The principle behind Cap and Dividend is that the atmosphere belongs to all of us, and polluters should pay all of us for the right to pollute it.

Below are the details of SB 775, a new Cap and Dividend piece of legislation that we fully support.

SB 775 could be called “California’s Climate Refund.” It enacts into law a post-2020 cap and trade program as an update to California’s Global Warming Solutions Act of 2006, which put a cap (limit) on carbon emissions, and allowed businesses to purchase permits to pollute, and to trade those permits in an open market. The number of permits declines over time, giving businesses time to reduce their emissions as the whole economy shifts to clean energy. The revenues created from the sale of the permits go back to the people of California in the form of dividends to help offset the rising costs of energy use. Revenues also go toward investments in renewable energy.


Click here for The Climate Center letter of support for this bill.

  • Asian Pacific Environmental Network
  • California Environmental Justice Alliance (CEJA)
  • Californians for a Carbon Tax (CalFACT)
  • The Climate Center
  • Center on Race, Poverty & the Environment
  • Citizens’ Climate Lobby
  • City of Santa Monica
  • Coalition for Clean Air
  • Friends of the Earth
  • Greenlining Institute
  • Public Advocates SCOPE (Los Angeles)
  • Union of Concerned Scientists

Take Action

Call or write your State Senators and Assembly Members and tell them to OPPOSE Big Oil’s cap and trade take over. Tell them you want them to SUPPORT an upgrade of cap and trade like Senate Bill 775.

First: find your legislators’ contact info
(Note: you can also use CEJA’s contact link or call number: 916-694-1101 to contact your Assembly Member on this topic)

Suggested script:

Hello my name is _______________ and I live in ______________.

I’m calling to urge you to OPPOSE Big Oil’s plan to extend cap and trade.

Instead I want you to SUPPORT a real upgrade to cap and trade like SB775.

We need:

  • A high price collar with a floor of $60 and a ceiling of $120/ton of CO2 by 2030
  • An end to offsets that allow local pollution to continue
  • An end to free pollution allowances
  • A climate dividend that returns revenue to every California resident
  • To deal with surplus allowances from the current program so they don’t undermine the post-2020 program

I support equitable, efficient, and effective carbon pricing in California that reduces emissions while supporting our families, our communities, and our economy.

Thank you.

SB 775 text and status:

SB 775 Details:

  1. Establishes a new cap-and-trade program that begins on January 1, 2021. The new program applies to the same set of covered entities that are subject to the current program; The California Air Resources Board (ARB) would retain its current authority to change coverage in the future.
  2. Sets declining annual caps on emissions from covered sources that are consistent with achieving the 2030 statewide emissions goal.
  3. Includes a price floor and price ceiling (a price collar) for carbon at quarterly auctions. In combination, these two program elements reduce market volatility, help to ensure smoother revenue flows, and enable a gradual transition to higher carbon prices.
  4. The initial price ceiling begins at $30/tCO2e and rises at $10/tCO2e per year, plus inflation.
  5. The initial price floor begins at $20/tCO2e and rises at $5/tCO2e per year, plus inflation, after a one-year delay, such that there is a $20/tCO2e spread between the floor and ceiling after one year of market operation and a $60/tCO2e spread between the floor and the ceiling in 2030.
  6. Prohibits the use of carbon offsets, banked allowances from the pre-2020 market, and allowances from external market programs that have not yet linked to the new post- 2020 program. These steps separate the trading periods completely.
  7. The new program can link external market programs.
  8. Requires annual (as opposed to 3-year) compliance for all covered entities.
  9. Prohibits banking of allowances for use outside of the year they are issued.

The Economic Case for SB 775

A State-appointed panel of experts, called the Economic and Allocation Advisory Committee (EAAC), studied the best strategy to allocate the revenue raised by a cap & trade program. The EAAC’s January 10th, 2010 report recommended that the largest share – roughly 75% of allowance value – should be returned to California households. According to EAAC figures, this dividend translates to $388 in 2012 for a family of four, rising to $1,036 by 2020, adding a total of $7,004 to family incomes over the 8 year period. The Climate Center continues to reach out to lawmakers to incorporate this recommendation into future legislation. If we are successful, it will be a huge victory for California’s economy and the environment!

The Climate Center continues to reach out to lawmakers, businesses, the broader community to support this legislation. If we are successful, it will be a huge victory for California’s economy and the environment!

Download the factsheet (pdf):


Close to Home: State can show the way on climate policy by Jane Bender and Larry Robinson, June 8, 2017

California is about to revolutionize climate policy … again, by David Roberts, May 3, 2017

Understanding SB 775: A Realistic Path to Achieving California’s Climate Goals, by Michael Wara and Danny Cullenward, Legal Planet, Berkeley Law and UCLA Law, May 15, 2017

Wieckowski, De León unveil new post-2020 Cap and Trade program, May 1, 2017

California’s climate debate heats up behind closed doors as Gov. Brown pushes to extend cap and trade by Chris Megerian and Melanie Mason, LA Times, June 23, 2017