Courts uphold California's new cap-and-trade program to reduce greenhouse gas emissions

Ryan Wiggins Headshot

Cap-and-trade auctions should fund clean transportation

Today, polluters are lining up for the fifth auction of greenhouse gas emissions allowances under California’s landmark cap-and-trade climate program. Companies that produce climate pollution will pay (some) for permission to continue polluting, while the State will collect revenues that will be used to reduce greenhouse gases and help to mitigate the impacts of climate change on California.

At least that’s how it’s supposed to go. Last year, the funds raised through cap-and-trade were “loaned” to the State’s general fund to meet other budget needs. It’s still unclear if and when those funds will be repaid . . . and whether this year’s revenues will be allocated according to the State’s own investment plan.

Meanwhile, the entire cap-and-trade program, an important part of California’s landmark climate law known as AB 32, continues to face challenges to its very existence from those looking for a free ride to pollute.

So it was a great victory for the environment when, last Thursday, the Sacramento Superior Court upheld the program against a challenge to its carbon auctions, a key feature of this approach to fighting climate pollution.

The lawsuit was brought by the California Chamber of Commerce, whose eleventh-hour filing held little weight with the court. Environmentalists cheered the decision, which affirmed the state’s ability to adopt the cap-and-trade program and collect revenues.

Currently, polluters only have to purchase a small percentage of carbon allowances at auction – most of them have been given away for free. Collecting and using this fee is an important way to help “level the playing field” for communities and households who bear the brunt of climate change impacts, and who currently suffer from other impacts related to these emissions.

This money can do a lot of good for all Californians. It is the first really substantial pot of money that must be used to reduce greenhouse gases, and State law requires that it benefit Californians in other ways, too – such as directing investments to our most disadvantaged communities and households.

TransForm and our allies have identified a number of places where these revenues can be effective at reducing climate pollution and promoting opportunities for all Californians, from affordable housing near transit to transit passes for students and others.

But to achieve these goals, we need to invest cap-and-trade revenues in climate solutions without delay. We have an amazing opportunity to put this money to good use in 2014. 


About This Blog

TransForum is the blog of TransForm, California's leading transportation advocate. For more about our work, including ways you can take action and contribute, visit