SACRAMENTO, Calif. (May 14, 2025)—Governor Gavin Newsom released his revised 2025-26 state budget proposal today, highlighting the urgent need for the reauthorization of California’s Cap-and-Trade Program. The Union of Concerned Scientists (UCS) was instrumental in securing passage of this program nearly two decades ago and supports strengthening and reauthorizing it.
Below is a statement from Daniel Barad, the western states policy manager at the Union of Concerned Scientists (UCS).
“We join Governor Newsom in calling for California to reaffirm its commitment to climate and clean energy progress by reauthorizing cap-and-trade this year. With a budget shortfall and a hostile federal administration attacking our state’s right to protect its residents from toxic air and water, as well as the worsening climate crisis, reauthorizing this program can’t wait.
“As the governor’s office and legislature work diligently on this endeavor, we encourage them to act boldly by building on what was adopted two decades ago. This should include restructuring the California Climate Credit to reduce electricity rates for low-income customers and incentivize broader electrification. Local air quality concerns elevated by frontline communities must also be addressed to better protect the communities most harmed by pollution.
“California’s climate leadership is a beacon of hope for the country and the world. We urge California’s decisonmakers to continue to lead the way to a sustainable and just future for all.”
The Cap-and-Trade Program aims to reduce heat-trapping emissions to 1990 levels by 2020 and by an additional 40% by 2030. Thus far, the Greenhouse Gas Reduction Fund—created to put the proceeds of the Cap-and-Trade Program auctions to work—has generated nearly $30 billion and helps fund critical climate programs. The Cap-and-Trade Program can be improved, and reauthorization provides an opportunity to resolve ongoing affordability and environmental justice concerns. For example, the California Climate Credit could be redirected away from gas companies towards lowering electricity prices for low-income households—an action that would also send an important pro-electrification market signal.
The Cap-and-Trade Program guarantees billions of dollars of investments in a cleaner, healthier future at a time when California is facing unrelenting attacks from the Trump administration on its nation-leading environmental standards. Additionally, the longer the state waits to reauthorize this program, the more uncertainty will persist in the market and the lower GGRF revenues may be in the coming years.