Policies that are good for the environment and the economy aren’t mutually exclusive — and California is proof that advancing such goals doesn’t have to be a red or blue issue.
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That seemed to be the message that former California Gov. Arnold Schwarzenegger, a Republican, and current Gov. Gavin Newsom, a Democrat, shared during a joint appearance at the California Economic Summit in Long Beach on Wednesday, Oct. 14.
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During a fireside chat recognizing the 20th anniversary of the Global Warming Solutions Act, landmark legislation that Schwarzenegger signed in 2006 to reduce California’s greenhouse gas emissions, both the former and current governors of the world’s fourth-largest economy touted the state’s role as a climate leader.
“We have shown to the world what a subnational … state can do,” said Schwarzenegger.
Governor Gavin Newsom participates in a fireside chat with former Gov. Arnold Schwarzenegger to mark 20 years of California’s landmark climate law, AB 32, and discuss how the state is growing its economy while cutting pollution and creating clean energy jobs at the 15th annual California Economic Summit in Long Beach on Wednesday October 14, 2026. (Photo by Axel Koester, Contributing Photographer)
Governor Gavin Newsom participates in a fireside chat with former Gov. Arnold Schwarzenegger to mark 20 years of California’s landmark climate law, AB 32, and discuss how the state is growing its economy while cutting pollution and creating clean energy jobs at the 15th annual California Economic Summit in Long Beach on Wednesday October 14, 2026. (Photo by Axel Koester, Contributing Photographer)
Governor Gavin Newsom participates in a fireside chat with former Gov. Arnold Schwarzenegger to mark 20 years of California’s landmark climate law, AB 32, and discuss how the state is growing its economy while cutting pollution and creating clean energy jobs at the 15th annual California Economic Summit in Long Beach on Wednesday October 14, 2026. (Photo by Axel Koester, Contributing Photographer)
Governor Gavin Newsom participates in a fireside chat with former Gov. Arnold Schwarzenegger to mark 20 years of California’s landmark climate law, AB 32, and discuss how the state is growing its economy while cutting pollution and creating clean energy jobs at the 15th annual California Economic Summit in Long Beach on Wednesday October 14, 2026. (Photo by Axel Koester, Contributing Photographer)
Governor Gavin Newsom participates in a fireside chat with former Gov. Arnold Schwarzenegger to mark 20 years of California’s landmark climate law, AB 32, and discuss how the state is growing its economy while cutting pollution and creating clean energy jobs at the 15th annual California Economic Summit in Long Beach on Wednesday October 14, 2026. (Photo by Axel Koester, Contributing Photographer)
Governor Gavin Newsom participates in a fireside chat with former Gov. Arnold Schwarzenegger, with Kate Gordon, CEO of California Forward, as moderator, to mark 20 years of California’s landmark climate law, AB 32, and discuss how the state is growing its economy while cutting pollution and creating clean energy jobs at the 15th annual California Economic Summit in Long Beach on Wednesday October 14, 2026. (Photo by Axel Koester, Contributing Photographer)
Governor Gavin Newsom participates in a fireside chat with former Gov. Arnold Schwarzenegger, with Kate Gordon, CEO of California Forward, as moderator, to mark 20 years of California’s landmark climate law, AB 32, and discuss how the state is growing its economy while cutting pollution and creating clean energy jobs at the 15th annual California Economic Summit in Long Beach on Wednesday October 14, 2026. (Photo by Axel Koester, Contributing Photographer)
Governor Gavin Newsom participates in a fireside chat with former Gov. Arnold Schwarzenegger to mark 20 years of California’s landmark climate law, AB 32, and discuss how the state is growing its economy while cutting pollution and creating clean energy jobs at the 15th annual California Economic Summit in Long Beach on Wednesday October 14, 2026. (Photo by Axel Koester, Contributing Photographer)
Governor Gavin Newsom participates in a fireside chat with former Gov. Arnold Schwarzenegger to mark 20 years of California’s landmark climate law, AB 32, and discuss how the state is growing its economy while cutting pollution and creating clean energy jobs at the 15th annual California Economic Summit in Long Beach on Wednesday October 14, 2026. (Photo by Axel Koester, Contributing Photographer)
