{"id":145395,"date":"2025-08-14T15:24:12","date_gmt":"2025-08-14T15:24:12","guid":{"rendered":"https:\/\/www.europesays.com\/us\/145395\/"},"modified":"2025-08-14T15:24:12","modified_gmt":"2025-08-14T15:24:12","slug":"californias-biggest-climate-effort-is-up-for-review-and-its-a-fight","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/145395\/","title":{"rendered":"California’s biggest climate effort is up for review and it’s a fight"},"content":{"rendered":"\n

As California pushes toward its ambitious goals for addressing climate change, the fate of its signature program is hanging in the balance. For months, lawmakers, industry groups and environmental advocates have been mired in negotiations over whether and how to extend the cap-and-trade program<\/a>, which limits planet-warming emissions, beyond its 2030 expiration date.<\/p>\n

The cap-and-trade program was nation-leading when it was authorized by state law in 2006. It requires major polluters such as power plants, oil refineries and other industrial facilities to purchase allowances, or credits, for each ton of carbon dioxide they emit, and lets those companies buy or sell their unused allowances at quarterly auctions. Each year fewer credits are created, lowering the total annual climate pollution in the state. <\/p>\n

Gov. Gavin Newsom is advocating for the program<\/a> to be extended to 2045, and hopes to see it reauthorized before the end of the legislative session on September 12. Cap-and-trade currently covers about two-thirds of California\u2019s greenhouse gas emissions, and its auctions generate billions of dollars for the state each year.<\/p>\n

Most experts agree the program must continue in order for California to reach its goal of carbon neutrality by 2045<\/a>. But while Newsom is pushing for it to be reauthorized largely in its current form, critics say considerable reforms are needed to address concerns about how cap-and-trade is run and where the money is spent. The California Air Resources Board, which administers the program, is involved in a halting rulemaking process to evaluate changes, including how the program is structured.<\/p>\n

\u201cIt is hugely consequential \u2014 it is a decadal decision,\u201d said Barry Vesser, chief program officer at nonprofit The Climate Center. \u201cCalifornians overwhelmingly support doing something about climate change. We need the program, and it needs to be strengthened.\u201d<\/p>\n

Among critics\u2019 biggest concerns are that the cap is too weak and there are too many credits for polluting companies.<\/p>\n

While the program has been instrumental in helping California meet its greenhouse gas reduction goals \u2014 including a 14% decline in overall emissions since the first cap went into effect in 2013 \u2014 the progress has slowed in recent years. California is not on pace to meet its more aggressive future targets, which include a 40% reduction in greenhouse gas emissions by 2030 and at least 85% by 2045. <\/p>\n

At the current rate of about 2.5% reductions per year, the state is not on track to meet its 2030 goal, according to an analysis<\/a> from the nonprofit Next 10, which examines the state\u2019s climate progress each year. What\u2019s more, emissions would need to fall at about 3.5 times that rate \u2014 8.8% per year \u2014 to reach the 2045 goal.<\/p>\n

These goals are intended to make sure the fourth-largest economy in the world does its part to maintain a recognizable climate in the future. <\/p>\n

\u201cIt\u2019s incredibly important that the cap be ambitious enough that it aligns with our 2045 greenhouse gas reduction target, and we want to make sure that that is clear in the reauthorizing legislation,\u201d said Katelyn Roedner Sutter, California state director with the nonprofit Environmental Defense Fund. \u201cFrankly, there isn\u2019t wiggle room in our ambition. Cap-and-trade is the most cost-effective climate policy that California has.\u201d<\/p>\n

The stakes are so high, in fact, that a recent report<\/a> from the nonpartisan Legislative Analyst\u2019s Office urges the legislature to \u201ctake the time it needs to weigh its policy choices before deciding on whether and how to reauthorize the program,\u201d as any decision around cap-and-trade will have significant environmental, economic and political ramifications. <\/p>\n

Indeed, there\u2019s no world in which California could meet its climate goals without cap-and-trade, Roedner Sutter said, noting that \u201cwithout a limit on pollution, pollution would be unlimited.\u201d She said delaying the program\u2019s extension would also lead to lost revenue, jobs and economic growth for California, among other consequences.<\/p>\n

\u201cClimate change is costing Californians money right now with wildfires and insurance and extreme heat and all of this, and so we have to keep up the climate ambition,\u201d she said. <\/p>\n

But while cap-and-trade is a climate program at heart, the revenue it generates often garners the most attention. The auctions have brought in roughly $31 billion since the program\u2019s inception, and are projected to bring in anywhere from $70 billion to $260 billion more if it is extended to 2045<\/p>\n

The money, which is deposited into the state\u2019s Greenhouse Gas Reduction Fund, is used to support a wide range of environmental projects, including electric vehicle infrastructure, energy efficiency programs and the California Climate Credit, which provides direct savings on residents\u2019 utilities bills across the state. <\/p>\n

But revenue has been tumbling as lawmakers and regulators drag their feet on extending the program. The state missed out on an estimated $3 billion in cap-in-trade revenue over the last year \u2014 an amount equal to roughly a quarter of California\u2019s budget deficit<\/a> \u2014 and the most recent auction in May ended with about 20% of the credits unsold. <\/p>\n

Critics also argue that some of the fund\u2019s biggest expenditures are politically driven and don\u2019t offer immediate carbon benefits as intended. Newsom has proposed setting aside nearly half of the program\u2019s average annual revenue to support the high-speed rail project<\/a> and wildfire operations at the California Department of Forestry and Fire Protection, which would result in about $1 billion each.<\/p>\n

