Background
On September 19, 2025, Governor Newsom signed into law Senate Bill 840 (SB 840; Limón, statutes of 2025) and Assembly Bill 1207 (AB 1207; Irwin, statutes of 2025), both of which were passed by a supermajority in the Legislature. AB 1207 extends the Cap-and-Invest Program (previously known as the Cap-and-Trade Program) through 2045, providing investment and regulatory certainty for clean energy and technology, uplifting affordability for Californians, and giving additional direction to CARB. CARB is working on updating the Cap-and-Invest Regulation (Regulation) to reflect the direction and process in AB 1207. This work builds on the public process to update the Regulation that CARB started in 2023. The previous public process materials are available at the Cap-and-Invest Program Meetings and Workshops webpage. The formal rulemaking process is following the Administrative Procedure Act with formal comment periods. CARB posted Proposed Amendments to the Regulation in January 2026 for a 45-day public comment period, which ended March 9, 2026.
CARB first formally adopted the Cap-and-Invest Regulation in October 2011. The Cap-and-Invest Regulation (Regulation) establishes a declining limit on major sources of greenhouse gas (GHG) emissions throughout California, and it creates a powerful economic incentive for significant investment in cleaner, more efficient technologies. CARB adopted the Regulation, along with complementary measures, pursuant to Health and Safety Code Sections 38500-38599 (AB 32) to cost-effectively reduce California’s GHG emissions and meet the State’s statutory climate targets. The Board subsequently amended the Regulation in June 2012, October 2013, April 2014, September 2014, June 2015, July 2017, March 2018, and December 2018. The California Cap-and-Invest Program and Québec Cap-and-Trade System have participated in a linked carbon market since January 2014. In 2017, AB 398 was passed by a supermajority in the Legislature and included prescriptive direction on the design of the program from 2021 through 2030.
The Attachments to the 15-Day Notice show the specific proposed modifications to the text of the proposed regulation. The Attachments, original Notice, Initial Statement of Reasons, and all subsequent regulatory documents are available on CARB's Rulemaking webpage.
Inquiries concerning the substance of the proposed regulation may be directed to Mark Sippola, Branch Chief, Climate Change Program Evaluation Branch, at (279) 208-7918 or Rachel Gold, Supervisor, Program Development Section, at (279) 208-7516.
Written Comment Period & Comment Submittal
Written comments will only be accepted on the modifications identified in the 15-Day Notice. The public comment period for this regulatory action will begin on April 14, 2026. Written comments must be received no later than April 29, 2026, and addressed to the following:
Clerk of the Board, California Air Resources Board
1001 I Street, Sacramento, California 95814
Please note that under the California Public Records Act (Government Code section 7921.000 et seq.), your written and oral comments, attachments, and associated contact information (e.g., your address, phone, email, etc.) become part of the public record and can be released to the public upon request.
Real and Increasing Costs of Climate Change Impacts for Californians
The science behind climate change is irrefutable. With the increasing severity and frequency of drought, wildfire, extreme heat, and other impacts, Californians just have to look out their windows to know that climate change is real and rapidly getting worse. The impacts once thought decades away are happening now. Recent reports detail some of the impacts to the state:
- A 2024 national report ranked California the worst state for natural disasters fueled by a changing climate, with expected annual losses totaling more than $16 billion statewide.
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Home insurance is harder and more expensive to get. Seven of California’s largest property insurers, State Farm, Allstate, Farmers, USAA, Travelers, Nationwide and Chubb recently limited new homeowners policies in the Golden State — raising questions about the stability of the California home insurance market.
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During an 11-year period, exposure to wildfire smoke caused more than 50,000 deaths in California and more than $400 billion in economic impacts.
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During seven extreme heat events over the past decade, California experienced $7.7 billion in losses.
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Fueled by record drought conditions linked to climate change, the January 2025 Southern California wildfires caused widespread losses including at least 440 deaths, with 31 direct deaths and 409 indirect fatalities from smoke or healthcare disruptions, and destruction of over 16,000 structures. The economic impacts from these fires alone is estimated to be more than $30 billion.
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