California Cap-and-Trade For Transit Investment
The Cap-and-Trade Program is a key element of California’s strategy to reduce greenhouse gas emissions
In April 2025, the Governor and legislative leaders announced their intention to extend California’s emissions reduction program—also known as Cap-and-Trade—which is set to expire in 2030. The Governor’s Revised 2025-26 Budget seeks to reauthorize and fund the program through 2045.
“California must continue to lead on reducing pollution and ensuring our climate dollars benefit all residents. That’s why we’re doubling down on cap-and-trade: one of our most effective tools to cut emissions and create good-paying jobs. In just the last decade, cap-and-trade has invested billions of dollars in projects by holding polluters accountable – helping clean our air, protect public health, and propel new careers.”
– Governor Gavin Newsom
Rebuild SoCal Partnership fully supports the extension of California’s Cap-and-Trade program through 2045, recognizing it as a proven mechanism that generates billions in revenue while creating good-paying jobs and reducing emissions. This extension is just the beginning of what’s possible when we fully commit to climate action and infrastructure investment. We urge lawmakers to seize this moment to not only reauthorize the program but to expand its reach, because every dollar invested today creates the foundation for thousands more jobs in California’s future.
The Transit and Intercity Rail Capital Program (TIRCP) exemplifies how Cap-and-Trade funding delivers transformative results for California communities. This cornerstone program sustains tens of thousands of high-paying construction and engineering jobs while modernizing transit systems across Southern California, from expanding Metrolink and light rail to developing clean rail corridors that connect underserved communities. TIRCP investments are catalytic, leveraging federal dollars and private investments to maximize every state dollar spent. With Southern California’s growing population and freight demands, these shovel-ready projects are essential for reducing traffic congestion, improving air quality, and building the integrated transportation network that keeps our region competitive and economically vibrant.
California’s Cap-and-Trade program generates billions in revenue to fight climate change, with funds flowing directly into the Greenhouse Gas Reduction Fund (GGRF) that powers California Climate Investments statewide. A flagship beneficiary is the California High-Speed Rail (CAHSR) project. By electrifying transportation between California’s major regions, CAHSR simultaneously slashes emissions, drives economic growth, and delivers the sustainable infrastructure California needs for the future.
Economic & Job Impact of the California High-Speed Rail Project:
Significant Construction Jobs
Since construction began, the project has created over 14,000 construction jobs, with a large majority of these jobs going to residents of the Central Valley. These are often described as good-paying, union jobs, benefiting electricians, cement workers, steel laborers, and more.
Billions in Economic Activity
The California High-Speed Rail Project has generated substantial economic activity. From July 2006 through June 2024, the California High-Speed Rail Authority’s investment of approximately $13 billion has stimulated $21.8 billion in total economic activity statewide.
Regional Impacts:
The economic impacts are felt across the state, with the most significant effects concentrated in the Central Valley due to extensive ongoing construction activities. For example, the Central Valley alone supported approximately 10,350 job-years in FY 2023-24, contributing $730 million in labor income and $1.93 billion in economic output in that fiscal year.
Transit's Economic & Job Impact Statewide:
Investment in transit is the most cost-effective path to reducing emissions.
Construction Jobs
Investment in new transit infrastructure projects (like rail extensions, new stations, or bus rapid transit lines) generates substantial construction jobs. Studies by organizations like the American Public Transportation Association (APTA) estimate that every $1 billion invested in public transit can create or support around 36,000 to 50,000 jobs across the economy.
Economic Activity
High-speed rail projects are powerful engines for economic growth. Each $1 invested in high-speed rail is estimated to generate $4 in broader economic benefits, including increased productivity, business growth, and improved regional connectivity. For instance, the Brightline West project is projected to carry 8 million passengers annually and will support the creation of a new high-speed train manufacturing facility in New York, generating an additional 300 jobs in advanced manufacturing and supply chain sectors.
Regional and Equity Impacts
Targeting transit investments in communities with high unemployment can produce up to 2.5 times more jobs than similar investments in wealthier areas, supporting economic mobility and equity. The benefits extend beyond direct construction jobs to indirect and induced employment in supporting industries, local services, and supply chains.
Climate and Long-Term Benefits
Investing in high-speed rail is not only a proven job creator but also a cost-effective way to reduce greenhouse gas emissions and promote sustainable economic growth. Public transit investments stimulate urban economies, increase access to employment, and help cities meet climate targets, creating millions of jobs worldwide when scaled up.