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Environmental Justice Groups Urge Lawmakers to Reject Gov. Newsom’s Cap-and-Trade Proposal, Prioritize Affordability over Oil Industry Profits

Groups call for eliminating Cap-and-Trade’s $1 billion giveaway to Big Oil and redirecting these funds to affordability programs 

(SACRAMENTO, CA) - Environmental justice and equity organizations across California are urging lawmakers to reject Governor Gavin Newsom’s proposal for a “straight extension” of California’s Cap-and-Trade program released today as part of the May Revision and to enact program reforms to address California’s affordability crisis. 

Today’s call to action echoes this letter sent to legislative leaders last month signed by over 40 organizations calling for the elimination of free allowances to the oil and gas industry as “one of the most critical issues that must be resolved in Cap-and-Trade negotiations.” Rather than subsidizing the oil industry, the letter implores lawmakers to protect communities and support California households, especially those with low incomes.

Organizations are also highlighting the continued need for significant investments in critical community priorities as outlined in this letter sent to legislative leaders signed by over 80 organizations. By proposing that almost half of the total current Greenhouse Gas Reduction Fund revenue be used for High Speed Rail or General Fund backfill, the Governor’s proposal does not leave sufficient funding to meet urgent needs for protection from extreme heat impacts, affordable housing, clean drinking water, and other critical environmental programs that reduce greenhouse gasses and clean up contaminated air, water and soil that pose direct threats to public health.

Catherine Garoupa, Executive Director, Central Valley Air Quality Coalition: "The San Joaquin Valley is one of the most polluted air basins and poorest places in the country. We are hardest hit by high gas prices and electricity bills. We deserve more from this program than business-as-usual, and demand the Legislature push back on the Governor's proposal. We must end free handouts to industry and protect investments that lower the cost of living and help our communities adapt to climate change."

Faraz Rizvi, Policy and Campaign Manager, Asian Pacific Environmental Network: “We're disappointed that the Governor's proposal chooses to reward fossil fuel companies with nearly a billion per year in free pollution allowances - giveaways that enable the largest polluters to emit millions of metric tons of poison into the air and bodies of working class communities while further fueling the flames of climate change. At a time when the state is struggling to cover the skyrocketing costs of climate disasters and fund desperately needed fossil-free transportation options for California's working families, we cannot afford even more giveaways to fossil fuel billionaires.”

Asha Sharma, State Policy Manager, Leadership Counsel for Justice and Accountability: "The Governor's proposal to extend the Cap-and-Trade Program without any program changes leaves money in the pockets of polluting industries instead of shifting resources to frontline communities. Additionally, the Governor's proposal fails to include investments in communities most vulnerable to the compounding impacts of the climate crisis and the state's continued reliance on polluting fuels." 

Nile Malloy, Climate Justice Director, California Environmental Justice Alliance: “Environmental justice communities need more than a rebranding of the Cap-and-Trade program. Renaming it 'Cap-and-Invest' must come with meaningful reforms—not just cosmetic changes. Reauthorization must include strong, enforceable criteria that eliminate free allowances and corporate giveaways. Real climate investment means centering environmental justice, public health, air quality, and accountability—with every dollar directed toward reducing pollution, protecting frontline communities, and accelerating truly clean, public-benefit infrastructure—not maintaining business-as-usual climate pollution while communities continue to bear the burden.”

Lolly Lim, Senior Program Manager of Climate Equity, The Greenlining Institute: “Cap-and-Trade has become a pillar of California’s climate strategy — but it is long overdue for reform. Rushing to reauthorize the program for another 15 years without addressing serious flaws is a betrayal of California’s climate justice commitments and risks further deepening inequalities, especially for communities of color hit hardest by pollution. Real climate leadership means thoughtfully strengthening cap-and-trade so it delivers more tangible benefits for frontline communities — not perks for polluters."

Dan Ress, Senior Attorney, Center on Race, Poverty & the Environment: "In this budget proposal, we see the governor protecting the wealthy while cutting programs for the vulnerable. In renewing Cap-and-Trade alone, he would keep almost a billion dollars in direct subsidies to the oil and gas industry through free allowances even as he defunds critical climate justice programs. We insist that the Legislature intervene to make robust changes to the Cap-and-Trade program that will ensure our communities do not continue to be left behind - starting by ensuring that polluting industries pay their fair share."

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