Governor Gavin Newsom participates in a fireside chat with former Gov. Arnold Schwarzenegger to mark 20 years of California’s landmark climate law, AB 32, and discuss how the state is growing its economy while cutting pollution and creating clean energy jobs at the 15th annual California Economic Summit in Long Beach on Wednesday October 14, 2026. (Photo by Axel Koester, Contributing Photographer)
Governor Gavin Newsom participates in a fireside chat with former Gov. Arnold Schwarzenegger, with Kate Gordon, CEO of California Forward, as moderator, to mark 20 years of California’s landmark climate law, AB 32, and discuss how the state is growing its economy while cutting pollution and creating clean energy jobs at the 15th annual California Economic Summit in Long Beach on Wednesday October 14, 2026. (Photo by Axel Koester, Contributing Photographer)
Governor Gavin Newsom participates in a fireside chat with former Gov. Arnold Schwarzenegger to mark 20 years of California’s landmark climate law, AB 32, and discuss how the state is growing its economy while cutting pollution and creating clean energy jobs at the 15th annual California Economic Summit in Long Beach on Wednesday October 14, 2026. (Photo by Axel Koester, Contributing Photographer)
Governor Gavin Newsom participates in a fireside chat with former Gov. Arnold Schwarzenegger to mark 20 years of California’s landmark climate law, AB 32, and discuss how the state is growing its economy while cutting pollution and creating clean energy jobs at the 15th annual California Economic Summit in Long Beach on Wednesday October 14, 2026. (Photo by Axel Koester, Contributing Photographer)
Governor Gavin Newsom participates in a fireside chat with former Gov. Arnold Schwarzenegger to mark 20 years of California’s landmark climate law, AB 32, and discuss how the state is growing its economy while cutting pollution and creating clean energy jobs at the 15th annual California Economic Summit in Long Beach on Wednesday October 14, 2026. (Photo by Axel Koester, Contributing Photographer)
But getting Assembly Bill 32 implemented was no walk in the park — and not just because of pushback from the oil industry.
Schwarzenegger recounted the struggles California faced in getting the U.S. Environmental Protection Agency, then under the administration of President George W. Bush, to grant the state the waivers it needed to adopt stricter environmental standards.
The state sued the EPA in 2007, and ultimately won.
Fast forward to today.
Newsom, sitting next to Schwarzenegger during the conversation at the Long Beach Convention Center, credited the former governor’s signing of AB 32 for the creation of the state’s cap-and-trade program, now known as the cap-and-invest program.
Under the program, companies must reduce how much carbon emissions they produce, purchase allowances from the state or other businesses, or pay into projects to offset the pollution they produce. Money the state receives pays for climate-change mitigation, affordable housing and transportation projects, along with utility bill credits for residents.
Since the AB 32 bill signing, Newsom said, $16 billion has been reinvested to offset the cost of Californians’ electric bills, and the state expects to receive another $8 billion over the next four years.
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Newsom also said that the state’s cap-and-invest program has brought about market predictability, which is critical when companies are deciding whether to set up shop in California. Newsom last year signed legislation extending the cap-and-invest program through 2045.
He suggested that the cap-and-invest program is beneficial to the state and credited Schwarzenegger for helping advance the idea.
“There’s no Elon Musk without what Gov. Schwarzenegger did because there would be no Tesla,” Newsom said. “There would not be the predictability that created the incentives for him (Musk) to take the big risks and make the big bet in the state of California.”
Now, Newsom continued, “we’re on the other side of the debate as it relates to whether or not this is good for the economy.”
Some Republicans objected when Newsom extended the cap-and-invest program, raising concerns that it would increase gas prices.
Schwarzenegger, meanwhile, agreed that the market predictability is “why everyone is coming to California” and doubled down on the idea of California as a climate leader.
“What happens in California will happen worldwide,” he said.
The afternoon fireside chat was Newsom’s second appearance Wednesday at the California Economic Summit. Earlier in the day, he also spoke about California’s economic successes over the years.
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The Associated Press contributed to this report.