California’s cap‑and‑trade system is a central part of the state’s climate strategy. It aims to reduce greenhouse gas emissions while funding clean energy goals, supporting affordability programs, and helping communities impacted by climate hazards. To accomplish these goals, the state issues permits, or a “cap,” on the amount of greenhouse gases a company can emit; companies who do not use all of their permits can sell, or “trade,” them to other companies. Revenue raised through issuing permits goes into the Greenhouse Gas Reduction Fund to support a variety of programs and projects. Recently renamed “cap-and-invest” to emphasize support for environmental projects, an extension of the system was signed into law by Governor Newsom in mid-September. What do Californians think about their state’s environmental leadership? And do they support the cap-and-trade system and its goals?
Most Californians want the state to take climate action. According to the July 2025 PPIC survey, more than six in ten Californians favor the state government making its own policies, separate from the federal government, on climate change; nearly two-thirds think it is important that California acts as a climate leader around the world.
What about cap-and-trade? The survey reveals that around six in ten Californians favor the system. Cap-and-trade has had majority support since it began operation in 2013. Today, about half or more across the state’s regions and demographic groups favor it, with support highest among Los Angeles residents (67%), college graduates (66%), and Latinos (65%). Three in four Democrats and six in ten independents support it, while six in ten Republicans oppose.
A key component of the program involves allocating funds to disadvantaged communities. The law requires that at least 35% of funds benefit priority populations, which include low-income communities (defined as earning up to 80% of the statewide median) and those disproportionately affected by environmental hazards.
Seven in ten Californians (69%) and likely voters (70%) believe it is important for cap-and-trade revenues to support these communities. About three in four Latinos, Asian Americans, African Americans, and residents earning less than $100,000 say this is important.
This support reflects the public’s broader view that environmental impacts disproportionately affect lower-income communities. Most Californians see the pollution of drinking water (65%) and air pollution (58%) as more serious threats for lower-income areas, although fewer (43%) think the same about climate change. About one-third of Californians identify all three issues as heightened threats.
Across demographic groups, Latinos, African Americans, and lower-income Californians (those earning less than $40,000 annually) are most likely to see water and air pollution as disproportionately harmful to lower-income communities. Among regions, Los Angeles residents are most likely to hold these views.
California’s cap-and-trade system is both a climate tool and a reflection of the state’s broader values. As the system evolves into cap-and-invest and extends through 2045, its impact and success will hinge on not only reducing emissions but also on delivering tangible benefits to impacted communities and reinforcing the state’s role as a leader in climate action. Stay tuned as the PPIC Statewide Survey continues to track Californians’ perceptions of climate policies and actions.
