California Environmental Justice Alliance

Building Healthy Communities from the Ground up

Advancing Equitable Carbon Pricing in California

This year, the California legislature is poised to make big decisions on how our state will meet our ambitious climate change goals and assure that we continue to reduce localized air pollution. We have many strong regulatory programs in place that are fundamental to achieving our greenhouse gas reduction goals, but on the table for discussion this year is whether or not the carbon pricing system of cap and trade will be extended, or whether we look at an alternative to putting a price on carbon.

Across the state, the biggest sources of greenhouse gases are located in low-income communities and communities of color, where residents living next to polluting factories, freeways, refineries, and power plants breathe dirty air. There is a long-standing health and air quality crisis in our communities.

Cap and trade is not achieving the win-win outcomes of reducing greenhouse gas emissions and improving local air quality. Recent research has shown that GHG emissions from some facilities have actually increased, and rather than cutting emissions directly at the source, our dirtiest polluters are using out-of-state offsets to trade away our clean air benefits. Read our fact sheet for more information on the environmental justice challenges within cap and trade.

Last year, CEJA was proud to help pass two bills, SB 32 and AB 197, that ensure California stays on an ambitious path to curb emissions by setting stronger GHG targets by 2030, while simultaneously ensuring local emissions reductions that improve air quality in disadvantaged communities.

As California decides the best path to meet our 2030 targets, our decision makers must stay committed to solutions that will reduce the high levels of air pollution in toxic hotspots and help California most effectively reduce climate change in our state.

CEJA’s – and many environmental justice communities’ – preferred option for carbon pricing has always has been a cap and direct fee. It is the simplest, most direct pricing mechanism. It has greater potential to achieve the direct emission reductions needed in our communities and most effectively reduce GHG emissions while bringing in revenue. Members of the California Environmental Justice Advisory Committee recently passed a resolution in support of a carbon fee.

Regardless of the exact market-based mechanism, we seek the following environmental justice outcomes from any carbon pricing legislation this year:

  1. Strengthen existing climate and air quality regulations. Our core regulatory policies, such as SB 350 and AB 197, are critical to stopping further climate change and improving conditions in environmental justice communities.
  2. Ensure direct emission reductions in environmental justice communities. Greenhouse gas emissions, fine particulate matter and toxic air contaminants are strongly correlated. Cap and trade has exacerbated long-standing air quality hot spots, and it time to achieve win-win solutions that address both the air quality and climate crises in environmental justice communities.
  3. Close loopholes for polluters. Policies like offsets and free allowances, all part of the current cap and trade system, give cheap and free opportunities to avoid reducing what is coming out of their smokestacks, which is best for local communities and California. Offets and free allowances also undermine the overall integrity of the entire system because they lead to facilities exceeding the emission cap.
  4. Incentivize early action. The current price – around $13 per ton – is too low to incentivize market level changes of regulated entities and will not drive the innovations needed to achieve the 2030 targets. We need a price that is reflective of the true impacts of climate change based on the social cost of carbon, specific to California.
  5. Increase transparency and data sharing between the Air Resources Board and local air districts. Without standardized data collection and sharing across our regulatory agencies, our ability to understand what is happening with air quality at specific facilities is hampered. GHG and co-pollutant data collection and reporting must be standardized across agencies.
  6. Provide investments and economic benefits for environmental justice communities. We support the current Greenhouse Gas Reduction Fund investments in disadvantaged communities and for low-income households, and we must address additional investment needs in the state such as a dividend to low-income households, a job training fund for workers and increased revenues for climate adaptation.

We are closely watching measures such as AB 378 (Garcia, Holden, Garcia), the budget process, and others to see bold action from our legislators to achieve these outcomes in carbon pricing policy.

CEJA is lifting up the voices of our members and working to keep equity and environmental justice at the center of the current debates on climate change to ensure that environmental justice is a priority and our most vulnerable communities are not left behind.