In one of its last official acts before starting its summer recess earlier this month, the California legislature passed a bill putting Prop 4 on the November ballot, which would allow the state to borrow $10 billion plus interest toward addressing climate change. Before it gained the moniker “Prop 4,” the bond measure was initially called SB 867 – The Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act of 2024.

Passed on July 3 by both the California Senate and Assemblymembers, Prop 4 will now make its way to Secretary of State Shirley Weber’s office to be added to the ballot for voters to decide on in November.

So, what does Prop 4 do exactly? In a nutshell, the 49-page proposal authorizes the issuance of bonds to the state in the amount of $10 billion pursuant to the State General Obligation Bond Law to fund a number of projects aimed at addressing climate change, safe drinking water, drought, flood, and water resilience, wildfire and forest resilience, coastal resilience, extreme heat mitigation, biodiversity and nature-based climate solutions, climate-smart, sustainable, and resilient farms, ranches, and working lands, and clean air programs.

Of note among these projects include providing $1.2 billion to address sea level rise, providing another $3.8 billion toward safe drinking water and groundwater, and $1.5 billion for wildfire and forest programs. Overall, the bond proposal is the latest in California’s efforts to reach its goal of reducing greenhouse emissions by 2045.

The bond gained support when the state’s climate change goals were hampered by the state’s nearly $30 billion budget deficit, which saw cuts to Gov. Gavin Newsom’s proposed $54 billion on climate efforts in 2022.

A closer reading of the language in the bill indicates a requirement that at least 40 percent of the money go to projects that aid disadvantaged communities, defined in the bill as those where the median household income is less than 80 percent of the area average. Clearly, though, hundreds of millions of dollars from the bond would benefit the private industry, which would likely be tasked with building many of the proposed clean energy projects.

If approved by voters and the state is allowed to borrow the $10 billion, it’ll be the California taxpayers who would pay back the bond with interest. One legislative analyst estimates that the $10 billion bond would eventually cost California $650 million a year for the next 30 years for a total of more than $19 billion.

Advocates of the bond, including associate director at the Luskin Center for Innovation at UCLA Kelly Turner, said that “the investment today is going to save us in the future because we will only see worse, more intense, longer heatwaves, longer heat sessions impacting more areas of the state.” She highlighted a 2023 study in the Annual Review of Resource Economics that found that extreme heat costs the United States $100 billion annually.

In addition to Kelly Turner, the proposal was pushed through with support from dozens of environmental groups, labor unions, social justice organizations, water agencies, renewable energy companies, and the water recycling industry.

However, not everyone in California is in favor of Prop 4. For example, Susan Shelley with the Howard Jarvis Taxpayers Association doesn’t see borrowing money as the solution to combating climate change.

“The right way is to prioritize the current budget and spend the money on what’s important right now. Including things for climate change and for safe water and for fire prevention. That’s what should be a priority, and we shouldn’t be putting that on the credit card. We should cut the unnecessary spending out of the budget, and we should spend the money out of our current budget on the priorities,” Shelley said.

Shelley also points out that the proposal lacks tangible projects that would outlast the loan itself and fears adding this debt to California’s already debt bill.

Ultimately, it’ll be California voters in November who will decide what California should do with this proposal and we will be monitoring the developments for any nationwide implications.