California's cap-and-invest program, the carbon market that charges big polluters for emissions and funnels billions of dollars into climate and other spending, will land on the next governor's desk after a year of changes that critics say weakened it, CalMatters reported Friday.
What changed this year
A May agreement to reauthorize the program is expected to cut yearly auction revenue roughly in half, according to projections from the Legislative Analyst's Office cited in the report. That would leave about $2 billion less a year for priority environmental programs.
The deal also created a separate set of free allowances, worth as much as $4 billion, for polluters that commit to investing in cutting their emissions.
The state Air Resources Board, which administers the market, said the added allowances were meant to weigh affordability and economic uncertainty against emissions goals. A board spokesperson told CalMatters the new incentives would not affect auction revenue. Oil companies had fought the original reauthorization plan, arguing it would push businesses out of state or raise fuel prices; the Western States Petroleum Association declined an interview.
In September, Gov. Gavin Newsom said the state would link its market with a new one in Washington state bringing Washington into the existing California-Quebec market. Air board Chair Lauren Sanchez has written that linkage would strengthen the program and is expected to push up prices in California, where auction results have recently sat at the state's floor price.
The board anticipates the combined market will begin operating next year, though no rulemaking schedule has been set.
