The Affordable Future Is Climate-Smart
As policymakers address Californians' financial struggles, they must remain mindful of the cost implications of energy and climate policies
Rising inflation has taken a toll on Americans, with the cost of essential goods increasing over 20% nationwide in the last four years. In California, the strain is particularly severe. A recent PPIC poll conducted after the 2024 election revealed that 56% of adult residents foresee tough financial times ahead, with majorities across all income levels and regions anticipating economic challenges over the next year.
California has long struggled with one of the highest costs of living in the nation. Legislative leaders in both chambers have publicly acknowledged growing concerns over affordability and the unsustainable rise in living expenses. Addressing these issues must be a top priority for lawmakers in the upcoming 2025-2026 legislative session.
Balancing Affordability and Climate Goals
As policymakers address California’s affordability crisis, they must remain mindful of the cost implications of energy and climate policies. The upcoming legislative session presents a crucial opportunity to craft balanced solutions that address affordability concerns while maintaining the state’s ambitious climate goals.
California’s market-based programs, like the Cap-and-Trade initiative, have proven effective in reducing greenhouse gas emissions cost-efficiently, helping the state avoid more significant expenses associated with direct regulation. This year, both the California Air Resources Board and the legislature are expected to revisit the program’s reauthorization. In its history, Cap-and-Trade has delivered steady reductions in emissions, provided funding for climate-smart agricultural programs while ensuring vital support to priority populations through designated revenue streams.
Climate-Smart Farming: A Path to Affordable Food
Livestock Methane Reduction Programs:
The California Department of Food and Agriculture (CDFA) Livestock Methane Reduction programs are among the state’s most effective and cost-efficient climate investments. More than 300 methane reduction projects have been funded on dairies in the state, reducing nearly 3 million metric tons of CO2e annually. These projects also provide tremendous air quality benefits for rural and disadvantaged communities as diesel trucks are being fueled with clean, renewable natural gas.
Low-income families and vulnerable populations bear the brunt of rising costs. A new state report warns that moving away from California’s successful incentive-based programs with farmers in favor of heavy-handed regulation would jeopardize both climate progress and the economic backbone of the San Joaquin Valley. Such a shift risks accelerating the decline of small family farms, leading to industry consolidation and the loss of year-round jobs for agricultural workers, processors and truckers.
Like other farmers, local dairy producers play a critical role in ensuring access to nutritious, affordable food, particularly for those in need. In 2023 alone, California dairy organizations donated over 3.6 million pounds of dairy products, with the USDA providing tens of millions more for government programs and food banks. Milk remains one of the most sought-after items at California’s food banks due to its affordability, nutritional value and versatility across diverse cultures.
With one in five Californians facing food insecurity, dairy farm families are helping close the gap. Over-regulating this vital sector would limit its ability to serve communities and further exacerbate food access challenges.
A Balanced Path Forward
California stands at a crossroads. Policymakers must prioritize affordability while continuing to lead on climate action. By fostering collaborative, incentive-based approaches to advanced energy and decarbonization projects, the state can achieve a future that is both affordable and climate-smart. Rural funding for climate-smart agriculture and food production also benefits disadvantaged communities.
Key climate-smart projects include:.
Funding Agricultural Replacement Measures for Emission Reductions (FARMER) Program:
The FARMER program has a proven track record, with oversight from the Air Resources Board and implementation through local Air Districts, replacing older diesel tractors and equipment with cleaner alternatives. The program delivers immediate air quality and public health benefits, reducing over 28,000 tons of NOx, 1,600 tons of PM and 388,000 metric tons of CO2e emissions annually, while prioritizing disproportionately impacted areas.
Food Production Investment Program (FPIP):
FPIP, managed by the California Energy Commission (CEC), provides grants to food processors to accelerate adoption of advanced energy and decarbonization technologies. Sixty FPIP projects to date will result in a reduction of 3.2 million metric tons of CO2e over their useful lifetimes.