The Greenlining Institute Respond to CARB’s Cap-and-Invest Changes

Statement from Kirin Kumar, Vice President of Policy at The Greenlining Institute, on CARB's Cap-and-Invest Decision

The California Air Resources Board's recent vote on changes to the Cap-and-Invest program is a step backward from the state's commitments to communities most burdened by poverty, pollution, and climate change.

By creating the Manufacturing Decarbonization Incentive, CARB provides even more free allowances to polluters through an untested mechanism with no guarantees of benefits to overburdened communities - all while putting funding for much-needed climate investments at risk.

While the MDI is framed as a tool to support industrial emissions reductions, it is unclear how it will tangibly benefit local communities when it comes to air quality improvements or addressing affordability concerns. It could also significantly reduce revenues for the state's Greenhouse Gas Reduction Fund - an important source of funding for clean transit, affordable housing, air pollution reduction, safe drinking water, and climate resilience programs, and more.

Residents, environmental advocates, air quality experts, and transit leaders across the state raised serious concerns about these impacts. We are grateful to Board Members Hopkins, Limón, and Takvorian who spoke up about these concerns and voted against moving forward with the proposal.

At a time when our communities are already navigating rising costs, climate disasters, pollution, and displacement, any action that weakens the GGRF while providing no commensurate benefits to disadvantaged communities moves California in the wrong direction. CARB's practices should not destabilize key resources that help Californians breathe cleaner air, access affordable transportation and housing, drink safe water, and prepare for climate disasters - especially when they come with no clear benefits to these communities.

The Greenlining Institute will continue to advocate for pathways to fund critical climate programs through Cap-and-Invest. In coalition with our partners, we are calling on state budget leaders to prioritize investments in GGRF's "Tier 3" programs, which will be the first to lose funding if Cap-and-Invest revenues fall due to decisions by CARB. These programs include:

• $800 million for Affordable Housing and Sustainable Communities
• $400 million for Transit and Intercity Rail
• $250 million for AB 617 Community Air Protection Program implementation
• $200 million for Low Carbon Transit Operations
• $200 million for Forest Health and Fire Prevention
• $130 million for Safe and Affordable Drinking Water

You can read our full letter to Senator John Laird, Assemblymember Jesse Gabriel, Senator Eloise Gómez Reyes, and Assemblymember Steve Bennett here.

This decision highlights a glaring problem for California beyond Cap-and-Invest: the state clearly lacks a coherent, durable climate funding strategy that matches the scale of its ambitions and the needs of its communities.

Critical investments in transit, air quality improvements, affordable housing near transit, and safe drinking water should not be subject to recurring uncertainty, nor should communities be forced to fight year after year to preserve funding for programs that are desperately needed.

California's climate commitments are only as strong as the investments behind them. As budget negotiations continue, state leaders have a responsibility to align climate resources with community needs and deliver proven investments to the communities most affected by disinvestment, pollution, and climate change - without delay, uncertainty, or convoluted processes that make equity harder to achieve.