BILL ANALYSIS Ó
AB 347
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Date of Hearing: April 25, 2011
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 347 (Galgiani) - As Amended: March 25, 2011
SUBJECT : California Global Warming Solutions Act of 2006:
early actions
SUMMARY : Amends the California Global Warming Solutions Act (AB
32) to specifically require the Air Resources Board (ARB) to
"ensure that the cement manufacturing, glass manufacturing, soda
ash manufacturing, and steel production sectors receive
appropriate credit for taking early action through energy
efficiency or energy reduction improvements."
EXISTING LAW requires ARB, pursuant to AB 32, to adopt a
statewide greenhouse gas (GHG) emissions limit equivalent to
1990 levels by 2020 and to adopt rules and regulations to
achieve maximum technologically feasible and cost-effective GHG
emission reductions. The limits and emission reduction measures
must be adopted by January 1, 2011 and become operative
beginning January 1, 2012. Among its provisions, AB 32 requires
ARB, in adopting these regulations, to "ensure that entities
that have voluntarily reduced their (GHG) emissions prior to the
implementation of (the section requiring the regulations)
receive appropriate credit for early voluntary reductions."
THIS BILL :
1)Modifies the voluntary early action provision in AB 32 to
specifically require ARB to "ensure that the cement
manufacturing, glass manufacturing, soda ash manufacturing,
and steel production sectors receive appropriate credit for
taking early action through energy efficiency or energy
reduction improvements."
2)Establishes findings regarding the benefit of cement
manufacturing, glass manufacturing, soda ash manufacturing,
and steel production in California.
FISCAL EFFECT : Unknown
COMMENTS :
AB 347
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By design, the AB 32 cap-and-trade program provides credit for
early action through the amount of allowances given to a firm
for free (allowance allocation). Firms in the cement, glass,
soda ash, and steel sector receive allowances based on stringent
emissions intensity benchmarks. The most efficient
installations meet the benchmarks and will receive all
allowances they need to meet their cap-and-trade compliance
obligation (the amount of allowances the firm must turn in to
ARB). Any energy efficiency or energy reduction project
undertaken by these industrial facilities, no matter when it was
done, will both lower the cap-and-trade obligation of the
facility and help improve emissions intensity relative to the
benchmark. Installations that do not meet the benchmark will
have a shortage of allowances and the option either to lower
their emissions (e.g. through abating emissions at their
facility) or to purchase additional allowances to cover their
excess emissions. Firms that have made aggressive emission
reductions in the past may have excess allowances to sell at the
program's outset.
According to the author, "the intent of AB 32 is to ensure that
the cement, glass, soda ash, and steel manufacturers receive
credit for improvements made to reduce GHG emissions prior to
the enactment of AB 32." Indeed, AB 32 already recognizes this
by requiring ARB to ensure that entities that have voluntarily
reduced their GHG emissions prior to the implementation of AB 32
regulations receive appropriate credit for early voluntary
reductions. This bill doesn't change existing law in any
substantive way, but perhaps provides some clarity and emphasis
for the specific industries listed.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092
AB 347
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