The cap-and-trade program is a centerpiece of the state’s effort to fight climate change under the Global Warming Solutions Act of 2006 (AB 32).[14] It establishes an annual declining cap on carbon emissions from the included sectors and requires emitters to hold carbon emissions permits to cover their emissions. A large proportion of these permits must be purchased at auction and the resulting proceeds are then deposited in the state’s Greenhouse Gas Reduction Fund (GGRF).[15] These proceeds in turn must be invested in projects and programs that reduce GHGs and provide substantial economic, public health, and equity benefits in communities around the state. The majority of these funds are allocated on a competitive basis statewide.