Celebrating state action & setting new year’s climate resolutions

As 2025 comes to a close, we’re looking back on several significant moments of climate leadership (and a few examples of backsliding we’d rather forget) in state-level cap-and-invest programs which kept us moving forward even in the face of a hostile and anti-science federal government.

States who delivered on climate and affordability in 2025

Across the country, governors, legislators and regulators doubled down on cap and invest programs as one of the most powerful tools at our disposal to reduce household costs while cutting pollution and investing in local communities.

States like California and Washington showed how climate leadership and cutting costs can go hand-in-hand with major progress on carbon pricing policies that cut pollution and put more money into their residents’ pockets. As we look ahead to 2026, these states (and others that follow their lead) have the chance to meaningfully deliver for the climate and for their constituents. 

California: Extending cap-and-invest and delivering energy bill savings

This fall, after championing cap-and-invest as a tool to fight climate change and address affordability challenges, Governor Gavin Newsom signed legislation extending the state’s program through at least 2045, with supermajority support in each chamber of the legislature. California’s cap-and-invest program continues to deliver major benefits for communities: the program has raised nearly $33 billion for climate projects and community investments, including affordable housing, wildfire resilience, expanding public transit, and vehicle electrification. Reauthorization ensures California can continue to invest in climate and affordability solutions – with the legislation projected to save $3.9 billion for households earning less than $70,000 per year, equivalent to nearly $700 per household. It also builds momentum toward a broader interconnected West Coast market as leaders in California and Washington state are preparing to move towards linking their states’ cap-and-invest markets together. 

For over a decade, California’s cap-and-invest program and other landmark climate policies have made the state a national leader. As the Golden State has charted its path forward — cutting pollution and lowering costs for households — other states have followed suit with similar strategies that pair climate progress with affordability.

RGGI states: Proven benefits and renewed public support

The Regional Greenhouse Gas Initiative (RGGI) is the nation’s longest running cap-and-invest program, and spans across 10 states delivering economic and climate benefits. Since its inception in 2009, RGGI has raised over $9 billion for clean energy and efficiency, provided direct benefits for over 8 million households and generated over $20 billion in projected energy bill savings. This year, RGGI states completed their Third Program Review and announced updates that significantly strengthen the regional cap on climate pollution beginning in 2027.

And in November, voters sent a powerful message: they want more of this progress not just because the program is ensuring the power sector decarbonizes at a faster rate than the rest of the country, but because the program itself is a powerful tool for driving down energy costs. In Virginia, voters elected the candidate who explicitly committed to staying in RGGI, handily defeating an opponent who campaigned on abandoning the program. Virginia Governor-elect Abigail Spanberger supported the state rejoining RGGI as part of her platform to make energy bills more affordable, and defeated her opponent, a vocal opponent of RGGI, by roughly 15 points. 

Washington: Cutting pollution, raising revenue and moving toward linkage

Washington’s cap-and-invest program continued to demonstrate its strength in 2025, generating roughly $1.2 billion this year in revenue that will be invested in climate resilience, communities, and the clean energy transition while also ensuring that covered polluters in the state are reducing their pollution in line with the state’s climate targets. Following the 2024 election where Washingtonians voted to defend their cap-and-invest program by a whopping 23 point margin, 2025 offered a clearer picture of what that vote secured: major climate and economic benefits for communities, and momentum toward linking Washington’s program with California and Quebec. 

2026 state climate resolutions

States with resolutions to deliver

Some key states affirmed their climate and affordability goals in 2025 and now face the task of turning commitments into measurable results. In 2026, follow-through is critical to ensure emissions are reduced, households benefit, and community investments are delivered. 

California and Washington: Unlocking greater ambition and market stability through linkage

California had a big year for climate in 2025 with the reauthorization of cap-and-invest, but the work is far from over. In order to actually implement the important updates made to the program and align the emissions cap with California’s climate targets, California needs to finalize a rulemaking that’s been in the works for years. Draft regulatory text from CARB remains under development, with release expected in late 2025 or early 2026. The agency needs to act swiftly and ambitiously as soon as possible in 2026 to finalize these long-awaited program updates.

The other major climate resolution on California’s list this year is taking concrete next steps toward a unified carbon market with Washington. California’s program has been linked with the cap-and-invest program in Quebec for over ten years now, and when Washington lawmakers were designing their own cap-and-invest program, they did so with the goal of linking to this broader existing market.

A linked market would bring real advantages — improving price stability, reducing emissions at a greater rate and at lower cost than could be achieved alone, and creating a model for durable, multi-state climate leadership. Washington has made steady progress towards linkage with their ongoing rulemaking, and in 2026 should finalize their rulemaking and work collaboratively with California and Quebec on a linkage agreement. 

Colorado: Momentum building for a cap-and-invest program that cuts pollution and reduces costs

Colorado is facing rising energy costs, federal attacks on clean energy progress, and worsening climate impacts — while remaining off track from its statutory emission reduction goals. Colorado Senator and candidate for Governor, Michael Bennet, released his plan for a statewide cap-and-invest program as a key pillar of his climate and affordability strategy if elected Governor. This type of program could complement Colorado’s existing climate and energy policies and accelerate pollution reductions to close the gap between pollution levels and statewide targets. For Colorado, adopting a cap-and-invest program could reduce a cumulative one billion tons of climate pollution through 2050, relative to the state’s estimate for emissions under existing policy. And Colorado would also stand to gain the affordability benefits already seen in other cap-and-invest programs around the country, like the $16 billion California households have received on their electricity and natural gas bills thanks to utility bill credits funded by cap-and-invest. 

