California Air Resources Board

What You Need to Know: A new report details nearly $33 billion raised for climate projects by cap-and-trade, as Governor Gavin Newsom and Democratic legislative leaders seek an extension of the program. 

SACRAMENTO – Nearly $33 billion has been raised to fund climate solutions in communities across the state with money from the state’s Cap-and-Trade Program, according to a new report published by the California Air Resources Board (CARB). 

The annual report provides detailed information about California Climate Investments, which tracks funds generated by cap‑and‑trade auction proceeds and allocated to 117 programs by the Legislature.  

“California is proving that cutting pollution creates jobs and boosts communities. By holding polluters accountable, we’re sending billions of dollars back to communities and back to people’s wallets through credits on utility bills,” said Governor Gavin Newsom. “And we’ve got the receipts: healthier and cleaner communities and thousands of good paying jobs.” 

California Climate Investments puts cap‑and‑trade dollars to work reducing greenhouse gas emissions, strengthening the economy, and improving public health — particularly among communities and households facing greater economic and environmental challenges. 

In 2024, $1.9 billion was invested in nearly 12,000 new projects with $1.2 billion directly benefiting priority populations, including low-income communities and households. The investments are a key part of Governor Newsom’s build more, faster agenda delivering infrastructure upgrades and creating jobs across the state. 

Since the program’s inception 11 years ago, more than $18 billion in funding provided by the Governor and Legislature has been awarded, with nearly $13 billion supporting over half a million projects that are complete or in progress. 

“California is proud of how we’ve invested billions of cap-and-trade dollars across the state over the last decade,” said CARB Chair Liane Randolph. “From individual incentives for cleaner cars and water-efficient appliances, to forest health programs that help safeguard communities from wildfire, these programs provide benefits to all Californians. In addition, cap-and-trade has also delivered $15 billion in bill credits back to utility customers. It’s climate policy that pays.” 

Project funding already on the ground is expected to wipe out emissions equivalent to taking more than 80% of the state’s gas cars off the road for a year, with billions of dollars more in the process of being disbursed. Examples of investments include:  

• Tribal land stewardship and wildfire resilience in the North Coast. 

• Workforce development for zero-emission vehicle careers in Fresno. 

• A composting effort supporting migrant and refugee farmers in West Sacramento. 

Along with the report, CARB released a general fact sheet, legislative fact sheets by Senate district and Assembly district, information on geographic fund distribution, updates to the project map, and project level datasets. Additionally, CARB has published tables detailing cumulative budgetary expenditures, leveraged funds, and competitive project proposals received. 

Extending the Cap‑and‑Trade Program 

Cap-and-trade is a foundational part of California’s climate policy portfolio and needs to be extended to help achieve the state’s goal of carbon neutrality by 2045. 

In 2006, the legislature approved Assembly Bill 32, which established the state’s 2020 climate pollution reduction goal and authorized CARB to adopt the Cap-and-Trade Program, along with other programs, as a mechanism to help achieve it. In 2017, the legislature extended the program to 2030. 

Governor Newsom recently announced that he, Senate President pro Tempore Mike McGuire, and Assembly Speaker Robert Rivas will seek an extension of the Cap-and-Trade Program during this legislative year, detailing its success and impact.  

Newsom noted in his proposed budget that extending the program this year can provide the market with greater certainty, attract stable investment, further California’s climate leadership and set the state on a clear path to achieve its 2045 carbon-neutrality goal. 

How cap-and-trade works 

Cap-and-trade establishes a declining limit on major sources of climate pollution throughout California. It covers the largest polluters, including large factories, energy companies, and oil and gas suppliers, accounting for 80% of the state’s total climate emissions.  

The program creates a powerful economic incentive for polluters to invest in cleaner, more efficient technologies and energy, or continue to pay for carbon emissions they produce.  

Thanks in part to cap‑and‑trade, California achieved its 2020 climate goal six years ahead of schedule while the state’s economy continued to grow.  

A portfolio of climate solutions  

Since California’s first climate change scoping plan, the state has used a portfolio approach that includes performance standards, incentives and carbon pricing under cap-and-trade. 

This portfolio includes programs to expand clean fuels, put cleaner cars on the road and build the state’s supply of renewable energy. Altogether the state’s climate policy portfolio has delivered a significant return on investment, including: 

• Lowering fuel costs through more efficient vehicles 

• Generating tens of billions for climate investments 

• Offsetting costs in utility bills through an annual credit  

• Launching new job-creating industries as part of California’s clean energy economy