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Why California wants to give residents $1,000 not to have a car

Amid a climate-policy bonanza, California passed a bill to give an incentive for living car-free

A cyclist maneuvers his way through downtown Los Angeles traffic on in 2014. (Richard Vogel/AP)

While Americans love their cars, California has adopted a radical strategy aimed at changing their minds, passing a first-of-its-kind bill Wednesday to reward low-income residents who live car-free.

Amid a bonanza of measures passed to cut the state’s carbon emissions as fast as possible, the California legislature approved a $1,000 refundable tax credit to poorer Californians who don’t own vehicles. It will head to the desk of Gov. Gavin Newsom (D), who is expected to sign it.

The bill offers the tax credit to single-filers earning up to $40,000 and joint-filers making up to $60,000 who live without personal cars. And, because the tax credit is refundable, Golden State residents can claim the full amount even if they don’t have $1,000 in tax liability.

The move, which comes a little more than a week after California decided to ban the sales of new gas-only powered vehicles, represents the state’s latest attempt to lead the United States in ambitious climate policy. In a marathon legislative session, the state also passed a law requiring 3,200-foot “buffer zones” between oil wells and buildings such as schools or day-care centers, approved a plan to keep the Diablo Canyon nuclear plant open, and finally, set goals to generate 90 percent of electricity from clean sources by 2035 and cut greenhouse gas emissions 85 percent by 2045.

“There has never been a year like this on climate,” David Weiskopf, a senior policy adviser at NextGen Policy, said in a statement. “I could not be more proud of what our state has accomplished.”

The new tax credit aims to make a small dent in California’s famous road congestion and to provide low-income households with extra funding to make use of public transportation.

“SB 457 will be a dramatic attempt to remedy the challenges of not owning a car in California,” Marc Vukcevich, a state policy advocate at the nonprofit Streets For All, said in a statement. “SB 457 incentives folks to not own a car, rewards them for that good behavior, and provides them money for alternative forms of transportation.”

In Los Angeles, for example, the extra $1,000 could provide almost enough cash for monthly unlimited passes on the Los Angeles Metro. (Yes, Los Angeles has a metro!)

While the transition to electric vehicles is underway, many policymakers have begun to reckon with the need to reduce greenhouse gas emissions by cutting down on driving.

The United States is unlikely to hit its climate goals without a significant decrease in personal car ownership and driving. Thanks to a combination of car-centric urban planning and suburban sprawl, Americans annually drive a total of 3 trillion miles. According to the energy think-tank RMI, the United States must cut vehicle miles traveled 20 percent by 2030 to keep warming below 2.7 degrees Fahrenheit (1.5 degrees Celsius) — and that is true even in scenarios of aggressive EV adoption.

Originally, California would have offered its no-car incentive to a much broader swath of residents, giving a $2,500 credit to any California taxpayer without a car, regardless of income, and to households that had fewer cars than household members.

But even in its narrowed form, the bill could set an example for other state and local governments for how to encourage reduced driving and increased public transit use.

“As the impacts of climate change are felt across our state, it’s time we more aggressively commit to implementing modes of sustainable transportation,” state Sen. Anthony J. Portantino (D), the author of the bill, said in a statement. “SB 457 is an important step towards that goal.”

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