[{"_1":2,"_112":-5,"_113":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76,88,100],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6562995,"mediaKeyId","3237170-c5b8d0f30429da39be6c849b599a0560","parentId",3237170,"title","Price collar, allowance counts and free allowances emerge as focal points in reauthorization debate","audioSeconds",1691,"startMs",5197000,"endMs",6888000,"viewUrl","/Search/View?dp=1&key=3237170-c5b8d0f30429da39be6c849b599a0560&start=5197&end=6888","thumbnailUrl","https://assets.pipeline.soar.com/3237170-c5b8d0f30429da39be6c849b599a0560/thumbnail_5197000.jpg","articleUrl","/articles/6562995/California/Price-collar-allowance-counts-and-free-allowances-emerge-as-focal-points-in-reauthorization-debate","mediaUrl","https://secure.pipeline.soar.com/6562995-db03b96f82c460291fd5637f0ff2b6f8/orig.mp4?Expires=1770447886&Signature=BEBKqGdxh4dQYf96YAdDWHcc0q68ApoGKNE8js48RuzPspNIzieBlrHNM3pdG9qrwvX215Bqr~vQulO57VGyxJBU4rb-gOzMBswwVwlqMGsh0WA0V5WZOgJQ5aSzYCy9sBFHSINoCHJDdrWteBqoWHJCgw9bcSeRlAH1KIKMfTJfg88eXBDYUB7ZCuYsCnYPMCW3t2xaEoG8SrASLz-5XUbv6J07jIXq58yN1E0xhbV01D8S3n4Nqe~87hKfpCiiPDmST720m5PFMkW5qgl3nnaGnHQB5Fnap0xH9XJklUbXgxbvRIAZ8wVZcBZR75bFEgMrEU7SAeDeQH3LJJtgVA__&Key-Pair-Id=KUT5TJCACFTXG","author","California State Senate","date","2025-05-08T00:00:00Z","article","Senators and outside experts pressed CARB and panelists on market design: how many allowances should remain in the system, how the price floor and ceiling (the ‘‘collar’’) should be set, and whether free allowances to trade‑exposed industries should be reduced or redirected.

Independent analysts and university researchers told the committee that the program could move from a condition of ‘‘relative laxity’’ to greater stringency under reauthorization and that market prices could, under some modeled scenarios, approach the regulatory price ceiling. Helen Christian of the Legislative Analyst’s Office and Danny Cullenward warned that the existing price spread — recent market prices in the low‑to‑mid‑$30s and a ceiling near $95 — creates substantial revenue volatility for the Greenhouse Gas Reduction Fund and for planning by regulated entities and funded programs.

Danny Cullenward presented scaling scenarios: depending on allowance budgets and market prices, the program could involve ‘‘several hundred, maybe more than $300,000,000,000 worth of allowances being allocated over the next 20 years,’’ and that the distribution of allowance value (the share going to utilities, GGRF, and large emitters) matters for who ultimately receives revenue. He emphasized two choices that need legislative‑administration clarity: expected price levels and how revenues and program value will be allocated.

Senators pressed whether changes to free allowances to oil and gas would directly raise gasoline prices; analysts clarified that overall cap stringency (the total number of allowances) drives allowance scarcity and prices while allocation determines who receives value but does not, by itself, change total allowance supply. Several senators and witnesses urged a narrowing of the collar to reduce price volatility; others cautioned that excessive statutory micromanagement could harm the regulator’s ability to do technical rulemaking.

Public power utilities and municipal utilities asked legislators to preserve existing treatment of allowances for publicly owned utilities, warning that changes could raise local electricity rates and hurt low‑income ratepayers. Business groups urged the legislature to prioritize cost containment and warned against removing flexibility that helps prevent leakage and maintain competitiveness.