Colorado can strengthen its climate toolkit with policies that protect family budgets, limit climate pollution, and support clean-energy jobs. A well-designed cap-and-invest program would accomplish all three– and a solution that’s ripe for all candidates for Governor and state legislature to embrace.

Virginia: Rejoining RGGI to tackle rising pollution and costs

Virginia faces unprecedented energy demand growth, driven in part by a boom in data center construction that is putting upward pressure on electric bills for families. New analysis shows that volatile fossil fuel costs and heavy investment in grid infrastructure are major drivers of rising power costs, and that shifting investment toward lower-cost, price-stable renewable energy is key to stabilizing rates while cutting pollution. Participation in the Regional Greenhouse Gas Initiative previously helped Virginia cut carbon pollution by 22% and raised over $800 million in funding for energy efficiency programs that cut household energy costs, as well as community resilience programs. Rejoining RGGI in 2026 would help ensure that as demand for electricity accelerates, the state keeps energy affordable, accelerates cuts in pollution, and delivers community investments rather than locking in costly fossil infrastructure. Virginia needs action next year to restore the climate, consumer, and environmental benefits that Virginians clearly want. And with a new Governor-elect who understands how RGGI can deliver for Virginians, the time is right for progress. 

States with resolutions to rebuild

Other states stepped back in 2025 from proven climate solutions, vacating a climate leadership role and leaving significant consumer savings on the table. They need to reset their approach, and in the new year have the opportunity to learn from what other states have done to deliver big on both climate and affordability.  Ambitious policies can deliver cuts in pollution alongside  much-needed investments to drive down household energy costs.. 

New York: Implement the Clean Air Initiative

In 2026, New York should follow through on its climate commitments by standing up the cap-and-invest program — now known as the Clean Air Initiative — after years of delay. Unlike households in California and Washington that are seeing savings today on their utility bills because of cap-and-invest revenue, the delay is costing New Yorkers at the same time many are looking for relief. Moving the program forward will unlock billions in community investments and meaningful savings for working families across the state, and help get the state on track to meeting its climate targets.

Cap-and-invest is expected to generate at least $3 billion annually that can save New Yorkers money on energy bills, create family-sustaining jobs, and deliver health benefits, particularly in communities most impacted by climate and air pollution. Research shows the program could deliver substantial affordability benefits, with nearly all households earning under $200,000 — about 85% of households in the state — projected to see net savings.

The Hochul administration is currently appealing a court decision in a lawsuit brought by environmental justice organizations, which found that the state is violating its climate law after failing to advance rules to limit emissions. 2026 is a year for action, not further delay. Governor Hochul has the opportunity to join other Governors who are slashing pollution, shielding families from rising energy costs, and pushing back against federal rollbacks that would stick New Yorkers with dirty, expensive energy sources. The sooner New York’s Clean Air Initiative gets back on track, the sooner New Yorkers will benefit from lower electricity bills and cleaner air.

Pennsylvania: Rebuilding climate progress 

Pennsylvania took a significant step backward in 2025 when Governor Shapiro abandoned the Commonwealth’s plan to participate in the Regional Greenhouse Gas Initiative (RGGI). This decision means Pennsylvania forfeited its most powerful tool to lower electricity bills for households and cut pollution. The decision was a result of a months-long budget impasse. Pennsylvanians had not yet seen the benefits from the program as the state’s participation was pending the outcome of a legal challenge brought by fossil fuel interests. In fact, estimates suggest that delayed implementation of the program from its intended start date in 2022 amounted to $5 billion in foregone investments in energy efficiency and clean energy that should be providing relief on household energy bills today. By walking away when resolution was imminent, Governor Shapiro has further delayed the opportunity to unlock those benefits. 

Yet, despite walking away from RGGI, Governor Shapiro has promoted a Pennsylvania-led cap-and-invest proposal throughout 2025 as part of his Lightning Plan. And, a working group he convened upon taking office with representatives from labor, the energy industry, consumer advocates, and environmental organizations reached consensus that a cap-and-invest approach to regulating power sector pollution is the optimal approach for PA to protect and create energy jobs, take real action to address climate change, and ensure reliable, affordable power for consumers. Governor Shapiro must consider every avenue to enact new policies that reduce climate pollution and deliver cleaner air, healthier communities, and lower bills for Pennsylvanians at the same scale as promised by RGGI. 

States are stepping up in climate leadership

As federal leaders continue to undermine climate science and exacerbate the causes of climate change, states have shown what real climate leadership looks like. In 2025, cap-and-invest programs specifically were among the state level efforts that delivered the most tangible and high-impact results — cutting pollution, lowering energy bills and investing billions back into communities — while earning strong public support at the ballot box. These successes make clear that climate ambition and affordability are not in tension; in fact, with the right policy approach, going big on climate can deliver cost savings benefits to households that need it most. 

Looking ahead to 2026, the opportunity is twofold. Leading states like California, Washington, and the RGGI region can build on proven programs by strengthening caps, finalizing rulemakings, and expanding collaboration across state lines. At the same time, states like Colorado and New York have a clear chance to turn momentum into action by taking critical steps towards standing up cap-and-invest programs that will deliver required pollution reductions, concrete economic benefits, and meaningful energy bill savings for households. Together, these efforts can push back against federal backsliding, protect families from rising costs, and chart a durable, state-led path toward a cleaner, more affordable energy future.