BILL ANALYSIS Ó
AB 153
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Date of Hearing: May 15, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 153 (Bonilla) - As Amended: April 8, 2013
Policy Committee: Natural
ResourcesVote:9-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the Air Resources Board (ARB), on or before
January 1, 2015, to adopt a process for the review and
consideration of new offset protocols for compliance with the
California Global Warming Solutions Act of 2006.
FISCAL EFFECT
1)One-time costs of several hundred thousand dollars to ARB in
2012-13 to develop the protocol review and approval process
(special fund).
2)Ongoing costs in the range of $300,000 to ARB to implement the
program, maintain online resources and prepare mandated
reports (special fund).
COMMENTS
1)Rationale. According to the author, cap-and-trade regulation
allows offset credits to be used by regulated parties to lower
the costs of compliance. By requiring a robust regulatory
process, it is the author's intent that only high-quality
offset credits will be allowed for compliance with the cap-and
trade regulations.
2)Background. AB 32 (Núñez, Chapter 455, Statutes of 2006)
requires California to limit its emissions of GHGs so that by
2020, those emissions are equal to what they were in 1990. To
that end, AB 32 requires ARB to quantify the state's 1990 GHG
emissions and to adopt, by January 1, 2009, a scoping plan
that describes the board's plan for achieving the maximum
AB 153
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technologically feasible and cost-effective reductions of GHG
emissions reductions by 2020. ARB adopted its AB 32 scoping
plan in December of 2008.
Consistent with AB 32, the scoping plan includes both direct
regulatory measures and market-based compliance mechanisms.
Direct regulatory requirements, such as efficiency and
emissions standards, account for over three-quarters of the
plan's GHG emissions reductions.
The remainder of the plan's GHG emissions reductions-about
20%-result from a cap-and-trade market in which regulated
emissions sources buy and sell credits that give the holder
the right to emit a quantity of GHGs.
Offsets have the potential to result in a reduction in overall
GHGs, but at a cost that is lower than if only regulated
emissions sources directly realized those reductions
themselves. Use of offsets, however, is controversial. It
can be difficult to verify that offsets represent a real
reduction in GHG emissions and to verify that the emissions
reductions represented by the offset are truly
additional-meaning they would not have occurred absent the
payment made by the regulated emission source. These
difficulties become more pronounced as the eligible geographic
location of potential offset projects is broadened. In
addition, offsets allow an emissions source to avoid reducing
its own emissions, a fact that some find objectionable.
On October 20, 2011 the ARB adopted Resolution 11-32 directing
the Executive Officer to develop implementation documents
laying out the process for review and consideration of new
offset protocols, including a description of how staff will
evaluate what is additional.
Analysis Prepared by : Jennifer Galehouse / APPR. / (916)
319-2081