California air regulators approved a major overhaul of the state's cap-and-invest carbon market on Friday, a change that could direct billions of dollars in free pollution permits to oil refineries and other large emitters. The California Air Resources Board voted 10-0 to adopt the changes after two days of hearings and intense lobbying from the oil industry and Governor Gavin Newsom's administration, who argued the move was needed to keep refineries operating amid high gas prices. The Legislative Analyst's Office projects quarterly auction revenue for state climate programs will drop from roughly $4 billion a year to about $2 billion under the new rules. That shortfall could zero out funding for affordable housing, public transit, drinking water in low-income communities, and pollution monitoring in the state's most polluted neighborhoods. Environmental groups and three board members opposed the decision, calling it a giveaway to the fossil fuel industry that weakens California's only firm cap on greenhouse gas emissions.
