California lawmakers call for more flexibility in carbon market rewrite

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🗞️ Driving the news: A bipartisan group of 22 lawmakers in California is urging regulators to add more flexibility to the state’s cap-and-trade carbon market, warning that stricter rules could raise energy prices and push industrial activity out of the state

🔭 The context: The program, overseen by the California Air Resources Board (CARB), requires companies to buy and trade emissions permits under a gradually declining cap
• Regulators are considering extending the system to 2045 while tightening emissions limits, with a key decision expected in May

🌍 Why it matters for the planet: Carbon markets are a central tool for reducing greenhouse-gas emissions by putting a price on pollution
• Weakening the emissions cap could slow the pace of decarbonization, while an overly strict cap could shift emissions to other regions if industries relocate, a phenomenon known as carbon leakage

⏭️ What’s next: Lawmakers proposed measures such as additional allowances for industries at risk of relocating and maintaining subsidies for low-income energy customers
• CARB is expected to consider these recommendations before its upcoming vote on the revised carbon market rules

💬 One quote: Lawmakers warned that a tighter emissions cap could increase consumer costs and drive industrial activity out of the state

📈 One stat: The proposed changes aim to avoid $10–15 billion in potential cost increases that could otherwise be passed on to consumers through higher fuel, gas and electricity prices

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