Market-based environmental policies are widely adopted for their allocative efficiency. However, there is growing concern that market-induced spatial reallocation of pollution could widen existing pollution concentration gaps between disadvantaged and other communities. We estimate how this “environmental justice” (EJ) gap changed following the 2013 introduction of California’s greenhouse gas (GHG) market, the world’s second largest and most subjected to EJ critiques. We find the policy has reduced GHG and criteria air pollution emissions. Applying an atmospheric dispersal model to determine resulting pollution concentration changes, we detect the EJ gap, which was widening before 2013, has since fallen across criteria pollutants.