BILL NUMBER: SB 246 INTRODUCED
BILL TEXT
INTRODUCED BY Senator De León
FEBRUARY 10, 2011
An act to amend Section 38505 of, and to add Section 38573 to, the
Health and Safety Code, relating to air pollution.
LEGISLATIVE COUNSEL'S DIGEST
SB 246, as introduced, De León. California Global Warming
Solutions Act of 2006: offsets.
The California Global Warming Solutions Act of 2006 designates the
State Air Resources Board as the state agency charged with
monitoring and regulating sources of emissions of greenhouse gases.
The state board is required to adopt a statewide greenhouse gas
emissions limit equivalent to the statewide greenhouse gas emissions
level in 1990 to be achieved by 2020, and to adopt rules and
regulations in an open public process to achieve the maximum
technologically feasible and cost-effective greenhouse gas emission
reductions. The state board is authorized to adopt market-based
compliance mechanisms, as defined, meeting specified requirements to
be used for compliance with those regulations.
This bill would require the state board to meet specified
requirements relating to verification and oversight of compliance
offsets, as defined, if the state board allows the use of compliance
offsets as part of a regulation adopted pursuant to the act.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) A transition to a clean energy economy is essential for
meeting the state's long-term goals for reducing global warming
pollution and can also result in substantial air quality, health,
economic, and environmental benefits.
(b) The State Air Resources Board has voted to adopt a
market-based regulation pursuant to the California Global Warming
Solutions Act of 2006 that sets a limit on emissions of greenhouse
gases by the state's largest emitters and that allows for flexible
compliance including the expansive use of offsets.
(c) Compliance offsets allow regulated entities to purchase
emission reduction credits from unregulated entities in sectors that
are not subject to emission limits, instead of directly reducing
their own emissions or causing emissions to be reduced amongst other
regulated entities in California.
(d) Offsets are inherently risky and difficult to quantify. Large
portions of offsets claimed in other global warming compliance
programs, such as the United Nations' Clean Development Mechanism,
have been proven to be fake.
(e) In order for compliance offsets to be of value in reducing
greenhouse gas emissions and achieving the requirements of the state'
s landmark climate solutions law, they should be proven to be real
and additional. The integrity of any market-based regulation that
includes offsets depends on strict oversight, verification,
monitoring, and enforcement of the offsets program.
(f) Pursuant to Section 38597 of the Health and Safety Code, the
state board has the authority to assess fees on regulated emitters of
greenhouse gases to be used for the purposes of carrying out the
California Global Warming Solutions Act of 2006, including oversight
and enforcement of all elements of any market-based regulation.
(g) The costs of compliance offsets should accurately include the
true cost of ensuring that offset protocols are developed based on
the best existing science and that the compliance offsets are
monitored, verified, audited, enforced, and tracked by one or more
state regulatory agencies, not third-party, for-profit offset
businesses.
SEC. 2. Section 38505 of the Health and Safety Code is amended to
read:
38505. For the purposes of this division, the following terms
have the following meanings:
(a) "Allowance" means an authorization to emit , during a
specified year, up to not more than one ton of
carbon dioxide equivalent in a specified year .
(b) "Alternative compliance mechanism" means an action undertaken
by a greenhouse gas emission source that achieves the equivalent
reduction of greenhouse gas emissions over the same time period as a
direct emission reduction, and that is approved by the state board.
"Alternative compliance mechanism" includes, but is not limited to, a
flexible compliance schedule, alternative control technology, a
process change, or a product substitution.
(c) "Carbon dioxide equivalent" means the amount of carbon dioxide
by weight that would produce the same global warming impact as a
given weight of another greenhouse gas, based on the best available
science, including from the Intergovernmental Panel on Climate
Change.
(d) "Compliance offset" means a quantified reduction in emissions
of greenhouse gases in a sector different from the sector or sectors
regulated by a greenhouse gas emission limit for which a market-based
compliance mechanism has been adopted by the state board, that is
used for compliance of that greenhouse gas emission limit by a
greenhouse gas emission source regulated by that limit.
(d)
(e) "Cost-effective" or "cost-effectiveness" means the
cost per unit of reduced emissions of greenhouse gases adjusted for
its global warming potential.
(e)
(f) "Direct emission reduction" means a greenhouse gas
emission reduction action made by a greenhouse gas emission source at
that source.
(f)
(g) "Emissions reduction measure" means programs,
measures, standards, and alternative compliance mechanisms authorized
pursuant to this division, applicable to sources or categories of
sources, that are designed to reduce emissions of greenhouse gases.
(g)
(h) "Greenhouse gas" or "greenhouse gases" includes all
of the following gases:
(1) Carbon dioxide.
(2) Methane.
(3) Nitrous oxide.
(4) Hydrofluorocarbons.
(5) Perfluorocarbons.
(6) Sulfur hexafluoride.
(7) Nitrogen trifluoride.
(h)
(i) "Greenhouse gas emissions limit" means an
authorization, during a specified year, to emit up to a level of
greenhouse gases specified by the state board, expressed in tons of
carbon dioxide equivalents.
(i)
(j) "Greenhouse gas emission source" or "source" means
any source, or category of sources, of greenhouse gas emissions whose
emissions are at a level of significance, as determined by the state
board, that its participation in the program established under this
division will enable the state board to effectively reduce greenhouse
gas emissions and monitor compliance with the statewide greenhouse
gas emissions limit.
(j)
(k) "Leakage" means a reduction in emissions of
greenhouse gases within the state that is offset by an increase in
emissions of greenhouse gases outside the state.
(k)
(l) "Market-based compliance mechanism" means either of
the following:
(1) A system of market-based declining annual aggregate emissions
limitations for sources or categories of sources that emit greenhouse
gases.
(2) Greenhouse gas emissions exchanges, banking, credits, and
other transactions, governed by rules and protocols established by
the state board, that result in the same greenhouse gas emission
reduction, over the same time period, as direct compliance with a
greenhouse gas emission limit or emission reduction measure adopted
by the state board pursuant to this division.
(l)
(m) "State board" means the State Air Resources Board.
(m)
(n) "Statewide greenhouse gas emissions" means the
total annual emissions of greenhouse gases in the state, including
all emissions of greenhouse gases from the generation of electricity
delivered to and consumed in California, accounting for transmission
and distribution line losses, whether the electricity is generated in
state or imported. Statewide emissions shall be expressed in tons of
carbon dioxide equivalents.
(n)
(o) "Statewide greenhouse gas emissions limit" or
"statewide emissions limit" means the maximum allowable level of
statewide greenhouse gas emissions in 2020, as determined by the
state board pursuant to Part 3 (commencing with Section 38550).
SEC. 3. Section 38573 is added to the Health and Safety Code, to
read:
38573. If the state board allows the use of compliance offsets as
part of a regulation adopted pursuant to this division, the state
board shall ensure all of the following:
(a) That each compliance offset is permanently retired and the
emission reductions represented by the compliance offset have not
been claimed by another person or entity.
(b) That the compliance offset does not cause or contribute to
significant adverse effects on human health or the environment, as
determined by the state board.
(c) That the state board maintains authority over the eligibility
of a compliance offset.
(d) That the state board has conducted an independent review of
all third-party claims regarding a compliance offset before a
compliance offset is credited.