California sends millions of dollars out of state for carbon offsets of dubious quality

California sends approximately $140 million out of state each year for carbon offsets, most of which have little-to-no actual climate benefit. As the state considers extending its cap-and-trade program to 2045, it has the opportunity to replace the current offset program with a program that works for California and for the climate. We review alternatives to the current program, and find that Oregon’s Community Climate Investment program provides a model that California should consider. Instead of offsetting, Oregon allows businesses covered under its cap-and-trade program to pay into a fund focused on reducing emissions in the state while improving air quality and energy affordability in low income and Tribal communities. California could choose a fund structure that avoids increasing energy prices for lower-income residents.