Ending: The committee heard broad agreement that the legislature should act quickly to provide legal and policy direction to reduce market uncertainty, but members differed on whether to set price parameters in statute or leave technical specification to CARB rulemaking.","mediaType","Video","parentTitle","Joint Hearing Senate Budget and Fiscal Review Subcommittee No. 2 on Resources, Environmental Protection and Energy and Senate Environmental Quality Committee","oneSentenceSummary","Senators and experts discussed how allowance counts, the price floor/ceiling ‘‘collar’’ and the allocation of free allowances affect market certainty, consumer prices and potential leakage; analysts recommended narrowing the price band and swift regulatory clarity to reduce revenue volatility.","taxTitle","California State Senate, Senate, Legislative, California","taxId",77650,"location","California","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6563000,"Offset integrity and enforcement draw scrutiny from senators and public: water and permit violations cited",312,1767000,2079000,"/Search/View?dp=1&key=3237170-c5b8d0f30429da39be6c849b599a0560&start=1767&end=2079","https://assets.pipeline.soar.com/3237170-c5b8d0f30429da39be6c849b599a0560/thumbnail_1767000.jpg","/articles/6563000/California/Offset-integrity-and-enforcement-draw-scrutiny-from-senators-and-public-water-and-permit-violations-cited","https://secure.pipeline.soar.com/6563000-13149712a330e8b6274c0e2a726068c8/orig.mp4?Expires=1770447886&Signature=axeuqThRrFk5KRanMtJBTBGFm-yXlCsDl3YXlZ1iTs~~6242O-eeeLHKTwUwELpWF4cuwzXGSbtG3TgYAATHkU7WiTCB3kKlfXf3dgu6N8jwzTGR4bbUYKPF1r18dMJ7r1EAwqDVS4gdzou5NbKgUzSsvZjGW9uladubR3rMtf6jck4HPKdcFM3cxlzIYDQf-YXVuUOWgPEt0RLS9CTNcy~1fPFMVYor9XyJODXrItkWnxPRmWNmqog9iR9e~v1m6D5jutAJj2hdT3lgGUccA4zZ~k8NGR76xXmNOmZvqLnjFibOtWb1DhHmXb~CfZGaZUejQ9VJZ9Hem6Z5WPrRpA__&Key-Pair-Id=KUT5TJCACFTXG","Senators pressed California Air Resources Board officials about how the agency enforces offset project requirements and whether offsets are being issued to projects that violate environmental permits.

CARB staff explained that offset projects must comply with local, state and federal regulations; if a project is found out of compliance, CARB has invalidated offset credits in the past and required covered entities that used the credits for compliance to replace them with allowances or valid offsets.

Senator questions focused on agricultural offset projects, including digesters and other manure‑management projects. Committee members asked whether CARB would pull credits from projects that had non‑air pollution violations, such as improper land application of digestate. CARB staff said they have investigated water concerns, followed up on notices of violation, and taken action where projects were found to be noncompliant.

Several public commenters and environmental justice advocates called for eliminating or significantly tightening the use of offsets and increasing in‑state direct emissions reductions. The Central Valley Air Quality Coalition and others argued that relying on offsets — particularly out‑of‑state projects — reduces direct emissions controls in California and leaves frontline communities exposed.

CARB said offsets constitute a limited fraction of compliance (4% through 2025, 6% thereafter) and that half of allowed offsets must provide direct environmental benefits to California. Staff also reiterated that CARB has the authority and has used it to invalidate offsets when enforcement finds noncompliance.

Ending: The agency said it will continue to investigate alleged violations and has a record of invalidating offset credits when warranted, while community groups urged further restrictions or elimination of offsets.","Senators pressed CARB staff about the agency's approach to offsets and enforcement, including whether credits have been invalidated where projects violated local or state permits and whether projects with water‑quality violations have been allowed to keep credits.",{"_33":89,"_35":36,"_37":38,"_39":90,"_41":91,"_43":92,"_45":93,"_47":94,"_49":95,"_51":96,"_53":97,"_55":56,"_57":58,"_59":98,"_61":62,"_63":64,"_65":99,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6563005,"Senators and advocates spar over how to spend cap‑and‑trade proceeds: housing, transit, nature and agriculture vie for funds",806,5424000,6230000,"/Search/View?dp=1&key=3237170-c5b8d0f30429da39be6c849b599a0560&start=5424&end=6230","https://assets.pipeline.soar.com/3237170-c5b8d0f30429da39be6c849b599a0560/thumbnail_5424000.jpg","/articles/6563005/California/Senators-and-advocates-spar-over-how-to-spend-capandtrade-proceeds-housing-transit-nature-and-agriculture-vie-for-funds","https://secure.pipeline.soar.com/6563005-fd129be856012e386a6b052901705299/orig.mp4?Expires=1770447886&Signature=aYCh0D2l4U46AUdNaAsPUJm8uoPgeDr8e9ukpnsWPK3-ZrMHFF0FJs096rQtH06yfBj9jcib8gO~WY9HaGaQwUGAJEodKlu4RUCbzao85VG1ZAG2kKmZyhPPgkLPt7MbmzeXb-sMXXIfUNk5QvrAhAPJgzpeQwmIGkfKaNoo~R8FJTvU42JtqMQhD57rHOUwdfJSAa5tL2z35E0A62ULSx73qaPeFWjUD28dvkaC2RK-OGQ8VecqlWDjilfr85e9lnDBHCCQ1tZKMPjBv~pf1~Jq8IPEOIhgo6xYog4loSRXQYGyLFnnEyHeCl8FrKBaWI~4L2a2uHr03DHa2K6Z4w__&Key-Pair-Id=KUT5TJCACFTXG","Lawmakers heard a wide range of competing recommendations for how to spend proceeds from California’s cap‑and‑trade auctions, with testimony divided across several broad priorities: community air protections, housing near transit, mass transit and rail, nature‑based solutions, and agricultural climate programs.

