California Air Resources Board Approves Major Changes to Cap-and-Invest Program
Published Friday, June 5, 2026
Last week, the California Air Resources Board approved significant amendments to the state's Cap-and-Invest Program, including the creation of a new Manufacturing Decarbonization Incentive program designed to provide emissions allowances to industrial facilities pursuing decarbonization projects.
According to the Legislative Analyst's Office, the changes are expected to reduce annual Cap-and-Invest auction revenues from approximately $4 billion to roughly $2 billion per year. These revenues support a variety of climate and environmental programs through California's Greenhouse Gas Reduction Fund, or GGRF.
For agriculture, GGRF-funded programs such as the Funding Agricultural Replacement Measures for Emission Reductions Program, Alternative Manure Management Program, and State Water Efficiency and Enhancement Program have helped farmers and ranchers invest in equipment, technologies and management practices that improve water efficiency, reduce greenhouse gas emissions, improve air quality, and strengthen resilience to drought and extreme weather.
California Farm Bureau opposed the amendments, expressing concern that reduced auction revenues could increase competition for already limited program funding, create uncertainty for producers planning long-term investments, and slow the adoption of practices that support the state's climate and environmental goals.
As the Legislature works to finalize the 2026-27 state budget, Farm Bureau and other agricultural organizations continue advocating for stable and adequate funding for these important agricultural conservation and climate programs.
Staff contact: Richard Filgas, rfilgas@cfbf.com.
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