Lawmakers need to get details right to extend Cap-and-Trade program | Opinion
California has always worn the mantle of climate leadership with pride. Our state has pioneered bold goals and innovative programs to reduce emissions, from renewable energy investments to the Cap-and-Trade program that has been central to our climate strategy. These efforts are commendable. But we must face a hard truth: California contributes only about 1% of the world’s greenhouse gas emissions.
That means no matter how ambitious our goals or how stringent our policies, we cannot solve climate change alone. The only way California’s efforts will truly matter is if they are exportable policies other states and nations can replicate.
That is why, as members of the bipartisan Problem Solvers Caucus, we joined colleagues in releasing four guiding principles for the reauthorization of California’s Cap-and-Trade program. These principles are designed to ensure that climate leadership doesn’t come at the expense of affordability, accountability, or economic stability.
This program, now 12 years old, requires the largest emitters of greenhouse gases in the state to purchase credits, with the funds used for various efforts to battle climate change. Our problem is that we have seen the consequences of poorly balanced climate policy right here at home.
Californians already face some of the highest gas prices in the nation, along with rising electricity bills and some of the steepest housing costs. Every time climate rules are implemented without a clear plan to protect consumers, families end up paying more at the pump, on their utility bills, and even at the grocery store, where transportation and energy costs drive up prices.
When emitters in the Cap-and-Trade program have to pay for these credits, this cost inevitably trickles down to consumers in the form of higher costs for food, fuel, utilities, and building materials. Free allowances and offset protocols have historically softened the blow, helping retain jobs in California while keeping everyday essentials within reach. Our first principle is to ensure that any reauthorization must preserve and enhance these protections.
Second, we need real, comprehensive cost analysis. Too often, regulations are passed without fully accounting for their economic impacts. Californians deserve transparent, timely, and complete assessments of what new rules will cost – not just in isolation, but in combination with the dozens of other regulations already on the books. Without this accountability, we risk layering burdens on families and businesses until California becomes unlivable and uncompetitive.
Third, legislative oversight is critical. Passing policies is not enough, we must continually ask if they are still working as intended. Are they cost-effective? Are they still necessary? Are they producing real emissions reductions, or just more, expensive red tape? Regular, rigorous legislative review will ensure our climate rules remain efficient, relevant, and fair.
Finally, we need certainty. Cap-and-Trade is set to expire in less than five years. That uncertainty discourages investment and slows innovation. Extending the program through 2045, with a bipartisan consensus focused on driving costs lower, would provide businesses and workers with the clarity they need to plan, invest, and innovate in California.
California has an opportunity to chart a course that not only advances our own climate goals but also inspires others to follow. But if we design programs that just further raise the cost of living, we will fail on both counts. Other states will reject our example, and Californians will lose patience with climate leadership that feels more like a tax than a solution.
The truth is, California can have it both ways. We can meet our ambitious climate goals while lowering costs, strengthening oversight, and encouraging investment. A smarter, more affordable Cap-and-Trade program can help us achieve that balance.
If we get this right, California can continue to lead the nation. This time, the world may actually want to follow.
Assemblymember Anamarie Ávila Farías, D, is a California Problem Solvers Co-Chair and represents the 15th Assembly District. Assemblymember Greg Wallis, R, is a California Problem Solvers Caucus member and represents the 47th Assembly District.
This story was originally published September 9, 2025 at 2:02 PM with the headline "Lawmakers need to get details right to extend Cap-and-Trade program | Opinion."