California Air Resource Board defends Cap-and-Invest program

There’s growing pressure to pull the plug on California’s proposed Cap-and-Invest Program but the agency behind the plan isn’t moving.

The California Air Resources Board (CARB) responded to the concerns, calling the initiative “the most cost-effective way” to meet the state’s climate goals.

“Although companies in the program have added their costs to gasoline prices, the proposed updates are not expected to add additional costs,” the office of CARB Chair Lauren Sanchez told the Post in a statement. “That’s because the oil industry’s allowance allocation remains unchanged to help them continue operating in California.”

This response comes after companies such as Chevron and Marathon wrote to the board saying that they are “deeply concerned and strongly oppose” CARB’s proposed amendments to the Cap-and-Invest regulations.

In addition to letters from these two oil and gas companies, California Democratic lawmakers also wrote to CARB, urging regulators to go back to the drawing board on a key part of the policy — warning it could further destabilize the state’s energy market and drive prices even higher.

“An energy transition that outpaces infrastructure readiness, market realities, and technological feasibility risks creating chronic supply imbalances and long-term market instability,” wrote fifteen California Democrats.

The assemblymembers sent a letter Monday to CARB asking the agency to reconsider proposed amendments to the state’s Cap-and-Invest program covering fuels, gas, and electricity. California’s Cap-and-Invest program works by placing a limit, or “cap,” on greenhouse gas emissions and requires major polluters to buy allowances for their emissions.

According to the California Energy Commission, the Cap-and-Invest program currently adds about 24 cents per gallon to the cost of gasoline in the Golden State. Key measures under the proposed amendments include accelerating greenhouse gas reductions and requiring large companies to report emissions and climate-related financial risks.

The package also addresses refinery emissions and allows first-year flexibility for reporting, all as part of California’s broader push for carbon neutrality by 2045.

Officials from Nevada also raised concerns in a lengthy letter Monday to Gov. Gavin Newsom, warning him of “real-world consequences” for the state’s anti-oil policies.

The California Post reached out to Newsom’s office for a response; the office referred inquiries to CARB and did not confirm receipt of the letters.

“We have received the letters and are evaluating them along with all the input received during the public comment period,” CARB noted, acknowledging frustration and opposition to the program.

According to the office of the chair of CARB, the proposal could deliver $180.7 billion in statewide benefits— including $123 billion in avoided health costs —and up to $485 billion in global climate savings.

“Since when are oil companies concerned about keeping prices down for us? The oil industry is climate washing all its ills to derail the Cap-and-Invest program and stop our transition to cheaper, cleaner energy to protect its profits,” said Katelyn Roedner Sutter, Senior California Director at Environmental Defense Fund. “By wide margins, Californians see climate action as an affordability solution and want their leaders to do more.” 

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