Democratic California Gov. Gavin Newsom on Wednesday released the May revision of his state budget proposal for 2025-2026, which included an extension to a cap-and-trade program that some analysts warn could raise gas prices, while also helping fund a problem-ridden high-speed rail project.
Newsom’s revised budget proposal, first reported by Politico, includes a 15-year extension of California’s cap-and-trade program — which launched in 2013 and was established to limit greenhouse gas (GHG) emissions in the state. While the program is currently set to expire in 2030, the state’s Legislature is considering extending it, which some have cautioned could lead to a spike in gas prices in the state over the next few years.
The state’s cap-and-trade system requires natural gas power plants, coal power plants and other companies to purchase allowances to offset emissions, according to the U.S. Energy Information Administration. The program “establishes a declining limit” on major sources of GHG emissions throughout the state and also incentivizes companies to invest in “cleaner, more efficient technologies and energy,” according to the California Air Resources Board (CARB)…