{"id":1034,"date":"2026-06-02T14:13:08","date_gmt":"2026-06-02T14:13:08","guid":{"rendered":"https:\/\/nextcitydigest.com\/?p=1034"},"modified":"2026-06-02T14:13:08","modified_gmt":"2026-06-02T14:13:08","slug":"will-a-major-update-to-californias-climate-program-affect-what-you-pay-at-the-pump","status":"publish","type":"post","link":"https:\/\/nextcitydigest.com\/?p=1034","title":{"rendered":"Will a major update to California\u2019s climate program affect what you pay at the pump?"},"content":{"rendered":"
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The California Air Resources Board just passed a significant overhaul of the Cap-and-Invest program \u2014 a cornerstone of the state\u2019s climate action policy \u2014 but it\u2019s too early to tell what the changes mean in the long run for drivers in the Golden State, who pay the highest prices in the country for gasoline.<\/p>\n

Read more California dog trainer on trial for deaths of nearly a dozen canines in his care<\/a><\/p>\n

The revisions that passed on a 10-3 vote made accommodations to industry, but oil companies say the new rules don\u2019t go far enough to ensure that more refineries won\u2019t exit California, while environmental groups say the amended Cap-and-Invest program undermines the state\u2019s decarbonization efforts.<\/p>\n

The policy director for Communities for a Better Environment called the changes a \u201chuge step backwards\u201d that amounted to \u201chanding billions to oil executives.\u201d<\/p>\n

The oil industry wasn\u2019t exactly gushing with enthusiasm, either, with a spokesman for the Western State Petroleum Association trade group saying in an email to the Union-Tribune, \u201cIt is clear the state is not serious about keeping refineries in California.\u201d<\/p>\n

In sessions that ran all day and into the night Thursday and concluded on Friday after more than seven hours of further deliberations, CARB leadership and staff on multiple occasions said they were performing \u201ca careful balancing act\u201d to update the 13-year-old program.<\/p>\n

\u201cBy moving forward today, we are responding to real affordability concerns,\u201d CARB Chair Lauren Sanchez said in a statement, \u201cwhile sending a clear and unwavering signal to the world that we remain committed to long-term investment in clean energy, good jobs and healthier communities.\u201d<\/p>\n

What is Cap-and-Invest?<\/h4>\n

Cap-and-Invest requires power plants, food processors and other large industries such as refiners and cement manufacturers that emit greenhouse gases to purchase permits on the carbon pollution they produce.<\/p>\n

The program is designed to encourage investment in cleaner energy and more efficient technologies to help California meet its ambitious climate goals \u2014 such as reducing greenhouse gas emissions to 40% below 1990 levels by 2030 and 85% by 2045.<\/p>\n

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The money raised by the program funds multiple state initiatives aimed at reducing vehicle pollution, as well as the California Climate Credit that delivers automatic reductions in utility bills during various months of the year to customers of the state\u2019s investor-owned utilities.<\/p>\n

CARB says Cap-and-Invest has generated $35 billion in statewide climate investments during its lifetime.<\/p>\n

The program used to be called Cap-and-Trade but the\u00a0name changed to Cap-and-Invest last year when Gov. Gavin Newsom and the Legislature joined forces to pass a law extending and updating the program for another 20 years.<\/p>\n

Updates to Cap-and-Invest come at a precarious time for consumers.<\/p>\n

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Cap-and-Invest adds about 24 cents\u00a0to the price of a gallon of gas that Californians pay at the pump \u2014 and that does not include other state taxes and fees.<\/p>\n

The cost of a gallon of regular has soared in the wake of the war in Iran.\u00a0With oil tanker traffic in the Strait of Hormuz clogged since hostilities started on Feb. 28, the average price for regular-grade gasoline in San Diego has exceeded $6 a gallon for nearly a month, according to AAA.<\/p>\n

What\u2019s more, the Valero refinery in the Northern California town of Benicia and the Phillips 66 twin refinery in the Los Angeles area shut down operations in recent months. The two facilities combined to account for about 18% of California\u2019s total refining capacity to process gasoline, diesel, aviation and other transportation fuels.<\/p>\n

Imports from foreign countries can help pick up the slack, but the closures may leave the state vulnerable to price spikes.\u00a0The state is now down to seven major refineries that produce gasoline.<\/p>\n

The outlook even rattled 15 Democrats in the California Assembly, who earlier this year wrote a letter to CARB leadership, worried that the revisions to Cap-and-Invest \u201cwill further destabilize California\u2019s fuel supply, economy, and working families.\u201d<\/p>\n

Debating the update<\/h4>\n

CARB came up with proposed amendments to the program in January and then made further updates ahead of Friday\u2019s vote.<\/p>\n

