{"id":872,"date":"2026-05-30T04:00:49","date_gmt":"2026-05-30T04:00:49","guid":{"rendered":"https:\/\/california-relocation-journal.com\/?p=872"},"modified":"2026-05-30T04:00:49","modified_gmt":"2026-05-30T04:00:49","slug":"after-heated-debate-california-updates-key-climate-limit-critics-say-its-a-retreat","status":"publish","type":"post","link":"https:\/\/california-relocation-journal.com\/?p=872","title":{"rendered":"After heated debate, California updates key climate limit. Critics say it\u2019s a retreat"},"content":{"rendered":"
\n

In a high-stakes decision that will shape California\u2019s economy for years, air officials late Friday approved a sweeping overhaul of the state\u2019s signature climate program, cap-and-invest.<\/p>\n

Read more Pleas and political attacks fill the homestretch of California governor\u2019s race<\/a><\/p>\n

The 10-3 vote from the California Air Resources Board determines how aggressively the Golden State will curb planet-warming greenhouse gas emissions in the years ahead \u2014 and how billions of dollars in revenue will flow through communities, businesses and public programs statewide.<\/p>\n

Cap-and-invest was nation-leading when it launched in 2013. The program forces major polluters to pay for their share of emissions by buying allowances at auctions or being granted them for free. It uses the revenue to fund public transit projects, wildfire prevention, affordable housing, clean energy, electric vehicles and safe drinking water.<\/p>\n

The pollution limit \u2014 or cap \u2014 declines each year, reducing the total amount of emissions in the state and helping California reach its ambitious climate targets, including 100% carbon neutrality by 2045.<\/p>\n

The Legislature voted last year to extend cap-and-invest through 2045<\/u>. Officials at the Air Resources Board then spent the last several months drafting and revising the plan voted on this week, which received considerable feedback<\/u> from oil and gas companies, environmental groups, lobbyists and lawmakers all jockeying for different priorities. <\/p>\n

Some 200 people testified in person during the marathon two-day meeting preceding the vote, and the final proposal received more than 1,000 written comments<\/u>.<\/p>\n

Industry groups warned that capping emissions too much and too quickly would push refineries out of the state and drive up already soaring energy costs. But environmentalists and other stakeholders said giving too many concessions to fossil fuel interests would defeat the program\u2019s purpose, which is to drive down emissions along a pathway consistent with what scientists say could preserve a recognizable climate. <\/p>\n

The program was always planned to become stricter as the years unfolded, to give businesses more time to make the stronger reductions in their emissions.<\/p>\n

Officials were under legal, market and budgetary pressure to pass a plan without delay, and also said it\u2019s important for California to signal market certainty.<\/p>\n

\u201cIt is no secret that climate policy is at a crossroads \u2014 under attack by an openly hostile and well-funded opposition and upended by global economic upheaval,\u201d CARB chair Lauren Sanchez said during the meeting. \u201cAt a moment of uncertainty at the federal and international levels, California has the opportunity to lead with consistency.\u201d <\/p>\n

Among the key updates to the program are the removal of 118 million pollution permits, or allowances, from the market by 2030, and 900 million after 2030. Officials say this will amount to a steep, 11% annual lowering of the cap by the end of this decade, and 7% from 2031 to 2045, in keeping with the state\u2019s mandated targets. <\/p>\n

Critically, however, the update will also create a new pool of 118 million allowances above the cap that polluters can apply for and receive if they invest in decarbonization projects, a program dubbed the . <\/p>\n

The incentive program is intended to discourage regulated industries from leaving the state. Two major refineries have announced exit plans in recent years, including Valero\u2019s Benecia refinery and Phillips 66\u2019s Los Angeles refinery, which shut down in 2025.<\/p>\n

But many critics \u2014 including transit, affordable housing, environmental justice and clean water groups \u2014 said this amounts to a dismantling of the program.<\/p>\n

\u201cCARB has proposed creating exactly 118.3 million additional allowances … outside the cap, the precise number of allowances that must be removed from the cap to keep us on track for our 2030 targets,\u201d said Caroline Jones, a senior analyst with the nonprofit Environmental Defense Fund. \u201cThis undermines the cap\u2019s role in actually limiting climate pollution, which is the core function of this program.\u201d<\/p>\n

