California, September 9, 2025
News Summary
California business groups are urging lawmakers to delay the reauthorization of the cap-and-trade program, which is crucial for reducing greenhouse gas emissions. With discussions intensifying ahead of the September 12 deadline, stakeholders stress the need for careful consideration of the program’s future implications. The California Chamber of Commerce has criticized legislative inaction and requested extended discussions. As the state aims for carbon neutrality by 2045, there are concerns about the impact of potential reforms, including revenue allocation and emissions limits.
California business groups are urging lawmakers to delay the reauthorization of the cap-and-trade greenhouse gas emissions reduction program, as discussions ramp up before the legislative deadline of September 12. The cap-and-trade program, originally authorized in 2006, does not expire until 2030, yet stakeholders are concerned about the need for careful consideration of its future implications.
The California Chamber of Commerce has expressed disappointment in the legislative inaction surrounding the program and advocates for extended discussions into the next year. Jennifer Barrera, president and CEO of the California Chamber of Commerce, criticized lawmakers for not taking the necessary steps towards ensuring a sustainable environmental future.
This cap-and-trade program is pivotal for California’s ambitious climate change objectives, which include reaching carbon neutrality by 2045. Governor Gavin Newsom has shown support for extending the program up to 2045 and aims to secure its renewal before the looming deadline.
Currently, California’s cap-and-trade program is responsible for managing approximately two-thirds of the state’s greenhouse gas emissions. Additionally, it generates billions in revenue each year through allowances sold at auctions. However, industry experts caution that without a reinforced cap-and-trade program, California may struggle to achieve its future greenhouse gas reduction targets: a 40% reduction by 2030 and a staggering 85% reduction by 2045.
Critics of the program argue that significant reforms are necessary, particularly in how revenue is allocated, to address concerns related to environmental justice and the effectiveness of emission reductions. Reform advocates highlight the need for a systemic approach to ensure that funds directly support sustainable initiatives rather than be diverted to unrelated projects. The California Air Resources Board is currently evaluating potential changes to the cap-and-trade program to address these issues.
Recent analyses suggest that California must increase its annual greenhouse gas emission reductions from the current rate of 2.5% to around 8.8% to meet its 2045 carbon neutrality target. Revenue from cap-and-trade auctions has been on a downward trend, resulting in a loss of approximately $3 billion over the past year, which has direct implications for California’s growing budget deficit.
There is significant concern amongst industry officials that eliminating free credits could lead to the exit of major polluters, such as refineries, from California. Such actions could potentially increase consumer costs and result in job losses and facility closures. Additionally, cap-and-trade auctions have experienced a high volume of unsold credits, indicating dwindling market confidence and uncertainty regarding the program’s future.
The Legislative Analyst’s Office has recommended that lawmakers take time to deeply consult and assess their policy options related to reauthorizing the cap-and-trade program. Various environmental groups have also pressured for any future program renewal to impose strong emissions limits and ensure equitable enforcement across communities impacted by pollution.
As California navigates the complexities around its cap-and-trade program, the outcome of this legislative session could have a lasting impact on the state’s environmental policies and efforts toward meeting critical climate goals.
Frequently Asked Questions
What is California’s cap-and-trade program?
California’s cap-and-trade program is a market-based approach designed to reduce greenhouse gas emissions. It sets a cap on emissions for regulated entities, allowing them to buy and sell allowances for emissions.
What is the deadline for reauthorizing the program?
The legislative deadline for the reauthorization discussions is September 12.
Why are business groups requesting a delay in the reauthorization?
Business groups are requesting a delay to ensure thorough consideration of the program’s implications, particularly regarding its impact on the state’s economy and jobs.
What are the potential reforms being discussed?
Potential reforms include changes to how revenue from the cap-and-trade program is allocated and ensuring that emissions limits are strengthened to protect vulnerable communities.
Key Features of California’s Cap-and-Trade Program
| Feature | Details |
|---|---|
| Original Authorization | 2006 |
| Expiration Date | Does not expire until 2030 |
| Impact on Emissions | Account for two-thirds of California’s greenhouse gas emissions |
| Annual Revenue Generation | Generates billions through allowances sold at auctions |
| Targets for Reduction | 40% reduction by 2030; 85% by 2045 |
| Recommendations from Analysts | Lawmakers should assess policy options thoroughly before reauthorization |
Deeper Dive: News & Info About This Topic
- Bloomberg Government: California Business Groups Urge Delay on Cap-and-Trade Extension
- Wikipedia: Cap-and-trade
- Los Angeles Times: California Cap-and-Trade at a Crossroads
- Google Search: Cap-and-Trade California
- Carbon Credits: Understanding Carbon Credits
- Encyclopedia Britannica: Cap-and-trade
- Politico: California Climate Newsletter
- Google News: California Cap-and-Trade
- Politico Pro: Assembly’s Draft Cap-and-Trade Language
Author: STAFF HERE LOS ANGELES WRITER
LOS ANGELES STAFF WRITER The LOS ANGELES STAFF WRITER represents the experienced team at HERELosAngeles.com, your go-to source for actionable local news and information in Los Angeles, Los Angeles County, and beyond, specializing in "news you can use" with coverage of product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise from years of dedicated reporting and strong community input, including local press releases and business updates, while delivering top reporting on high-value events like the Academy Awards, LA Auto Show, and Los Angeles Marathon, extending coverage to key organizations such as the Los Angeles Area Chamber of Commerce and the Los Angeles Tourism & Convention Board, plus leading businesses in entertainment and technology like Warner Bros. and SpaceX, and as part of the broader HERE network including HEREAnaheim.com , HERECostaMesa.com , HEREHuntingtonBeach.com , and HERESantaAna.com , providing comprehensive, credible insights into Southern California's dynamic landscape. HERE Anaheim HERE Beverly Hills HERE Coronado HERE Costa Mesa HERE Hollywood HERE Huntington Beach HERE Long Beach HERE Los Angeles HERE Mission Viejo HERE San Diego HERE Santa Ana