Read more Video of unattended Peninsula vote center sparks concern<\/a><\/p>\n

One of the changes that drew the most attention is the establishment of a , that provides $4 billion to support industry \u2014 including refiners \u2014 \u201cdoing business in California and to help make up for the loss of federal incentives.\u201d<\/p>\n

Hailed by CARB leadership as a first-of-its-kind initiative, the MDI would see the agency issue 118 million new Cap-and-Invest allowances through 2030 to industry, provided the companies invest in emissions reductions projects in the future.<\/p>\n

But oil companies said they need assurances beyond 2030.<\/p>\n

Jodie Muller, president of the Western States Petroleum Association, told CARB voting members on Thursday that while the update to Cap-and-Invest is \u201ca step that provides some near-term relief and greater competitiveness for in-state operations,\u201d it does not address concerns the industry has post-2030, \u201cparticularly for the large capital investments needed to maintain safe and reliable refinery operations.\u201d<\/p>\n

Chevron, which operates two of the largest refineries still left in California, expressed similar concerns. In a letter to CARB on May 4, the company said the Cap-and-Invest changes still make \u201clong-term planning difficult and will only increase the likelihood of leakage occurring\u201d \u2014 referring to the risk of strict California climate regulations driving industries to move out of state.<\/p>\n

Asked if the changes adopted Friday make Chevron any more likely to maintain its refinery business in California, a Chevron spokesperson referred to last month\u2019s letter, which concluded by saying California\u2019s \u201cenergy industry\u2019s economic, industrial, environmental and national security benefits have been the foundation of a health, prosperous state, and we would like this to continue.\u201d<\/p>\n

Conversely, 28 Democrats in the Legislature , warning that the Cap-and-Invest changes will \u201cput both our 2030 (climate) targets and the stability of the Greenhouse Gas Reduction Fund at risk.\u201d<\/p>\n

The Greenhouse Gas Reduction Fund is a dedicated source of money collected through revenue generated by the Cap-and-Invest program that invests billions of dollars annually into various pollution-reduction projects.<\/p>\n

\u201cThese changes to Cap-and-Invest allow more pollution and undermine the program\u2019s ability to support investments that cut emissions and costs for families,\u201d Katelyn Roedner Sutter, California senior director of the Environmental Dense Fund, said in a statement after the vote, calling the update \u201cdeeply misguided.\u201d<\/p>\n

\u201cCARB\u2019s mandate is to protect public health \u2014 not subsidize Big Oil,\u201d said Kaya Allan Sugerman of Physicians for Social Responsibility \u2013 Los Angeles.<\/p>\n

According to the nonpartisan Legislative Analyst\u2019s Office, the updates may cut the fund\u2019s annual revenues in half \u2014 but CARB staff disagrees with that.<\/p>\n

CARB officials say the revision establishes more stringent allowance budgets that align with 2030 and 2045 climate targets, provides $10 billion for electricity bill credits and maintains $8 billion for the Greenhouse Gas Reduction Fund.<\/p>\n

The board added a provision Friday ensuring CARB can claw back MDI money from companies that don\u2019t make good on their emissions reductions projects. The board also agreed to hold off on issuing those allowances until CARB\u2019s executive officer takes a close look at them and reports back to the board.<\/p>\n

CARB chair Sanchez used to be Newsom\u2019s chief climate adviser, and the outgoing governor praised the passage of the Cap-and-Invest updates.<\/p>\n

\u201cCalifornia\u2019s nation-leading Cap-and-Invest program has proven we can cut pollution, create jobs and invest in a cleaner future at the same time,\u201d Newsom said in a statement.<\/p>\n

He also took a shot at President Donald Trump, who last year signed three Congressional Review Act resolutions that included rescinding a 2020 executive order by Newsom that mandates the elimination of sales of all new gasoline-powered passenger vehicles throughout California by 2035.<\/p>\n

Newsom said California is staying focused while \u201cTrump sows ongoing chaos and uncertainty.\u201d<\/p>\n

Read more Eye on the Hills: Cozy new Thai restaurant opens in Oakland\u2019s Montclair<\/a><\/p>\n

The Cap-and-Invest updates are expected to go into effect Sept. 1.<\/p>\n

The Associated Press contributed to this article.\u00a0<\/em><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

For different reasons, oil companies and environmentalists don’t like changes made by the California Air Resources Board.<\/p>\n","protected":false},"author":1,"featured_media":1033,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1034","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"\nWill a major update to California\u2019s climate program affect what you pay at the pump? - Next City Digest<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nextcitydigest.com\/?p=1034\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Will a major update to California\u2019s climate program affect what you pay at the pump? 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