THE NET-ZERO BLOG
Climate policy analysis and updates from Sacramento
GGRF investments are a dumpster fire. Does anyone even care?
The cap-and-invest program update has quickly become one of the most contentious environmental policy fights of 2026. The California Air Resources Board’s (CARB's) proposal to establish a Manufacturing Decarbonization Incentive (“MDI”) that would reduce near-term compliance costs for manufacturers, notably refineries, has been strongly opposed by environmental organizations. Industry groups, meanwhile, have argued it doesn’t go far enough in addressing leakage risks. The Legislature has expressed deep frustration over how the MDI could significantly reduce Greenhouse Gas Reduction Fund (GGRF) revenues and therefore undermine the spending commitments agreed under SB 840 (Limon). The budget chairs in both houses have suggested reopening these negotiations.
How California can deliver another milestone year on climate despite a budget deficit
Despite strong progress in recent years, California still risks falling well short of its 2030 and 2045 climate goals. And now, as the state faces a projected $18 billion budget deficit, a key question relates to what climate action might look like in 2026. In this blog, we show there is no shortage of no- and low-cost policy reforms that could make for another milestone year of pragmatic climate action in California. We highlight nine opportunities focused on improving the efficiency of existing programs and processes as well as leveraging small amounts of funding to establish key standards that are essential to meeting the state's climate goals.
Assembly releases cap-and-invest proposal that prioritizes affordability, clean energy
Today, the Assembly released a cap-and-invest reauthorization proposal. In this blog, we summarize the key reforms related to the market-based mechanism, including distribution of utility allowances, residential climate credit, and a new Clean Energy Infrastructure Investment Fund. Overall, the Assembly proposal would serve to meet immediate- and long-term energy affordability objectives while driving emissions reductions consistent with the state’s greenhouse gas mitigation goals.
Op-ed: How current programs can inform future cap-and-trade investments
NZC’s Sam Uden published an op-ed in Capitol Weekly which examines the Governor Newsom’s proposal to extend California’s cap-and-trade program to 2045. The piece highlights the cost-ineffectiveness of Greenhouse Gas Reduction Fund spending and misalignment with key state climate strategies. The op-ed introduces an ‘Affordable Net-Zero’ investment framework that would shift these investments to support California’s climate and affordability goals.
Analyzing the Governor’s proposed climate actions in the May Revise budget
Yesterday, Governor Newsom released the May Revision to the 2025-26 State Budget, totaling $322 billion in proposed expenditures and including multiple key climate actions. In this short article, we analyze the degree to which these actions could support the state’s climate and energy affordability goals.
A clean energy infrastructure plan for the GGRF
There is evidence that California’s Greenhouse Gas Reduction Fund investments are underperforming with multiple programs requiring thousands of dollars to reduce one ton of carbon emissions. Identifying opportunities for leverage - where $1 of public investment can generate a 3x, 4x, 5x or more improvement on key priorities such as residential rate reductions, clean energy deployment, climate resilience, and similar - could significantly improve the overall performance of the portfolio. This blog highlights one such opportunity: dedicating a portion of annual GGRF revenues into a revolving clean energy infrastructure fund. By targeting investments at high priority infrastructure, such as transmission, the fund can have the catalytic effect of unlocking gigawatts of new clean generation at low-cost.