, mostly across International Boulevard.\u00a0<\/p>\n

The express line costs about $23 million a year to operate, and according to the agency, about a third of that cost has been covered by state cap-and-trade funds. Thanks to a recent move by a state environmental board, that funding stream is now at risk.\u00a0<\/p>\n

The change has sparked intense pushback from advocates and state legislators, including Rep. Buffy Wicks, who represents parts of Oakland. In the face of that pressure, Gov. Gavin Newsom has agreed to backfill the lost funds for the 2027-2028 fiscal year, postponing the crisis.\u00a0<\/p>\n

The cap-and-trade program, now known as Cap-and-Invest<\/a>, charges energy companies subsidies for their carbon emissions above increasingly tight annual caps. It has brought in about $35 billion in revenue since the program began in 2013. This money has been used to pay for everything from infrastructure and maintenance of mass transit (such as BART\u2019s purchase of new trains) to operational funds for transit agencies and housing development. Recent changes have substantially reduced those revenues.\u00a0<\/p>\n

The first major change came with the passage of Senate Bill 840 in 2025, which created tiers for allocating Cap-and-Invest funds, slightly reducing the dollars available to mass transit operators.\u00a0<\/p>\n

Then this year, the California Air Resources Board, which oversees the program, decided to grant energy companies an additional 118 million carbon permits from 2028 to 2035. The board said the change was necessary to encourage investment in electrification and renewables through the Manufacturing Decarbonization Incentive<\/a> and prevent companies from taking their energy businesses<\/a> elsewhere. They also said it would lead to $10 billion<\/a> in electricity bill consumer credits.\u00a0<\/p>\n

The board made its decision in late May, after the state\u2019s legislative analysis<\/a>, released on May 6, found that the plan would reduce revenues by about $2 billion a year, starving statewide transit and affordable housing programs. For example, the Transit and Intercity Rail Capital Program<\/a>, which funds rail, bus, and ferry services, would lose about $400 million a year, the analysis found, while the Low Carbon Transit Operations Program<\/a>, which funds transit systems serving low-income communities, would lose about $200 million.<\/p>\n

In the last fiscal year, AC Transit was awarded<\/a> $7 million<\/a> by the latter program to pay for TEMPO operations.\u00a0<\/p>\n

\u2018A major blow to California\u2019s ability to fight climate change\u2019<\/p>\n

The Air Resources Board decision was applauded by some energy associations<\/a> but immediately criticized by some elected officials and advocates as a giveaway to energy companies. The change, State Sen. Catherine Blakespear said<\/a>, was especially galling as oil companies saw revenues explode<\/a> this year amid spiking gas prices due to the U.S. war on Iran.\u00a0<\/p>\n

The California Transit Association, the California Federation of Labor Unions, and the Greenbelt Alliance were among those who opposed the change. Seamless Bay Area, an advocacy network, called<\/a> the decision a \u201cmajor blow to California\u2019s ability to fight climate change and make the state a more affordable place to live.\u201d In July, Californians for a Better Environment, a nonprofit, sued<\/a> the Air Resources Board over what they saw as a \u201cflawed environmental review<\/a>\u201d of the decision.\u00a0<\/p>\n

A group of state assemblymembers, including Wicks<\/a>, wrote a letter<\/a> on August 10 to Speaker Robert Rivas explaining their concern about the air board\u2019s decision. They said it was expected to reduce proceeds to the Greenhouse Gas Reduction Fund by up to 50% and provide $4 billion in additional incentives to the state\u2019s largest polluters, \u201cgutting critical programs that help our state reach our climate goals and address affordability in our communities.\u201d<\/p>\n

\u201cThe Board acted in a manner that we consider contrary to our collective efforts to renew the Cap-and-Invest program in 2025, and to our larger work to keep California on track to meet our climate goals as equitably and quickly as possible,\u201d the legislators said.\u00a0<\/p>\n

