Reports

SB 684 (Menjivar) and AB 1243 (Addis) propose the establishment of a de facto carbon tax in California—administered not by elected legislators, but by Cal/EPA through a compressed rulemaking process. These identical bills would authorize Cal/EPA to identify oil and gas companies deemed “responsible parties” and assign them financial liability for climate-related costs spanning from 1990 to 2045. Although structured as corporate penalties, the estimated $51.7 billion per year in cost recovery demands will ultimately be passed on to consumers, echoing the findings of the Center’s previous report on SB 222.

In the latest data from International Monetary Fund (IMF), California—if it was treated as a separate economy—moved from 5th largest in the world to 4th largest as Japan’s economy contracted. However, Japan is projected to resume growth at 4% in 2025, while India is projected to continue moving up the ranks with 7% growth.

In the preliminary numbers, seasonally adjusted nonfarm jobs fell 11,600 in March. The February numbers were revised from a preliminary result of a 7,500 loss to 21,800. The March number was the worst among the states and DC, with jobs led by Texas with a gain of 26,500 followed by Pennsylvania at 20,900 and Florida at 18,100.

Data in the latest report from California New Car Dealers Association (CNCDA) again suggests that zero emission vehicle (ZEV) sales have reached a current saturation point. As defined by the current CARB regulations, total ZEV sales (PEV—plug-in electric vehicles) dipped to 24.5% of all new light duty vehicle registrations, the lowest level since 2023:Q1. Battery hybrids (HEV) in contrast edged up to their highest level at 17.9%.

In January, the California average residential electricity bill (12-month moving average) kept moving up into 6th place among the contiguous states and DC, putting us just barely behind Texas. Electricity rates across all three primary end users as well as the cost of fuels remained the highest in the contiguous states and DC.

Trade flows in the first two months of 2025 were heavily affected by two factors: accelerated inventory shipments in an effort to stay ahead of the recently imposed tariffs and the annual shifts due to the Chinese New Year holiday in China, which this year straddled both January and February. Total trade through the state’s ports in the first two months was up 14.9% from the same period in 2024 in nominal terms, and up 12.7% in real terms. Both measures represent a new high in trade activity.

As detailed in our preliminary analysis of the February economic data, signs are pointing to continued weakness in the state economy

In the preliminary numbers, seasonally adjusted nonfarm jobs fell 7,500 in February. The January numbers were revised from a preliminary result of no change in jobs to a loss of 21,400. The February number was the 49th highest among the states, with jobs led by Ohio with a gain of 23,100 followed by Texas with 25,600 and New Jersey at 19,200.

Recent press reports have raised the question of whether California will miss the governor’s ZEV sales mandates, currently set at requiring that 35% new light duty vehicle (LDV) sales in 2026 be qualifying plug-in electric vehicles (PEVs), 68% by 2030, and 100% by 2035. These questions are based on recent Energy Commission sales data showing that the annual PEV market share essentially showed no movement, notching up to only 25.3% in 2024 from 25.0% in 2023. In total, the Energy Commission data shows only 2,091 more PEVs were sold in California in 2024.

The January employment data incorporates the annual benchmark revisions, with changes to the wage and salary jobs data extending back in general to 2020 for the seasonally adjusted series and in some cases back to 1976. The labor force revisions extend back to 1976 as well. The Center’s data series have been updated with the new data for states and MSAs. The data for counties, regions, and legislative districts will be similarly revised after the data release later this month. In the short interim, comparisons between the January results for these sub-state regions and prior months should take into account the differences in the benchmark series.

Today’s release incorporates the first stage of the annual data benchmark revisions. Nonfarm jobs (seasonally adjusted) at the end of 2024 were reduced by 97,000. Incorporating the 2023 changes, total jobs gains in 2024 were revised from a preliminary gain of 180,500 to 153,700. Jobs growth by industry was dominated by Government and government-supported Healthcare & Social Assistance, which combined grew by 210,600 in 2024. Trade related Transportation, Warehousing & Utilities grew by 30,500, while jobs in all other private industries shrank by a net 87,400.

California’s trade surged in January 2025, with total trade flows rising by $13.5 billion (20.2%) compared to January 2024. Origin exports from the state’s businesses were up $1.1 billion (7.8%), and destination imports into the state were up $8.8 billion (25.7%).

In November, California average residential electricity rates (12-month moving average) again were more than double the average for the rest of the US. Electricity rates across all three primary end users as well as the cost of fuels remained the highest in the contiguous states and DC.

SB 222 would fundamentally alter California’s economic landscape by shifting climate policy into the courtroom, exposing businesses to retroactive liability for fossil fuel use dating back to 1965, leading to soaring litigation costs, higher consumer prices, and potential economic destabilization across key industries.

In November, California average residential electricity rates (12-month moving average) again were more than double the average for the rest of the US. Electricity rates across all three primary end users as well as the cost of fuels remained the highest in the contiguous states and DC.