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Cap and Trade Resource Center

Overview

Cap and Trade

Recent actions by the California Legislature and the Administration of Governor Brown promise to accelerate state efforts to address climate change. Cap and trade is one key strategy that California is implementing to achieve the greenhouse gas (GHG) emission reduction goals set in the state law. This resource center provides an overview of cap and trade, the funding available to local governments and each of the current cap and trade funds as of August, 2017. View the individual funds below. Click here to download the overview infographic.

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What is Cap and Trade?

The California Global Warming Solutions Act of 2006, AB 32, is a multi-year program to reduce Greenhouse Gas (GHG) emissions in California to 1990 levels by 2020. One key strategy to achieve this goal is a ‘cap and trade’ market system. The ‘cap’ creates a limit on carbon dioxide equivalent emissions, while a corresponding number of allowances within the cap can be ‘traded.’ The allowances are purchased by utilities and businesses at quarterly auctions. Over time, as the cap lowers, businesses that aggressively reduce emissions can trade their surplus allowances to firms that find it more expensive to reduce emissions.

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California Climate Investment Funding Portal

Proceeds from the Cap-and-Trade Program support a wide range of programs and projects that reduce greenhouse gas emissions and support major economic, environmental and public health benefits for Californians, including benefits to the most disadvantaged communities, low-income communities, and low-income households.

The Legislature and Governor appropriate money from the Greenhouse Gas Reduction Fund (GGRF) to State agencies through the Budget process. 

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