The Ongoing Fight for California’s Climate
Last year, Transform was part of a coalition of environmental justice, climate, transportation, and affordable housing groups that worked with the governor and legislature to ensure California renewed its Cap-and-Invest Program that funds vital housing, transportation, and environmental justice programs. We won.
But our victory didn’t last. Surprise proposed rule changes from the California Air Resources Board in April would drastically cut Greenhouse Gas Reduction Fund (GGRF) revenue, taking all funding from the Affordable Housing Sustainable Communities Program (AHSC), the Transit and Intercity Rail Capital Program (TIRCP), and the Low Carbon Transit Operations Program (LCTOP).
How we got here
In the 2025 legislative session, lawmakers were scheduled to set the terms for reauthorizing California’s Cap-and-Trade Program, which would have expired in 2030. The program charges polluters and continuously reduces the cap on greenhouse gas emissions with the goal of reducing and ultimately reversing climate change.
Instead, under Governor Gavin Newsom’s direction, the program reauthorization was immediate, taking effect in 2026. The new Cap-and-Invest Program assumed roughly $4 billion in annual revenue to the GGRF, allocated in descending priority:
- The first $1 billion goes to High-Speed Rail.
- The legislature allocates the next $1 billion at its discretion to a variety of emissions-reducing projects through the budget process each year.
- The final $2 billion is allocated to so-called “continuous appropriations” programs like AHSC, TIRCP, LCTOP, plus $250 million to CARB for programs to curb air pollution, $130 million for safe drinking water, and $200 million to the Department of Forestry for firefighting.
If Cap-and-Invest revenue falls short, funding disappears from the bottom up. Under CARB’s proposed rule changes, revenue for GGRF is expected to be $2 billion — no money for affordable housing, low-carbon transit, or intercity rail.
Rulemaking bait and switch
CARB oversees Cap-and-Invest and periodically makes rules governing the program. The agency initially proposed amendments to the Cap-and-Invest regulations in January 2026. These changes would have updated allowance budgets through 2045, providing a narrow incentive program to keep manufacturing in the state while keeping California on track to meet its 2030 climate goals.
Then, in April, without warning, CARB issued revised amendments, including a major rule change that would drastically increase the number of free allowances given to polluters, reducing revenue and increasing climate-killing emissions.
California’s green mirage
As of this writing, the price of crude oil sits at around $100/barrel, almost twice its price last fall when lawmakers finalized the Cap-and-Invest legislation. Oil companies are reaping windfall profits, yet CARB is giving them extra carbon credits at the price of defunding programs that effectively decarbonize our environment and improve quality of life for average Californians.
California has a reputation for being a leader on the environment and climate change, and in many respects, that reputation is deserved. However, the same regressive forces push against change in our energy and transportation sectors here as everywhere. Our governmental bodies can fall prey to that pressure, changing rules to shovel more money into the pockets of the privileged while disinvesting in the lives of the majority.
How we fight back
When we first conceived of this post, we expected to talk about the ongoing benefits from last year’s legislative victory. CARB’s actions show how our advances can get reversed; this is why Transform remains connected to coalitions actively working to ensure climate justice in California.
Our state won’t change without pressure from groups like Transform and people like you. Please take action with the letter campaign below. Please note: the letter is somewhat technical to address the CARB rulemaking process; it addresses the Cap-and-Invest funding rules and demands CARB not increase allowances to Big Oil.














