California Air Resources Board

California Republicans in Congress are targeting two state air-quality mandates they blame for rising consumer costs: the Vessels At-Berth rule and the Commercial Harbor Craft rule, both issued by the California Air Resources Board. Critics argue the regulations impose steep compliance costs and fines on shipping and fishing operators, expenses that get passed on through supply chains to gas, grocery, and other consumer prices. The state agency's own estimates put combined costs in the billions of dollars. The House has passed joint resolutions to overturn both mandates, framing them as hidden climate taxes, and now awaits Senate action. The debate ties into broader scrutiny of California's cost of living under Gov. Gavin Newsom.

California's carbon market, the cap-and-invest program created under AB 32, underwent major changes this year. A contentious reauthorization is projected to roughly halve annual auction revenue while opening billions in free permits for polluters investing in decarbonization. Gov. Gavin Newsom also announced plans to link the state's market with Washington's and eventually Quebec's, expected to raise credit prices and take effect next year. Critics say the changes push California's 2030 and 2045 emissions targets further out of reach, while regulators and some economists call the program still functional. The next governor will appoint air board members, oversee linkage rulemaking, and shape climate policy; neither gubernatorial candidate has made it a campaign focus.

California Governor Gavin Newsom announced plans to link the state's cap-and-invest carbon market with Washington's, a step officials say will cut additional pollution and boost revenue. The announcement, made during Climate Week in New York, allows the California Air Resources Board to begin the public process toward linkage, with joint auctions targeted for 2027. Officials estimate the move could generate roughly $10 billion in bill credits for electricity customers and $8 billion for California's climate fund through 2030.

California's cap-and-invest program, launched in 2013 and extended by lawmakers last year through 2045, requires major polluters to pay for carbon emissions and trade allowances, with the pool shrinking annually. Linking with Washington would expand the existing California-Quebec market. Modeling cited by the Environmental Defense Fund projects an additional 45 million metric tons of avoided emissions through 2045. The move comes as California pushes back against federal rollbacks of climate rules under the Trump administration.

California continues to expand electric vehicle adoption even as the Trump administration works to slow the national EV transition. Federal actions have eliminated the $7,500 EV tax credit, rescinded the endangerment finding underpinning vehicle emissions regulation under the Clean Air Act, revoked California's authority to set stricter-than-federal emissions standards, and overturned the state's EV sales mandate. The administration also froze funding for the National Electric Vehicle Infrastructure program, though a federal judge ruled that freeze unlawful.

Despite a national sales slowdown following the loss of the federal rebate, California's EV sales share held up: about 19% of new car sales in the state were zero-emission vehicles in the second quarter of 2025, nearly three times the national rate. Roughly 1 in 12 vehicles on California roads are now zero-emission. The state also led the nation in new fast-charging stations added last quarter and now has more public chargers than gas pumps. California is currently defending its 2035 gas-car sales ban in court, a case that could determine the future pace of its emissions strategy.

California advocacy groups battling Gov. Gavin Newsom over labor rules, artificial intelligence regulation, transportation funding, and cap-and-trade policy are increasingly pressuring him outside California, betting that his likely 2028 presidential ambitions give them new leverage. Transit advocates have run newspaper ads in South Carolina and Nevada targeting Newsom-backed climate program changes, a business group put up a Times Square billboard attacking his record, and labor leaders have warned they will confront him on the campaign trail over AI and workplace protections if he does not act. Labor leaders from Iowa and North Carolina have publicly said they will meet him at events like the Iowa State Fair unless he negotiates on AI and worker protections.

Strategists say the tactic aims less at swaying votes now than at forcing unresolved Sacramento fights into a national narrative before rivals or opposition campaigns can weaponize them. California Labor Federation President Lorena Gonzalez says talks with Newsom's office have intensified, including after labor allies confronted him during a Texas trip, and that he now discusses AI as a threat to workers. Newsom's office insists out-of-state pressure campaigns do not affect his decisions, though analysts remain split on whether the tactic builds his name recognition or exposes real vulnerabilities as his term nears its end.