The Joint Legislative Committee on Climate Change Policies (Committee) held its first hearing of the year on February 26, 2025, to evaluate California’s Cap-and-Trade Program, a component of the state’s climate strategy that is set to expire in 2030. The hearing focused on the program’s effectiveness, economic impacts, and potential modifications, with input from legislators, the California Air Resources Board (CARB), academic experts, and public stakeholders.

In her opening remarks, Committee Chair Jacqui Irwin (D-Thousand Oaks) emphasized the need for cost-effective and replicable climate policies, especially in light of rising utility rates and federal policy changes. In their presentation, CARB advocated for reauthorizing the program and maintaining cost-containment mechanisms such as offsets and free allowances, a stance strongly opposed by environmental justice representatives. Other Committee members highlighted the importance of ensuring communities benefit from the program, focusing on how funds are allocated from the Greenhouse Gas Reduction Fund (GGRF). The GGRF collects proceeds from the state’s Cap-and-Trade Program and uses them to support a variety of programs aimed at reducing greenhouse gas emissions, strengthening the economy, improving public health, and providing environmental benefits. 

Additionally takeaways from the February hearing include:

• Program Role and Updates: The program’s role in achieving climate targets, the importance of policy certainty for investment, and details on allowance allocation and cost containment were highlighted.

• Climate Change and Affordability: The severe impacts of climate change and the need to balance climate goals with financial pressures on Californians were emphasized.

• Emissions Reductions and Compliance Costs: The importance of achieving emissions reductions affordably, the need for accurate data, and the potential impacts of policy changes on compliance costs were stressed.

• Public Engagement and Federal Challenges: The need for more technical discussions and stakeholder engagement, as well as addressing challenges from shifting federal climate policies, were highlighted.