Advocates for environmental justice asked the legislature to ‘‘dramatically reduce or eliminate excessive free oil and gas allowances’’ and to prioritize direct investments in communities through the Greenhouse Gas Reduction Fund (GGRF). Connie Cho of the Asian Pacific Environmental Network told senators that groups representing frontline communities ‘‘are humbly asking the legislature to reform the cap and trade program for affordability and equity’’ and to redirect funds into programs that benefit low‑income and overburdened communities.

Housing and transit advocates asked for continued or expanded continuous appropriations for programs that combine land‑use, housing, and transit investments. Speakers representing affordable housing, regional planning and transit agencies urged the continuation of Affordable Housing and Sustainable Communities (AHSC) and the Transit and Intercity Rail Capital Program (TIRCP) and recommended that funds be protected because those programs drive mode shift and co‑benefits including reduced vehicle miles traveled and lower household costs.

Technical witnesses proposed different spending strategies. The Legislative Analyst’s Office advised memorializing key legislative priorities in statute and noted tradeoffs between program design choices (price collar, cap, allocation) and how allowance value is used. Net0 California recommended leveraging public funds through revolving infrastructure finance — for example, capitalizing a $5 billion clean‑energy revolving fund that, proponents said, could be rotated and leveraged to mobilize private capital and multiply deployment of clean infrastructure.

Agricultural groups and conservation organizations pressed for a steady stream of funding for climate smart agriculture, organic transition, food and processing upgrades, dairy methane projects and composting/organics infrastructure. Multiple speakers advocated for a continuous set‑aside in the range of 15% for agricultural climate solutions and reminded the committee that several agricultural programs have shown low dollars‑per‑ton costs for greenhouse‑gas reductions.

Several local air districts and environmental groups urged an increase in funding for AB 617 community air protection implementation; multiple speakers asked for continuous appropriations so districts could implement local emission reduction plans and accelerate projects that deliver immediate public‑health benefits.

Debate over program form: some environmental groups favored redirecting allowance value from free industry allowances to fund GGRF priorities and augment the California Climate Credit for utility customers; other stakeholders — including business and manufacturing representatives — argued for program stability and warned that overly prescriptive changes to design or allocations could raise costs and impair investor confidence.

