Cap and Trade in California


Kern County Residents protesting a Cap and Trade extension at an Air Resources Board hearing September 2016. 

CRPE and and the communities we work with believe that environmental justice – not pollution trading – should be at the heart of climate policy.  When the California Legislature passed the Global Warming Solutions Act (AB 32) in 2006, it did not mandate how the Air Resources Board should achieve greenhouse gas reductions.  Governor Schwarzenegger directed the Air Resources Board to use a market-based pollution trading scheme called Cap and Trade.

Since 2009, CRPE has represented communities and has advocated for just and equitable climate policy.  We worked with allies to pass SB 32 and AB 197, creating the most aggressive climate reduction targets in North CRPE also supported community leaders who attended an Air Resources Board hearing to tell the Board that it should focus on racial justice, and not extend cap and trade.  A recent report has demonstrated the racial disparity and the lack of pollution reductions from cap and trade.

This legislative session there are more efforts to extend cap and trade.  AB 32 wisely limited the Board’s authority to implement Cap and Trade past 2020.  Instead of more Cap and Trade, we need climate solutions that work for communities that have been, or will be, hit first and worst by climate change and related pollution.  The California Environmental Justice Movement wants direct emissions reductions and the health benefits that follow, and continues to oppose Cap and Trade.  Governor Brown and legislative leaders should listen to those most affected, and stop the Cap and Trade charade.

In February 2017, the California Environmental Justice Advisory Committee – a body of environmental justice leaders created by AB 32 to advise the Air Resources Board – called for an end to cap and trade.

What is Cap and Trade?


Community residents and CRPE staff protesting the Cap and Trade program in 2008.

Cap and trade relies on a “cap”, which limits the amount of allowed CO2 in California.  Regulated facilities are cement plants, oil refineries, oil production, power plants, and transportation fuels.  The “trade” part allows a polluter to buy “allowances” or “offsets” to meet the “cap” while continuing to emit harmful pollution. A source buys allowances from the Air Resources Board at auction, or from another Cap and Trade source.  Offsets originate from a variety of activities not subject to cap and trade and located even outside of California.

Communities that live close to Cap and Trade sources are majority people of color.  Close proximity to the sources means exposure to toxics and particulate matter (PM10 and PM2.5), known as “co-pollutants.”  For example, a refinery does not just emit CO2, when refining gasoline, but along with that fuel come toxics, PM2.5, and chemicals that form ozone and PM2.5.

Cap and Trade prevents transparency, because the Air Resources Board keeps sources’ compliance secret, as so-called “confidential business information.”  As a recent report has demonstrated, Cap and Trade provides no assurance that emissions will be reduced in the most polluted communities, which the data show are communities of color.  Moreover, Cap and Trade denies communities the benefits of the alternative – direct emissions reductions on site – when a source buys allowances and offsets because co-pollutant reductions do not occur.  Sources could also increase and have increased their pollution under Cap and Trade.