An additional analysis by the California Department of Finance projected a $900 million annual reduction in total Cap-and-Invest revenue and an 82% cut in funding from the program for transit operations programs in the 2026-27 fiscal year. According to the analysis, annual Cap-and-Invest revenue directed to transit operations, which had averaged $144 million since the program\u2019s inception,<\/a> would drop to about $38 million.\u00a0<\/p>\n

Gov. Newsom, responding to the pushback, approved additional general funds last week for transportation, climate, and environmental justice programs, including $160 million for the Low Carbon Transit Operations Program, which supports Oakland\u2019s TEMPO line operations.\u00a0<\/p>\n

A coalition of transit organizations<\/a> sent Newsom a letter last week thanking him for the decision. They noted that the transit operations program had resulted in the implementation of 1,123 projects statewide over its history and had led to a reduction of 7.4 million metric tons of carbon dioxide equivalent, a traditional greenhouse gas metric<\/a> that measures carbon dioxide along with other emissions such as methane and nitrous oxide.<\/p>\n

The state\u2019s backfill money means that AC Transit and other agencies that depend on Cap-and-Invest money won\u2019t face a major shortfall this year or next. Robert Lyles, the agency\u2019s communications director, told The Oaklandside that the new funds provide \u201csome important breathing room as we continue navigating significant financial challenges,\u201d including a projected $200 million structural deficit over the next four years.<\/p>\n

\u201cWithout long-term, sustainable funding, service cuts and layoffs could become necessary,\u201d he said.\u00a0<\/p>\n

And the loss of the Cap-and-Invest revenue will hurt over the long term.\u00a0<\/p>\n

\u2018A $2 billion hole in funding transit\u2018<\/p>\n

Carter Lavin, advocacy director of the Transbay Coalition, a group that works for improved transit and safe streets in Oakland and other Bay Area cities, said that while Wicks contributed to the effective pressure campaign, Oakland\u2019s other state rep, Mia Bonta, stayed on the sidelines\u00a0<\/p>\n

\u201cOakland depends on transit, and these cuts from Sacramento are going to hurt our community,\u201d Lavin told The Oaklandside yesterday. \u201cRight now the future of our bus, BART and paratransit service is at stake. We need action and leadership from Assemblymember Bonta in Sacramento and in the district supporting the regional transit measure \u2014 not silence.\u201d Bonta did not immediately respond to a request for comment.<\/p>\n

Lavin and other advocates have personally been out in the streets in the last few months to gather signatures for the Bay Area Regional Measure, a November ballot measure that, if passed, would add a half-cent sales tax in Alameda County and other local jurisdictions to create a $14 billion fund to help pay for regional mass transit. Many transit advocates, including volunteers with Streets for All<\/a>, also recently traveled to Sacramento to protest the air board\u2019s decision. Transbay Coalition volunteers also created a spreadsheet<\/a> showing how much money the state\u2019s Low Carbon Transit Operations Program has awarded to projects statewide this decade.\u00a0<\/p>\n

AC Transit\u2019s Lyles told us that if the agency loses operational funding from Cap-and-Invest, it doesn\u2019t mean TEMPO\u2019s bus service will automatically be reduced, as any decision would be part of a broader budget discussion. \u201cAny decisions about how to address that funding gap would be considered through that larger budget process,\u201d he said.<\/p>\n

Sarah Syed, an AC Transit board director representing Ward 3, which includes parts of Oakland, had harsh words for the California Air Resources Board, which, she said, \u201ccaved to the oil industry\u201d with its May decision and \u201cblew a $2 billion hole in funding transit riders were already promised.\u201d\u00a0<\/p>\n

\u201cThis budget doesn\u2019t fix that,\u201d she said of the legislature\u2019s backfill funding. \u201cIt barely dents it. The programs that pay for new buses and trains, and keep the ones we\u2019ve got running, are still stuck at about a quarter of what was promised. I\u2019m not going to pretend that\u2019s progress. Transit riders, low-income families, and frontline communities are paying so the state can protect oil company profits.\u201d<\/p>\n

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