BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 32
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          AB 32 (Nunez)
          As Amended August 30, 2006
          Majority vote
          |ASSEMBLY:  |50-27|(April 11,      |SENATE: |23-14|(August 30,    |
          |           |     |2005)           |        |     |2006)          |
           Original Committee Reference:    NAT. RES.  
          SUMMARY  :   Enacts the Global Warming Act of 2006 (Act), which  
          creates a statewide greenhouse gas (GHG) emission limit that  
          would reduce emissions by 25% by 2020.  

           The Senate amendments  delete the Assembly version of this bill,  
          and instead enact the Act, which does all of the following:

          1)Requires, on or before January 1, 2008, the state Air  
            Resources Board (ARB) to adopt regulations requiring GHG  
            emission sources to monitor and report their emissions to the  
            ARB, and specifies detailed criteria for the adoption and  
            compliance with those regulations.

          2)Requires, on or before January 1, 2008, ARB to adopt a  
            statewide emissions limit on GHG emissions, specifies both a  
            process and criteria for the adoption of the limit, and  
            provides that the limit shall remain in effect after 2020  
            until otherwise amended or repealed.  

          3)Requires ARB to adopt the maximum feasible and cost-effective  
            reductions in GHG emissions for sources and categories of  
            sources subject to the Act, in accordance with the following  

             a)   On or before July 1, 2007, ARB shall adopt a list of  
               those discrete early action emission reduction measures  
               that can be achieved prior to the adoption of market-based  
               compliance mechanisms and other measures and limits under  
               the bill's provisions;

             b)   On or before January 1, 2010, ARB shall adopt and  
               enforce those measures on the list described above in order  
               to achieve the maximum technologically feasible and  


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               cost-effective reductions of greenhouse gases;

             c)   On or before January 1, 2009, ARB shall prepare and  
               adopt a rulemaking scoping plan for the rules and  
               regulations it is required to adopt pursuant to the bill's  
               provisions, and shall comply with specified criteria in  
               developing and adopting the plan.  ARB is required to  
               update the plan every five years;

             d)   States that, on or before January 1, 2011, ARB shall  
               adopt GHG emission limits and measures to achieve the  
               maximum feasible and cost-effective reductions in GHG  
               emissions in furtherance of the GHG emission limit;

             e)   In adopting the regulations described in d) above, ARB  
               may adopt a so-called "cap and trade" system (i.e. "a  
               system of market-based declining annual aggregate emission  
               limits" as described in the bill), provided it complies  
               with specified conditions prior to authorizing the use of  
               those mechanisms;

             f)   In adopting the regulations described in d) above, ARB  
               may adopt market-based compliance mechanisms and specifies  
               conditions and criteria for the adoption and use of those  

             g)   In adopting regulations, requires ARB to take into  
               account environmental justice, equitable distribution of  
               emission reductions, best available scientific and economic  
               information, and other factors; and,

             h)   Provides that ARB shall consult with various other state  
               agencies that have jurisdiction over utilities and other  
               sources of GHG emissions in order to minimize any overlap  
               among those agencies.

          4)Authorizes ARB to impose administrative, civil, and/or  
            criminal penalties consistent with its authority under air  
            quality statutes for violations of any rule, regulation,  
            order, or standard adopted by the board pursuant to the bill's  

          5)Authorizes the Governor to adjust applicable deadlines for  
            individual regulations, or for the state in aggregate, to the  
            earliest feasible date in the event of extraordinary  


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            circumstances, catastrophic events, or significant economic  
            harm, limits that adjustment to one year in duration,  
            specifies procedures for notifying the public and provides  
            that this provision does not affect the Governor's authority  
            under the Emergency Services Act.  

          6)Requires ARB to establish an environmental justice advisory  
            committee and an economic and technology advisory committee  
            for the purposes of advising the board on implementation of  
            the bill's provisions, and specifies appointment processes and  
            procedures for those committees.

