The Joint Hearing of the Senate Budget and Fiscal Review Subcommittee No. 2 on Resources, Environmental Protection and Energy and the Senate Environmental Quality Committee convened on May 8, 2025, to discuss critical issues surrounding California's cap and trade program and its implications for environmental justice and climate action.

The meeting began with a proposal to utilize cap and trade funds for weatherizing homes and installing solar panels for farm workers, a demographic identified as economically disadvantaged but often excluded from current funding definitions. Advocates emphasized the importance of including farm workers in legislative definitions to ensure they receive necessary support.

Bill McGavin from the Coalition for Clean Air urged the legislature to reaffirm its commitment to combining cap and trade with air quality protections, particularly for disadvantaged communities facing severe pollution and climate change impacts. He supported several bills aimed at addressing mobile source pollution and emphasized the need for polluters to bear the full costs of their emissions, redirecting those funds to support clean transportation and affordable housing.

Representatives from The Nature Conservancy and the Climate Center highlighted the necessity of reauthorizing the cap and trade program while advocating for increased investment in nature-based climate solutions. They argued that these solutions are essential for achieving greenhouse gas reductions and enhancing the resilience of California's natural landscapes. A specific recommendation was made to allocate at least 25% of cap and trade revenues to these initiatives.

Erica Parker from Californians Against Waste echoed the call for significant investments in nature-based solutions, emphasizing their cost-effectiveness and potential to mitigate climate impacts. She also advocated for the elimination of free allowances that subsidize fossil fuel industries, suggesting that these funds could be better utilized to address affordability issues for low and middle-income Californians.

Community representatives, including Asha Sharma from the Leadership Council for Justice and Accountability, stressed the need for the cap and trade program to focus on real climate solutions that improve air and water quality in overburdened communities. They called for an end to practices that perpetuate pollution in these areas and highlighted the importance of addressing cumulative impacts on environmental justice communities.

The discussion also included input from the California Municipal Utilities Association, which emphasized the unique role of publicly owned utilities in managing allowances differently from investor-owned utilities, advocating for their continued use of free allowances to maintain affordability and reliability.

Mark Stivers from the California Housing Partnerships presented data supporting the Affordable Housing and Sustainable Communities program, which has successfully reduced greenhouse gas emissions while providing affordable housing and transit solutions. He urged the committee to maintain continuous appropriations for this program, citing its significant co-benefits for disadvantaged communities.

The hearing concluded with a consensus on the need for reauthorization of the cap and trade program, with a focus on ensuring that it effectively addresses the needs of California's most vulnerable populations while advancing the state's climate goals. The discussions underscored the importance of integrating environmental justice into climate policy and the necessity of ongoing funding for impactful programs.