Newsom signs climate overhaul, extending cap and trade while boosting oil

Gov. Gavin Newsom today signed a sweeping package of climate and energy policies to extend the cap-and-trade greenhouse gas emissions program, increase oil drilling and allow the state to create a Western regional electricity market. 

The overhaul that Newsom and top lawmakers negotiated in the final days of the legislative session amid heavy lobbying last week reflects urgency in the Democratic Party to preserve its climate goals while simultaneously reining in the surging gas and energy costs that have threatened to drive voters to the right. 

Lawmakers opened the session this year declaring a focus on making California more affordable, following a bruising national election for Democrats. The energy package was central to that goal, with progressives proposing to lower costs with industry regulations.

But after two years declaring special sessions targeting the oil and gas industry, Newsom began to warm up to them as oil refineries announced closures that could send gas prices spiking. As a result, one of the bills he signed Friday would boost domestic oil production in Kern County by approving a long-delayed environmental impact report for new wells. 

“We have to effectively transition,” Newsom said at an event in San Francisco. “This is not an ideological endeavor. We’re in the practical application business. We’ve got to manifest our ideals and our goals. So this lays it out. But it lays it out without laying tracks over folks.”

The biggest part of the complex package he signed were bills to extend the state’s cap and trade program, which since 2013 has put a price tag on carbon emissions. The program caps the amount of greenhouse gases that polluting industries can emit, and to a limited extent allows companies that cut emissions to sell permits to other companies that pollute. The program raises money for many of the state’s climate programs. 

The extension leaves the program largely the same, which disappointed environmental justice advocates who argued it has allowed oil and gas to continue polluting near low-income communities. In a nod to those concerns, Newsom also signed another bill in the package that creates a state fund to monitor pollution mitigation in disadvantaged communities.

He also signed two bills affecting the electricity grid. One would allow the state to create a Western regional energy market, allowing the state to trade more electricity with neighbors.