February 13, 2017 - In this report, we provide comments and recommendations related to the Governor’s proposal. We recommend the Legislature authorize cap-and-trade (or a carbon tax) beyond 2020. If the Legislature approves cap-and-trade, we recommend the Legislature strengthen the allowance price ceiling and provide clearer direction to ARB regarding the criteria that the board should use to determine whether a complementary policy should be adopted. We also recommend the Legislature approve cap-and-trade (or carbon tax) with a two-thirds vote because it would provide greater legal certainty and ensure ARB has the ability to design an effective program. With a two-thirds vote, we recommend the Legislature broaden the allowable uses of auction revenue because it would give the Legislature flexibility to use the funds on its highest priorities. When finalizing its 2017-18 cap-and-trade spending plan, we recommend the Legislature (1) reject the administration’s proposed language making spending contingent on future legislation, (2) consider alternative strategies for dealing with revenue uncertainty, and (3) allocate funds to specific programs rather than providing DOF that authority.
August 23, 2017 - Presented to Assembly Budget Subcommittee No. 3 on Resources and Transportation
August 24, 2017 - Presented to Senate Budget and Fiscal Review, Subcommittee No. 2
February 18, 2016 - Presented to Senate Committee on Budget and Fiscal Review
October 24, 2023 - This post answers commonly asked questions about cap-and-trade—one of the state’s key programs to address greenhouse gas emissions—and the Greenhouse Gas Reduction Fund.
December 12, 2017 - In this report, we (1) provide background information on cap‑and‑trade and the recent extension of the program to 2030, (2) identify key administrative implementation decisions that could affect program outcomes and the need for legislative oversight, (3) identify potential opportunities to increase the effectiveness of a new advisory committee created by AB 398, and (4) describe potential state cap‑and‑trade revenue scenarios through 2030.
April 15, 2016 - In March, the administration released its annual report on cap-and-trade spending outcomes. In this post, we summarize the information included in the report and, based on our review of the information, identify issues for legislative consideration.
December 21, 2018 - Chapter 135 of 2017 (AB 398, E. Garcia) requires our office to annually report on the economic impacts and benefits of California’s statutory greenhouse gas (GHG) emission goals—statewide emissions to 1990 levels by 2020 and to 40 percent below 1990 levels by 2030. This report provides a conceptual overview of the potential economic effects of policies intended to help meet these goals—both positive and negative—as well as identifies some key issues for the Legislature to consider when designing and evaluating state climate policies. In a companion report, Assessing California’s Climate Policies—Transportation, we provide more detailed information and comments on the state’s major policies aimed at reducing emissions from the transportation sector.
February 16, 2012 - This report examines the Governor's budget proposal regarding the use of revenues expected to be generated from the cap-and-trade auctions that the California Air Resources Board (ARB) will hold in 2012-13. These auctions are part of the state's plan to meet the goals of the Global Warming Solutions Act of 2006 (commonly referred to as AB 32). In this report, we recommend that the Legislature first use the revenues in 2012-13 to offset General Fund costs of existing programs designed to mitigate GHG emissions. Since the Legislature will need to decide which General Fund costs to offset as part of the 2012-13 budget process, such decisions are best made this spring. In addition, the Legislature will need to begin the process of determining how effectively to allocate the remaining auction revenues on new or expanded programs.
February 3, 2016 - Presented to Senate Committee on Environmental Quality and Select Committee on Climate Change and AB 32 Implementation
January 4, 2023 - This brief evaluates the California Air Resources Board's plan for achieving statewide 2030 greenhouse gas reduction goals.
September 22, 2015 - We discuss (1) the purpose of the administration's triennial cap-and-trade Investment Plan, (2) limitations of the administration's recently released Investment Plan concept paper, and (3) several key questions we believe the administration should consider as it further develops the Investment Plan that could result in better information about the potential benefits, tradeoffs, and risks associated with different funding choices.
February 9, 2012 - This report analyzes the design of the cap-and-trade program as adopted by the California Air Resources Board (ARB). This new, complex program is part of the state's plan to reduce greenhouse gas emissions statewide to 1990 levels by 2020—a goal set by the Global Warming Solutions Act of 2006 (commonly referred to as AB 32). The report examines in detail the specific policy choices made by the ARB in the design of the program, some specific policy trade-offs inherent in those decisions, and options for program design changes that the Legislature may wish to make depending on its policy priorities.