Key Takeaways

  • California's Cap-and-Invest program—a carbon pricing mechanism that sets a hard cap on major greenhouse gas emission sources statewide—has generated$36.2 billionfor climate investments since its launch in 2013. Data comes from the California Air Resources Board (CARB)newly released annual report。
  • CARB manages the program and enforces California's climate laws. The report notes that of the total, already$15.5 billionhas been deployed across 122 programs, supporting over 600,000 projects aimed at achieving clean air, energy efficiency, affordability improvements, and emission reduction goals.
  • The report, submitted to the state legislature last week, also mentions that of the deployed funds,76%has been directed to disadvantaged and low-income communities and households.

In-Depth Analysis

The programformerly known as "Cap-and-Trade"(Cap-and-Trade), was established to curb California's carbon footprint, making the state the first in the nation to adopt such a mechanism. The program is designed to run through 2045, covering approximately 80% of statewide emissions, and applies to facilities emitting 25,000 metric tons of carbon dioxide equivalent or more per year. Covered entities, including major polluters such as power plants and refineries, must surrender one tradable emission allowance for each metric ton of carbon they emit.

Earlier this year,the program was revisedwith the goal of reducing statewide emissions by 40% below 1990 levels by 2030, in line with California's climate targets.

The report shows that the Cap-and-Invest program has also resulted in emission reductions equivalent to130.5 million metric tons of carbon dioxide equivalent. CARB states this will help California move closer to its climate and air quality goals.

The CARB report also notes that the program has generated approximately$44.4 billionin cumulative cost savings through reduced fuel consumption, lower transportation expenses, and decreased household energy bills.

"For over a decade, Cap-and-Invest has been a vital funding source for many of California's priorities," said CARB Chair Lauren Sanchez in a July 20 press release. "This landmark policy is responsible for cutting the state's largest emission sources and directing billions of dollars to communities most harmed by environmental pollution."