May 28, 2025
A coalition of California labor, local government and transit groups released its list of priorities for cap-and-trade reauthorization on Wednesday as negotiations in the Legislature pick up speed.
What happened: More than a dozen organizations, including the California Alliance for Jobs, League of California Cities and California Transit Association, laid out priorities that focus heavily on using revenue generated through carbon allowance auctions to fund major infrastructure projects.
That revenue would be split over four categories: public transit and clean transportation infrastructure like electric vehicle charging, wildfire resilience, high-density housing development, and climate adaptation for sea-level rise.
“We strongly urge the legislature to re-authorize cap-and-trade and prioritize investments in the physical infrastructure proven to reduce air pollution while also keeping us safe from extreme weather that is already upon us,” said Michael Quigley, executive director of the California Alliance for Jobs, which represents carpenters, laborers, contractors and other construction unions.
Why it matters: The coalition’s public launch comes two weeks after Democratic Gov. Gavin Newsom released his plan to extend the state’s cap and trade 15 years beyond its 2030 expiration. That plan specifically prioritized funding for California’s high-speed rail project, supporting Cal Fire’s wildfire prevention and response efforts, and lowering residents’ utility bills.
The coalition letter notes support for maintaining cash flow for the controversial high-speed rail project, which Newsom proposed giving $1 billion in guaranteed annual funding. That plan comes as the Trump administration threatens to revoke $4.1 billion in federal grants awarded under former President Joe Biden.
What’s next: Lawmakers and a wide swath of groups that benefit from climate funding are now trying to hash out exactly how billions in annual auction revenues will be spent across a large pool of potential programs.
Assembly Utilities and Energy Committee Chair Cottie Petrie-Norris (D) said in an interview shortly after Newsom released his plan that she expected the Assembly and state Senate to release their own proposals around the end of May.
Lawmakers signaled skepticism last week of Newsom’s plan to spend $1.5 billion in auction revenues to support Cal Fire, and appear to have more interest than the governor in making larger reforms to the program.