California Democrats divided on proposed cap-and-invest changes

By Alex Nieves | 05/06/2026 12:10 PM EDT

The party’s moderate and progressive wings have split on the future of the emission trading program.

An aerial view shows the Marathon Petroleum refinery in Carson, California.

California Democrats are divided over the future of the state's emissions trading program. Jae C. Hong/AP

California Democratic lawmakers are divided on whether air regulators’ proposal to overhaul the cap-and-invest market will hamper the state’s climate goals or increase cost-of-living concerns.

What happened: Moderate and progressive Democrats both wrote letters to the California Air Resources Board ahead of a Monday deadline for public comment. The letters show they are split on whether the agency’s amendments to boost incentives for polluting businesses will be an effective tool for reducing emissions.

Senate Environmental Quality Chair Catherine Blakespear and Sen. Eloise Reyes, who chairs the budget committee that oversees the agency, wrote in a letter to CARB Chair Lauren Sanchez that the new, planned incentive for businesses that invest in long-term decarbonization projects was “in no way proposed or intended” when lawmakers passed AB 1207, a bill that extended the cap-and-invest program through 2045.

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“The Legislature’s clear intent and direction are not consistently and faithfully executed,” they wrote.

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