The board approved the decarbonization incentive but committed to additional workshops and evaluations of the program before issuing any allowances for it.<\/p>\n

Read more Your last minute voter guide to the 2026 California governor\u2019s race<\/a><\/p>\n

Other updates include more free allowances for industrial facilities and refineries, which regulators said will help reduce pressure on gasoline prices. Critics described the free permits as subsidies for oil and gas. <\/p>\n

The update will also shift some allowances from gas to electric utilities, and increase funding for the California Climate Credit, a rebate that appears automatically on people\u2019s utility bills. <\/p>\n

But perhaps most controversial is how the update will affect the program\u2019s multibillion-dollar revenue, which flows into the state\u2019s Greenhouse Gas Reduction Fund each year and is distributed to various programs. Cap-and-invest has delivered $35 billion for climate projects in California since its inception. <\/p>\n

The new incentive pool will mean the loss of $2 billion annually to the fund, or roughly half the amount it has received in recent years, according to an from the Legislative Analyst\u2019s Office. <\/p>\n

While the Air Resources Board does not determine how the fund is divvied up \u2014 that\u2019s the Legislature \u2014 opponents warned that this could amount to significant cuts for the Affordable Housing and Sustainable Communities Program<\/u>, the Low Carbon Transit Operations Program<\/u>, the SAFER drinking water program and the Community Air Protection Program, among many others that rely on revenue from cap-and-invest. <\/p>\n

\u201cThis could create serious consequences, including a potential zeroing out of the state\u2019s support for critical emission reduction programs,\u201d said Phillip Fine, executive officer at the Bay Area Air District. \u201cStriking the right balance is critical, but all consequences must be fully considered.\u201d<\/p>\n

It was a sentiment echoed by many who delivered comments during the board meeting. <\/p>\n

\u201cThese additional allowances would not only endanger our emissions targets, they would also flood the auction market and depress cap-and-invest revenues,\u201d said Pam Odell of the group Climate Action California. \u201cThese revenues fund vital programs, promote climate resilience, clean transit and transportation, and public health, especially in the most heavily exposed front-line communities.\u201d<\/p>\n

Some groups came out in support of the update, however, including Southern California Edison and Pacific Gas & Electric. The plan strikes a \u201cbalance between program stringency and affordability,\u201d Fariya Ali, air and climate policy manager with PG&E, said during the meeting.<\/p>\n

Assemblymember Jacqui Irwin (D-Thousand Oaks), who authored the bill that reauthorized the program last year, was cautiously supportive, noting that she would like to see more guardrails around the incentive program to ensure it aligns with state climate targets. But delaying the update would only create more uncertainty at a time when the Trump administration is already canceling clean energy funds and revoking California\u2019s authority to set clean vehicle standards, she said.<\/p>\n

\u201cIf we fail now to adopt the proposed amendments to cap-and-invest, it would be without a doubt the greatest victory that the Trump administration could possibly hope for to achieve against California\u2019s climate policies this year,\u201d Irwin said.<\/p>\n

Oil and gas groups were tepid. Jodie Muller, chief executive of the Western States Petroleum Assn., said the update provides some near-term relief for refineries, but leaves too much uncertainty after 2030 to drive continued investment. <\/p>\n

Brian McDonald, regulatory affairs manager with Marathon Petroleum Corp., said similarly that the oil company is \u201cdeeply concerned that the current proposal does not go far enough to provide the regulatory certainty needed to sustain in-state fuel production.\u201d <\/p>\n

In a briefing ahead of the vote, California climate economist Danny Cullenward said the update threatens both the \u201ccap\u201d aspect of the program by introducing the new allowance pool, and the \u201cinvest\u201d aspect by threatening to reduce the program\u2019s revenues. <\/p>\n

The proposal is \u201cbeing presented as a compromise when in fact it is sacrificing both of the key goals of the program,\u201d he said.<\/p>\n

Read more Oxnard man smuggled baby crocodiles, among 1,700 reptiles, gets 5 years<\/a><\/p>\n

The new plan is slated to go into effect Sept. 1. <\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

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