On May 8, 2025, the California State Senate convened a joint hearing of the Budget and Fiscal Review Subcommittee No. 2 on Resources, Environmental Protection and Energy, and the Senate Environmental Quality Committee. The meeting focused on the reauthorization of the state's cap-and-trade program, with significant discussions surrounding funding allocations and the program's impact on greenhouse gas (GHG) emissions and public health.

A key theme emerged around the need for increased funding for existing programs that effectively reduce GHG emissions while also benefiting public health. Mikhail Scavarla, representing the California Council for Environmental and Economic Balance, emphasized the importance of prioritizing cost-effective programs, specifically advocating for an increase in funding for the AB 617 program and the farmer program, which he noted had been underfunded. He called for an annual allocation of $200 million over five years for the farmer program, highlighting its potential for immediate emissions reductions and improved air quality.

Several speakers from agricultural organizations echoed this sentiment, underscoring the critical role of cap-and-trade funding in supporting programs that help farmers reduce emissions. Richard Filgus from the California Farm Bureau outlined specific funding requests, including $200 million for the farmer program and additional allocations for sustainable agricultural practices. These programs, he argued, have proven effective in reducing GHG emissions at a low cost per ton.

The discussion also touched on the implications of potential changes to cost containment measures within the cap-and-trade program. Scavarla cautioned that increasing costs in one sector could lead to higher prices for consumers, exacerbating the affordability crisis. This concern was echoed by representatives from various public utilities, including Brian White from the Los Angeles Department of Water and Power, who stressed the need for flexibility in the program to protect low-income ratepayers.

Environmental justice advocates voiced strong opinions on the need for systemic reforms to the cap-and-trade program. Catherine Garuba from the Central Valley Air Quality Coalition and Katie Valenzuela from the Center on Race, Poverty, and the Environment argued that without significant changes, the program would continue to benefit major polluters at the expense of vulnerable communities. They called for a reevaluation of free allowances and emphasized the importance of directing funds toward projects that directly benefit low-income populations.

The hearing concluded with a consensus on the necessity of reforming the cap-and-trade program to ensure it meets California's climate goals while addressing the needs of frontline communities. As the legislature prepares to make decisions on funding allocations and program reforms, the discussions highlighted the critical intersection of environmental policy, public health, and economic equity in California's ongoing efforts to combat climate change.