California’s Cap and Trade Program Extension: Will Lawmakers Approve Newsom’s Game-Changing Deal?

By Maya C. Miller, Alejandro Lazo, and Jeanne Kuang, CalMatters

California has taken a bold step in the fight against climate change. After a flurry of late-night discussions, leaders from both the Assembly and Senate have joined Governor Gavin Newsom to extend the cap-and-trade program until 2045. This program is vital for reducing greenhouse gas emissions and funding environmental initiatives.

Alongside extending cap and trade, there are new plans for boosting oil production through fresh drilling permits and updating an old offshore pipeline. The state is also looking to create a fund to monitor pollution in disadvantaged communities and add $18 billion to its wildfire fund. In an effort to collaborate better with neighboring states, California will create a shared electricity market to manage excess clean energy.

This series of agreements emerged amidst significant tension among lawmakers. Many felt excluded from the negotiations, which stirred frustration among lobbyists and grassroots activists.

In California, gas and electricity prices are significant issues. Governor Newsom, aiming for a balance between climate goals and affordability, emphasized the importance of stable prices for Californians. He’s eyeing the national stage as the 2028 election approaches, making these economic factors even more critical.

Cap-and-trade is designed to put a price on carbon emissions by issuing permits that companies can trade. This creates an incentive for firms to reduce their pollution levels. A recent report from Clean and Prosperous California highlighted that uncertainty around the program had resulted in a $3 billion revenue loss over a year. The program’s extension aims to provide the stability needed for businesses to plan for the future.

The latest proposals include a slight change in how the state distributes pollution permits. For instance, Assembly Bill 1207 reauthorizes the program, while Senate Bill 840 outlines spending plans, earmarking $1 billion annually for high-speed rail and another billion for various legislation to support housing, clean air initiatives, and disaster prevention.

Moreover, these agreements aim to lower utility costs for consumers and prevent utilities from profiting excessively on infrastructure upgrades aimed at fire safety. This transparency is essential since utilities often pass on costs to consumers.

The success of these measures depends on solid support in the legislature. Past reauthorizations have succeeded through bipartisan effort, but the current political landscape poses challenges. Concerns about whether Democrats can secure the necessary votes linger, as some Republicans express skepticism about the reforms, particularly regarding refinery operations.

User reactions on social media reflect a mix of hope and skepticism. Many express concern that these measures might not go far enough to protect vulnerable communities from pollution. Environmental justice advocates argue that the legislation still favors industry interests over community safety. Ryan Schleeter from the Climate Center emphasized that substantial revenue from the cap-and-trade program continues to flow to oil and gas corporations, calling for a more equitable approach.

California’s struggle showcases a critical moment in balancing economic growth with environmental sustainability. This ongoing negotiation reveals deep divisions and underscores the complexities of implementing effective climate policies that benefit all Californians.

For more detailed insights on the state’s cap-and-trade advances and the ongoing efforts to bridge the gap between industry and community needs, visit CalMatters.

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Air Pollution,California Legislature,environment