BILL ANALYSIS Ó
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THIRD READING
Bill No: SB 605
Author: Lara (D)
Amended: 5/24/13
Vote: 21
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 7-2, 5/1/13
AYES: Hill, Calderon, Corbett, Hancock, Jackson, Leno, Pavley
NOES: Gaines, Fuller
SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/23/13
AYES: De León, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
SUBJECT : California Global Warming Solutions Act of 2006:
scoping plan
SOURCE : Author
DIGEST : This bill makes various new requirements of the next
scoping plan prepared by the Air Resources Board (ARB), requires
that the scoping plan be approved by the Joint Legislative
Budget Committee (JLBC), and requires all greenhouse gas (GHG)
emissions reductions be achieved within the state in areas that
are most impacted by GHG pollutants and other air pollutants,
except as specified.
ANALYSIS :
Existing law under the California Global Warming Solutions Act
of 2006:
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1.Requires the ARB to determine the 1990 statewide GHG emissions
level and approve a statewide GHG emissions limit that is
equivalent to that level, to be achieved by 2020, and to adopt
GHG emissions reductions measures by regulation and sets
certain requirements in adopting the regulations. ARB may
include the use of market-based mechanisms to comply with
these regulations.
2.Requires ARB to prepare and approve a scoping plan by January
1, 2009, for achieving the maximum technologically feasible
and cost-effective reductions in GHG emissions from sources or
categories of sources of GHGs by 2020. ARB must evaluate the
total potential costs and total potential economic and
noneconomic benefits of the plan for reducing GHGs to the
state's economy and public health, using the best economic
models, emissions estimation techniques, and other scientific
methods. The plan must be updated at least once every five
years.
This bill:
1.Requires the ARB, when updating the scoping plan, to:
A. Prioritize and emphasize measures and actions resulting
in GHG emissions reductions that create jobs within the
state, and reduce co-pollutants in regions of the state
most impacted by toxic and criteria air pollutants.
B. Prioritize and emphasize current regulations and
actions, and recommend additional measures and actions that
can be implemented beginning no later than December 31,
2015, to achieve the maximum, technologically feasible, and
cost-effective reductions in short-lived climate with high
global warming potentials.
C. Limit the use of offsets, to the maximum extent
feasible, to those offsets originating and achieved within
the state.
D. Include a plan that achieves the GHG emissions goals
established to be implemented in the event any regulatory
measures implemented and adopted by the state pursuant to
this division are not projected to result in the GHG
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emissions reductions necessary to meet the GHG greenhouse
emissions goals.
E. Consider the use of special funds authorized to be
expended for the purposes of GHG emissions reductions,
including, but not limited to, funds derived from
market-based compliance mechanisms, the Electric Program
Investment Charge Fund, and the Alternative and Renewable
Fuel and Vehicle Technology Fund for emissions reductions
from sources within the state in furtherance of achieving
and maintaining the GHG emissions goals.
2.Requires ARB to submit the criteria required to the JLBC. If,
after 30 days of receipt, the JLBC has not a finding on the
submitted elements, the updated scoping plan shall be deemed
concurred.
3.If the scoping plan is updated prior to January 1, 2014, the
ARB shall revise the scoping plan to incorporate these
requirements.
Background
The California Global Warming Solutions Act of 2006, AB 32
(Nunez, Pavley, Chapter 488, Statutes of 2006), requires the
state's GHG emissions to be reduced to 1990 levels by 2020. The
ARB is required to adopt GHG emissions reduction measures by
regulation and may include the use of market-based mechanisms to
comply with these regulations. The implementation of AB 32 is
guided by a scoping plan prepared and approved by ARB. The
first scoping plan was required to be adopted by January 1, 2009
and updated at least once every five years. The ARB is required
to evaluate the total potential costs and total potential
economic and noneconomic benefits of the plan for reducing GHGs
to the state's economy and public health.
The current scoping plan outlines achieving GHG emission
reductions through a cap-and-trade program, the low carbon fuel
standard, light-duty vehicle GHG standards, energy efficiency
actions, the Renewable Portfolio Standard, regional
transportation-related GHG targets, and a variety of other
actions and programs.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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According to the Senate Appropriations Committee:
Annual limited-term costs of $1.7 million and 11.2 PYs
from the Cost of Implementation Account (COI) within the
Air Pollution Control Fund (special fund) for FY 2013-14,
FY 2014-15, and FY 2015-16 for additional information to be
incorporated into the 2013 scoping plan.
Annual ongoing costs of $1.7 million and 11.2 PYs from
the COI starting in FY 2013-14 for to incorporate
additional information into future scoping plans.
SUPPORT : (Verified 5/24/13)
Coalition for Clean Air
State Building Trades Council of California
OPPOSITION : (Verified 5/24/13)
California Chamber of Commerce
ARGUMENTS IN SUPPORT : According to the author, "SB 605 meets
AB 32 climate pollution objectives while ensuring that pollution
reduction efforts are focused in California and benefit the
state's economy and environment." The author further notes
that, "Over the past six years, the ARB has implemented several
market-based mechanisms that are intended to reduce greenhouse
gas emissions - such as cap and trade and the LCFS. It is
anticipated that these measures alone will account for over 40
MMTE (nearly 40%) of the reductions needed to meet the goals of
AB 32. The reliance on market-based systems can lead to
emissions reductions, but unfortunately not always in California
and not for disadvantaged communities or areas hardest hit by
pollution. Recently, Shell, which owns two oil refineries and
numerous other high polluting facilities in the state, purchased
500,000 California forest carbon credits to meet its AB 32
obligations - an offset based on the purchase of an existing
forest in Michigan. While this action is allowed under
California's cap and trade program, it does nothing to reduce
GHG's or air pollution in California. It creates no jobs, makes
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no in-state investment, or results in any new environmental
benefits. Instead, it allows an industry to maintain or
increase its emissions reductions in California and worsen the
health of our vulnerable populations."
ARGUMENTS IN OPPOSITION : The California Chamber of Commerce
states, "CARB adopted a hybrid approach to AB 32 implementation
- imposing what the agency believed were cost-effective and
technologically feasible regulations where appropriate, and
achieving the balance of emission reductions through a cap and
trade program. Cap and trade allows regulated entities to find
the lowest cost emission reductions through on-site reductions,
trading with other entities, or the purchase of qualified
offsets. CARB now limits the use of offsets to only 8% of total
emissions in the state. CARB adopted this blend of market
mechanisms, limited offsets, and direct regulation in the 2008
scoping plan."
"In 2006 it was hoped that more states and possibly the nation
would adopt similar programs in the years following AB 32
passage. The use of out-of-state offsets would not have been a
problem for anyone if those other states were part of a broad
cap and trade program."
"However, California is moving forward alone and there is no
national or regional program in sight. Instead of reducing
costs for compliance to the maximum extent possible, SB 605 will
instead raise costs by limiting offsets and directing program
funds for not the most cost-effective emissions reductions. SB
605 will shift the focus of AB 32 from global GHG emission
reductions to localized air pollution reduction; a goal that is
directly addressed by many other programs and regulations in the
state."
RM:ej 5/25/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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