California, September 9, 2025
News Summary
California business groups are urging lawmakers to postpone the reauthorization of the cap-and-trade greenhouse gas emissions reduction program before the session ends on September 12. The California Chamber of Commerce has expressed concerns over the lack of progress and advocates for further discussions regarding necessary reforms. Originally established in 2006 and currently active until 2030, the program aims to meet the state’s climate goals but faces criticisms regarding its structural reforms and revenue allocation. As the deadline approaches, the program’s future remains uncertain, with significant implications for California’s environmental and economic landscape.
California business groups are calling on lawmakers to delay the reauthorization of the cap-and-trade greenhouse gas emissions reduction program before the legislative session ends on September 12. Current discussions regarding this vital program, which aims to reduce greenhouse gas emissions, have raised concerns among various stakeholders.
The California Chamber of Commerce has publicly expressed its disappointment with the lack of action from lawmakers, advocating for continued discussions that extend into next year. The president and CEO of the California Chamber of Commerce has voiced concerns regarding lawmakers’ inaction in securing a sustainable future for the state’s environmental policies.
Originally authorized in 2006, California’s cap-and-trade program is scheduled to remain active until 2030. This program is essential to achieving the state’s ambitious climate change objectives, which include carbon neutrality by 2045. Governor Gavin Newsom has shown support for extending the program to 2045, aiming to secure its renewal before the upcoming legislative deadline.
Currently, the cap-and-trade program accounts for nearly two-thirds of California’s greenhouse gas emissions and generates billions of dollars annually through allowances sold at auctions. Experts warn that a robust cap-and-trade program is critical for the state to meet its future greenhouse gas reduction targets—specifically a 40% reduction by 2030 and at least an 85% reduction by 2045.
Despite the program’s significance, critics have raised concerns regarding the need for significant reforms in its structure and in how revenue is allocated. Calls for environmental justice and effective emission reductions underscore these demands. The California Air Resources Board is actively evaluating potential changes as part of this reform process.
Recent analyses indicate that California must increase its annual emission reductions from 2.5% to approximately 8.8% to meet its carbon neutrality goal by 2045. Challenges remain, particularly as revenue generated from cap-and-trade auctions has decreased over time, leading to a loss of approximately $3 billion over the past year. This decrease has put pressure on California’s budget deficit.
Concerns also linger among industry officials regarding the potential elimination of free credits, which could drive refineries and other large emitters out of California. Such outcomes may lead to increased consumer costs and job losses. Additionally, many credits from recent cap-and-trade auctions remain unsold, reflecting diminished market confidence and uncertainty about the future of the program.
The Legislative Analyst’s Office has recommended that lawmakers take the necessary time to evaluate their policy options concerning the cap-and-trade program’s reauthorization, citing its significant implications. Meanwhile, various environmental groups have stressed the importance of ensuring strong emissions limits and equitable enforcement provisions to protect vulnerable communities affected by pollution in any future reauthorization.
Frequently Asked Questions
What is California’s cap-and-trade program?
California’s cap-and-trade program is a regulatory program designed to reduce greenhouse gas emissions by allowing businesses to buy and sell emission allowances. The goal is to lower overall emissions and encourage investment in cleaner technologies.
Why do business groups want to delay the reauthorization?
Business groups urge lawmakers to delay the reauthorization to allow for further discussions about reforms needed in the program’s structure and revenue allocation, which they believe are essential for a sustainable and effective approach to emissions reductions.
What are the implications of not renewing the cap-and-trade program?
If California does not renew the cap-and-trade program or makes significant changes, experts warn it will struggle to meet future greenhouse gas reduction targets, potentially jeopardizing the state’s climate goals and economic stability.
Chart of Key Features of California’s Cap-and-Trade Program
| Feature | Description |
|---|---|
| Authorization Date | 2006 |
| Expiration Date | 2030 |
| Reduction Target | 40% by 2030, 85% by 2045 |
| Current Emissions Coverage | About two-thirds of California’s greenhouse gas emissions |
| Annual Revenue | Billions generated through allowance auctions |
| Recent Revenue Loss | Approximately $3 billion over the past year |
| Annual Emission Reduction Goals | Need to increase from 2.5% to 8.8% |
Deeper Dive: News & Info About This Topic
- Bloomberg Government: California Business Groups Urge Delay on Cap-and-Trade Extension
- Los Angeles Times: California’s Cap-and-Trade at a Crossroads
- Politico Pro: Assembly’s Draft Cap-and-Trade Language
- Planetizen: California’s Cap-and-Trade Program’s Impact on Air Quality
- Encyclopedia Britannica: Cap-and-Trade
Author: STAFF HERE BEVERLY HILLS WRITER
The Beverly Hills Staff Writer represents the experienced team at HEREBeverlyHills.com, your go-to source for actionable local news and information in Beverly Hills, Los Angeles 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 the Rodeo Drive Concours d'Elegance, the Beverly Hills artSHOW, Concerts on Canon, and holiday celebrations throughout the city. Our coverage extends to key organizations like the Beverly Hills Chamber of Commerce and Visit Beverly Hills, plus leading businesses in luxury fashion, hospitality, and entertainment that drive the local economy. As part of the broader HERE network, including HERELosAngeles.com, HERESantaAna.com, HEREHuntingtonBeach.com, and HERECostaMesa.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