          7)Provides that if the regulations adopted pursuant to AB 1493  
            (Pavley), Chapter 200, Statutes of 2002, to reduce GHG  
            emissions from vehicular sources do not remain in effect, the  
            board shall adopt alternative regulations that achieve the  
            equivalent or greater reductions.

          8)Requires all state agencies to consider and implement GHG  
            emission reduction strategies, and provides that nothing in  
            the bill affects the authority of any other state agency to  
            reduce GHG emissions, the authority of air districts, the  
            authority of the California Public Utilities Commission, or  
            utilities' obligation to provide electric service.

          9)Authorizes ARB to adopt a schedule of fees to pay for the  
            costs of implementing the program established pursuant to the  
            bill's provisions.

          10)Provides that the provisions of the bill are severable.

          11)Makes detailed findings and declarations relative to the  
            economic and environmental effects of global warming and  
            climate change.

          12)Establishes definitions of terms used under the bill.

           EXISTING LAW  :

          1)Establishes the California Climate Action Registry (Registry)  
            as a nonprofit public benefit corporation to voluntarily  
            record and register GHG emissions reductions made by  


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            California entities after 1990.

          2)Requires the Registry to provide referrals to approved  
            providers for advice on designing programs to establish  
            emissions baselines and to monitor and track GHG emissions,  
            establishing emissions reduction goals, and designing and  
            implementing organization-specific plans that improve energy  
            efficiency or utilize renewable energy, or both, and that are  
            capable of achieving emission reduction targets.

          3)Requires the Registry to perform various functions, including  
            among other things, adopting standards for verifying emissions  
            reductions, adopting a list of approved auditors that verify  
            emission reductions, establishing emissions reduction targets,  
            designing and implementing efficiency improvement plans,  
            maintaining a record of all emission baselines and reductions,  
            and recognizing, publicizing, and promoting entities that  
            participate in the Registry.

          4)Requires the Registry to adopt procedures and protocols for  
            the various offsets that a participant can use to mitigate  

          5)Requires the Registry to adopt procedures and protocols for  
            the monitoring, estimating, calculating, reporting, and  
            certifying of carbon stores and carbon dioxide emissions  
            resulting from the conservation and conservation-based  
            management of native forest reservoirs in California, so that  
            participants can include those conservation activities in  
            registered emissions results.

           AS PASSED BY THE ASSEMBLY  , this bill expanded the  
          responsibilities of the Registry by specifying the Registry work  
          in coordination with the California Environmental Protection  
          Agency and the State Energy Resources Conservation and  
          Development Commission to adopt procedures and protocols on  
          greenhouse gas emissions for oil and natural gas exploration,  
          extraction, processing, refining, transmission, and distribution  
          and cement production and municipal solid waste and industrial  
          waste hauling and disposal.

           FISCAL EFFECT  :  Unknown

           COMMENTS  :  According to the author, global climate change poses  
          a serious threat to California's economic well being, public  


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          health, and environment if aggressive actions to reduce GHG  
          emissions are not taken soon.  

          This bill would create a statewide GHG emissions limit that  
          would reduce emission 25% by 2020.  It establishes a mandatory  
          reporting system to track and monitor greenhouse gas emission  
          levels and institutes a limit on GHG emissions, requiring  
          emission reductions in California to 1990 levels by the year  

          The bill also directs ARB to develop a regulatory framework of  
          emission reduction measures, which may include multi-sector  
          market-based compliance options.  The bill also provides a clear  
          path by authorizing ARB to design the rules under which a  
          cap-and-trade program could emerge to help meet the 2020 limit  
          by 2011.   

          The bill also allows the Governor to suspend the provisions of  
          the bill for up to one year under extraordinary circumstances or  
          threat of significant economic harm and continues the Governor's  
          Climate Action Team created by the Governor's Executive Order in  

          The bill reflects an historic agreement between the Legislature  
          and the Governor on GHG reduction.

          Analysis Prepared by  :  Kyra Emanuels Ross / NAT. RES. / (916)  

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