What you need to know: A new report details nearly $33 billion raised for climate projects and direct support for Californians funded by cap-and-trade, as Governor Gavin Newsom and legislative leaders seek an extension of the program.

SACRAMENTO - Governor Gavin Newsom today announced that nearly $33 billion has been raised from polluters 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 (CCI), which distributes funds generated by cap?and?trade to 117 climate programs across the state.

“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. And we’ve got the receipts: healthier and cleaner communities and thousands of good paying jobs.” - Governor Gavin Newsom

CARB oversees CCI, which 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, cap-and-trade investments went to nearly 12,000 new projects using $1.9 billion in funding, with $1.2 billion directly benefiting 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, over $18 billion in funding has been awarded, with nearly $13 billion of that having already gone to over half a million projects that are complete or in progress. 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

In addition to community investments, cap-and-trade has also delivered $15 billion in bill credits back to utility customers and is reducing carbon pollution from industry investments in cleaner, more advanced technologies directly at their emission source.

“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.”  

Extending the cap?and?trade program

Cap-and-trade is a foundational part of California’s climate policy portfolio. To help achieve the state’s goal of net-zero carbon pollution by 2045, this program must be extended beyond the current sunset date of 2030.

Governor Newsom recently announced that he, alongside legislative leaders 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. Extending the program in 2025 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 carbon 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 with the funding raised from the payments used to invest in carbon reduction projects.  

California’s climate leadership

Pollution is down and the economy is up. Greenhouse gas emissions in California are down 20% since 2000 - even as the state’s GDP increased 78% in that same time period.

The state continues to set clean energy records. Last year, California ran on 100% clean electricity for the equivalent of 51 days – with the grid running on 100% clean energy for some period three out of every five days. Since the beginning of the Newsom Administration, battery storage is up to over 13,000 megawatts – a 1,600%+ increase.