If the federal money never shows up, the project's budget could have a multi-billion dollar hole to fill each year starting in 2015 (see Exhibit 7-10 in Chapter 7, Page 15 of the California High-Speed Rail Authority's newly-revised business plan). But by then, says Tiffany Roberts with the non-partisan Legislative Analyst's Office, auctioning off greenhouse gas emissions could raise between $3 billion and $14 billion a year (see page 13 of this LAO report).
Roberts: "It certainly does look like the money could potentially be there. It's probably a question of, is this a legally defensible use of the revenues, and if we're going to get the best return on investment."
A recent state analysis (see pages 56-57 of the 2008 California Air Resources Board AB 32 scoping plan) suggests high-speed rail would not be the most efficient way to use "cap and trade" revenues, which are intended to reduce greenhouse gas emissions. For example, expanding California's green building practices would be 26 times more efficient. But the governor's Department of Finance says that's a policy choice - and if the governor and legislature want to use that money for high-speed rail, they can.