How the Problem Solvers are Rethinking Cap-and-Trade
California's Cap-and-Trade program is recognized as essential for achieving the state’s ambitious 2045 climate goals. However, a vital question remains: will California be able to meet its environmental targets without overburdening consumers and businesses?
The answer, according to the California Problem Solvers Caucus (CPSC), is yes—if the program is reauthorized using a new roadmap focused on affordability and accountability. Established in 2020, the CPSC is a unique, bipartisan and bicameral group of Assemblymembers and Senators committed to finding solutions through collaboration.
They have released four principles intended to guide the reauthorization process and achieve consensus:
Affordability: The Caucus demands that the program extension retain and enhance features like free allowances and offset protocols. These tools are crucial for easing cost pressures on consumer necessities—such as food, fuel, utilities, and building materials—and protecting jobs and the economy. Co-chair Assemblyman David Alvarez (D-San Diego) emphasizes that effective climate policies must lower consumer costs to be exportable to other governments.
Certainty: Uncertainty about the program’s future can deter necessary investment. Therefore, the CPSC seeks a broad, bipartisan extension through 2045 to send a strong signal of commitment to the program’s longevity.
Comprehensive Cost Analysis: Executive agencies must adopt additional best practice standards for economic assessments. This ensures that cost-benefit analyses of climate policies are complete, timely, and transparent, thereby better illuminating trade-offs and cumulative impacts.
Oversight: The extension must require processes for regular, rigorous legislative review of significant climate portfolio policies. This allows the legislature to continually assess its current necessity, performance, costs, and impacts.
CPSC Co-chair Senator Suzette Martinez Valladares (R-Santa Clarita) stressed that California’s climate policies should prioritize affordability and market principles while ensuring stable rules for investment.
This focus on affordability is already yielding results. The CPSC recently championed AB 30, a successful bipartisan measure that legalized the E15 fuel blend, offering Californians immediate cost savings at the pump. By applying these pragmatic, principled standards to Cap-and-Trade, the Problem Solvers Caucus aims to ensure that California’s environmental leadership is both sustainable and cost-effective.