SACRAMENTO — California’s carbon trading programs funneled $27.8 billion to oil companies and biofuel suppliers from 2013 to 2024, according to a new report from The Climate Center released today.
The report, Clearing the Zero-Emission Path: A Review of Financial Transfers to Polluting Fuels via California Carbon Trading Programs, finds the combined value of free Cap and Trade allowances given to oil refiners and drillers and Low Carbon Fuel Standard (LCFS) credits awarded to oil companies and other biofuel suppliers totaled roughly $27.8 billion (in constant 2023 dollars) over 12 years.
Both the Cap and Trade program and the Low Carbon Fuel Standard have the stated purpose of reducing greenhouse gas emissions and helping California meet its statutory climate goals. In reality, the report finds, both programs incentivized continued reliance on fossil fuels and contributed to “carbon lock-in,” delaying the necessary transition to zero-emission vehicles and public transit.
“California is giving away billions of dollars to some of the wealthiest, most polluting corporations in the world instead of investing in a climate-safe future,” said Woody Hastings, Phase Out Polluting Fuels Program Director for The Climate Center and co-author of the report. “The Cap and Invest program and Low Carbon Fuel Standard are our state’s ‘signature’ climate programs, designed to accelerate California’s transition to a clean, prosperous economy for all. Our new report shows they’ve done the opposite, locking in dependence on fossil fuels. We urge Governor Newsom and state lawmakers to reform both programs to rein in climate pollution and generate investment in real climate solutions.”
Key findings:
From 2013 to 2024, California transferred $27.8 billion to combustion fuel producers, including:
- $8.64 billion through free Cap and Trade allowances to oil refiners and drillers
- $19.17 billion through Low Carbon Fuel Standard credits to biofuel suppliers
Over the same time period, $27.8 billion could have funded:
- The installation of 2.8 million level-two EV chargers to serve roughly 11 million Californians
- Free public transit statewide for 12 years, $11 billion left for service improvements and transit electrification
- Complete job transition support for California’s oil workers, with some $15 billion left over
The Climate Center will host a webinar on February 19 to walk through the report’s findings and discuss policy solutions. The webinar will feature report authors Woody Hastings (The Climate Center), Dr. Jasmin Ansar (The Climate Center), and Greg Karras (Community Energy reSource), as well as economist Dr. Clair Brown (University of California, Berkeley). Registration for this event is free and required. A recording, presentation slides, and other resources will be sent to all registrants following the webinar.
ENDS
Notes: The full report is available here: https://theclimatecenter.org/fossil-fuels/clearing-the-zero-emission-path/
Contact: Ryan Schleeter, Communications Director, The Climate Center: ryan@theclimatecenter.org, (415) 342-2386
About The Climate Center:
Since 2001, The Climate Center has been a leader in making climate solutions a reality in California at speed and scale. We are a think-tank, do-tank working to turn bold ideas into action for a climate-safe future. www.theclimatecenter.org
