Governor signs 20-year extension to state’s Cap-and-Trade emissions program Friday

SACRAMENTO, Calif. (KEYT) – On Friday, Governor Newsom signed a 20-year extension to the state's Cap-and-Trade program into law.

The extension of the program was a combination of three bills: Assemblymember Irwin's (AB 1207), State Senator Limón's (SB 840), and State Senator Reyes' (SB 352) and was signed into law alongside a package of climate-focused bills during a signing ceremony in Sacramento.

"California’s Cap-and-Trade program is the strongest, most cost-effective emissions reduction program in the world," said Assemblywoman Irwin. "With the passage of AB 1207, we reaffirmed our commitment to lead the effort to fight climate change while doing it in a manner that protects Californians’ pocket books. As the representative of the Pacific Palisades - where over 5000 homes tragically burned 9 months ago – we need to remember that the cost of inaction is immeasurable."

Part of the changes to the golden state's cap-and-trade program include renaming the scheme to the Cap-And-Investment program to reflect the billions of dollars expected to be generated through allowance auctions over the next two decades that will be used to fund investments in transit infrastructure, wildfire prevention, affordable housing, clean drinking water, and other emissions reducing and climate resilience programs statewide detailed Assemblymember Irwin's Office in a press release ahead of Friday's extension.

"Extending the program for another 20 years could unlock an additional $47 billion in auction-funded investments, create more than 287,000 jobs, and generate roughly $55 billion in total economic output," noted non-profit environmental advocacy group Ceres. "In an era of tight budgets, we must act to keep energy costs in check, deliver billions in clean investment, and ensure California continues to lead the world toward a stronger, more affordable clean energy economy."

Assemblymember Irwin's AB 1207 would also require an increase in the affordability benefit of the California Climate Credit, restructure industrial allowance allocation, and require the California Air Resources Board to adopt a market-based compliance mechanism as well as establish a scoping plan for emissions reductions that will part of routine recommendations to the state's Legislature.

State Senator Limón's SB 840 would require the state Legislature to direct specific percentages of the revenues from the auction or sale of allowances through the Cap-and-Investment program being deposited in the Greenhouse Gas Reduction Fund to individual projects such clean transportation, housing investments, and climate-focused innovation.

State Senator Reyes' contribution to the extension, SB 352, would require locations selected by the State Air Resources Board for remote air monitoring systems to remain active for no less than five years with the option to extend the remote monitoring for additional five-year periods.

"I said it in June and I’ll say it again: legislative Democrats live in 'Bizarro World'. Their idea of tackling affordability is extending the Cap-and-Trade program, a hidden tax that drives up costs on everything from gas to groceries," argued Republican State Senator Strickland earlier this month regarding plans to extend the program. "Families shouldn’t have to choose between affordability and ineffective climate promises, and I believe Californians deserve better."

"While the Trump Administration raises electricity costs by relying on dirty energy, California redoubles its commitment to a clean energy transition and puts real savings into the hands of Californians," said Victoria Rome, California Government Affairs Director for the Natural Resources Defense Council. "By making it cheaper to install transmission lines and setting up a western energy market, California legislators and Governor Newsom are keeping energy prices affordable for working families across the state. Reauthorizing the state’s cap-and-invest program will put up to $1 billion back into the wallets of ratepayers while keeping California’s climate goals on track through consistent funding."