Ending: No formal spending decisions were made at the hearing. Senators and witnesses agreed on the need for quicker clarity from CARB and the legislature to provide certainty to recipients and investors and to reduce revenue volatility for long‑lived projects.","Witnesses and public commenters offered competing proposals for allocating greenhouse‑gas reduction fund (GGRF) proceeds, with environmental justice groups seeking targeted continuous funding for frontline communities, others seeking infrastructure revolving funds, and agricultural and transit advocates asking for set‑asides for proven programs.",{"_33":101,"_35":36,"_37":38,"_39":102,"_41":103,"_43":104,"_45":105,"_47":106,"_49":107,"_51":108,"_53":109,"_55":56,"_57":58,"_59":110,"_61":62,"_63":64,"_65":111,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6563010,"CARB chair urges reauthorization of cap-and-trade, stresses portfolio approach and market stability",643,466000,1109000,"/Search/View?dp=1&key=3237170-c5b8d0f30429da39be6c849b599a0560&start=466&end=1109","https://assets.pipeline.soar.com/3237170-c5b8d0f30429da39be6c849b599a0560/thumbnail_466000.jpg","/articles/6563010/California/CARB-chair-urges-reauthorization-of-cap-and-trade-stresses-portfolio-approach-and-market-stability","https://secure.pipeline.soar.com/6563010-28e5bc8d22ee384be91719439bef4200/orig.mp4?Expires=1770447886&Signature=IibbLBqW63Ww0~ZUcJfZS3qwcMgpm5mQ8~qhsbEhew6dMwOLlJqCg~gVzMcK-rEJcwVJJ6yjiYaf41OuL3ofvyWeWgXkr0-Jz9-R9NxwdwCOxVI2k5Fvnlk8s-nn2WYJTNw2HhcDTRLzrWWhZXa2fIPgjZX3vdFkNb8cuRLng7tDEK4ykJkfFjfbstm~-YvG58mJ9k4kADtgreFlnfpk~98YiCpRPQfiqmkS5a6kqAWZYlkN7lUy-idxboQfZE7hMKRX5vWcjZ7WZPrmVWl-Rju6rDQ4~i454e0WWB7IKcbDNVeyM8~4ZatFypmkEpYCDW~LUURKW3ZeT7AvD3IdiA__&Key-Pair-Id=KUT5TJCACFTXG","Leon Randolph, chair of the California Air Resources Board, told a joint oversight hearing of the state Senate that cap-and-trade is a “foundational part of California's climate policy portfolio” and needs reauthorization to keep the state on track to meet statutory climate targets.

Randolph said the program covers the state’s largest polluters — including ‘‘large factories, energy companies, oil and gas suppliers’’ — and that it has helped California meet prior goals while funding billions in climate investments. ‘‘Cap and trade establishes a declining limit on major sources of climate pollution throughout California,’’ he said.

The chair framed the program as one tool in a “portfolio approach” that also includes performance standards and incentives. He said cap-and-trade has generated substantial funding: ‘‘including $28,000,000,000 in climate investments, delivering more than half a million projects across the state and $15,000,000,000 in bill credits back to utility customers,’’ and cited $1,500,000,000 in verified offsets issued to tribal projects.

Randolph and senators at the hearing repeatedly noted that any regulatory changes will ‘‘ripple across the system’’ because the program is a closed market. He warned that tightening features such as removing hedging or offsets could raise costs and might require adjustments elsewhere to avoid leakage or abrupt market impacts.

Randolph also said CARB is balancing environmental ambition with affordability concerns. ‘‘We are acutely aware of how Californians are feeling price squeezes across our economy, and are committed to ensuring that our actions deliver net benefits,’’ he said, calling for attention to projects that provide both climate benefits and tangible affordability improvements for communities.

Senators and witnesses at the hearing pressed CARB on a number of specific topics, including: how the agency will set an updated allowance trajectory consistent with the 2022 Scoping Plan; the role of carbon capture and removal and offsets; enforcement of offset projects; and how auction revenues and allowance allocations should be used to address rate affordability and community benefits.

Randolph declined to comment on some auction‑sensitive topics for market integrity reasons but said CARB is preparing regulatory updates aligned with the 2022 Scoping Plan. He urged rapid, coordinated action between CARB and the legislature to provide clarity to markets and investors.

The hearing continued with a second panel of technical witnesses and many public commenters focused on competing proposals for how to spend cap-and-trade proceeds and how to change program design.

Ending: The hearing concluded with senators urging a prompt joint effort between the legislature and CARB to define both program ambition and how revenues should be allocated, with senators warning that delay would add further uncertainty for markets and funded programs.
","California Air Resources Board Chair Leon Randolph told a joint Senate hearing that cap-and-trade must be extended to meet statutory climate targets, describing the program as cost‑effective and cautioning that changes ripple across a tightly linked system.","actionData","errors"]

Article not found

Price collar, allowance counts and free allowances emerge as focal points in reauthorization debate

Offset integrity and enforcement draw scrutiny from senators and public: water and permit violations cited

Senators and advocates spar over how to spend cap‑and‑trade proceeds: housing, transit, nature and agriculture vie for funds

CARB chair urges reauthorization of cap-and-trade, stresses portfolio approach and market stability