From devastating wildfires to droughts, rising sea levels, floods, and extreme weather events, the impacts of climate change are undeniable in California. Without action, these impacts will worsen, posing significant risks to lives and livelihoods, ecosystems, infrastructure, agriculture, and the economy.
On November 5, voters will have their say on the so-called Climate Bond — California Proposition 4 — which would authorize the state to issue $10 billion in general obligation bonds for projects related to
- Safe drinking water and drought resilience
- Natural hazard resilience (extreme heat, wildfire, sea level rise, flooding)
- Ecosystem restoration and nature-based climate solutions
- Sustainable farming and working lands
This proposed bond investment in climate resilience and natural resources reflects a reckoning with the state’s budget woes. In 2022, California harnessed a budget surplus to allocate approximately $54 billion to a comprehensive suite of climate and environment programs. However, as economic conditions shifted, fiscal adjustments resulted in a 7% reduction in the climate program budget, bringing the total to $48.3 billion over seven years.
Last year, to combat cuts to critical environmental and climate programs, two bills were proposed to advance bond funding. One bill, AB 1567, sponsored by a handful of democratic Assemblymembers, called for $16 billion in funding. The other, SB 867, sponsored by Senators Allen, Becker, Portantino, and Stern, called for $15.5 billion. In July 2024, the Senate approved $10 billion, putting California Proposition 4 on the ballot.
Spotlight on Disadvantaged Communities
Notably, a minimum of 40% of the bond funding would go to programs and projects in disadvantaged communities — those where the median household income is less than 80% of the area average or statewide median. This funding includes $150 million in restored funding for the Transformative Climate Communities (TCC) program. TCC provides grant funding for development and infrastructure projects that achieve major environmental, health, and economic benefits in California’s most disadvantaged communities. Locally, TCC has provided $28.2 million for an East Oakland-based program called Better Neighborhoods, Same Neighbors. The grant has created opportunities for the East Oakland community to strengthen relationships with the City of Oakland to advance neighborhood improvement projects such as affordable housing, urban farming, and neighborhood greening––without displacing long-term residents.
Funding Targets
So what will the $10 billion bond fund? Below are examples of projects in the three main categories of bond funding.
Clean water: The measure would earmark about $1.8 billion for projects that protect California’s drinking water quality, increase water supply and groundwater recharge, and improve water affordability.
Wildfire Resilience: The measure would provide $1.5 billion for wildfire prevention, including reducing community wildfire risk and restoring the health of forests. Approximately $135 million would go to a wildfire mitigation grant program managed by the California Office of Emergency Services.
Coastal resilience projects: The measure would direct $1.2 billion to coastal resilience projects that protect coastal communities, natural resources, and urban waterfronts from sea level rise and other impacts. This funding includes $350 million for combined coastal and flood management projects along urban shorelines to protect critical infrastructure. These monies would be made available to local agencies as matching funds for federally funded coastal resilience projects.
Doing the Math
General obligation (GO) bonds are a state debt service, not a new tax on voters. The state must pay back bonds on an annual basis, usually over 30-40 years. According to the Legislative Analyst’s Office (LAO), Proposition 4 would add $400 million annually — or $16 billion over 40 years — to the state’s debt. However, investing in climate resilience now will reduce future costs incurred to manage climate change. The Federal Emergency Management Agency estimates that every $1 invested in mitigation activities saves $6 in future losses from climate and natural disasters.
In 2023, the Bay Conservation and Development Commission released a report, the Sea Level Rise Adaptation Funding and Investment Framework, that estimated the cost of protecting the Bay Area from sea level rise and storm surge impacts by 2050 at about $110 billion. The report also estimated the cost of inaction — not protecting against sea level rise now — to be more than $230 billion. By investing in climate action now, California can reduce future direct economic costs such as property damages as well as indirect social costs such as biodiversity loss and human health impacts.
These figures make the proposed $10 billion Climate Bond a no-brainer. California is already paying for climate change impacts from devastating wildfires, droughts, floods, and other extreme weather events such as heat waves. State residents simply cannot afford a delay in confronting climate change. Bonds are one of the primary ways the state can invest in climate adaptation, hazard preparedness and mitigation, clean drinking water, and habitat restoration amid a budget shortfall.
By voting yes on Proposition 4 in November, California voters can demonstrate their commitment to combating climate change, protecting the environment, and building a more sustainable and resilient future for their families.