California to extend cap-and-trade program aimed at advancing state climate goals

Article content

SACRAMENTO, Calif. (AP) — California will extend a key climate program under a bill state lawmakers passed Saturday, sending the measure to Gov. Gavin Newsom, who has championed it as a crucial tool to respond to the Trump administration’s environmental rollbacks.

Article content

The Democrat-dominated Legislature voted to reauthorize the state’s cap-and-trade program, which is set to expire after 2030. Then-Gov. Arnold Schwarzenegger, a Republican, signed a law authorizing the program in 2006, and it launched in 2013.

Article content

Article content

Article content

The program sets a declining limit on total planet-warming emissions in the state from major polluters. Companies must reduce their emissions, buy allowances from the state or other businesses, or fund projects aimed at offsetting their emissions. Money the state receives from the sales funds climate-change mitigation, affordable housing and transportation projects, as well as utility bill credits for Californians.

Article content

Article content

Newsom, a Democrat, and legislative leaders, who said months ago they would prioritize reauthorizing the program, almost ran out of time to introduce the proposal before the statehouse wraps for the year.

Article content

“After months of hard work with the Legislature, we have agreed to historic reforms that will save money on your electric bills, stabilize gas supply, and slash toxic air pollution — all while fast-tracking California’s transition to a clean, green job-creating economy,” Newsom said after striking the deal this week.

Article content

The proposal would reauthorize the program through 2045, better align the declining cap on emissions with the state’s climate targets and potentially boost carbon-removal projects. It would also change the name to “cap and invest” to emphasize its funding of climate programs.

Article content

Article content

The Legislature approved another bill committing annual funding from the program’s revenues. It includes $1 billion for the state’s long-delayed high-speed rail project, $800 million for an affordable housing program, $250 million for community air protection programs and $1 billion for the Legislature to decide on annually.

Article content

Officials try to balance environmental protection with cost of living

Article content

The votes come as officials contend with balancing the state’s ambitious climate goals and the cost of living. California has some of the highest utility and gas prices in the country. Officials face increased pressure to stabilize the cost and supply of fuel amid the planned closures of two oil refineries that make up roughly 18% of the state’s refining capacity, according to energy regulators.

Article content

Proponents of the extension say it will give companies certainty over the program’s future. The state lost out on $3.6 billion in revenues over the past year and a half, largely due to uncertainty, according to a report from Clean and Prosperous California, a group of economists and lawyers supporting the program. Some environmentalists say the Trump administration’s attacks on climate programs, including the state’s first-in-the-nation ban on the sale of new gas-powered cars by 2035, added urgency to the reauthorization effort.