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Thank you for accepting these comments on the Cap-and-Trade Auction
Proceeds Investment Plan Concept Paper. The best use of revenues
from an auction of permits under the AB32 cap-and-trade program is
to return auction proceeds to the public through a dividend.  The
Economic and Allocations Advisory Committee (EAAC) recommended that
“the largest share (roughly 75%) of allowance value should be
returned to California households… through lump-sum payments…” and
“roughly 25% of this value used to finance socially beneficial
investments and other public expenditures.”  Dividends accomplish
the AB32 goals relating to equity, and maximizing additional
environmental, economic, and overall societal benefits. 
 
Although rebates are already being proposed for the electricity
sector, those rebates will not compensate consumers for costs from
transportation fuels and indirect costs from other goods and
services that are passed through as energy costs rise.  When the
transportation sector enters the program in 2015, consumers will
see a very visible hit to their pocketbooks.  The best way to
defuse a potential political backlash is to include a dividend for
transportation sector and indirect costs in the Investment Plan.
 
Some investments are expensive and may not result in reduced
emissions until after 2020.  That said, if the State follows the
75% dividends and 25% investments model recommended by the EAAC,
some positive investment projects would include local government
activities that reduce GHGs, financing programs that leverage
private capital for energy efficiency (i.e. PACE financing for
building energy efficiency and on-bill financing), activities that
reduce the carbon content of water treatment and delivery, projects
in disadvantaged communities (i.e. school bus retrofits), market
transformation and R&D programs (i.e. distributed generation,
micro-grids, web-enabled transportation information and networking
systems), and biochar carbon sequestration in the agricultural
sector. 
 
Most importantly, please include dividends in the Auction Proceeds
Investment Plan.
 
Sincerely,