THE NET-ZERO BLOG
Climate policy analysis and updates from Sacramento
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.
Near-term policy opportunities for carbon removal in California
In this blog, we identify near-term, low-cost and viable policy opportunities that would remove key barriers to carbon capture, removal and storage while not crowding-out other important state priorities, such as energy affordability. These policies include: (i) regulatory reforms, such as establishing a clear permitting framework and removing the moratorium on CO2 pipelines, amongst others; (ii) market signals, including establishing that carbon capture is an eligible emissions reduction action under Cap-and-Trade as well as guidance for biomass pathways under the Low Carbon Fuel Standard; and (iii) direct funding, including allocating a portion of Greenhouse Gas Reduction Fund revenues for direct procurement as well as continuing to pursue potential, albeit uncertain, federal opportunities. We conclude by briefly summarizing a ‘business models’ approach to carbon infrastructure for stakeholder consideration.
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.
Op-ed: A better deal on the power we need
Last week, NZC’s Director of Clean Power, Neil Matouka, published an op-ed in Capitol Weekly with Matthew Freedman of TURN, outlining how California can lower energy costs and meet climate goals by reforming transmission financing and ownership. The piece highlights new research showing that alternative models and public financing could cut transmission costs by over 50%, or up to $3 billion annually, and supports SB 330 (Padilla) to help achieve these savings.