Cap-and-trade works for Californians and our climate

It’s no question that California is a climate leader. Our state is successfully slashing emissions—we are officially below 1990 levels and working towards our 2030 climate goal. California has of course developed a suite of tools for climate action to bring us to this point, from our carbon-free electricity goals to climate smart agriculture.

Yet among many solutions, the cap-and-trade program stands out. While ensuring that California’s emissions reductions targets are met, it has efficiently and equitably delivered real benefits to California’s people, nature, and future.

However, cap-and-trade is set to expire in 2030 and must be reauthorized by the Legislature. Governor Newsom has recently called for it to be extended to 2045. It is currently being discussed in the legislature, with an expectation that full language on the extension will be inserted in one or two bills in the Assembly and Senate respectively.

As a climate scientist, I believe that the extension of cap-and-trade through 2045, including the continued use of offsets, is simply good policy.

Governments worldwide have struggled to deliver the emissions reductions critical to avoid the most dangerous impacts of climate change. Yet California’s landmark cap-and-trade program has helped achieve a nearly 15% decrease in annual emissions below 1990 levels, including by funding programs achieving an estimated 110 million metric tons of greenhouse gas (carbon dioxide equivalent) emissions reductions.

This matters: it shows that the program works, incentivizing major emitters to transition to lower-carbon practices. It’s helped to make our air cleaner, keep forests standing, and restore degraded lands and ecosystems.

Beyond its climate benefits, the cap-and-trade system has funded $28 billion in climate investments for a cleaner, greener future. Since 2016, 35% of that has been allocated to disadvantaged and low-income communities. With cap-and-trade, polluters pay up, funding initiatives for reduced air toxicity, zero-carbon transportation, and resilience efforts that are especially crucial for the communities too often on the frontlines of the climate crisis.

The program has also delivered tangible benefits at the household level. It has supported 30,000 jobs over the past decade and returned over $10 billion to Californians via utility bill credits—just this April, millions of Californians received $137 in credits on their bills.

Cap-and-trade naysayers cite the inclusion of offsets, suggesting they allow companies to sidestep real emissions cuts. Offsets are credits generated when someone else—like a forest project or farm—reduces or removes carbon pollution, and companies buy these credits to help meet their obligations and take responsibility for the emissions they cannot yet cut. Used wisely, they reduce costs and broaden the scope of climate action. But rely on them too much and companies might slow progress on reducing their own emissions. California’s approach is a model of balance: by limiting offsets to just 4–6% of compliance, the state ensures that companies focus most of their effort on cutting their own emissions, while still leveraging offsets to contain costs for consumers and to invest in California communities. At a time when the state’s budget deficit is high, we cannot afford to lose this cost-effective approach to emissions reductions.

These offsets are also grounded in scientific rigor. The state’s offsets are governed by protocols that are updated to reflect advancements in climate science. Ongoing improvement of carbon offsets, like any other climate tool, is crucial. The California Air Resources Board should continue to update their protocols to reflect the latest science and emerging guidance from key reform bodies, such as the Integrity Council for the Voluntary Carbon Market.

Offsets also play a strategic role in driving needed climate action beyond regulated industries. They direct capital toward nature-based solutions like forest restoration, grassland preservation, and Indigenous-led land stewardship—with over $1 billion having been driven to projects run by Indigenous communities. These projects protect carbon-rich ecosystems and provide co-benefits like biodiversity protection, clean water, and wildfire resilience, benefits that would not otherwise be funded through compliance alone.

The environmental, economic, and social benefits of the state’s cap-and-trade program are simply too great to lose. Extending cap-and-trade, including the offsets mechanism, will help ensure the deep emissions cuts needed to protect our future, while directly containing costs, helping communities, and supporting conservation in the state.

Any delays in reauthorizing the cap-and-trade program or its offsets mechanism put us in danger of lost climate revenue and missed opportunities for emissions reductions, two things we can’t afford to lose. As a climate scientist, a father, and a Californian, I fully endorse extending California’s cap-and-trade program through 2045.

Will Turner is a Senior Scientist at Conservation International and Founding Director of the Center for Natural Climate Solutions.