California reauthorizes Cap-and-Invest program, providing market certainty for clean investments and setting limits on the use of carbon offsets
Sacramento, CA – This weekend, the California legislature passed AB 1207 and SB 840, reauthorizing California’s Cap-and-Invest program through 2045, developing a plan for allocating revenues from the Greenhouse Gas Reduction Fund, and defining requirements for compliance offsets.
“California’s decision to extend and strengthen its Cap-and-Invest program is a powerful reminder that climate progress is still possible, even when federal climate policy is moving in the opposite direction,” said Conrad Schneider, Senior Director, U.S. at Clean Air Task Force (CATF). “California is one of the highest-emitting states in the nation, and if it were a country, its economy would rank as the fourth largest in the world. With more than 80% of its emissions already covered under the program, California is proving that states can cut emissions across their economies while continuing to prioritize growth. That kind of leadership essential for keeping the U.S. on track to meet its climate goals.”
“The reauthorization of California’s Cap-and-Invest program preserves a critical tool for reducing greenhouse gas emissions,” said Ashley Arax, Senior California Policy Manager at Clean Air Task Force (CATF). “By extending the program, the state is demonstrating a strong, long-term commitment to accelerating investments into clean technologies while ensuring funding for decarbonizing key sectors of the economy.”
SB 840 directs the California Air Resources Board (CARB) to update all existing compliance offset protocols by 2029 to reflect the best available science and to review them every five years starting in 2034. AB 1207 caps the use of offsets at 6% of an entity’s compliance obligation, requiring that half of those offsets deliver environmental benefits in-state, and permanently retiring an equal number of allowances so that their use effectively translates into a tightening of the overall cap.
“The reauthorization reiterates the need for robust, science-backed offset protocols that are regularly updated to ensure climate benefits are real and verifiable,” said Kathy Fallon, Land Systems Director at CATF. “We hope to see the California Air Resources Board begin updating offset protocols before the 2029 deadline, particularly for forest carbon protocols, to support public confidence in the ability of carbon markets to deliver real, quantifiable emissions reductions.”
Recent research from CATF and leading U.S. forest carbon scientists found that while high-quality forest carbon credits are possible under California’s current protocol, the bar needs to be raised to ensure credits deliver their promised climate benefits. The assessment offers a roadmap for incorporating new data and scientific advances to improve accuracy, durability, and transparency for forest carbon offsets.
CATF looks forward to working with California policymakers to ensure that Cap-and-Invest delivers real emissions reductions and sets a benchmark for high-integrity carbon credits.
Press Contact
Natalie Volk, Communications Manager, [email protected], +1 703-785-9580
About Clean Air Task Force
Clean Air Task Force (CATF) is a global nonprofit organization working to safeguard against the worst impacts of climate change by catalyzing the rapid development and deployment of low-carbon energy and other climate-protecting technologies. With more than 25 years of internationally recognized expertise on climate policy and a fierce commitment to exploring all potential solutions, CATF is a pragmatic, non-ideological advocacy group with the bold ideas needed to address climate change. CATF has offices in Boston, Washington D.C., and Brussels, with staff working virtually around the world. Visit catf.us and follow @cleanaircatf.
