California will try to extend cap-and-trade despite Trump's threats

Lia Russell, The Sacramento Bee on Apr 15, 2025

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SACRAMENTO, Calif. — Gov. Gavin Newsom and legislative leaders said Tuesday that they will try to extend cap-and-trade, California’s flagship environmental regulation program, a week after the White House said it would target state environmental regulations for “threatening national security.”

President Donald Trump issued an executive order last week criticizing state climate policies like the cap-and-trade system, arguing they were driving up energy costs and threatening the country’s “energy dominance.” The governor called Trump’s missive a “glorified press release masquerading as an executive order.” A judge dismissed Trump’s previous effort to weaken the program in 2020.

On Tuesday, Newsom said he, Assembly Speaker Robert Rivas and Senate President Pro Tem Mike McGuire would work to extend cap-and-trade, which is set to expire in 2030 and must be reauthorized by the Legislature. The program requires businesses to buy carbon credits or reduce their greenhouse gas output.

“California must continue to lead on reducing pollution and ensuring our climate dollars benefit all residents,” the three Democrats said in a joint statement. “That’s why we’re doubling down on cap-and-trade: one of our most effective tools to cut emissions and create good-paying jobs.”

Newsom said his office would release details of the proposed extension in the next few weeks.

Conservatives have frequently criticized the program as an impediment upon businesses and unsuccessfully challenged it in court. Former Gov. Jerry Brown led the previous re-authorization effort in 2017, which environmentalists decried as too lenient to fossil fuel companies.

While proponents have held up the program as the cornerstone of California’s leadership on climate change mitigation, its chief regulator, the California Air Resources Board, said in 2023 the state may not meet its self-imposed carbon reduction goal by 2030.

Still, cap-and-trade is California’s “most cost-effective climate policy,” according to Katelyn Roedner Sutter, the state director for the Environmental Defense Fund.

“Lawmakers must strengthen and extend this critical program, which has proven we can have a thriving economy with bold climate action together,” Roedner Sutter said in a statement. “As federal leadership promotes the expanded use of fossil fuels and coal, taking us backward in embracing the largest causes of climate change, California lawmakers must ask a simple question: if we don’t lead on climate, who will?”

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