\u201cIn just the last decade, cap-and-trade has invested billions of dollars in projects by holding polluters accountable \u2014 helping clean our air, protect public health and propel new careers,\u201d the governor said in a joint statement<\/a> with Senate President Pro Tempore Mike McGuire and Assembly Speaker Robert Rivas when they announced their intention to reauthorize the program in April. \u201cCap-and-trade is a huge success and, working together, we\u2019ll demonstrate real climate leadership that will attract investment and innovation to deliver the technologies of tomorrow, right here in California.\u201d<\/p>\n

But California also gives away about half of the program\u2019s credits or allowances for free. Most go to oil refineries and industrial facilities in the hope of keeping them in California. Others go to electric utilities and natural gas suppliers to keep them from passing compliance costs onto customers.<\/p>\n

As a result, opponents say, the cap-and-trade program amounts to a get-out-of-jail-free card for polluters, allowing them to continue business as usual without really eliminating harmful emissions in the state \u2014 particularly in the low-income and disadvantaged communities that tend to live closest to polluting facilities<\/a>.<\/p>\n

\u201cIt\u2019s absurd for our climate policy to include billions in giveaways for Big Oil so it can claim to reduce climate-altering emissions on paper instead of having to do it in real life,\u201d said Asha Sharma, state policy manager at the nonprofit Leadership Counsel for Justice and Accountability, in a statement. \u201cIf our state leaders don\u2019t make serious changes to the cap-and-trade program, polluters will continue to skate, while low-income communities of color neighboring polluters pay the price.\u201d<\/p>\n

Vesser, of the Climate Center, said he would like to see free allowances phased out. Oil and gas companies are \u201cfighting tooth and nail for what they see as their interests … but it shouldn\u2019t be the driver of our policy,\u201d he said.<\/p>\n

He also wants to see the program expand the California Climate Credit for low- and middle-income ratepayers and invest in projects that address equitability.<\/p>\n

\u201cThere is a revenue-generating side of this, and there is a carbon reduction side of this, and when it\u2019s managed well, those things can work and be mutually self-reinforcing,\u201d he said.<\/p>\n

For its part, the oil and gas industry is also pushing for reforms \u2014 but in the opposite direction. Eliminating free credits and strengthening the program\u2019s cap run the real risk of driving refineries and other large emitters out of the state, industry officials said. (Chevron executive Andy Walz recently told Politico<\/a> he\u2019d like to see cap-and-trade paused for up to 20 years). Two major companies, Valero and Phillips 66, have already announced plans to close refineries in California soon<\/a>, and additional closures would drive gas prices even higher for consumers, they say.<\/p>\n

\u201cThe reality is that consumers will pay the price through lost jobs, higher prices, and a slower economy if politicians get it wrong on cap-and-trade,\u201d said Catherine Reheis-Boyd, president and chief executive of the Western States Petroleum Assn., in a statement to The Times. \u201cUpdates to the program need to bring down costs to ensure California\u2019s oil and gas industry can compete in a global market while protecting workers, lowering emissions, and producing the unique fuel we rely on. If policymakers fail to get cap-and-trade\u2019s costs under control, it will send a clear message to those considering whether or not to remain in California. A well-designed market-based system is the best way to achieve our climate goals, but affordability must be a priority.\u201d<\/p>\n

Experts say the uncertainty around the program\u2019s future is largely why its revenue is continuing to fall. The most recent auction in May was not only undersold, but left an estimated $961 million of credits on the table, according to a report<\/a> from the nonprofit Clean and Prosperous California. They expect similar losses from future auctions, including the next one on August 20, \u201cuntil California leadership intervenes.\u201d<\/p>\n

The governor\u2019s office this week said it is still hoping to finalize the extension by mid-September.<\/p>\n

The California Air Resources Board said removing uncertainty around the program\u2019s future is one of its priorities \u2014 especially as the Trump administration takes steps to loosen emissions regulations at the federal level<\/a>.<\/p>\n

\u201cIn the current atmosphere of federal confusion and uncertainty, it is more important than ever to show political support for California\u2019s efforts on climate action,\u201d CARB spokeman Dave Clegern said. \u201cLegislative extension will send the investment signal for the private sector to keep moving forward on clean energy and technology in the state.\u201d<\/p>\n

For the most part, experts agree.<\/p>\n

\u201cThe evidence shows that California\u2019s cap-and-trade program has worked well so far to significantly reduce emissions and invest in communities,\u201d said Clayton Munnings, executive director of Clean and Prosperous California. <\/p>\n

But the present moment represents an opportunity for state leadership to build a foundation for the next 20 years, Munnings said. He urged them to finalize cap-and-trade\u2019s extension and ensure that its allowances are cut enough to align with the state\u2019s ambitious climate targets. <\/p>\n

\u201cSuch a program,\u201d he added, \u201cwould be emulated by climate leaders around the world.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"As California pushes toward its ambitious goals for addressing climate change, the fate of its signature program is…\n","protected":false},"author":3,"featured_media":145396,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[86142,35564,276,86140,38360,27125,35565,746,86144,19835,86143,86141,4369,4143,159,69588,67,132,68,1628],"class_list":{"0":"post-145395","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-environment","8":"tag-ambitious-goal","9":"tag-big-oil","10":"tag-california","11":"tag-cap-and-trade-program","12":"tag-credit","13":"tag-decline","14":"tag-emission","15":"tag-environment","16":"tag-environmental-project","17":"tag-future","18":"tag-major-polluter","19":"tag-oil-refinery","20":"tag-program","21":"tag-revenue","22":"tag-science","23":"tag-state-law","24":"tag-united-states","25":"tag-unitedstates","26":"tag-us","27":"tag-year"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115027815042070707","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/145395","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=145395"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/145395\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/145396"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=145395"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=145395"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=145395"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}