California, September 9, 2025
News Summary
Business groups in California are calling for lawmakers to delay the reauthorization of the cap-and-trade program aimed at reducing greenhouse gas emissions. They express frustration over the rushed timeline and emphasize the need for a thorough review of the program’s structure and its economic implications. The cap-and-trade initiative is critical for meeting California’s climate goals, including carbon neutrality by 2045. With the legislative deadline approaching, concerns are being raised over environmental justice and the allocation of funds generated from the program.
California – Business groups in California have called on lawmakers to postpone the swift reauthorization of the cap-and-trade program for greenhouse gas emissions reduction, which is currently under discussion ahead of the legislative session’s cutoff date of September 12. The existing cap-and-trade program, which was first approved in 2006, is set to last until 2030 but is crucial for California’s goals to combat climate change.
The California Chamber of Commerce’s recent statement highlighted the frustration regarding the lack of legislative action and the need for extended discussions into the coming year. Jennifer Barrera, the president and CEO of the Chamber, conveyed concerns regarding the sustainability of California’s environmental future due to this inaction.
The cap-and-trade program is a central component of California’s ambitious climate agenda, aiming for carbon neutrality by 2045. It is currently responsible for around two-thirds of the state’s greenhouse gas emissions and generates substantial revenue through allowances sold at regular auctions, totaling billions of dollars.
Governor Gavin Newsom is advocating for the program’s extension to align with the state’s climate targets, urging for its renewal before the legislative deadline. Experts warn that California may falter in reaching future greenhouse gas reduction goals of a 40% decrease by 2030 and at least 85% by 2045 without a dynamic cap-and-trade framework.
However, the program has faced criticism that significant reforms are necessary regarding its structure and revenue allocation. Advocacy groups have raised issues concerning environmental justice and the program’s effectiveness in reducing emissions. The California Air Resources Board is currently assessing potential changes to the cap-and-trade framework.
Recent analyses point to a required increase in annual emission reductions from the current 2.5% to about 8.8% to achieve the 2045 carbon neutrality target. Moreover, revenue from cap-and-trade auctions has been on a downward trajectory over the past year, resulting in an estimated loss of $3 billion, which contributes to California’s budget deficit.
Concerns persist regarding the allocation of funds derived from the program, including suggestions to deploy a significant portion towards projects such as the high-speed rail system, potentially detracting from immediate carbon reduction efforts. Industry officials feel that the elimination of free credits could make California less appealing for refineries and other large emitters, risking job losses and rising consumer prices.
Additionally, recent cap-and-trade auctions have shown notable unsold credits, highlighting dwindling market confidence and uncertainty surrounding the program’s future. The Legislative Analyst’s Office has recommended that lawmakers take adequate time to analyze policy choices regarding the cap-and-trade program’s reauthorization comprehensively, due to its far-reaching implications.
Various environmental organizations are urging any reauthorization to enforce stringent emission limits and fair enforcement practices, protecting the vulnerable communities impacted by pollution.
Conclusion
The push from business groups for a delay on the cap-and-trade reauthorization reflects broader concerns about California’s climate strategy and its implications, forcing lawmakers to consider both environmental and economic factors as the legislative deadline approaches.
FAQ
What is California’s cap-and-trade program?
The cap-and-trade program is California’s market-based approach to controlling greenhouse gas emissions and is designed to help the state meet its climate change goals.
Why are business groups requesting a delay in the reauthorization of the program?
Business groups are urging lawmakers to delay the reauthorization to allow for more thorough discussions on the program’s structure and its economic impacts.
What are the environmental targets associated with the cap-and-trade program?
The program aims for a 40% reduction in greenhouse gas emissions by 2030 and at least an 85% reduction by 2045, with the ultimate goal of achieving carbon neutrality by 2045.
Key Features of California’s Cap-and-Trade Program
| Feature | Details |
|---|---|
| Original Authorization | 2006 |
| Expiration | 2030 |
| Emission Reduction Targets | 40% by 2030; 85% by 2045; Carbon Neutrality by 2045 |
| Percentage of Total Emissions Covered | Approximately 66% |
| Revenue Generation | Billion dollars annually from auction allowances |
| Current Annual Emission Reduction Requirement | 2.5% |
| Recommended Increase in Reductions | To approx. 8.8% |
| Recent Revenue Loss | About $3 billion over the past year |
| Free Credits Concern | Eliminating could impact jobs and raise consumer costs |
Deeper Dive: News & Info About This Topic
- Bloomberg Government News
- Wikipedia: Cap-and-trade
- Los Angeles Times
- Politico – California Climate
- Carbon Credits: Understanding Carbon Credits
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MISSION VIEJO STAFF WRITER The MISSION VIEJO STAFF WRITER represents the experienced team at HEREMissionViejo.com, your go-to source for actionable local news and information in Mission Viejo, Orange County, and beyond. Specializing in "news you can use," we cover essential topics like 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 drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Oso Fit 5K Fun Run and Community Health Fair, Walk Against Drugs & Community Fair, and National Night Out. Our coverage extends to key organizations like the Mission Viejo Chamber of Commerce and Providence Mission Hospital Mission Viejo, plus leading businesses in retail and education that power the local economy such as The Shops at Mission Viejo, Capistrano Unified School District, and Amazon Delivery Station. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECostaMesa.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HERESanDiego.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
