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SACRAMENTO, Calif. — <\/span>California air regulators updated the rules of a key climate program on Friday in a move widely protested by environmental groups who said the changes would weaken the program and undercut efforts to curb planet-warming emissions. <\/p>\n The oil industry, meanwhile, said the program will still hinder efforts to bring down energy costs in the notoriously expensive state.<\/p>\n Democratic Gov. Gavin Newsom and the Legislature last year reauthorized<\/a> the state\u2019s cap-and-trade program<\/a> through 2045. The program sets a declining limit, or \u201ccap,\u201d on total greenhouse gas emissions in the state from major polluters. Companies must reduce their pollution, buy allowances from the state or other businesses, or fund projects aimed at offsetting their emissions. Similar programs exist across Europe and Asia, and California’s system is linked with others in Quebec, Canada and Washington state.<\/p>\n Under the changes approved Friday, the state will now give away up to roughly $3.5 billion worth of allowances to companies \u2014 mostly manufacturers and oil refiners \u2014 for free if they build projects that help them reduce their emissions. State regulators said it is designed to ensure major businesses don\u2019t leave the state, but environmentalists say it runs counter to the purpose of the program, which is aimed at incentivizing companies to reduce pollution so they can spend less on allowances. They also say it will mean there is less money to put toward programs designed to mitigate or reduce the impact of climate change.<\/p>\n California Air Resources Board Chair Lauren Sanchez, formerly Newsom’s chief climate adviser, says the changes will allow the state to remain a climate leader.<\/p>\n \u201cMoving forward shows that we can be responsive to affordability concerns, new legislative direction, while also setting a clear signal for Californians, other states and global partners that we remain committed to driving long-term investments in clean energy jobs and reducing pollution in communities,\u201d she said.<\/p>\n California law requires the state to reduce its planet-warming emissions 40% and 85% below 1990 levels by 2030 and 2045, respectively. Supporters of cap and trade say it will help the state reach those goals.<\/p>\n Newsom signed laws aimed at better aligning the declining cap on emissions with the state\u2019s climate targets; setting aside money generated by the program for various climate, housing and transit initiatives; and potentially boosting carbon-removal projects. The legislation also changed the name to \u201ccap and invest\u201d to emphasize its funding of climate programs.<\/p>\n But how to achieve those goals has been the subject of months of discussion by the air board and intense lobbying campaigns by both environmental groups and the oil industry. An initial proposal largely focused on aligning the program with the laws passed last year, but it was changed to focus more on trying to reduce the program’s costs.<\/p>\n California leaders have faced increased pressure to center affordability when shaping climate policies after two oil refineries announced their plans to close<\/a> in the last couple of years. The Democratic-led state has also grappled with federal challenges to its climate agenda, including a measure Republican President Donald Trump signed last year<\/a> blocking a first-in-the-nation rule<\/a> banning the sale of new gas-powered cars by 2035. <\/p>\n The newly approved updates also increase funding from allowance sales by $2 billion from 2027 through 2030 for a program providing utility bill credits to Californians and set aside about $800 million to help businesses participating in cap and trade limit the program\u2019s costs on Californians.<\/p>\n Before the changes, about $4 billion the state received annually from allowance sales helped pay for climate-change mitigation, affordable housing and transportation projects through a pot of money called the Greenhouse Gas Reduction Fund.<\/p>\n