BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                SB 605
                                                                       

                       SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                               Senator Jerry Hill, Chair
                               2013-2014 Regular Session
                                            
           BILL NO:    SB 605
           AUTHOR:     Lara and Pavley
           AMENDED:    August 18, 2014
           FISCAL:     Yes               HEARING DATE:  August 25, 2014
           URGENCY:    No                CONSULTANT:      Rebecca Newhouse
            
           SUBJECT  :    SHORT-LIVED CLIMATE POLLUTANTS

            SUMMARY  :    
           
            Existing law  , under the California Global Warming Solutions Act of  
           2006 (CGWSA): 

           1) Requires the California Air Resources Board (ARB) to determine  
              the 1990 statewide greenhouse gas (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.  
              (Health and Safety Code §38500 et seq.).

           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. (§38561).

            This bill, as approved by the Senate Environmental Quality  
           Committee on May 1, 2013  :  

           1) Requires ARB, when updating its AB 32 Scoping Plan, to:

              a)    Prioritize and emphasize measures and actions resulting  









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                 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 pollutants  
                 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 pursuant to AB 32 to be implemented in the  
                 event any of ARB's regulatory measures are not projected to  
                 result in the emissions reductions necessary to meet the  
                 established goals.

              e)    Consider the use of special funds authorized to be  
                 expended for the purposes of GHG emissions reductions.

           2) Requires ARB to submit these Scoping Plan criteria to the  
              Joint Legislative Budget Committee (JLBC).  If, after 30 days  
              of receipt, JLBC has not made a finding on the submitted  
              elements, the updated Scoping Plan shall be deemed concurred.

           3) Provides if ARB updates the Scoping Plan prior to January 1,  
              2014, ARB must revise the Scoping Plan to incorporate the  
              requirements established by this bill.

           4) Defines "offset" to mean a quantified unit of GHG emission  
              that is reduced, avoided, or permanently sequestered in a  
              sector not regulated by a market-based compliance mechanism  
              adopted by ARB.

            This bill, as it passed out of the Assembly on August 20, 2013   
           removes the provisions above relating to updating the Scoping  
           Plan and instead requires the ARB to develop and implement a  
           short-lived climate pollutant strategy. Specifically, the bill  
           does the following: 









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           1) Requires ARB to complete a short-lived climate pollutant  
              (SLCP) strategy by January 1, 2016.

           2) States that the requirements of this bill are notwithstanding  
              the 2020 statewide greenhouse gas (GHG) emissions limit  
              required by the California Global Warming Solutions Act of  
              2006 (also known as AB 32).

           3) Requires ARB to:

              a)    Complete an inventory of sources and emissions of SLCPs  
                 based on available data.

              b)    Identify research needs to identify any data gaps.

              c)    Identify existing and potential new control measures.

              d)    Prioritize the development of new measures that offer  
                 co-benefits by improving water quality or reducing air  
                 pollutants that impact community health and benefit  
                 identified disadvantaged communities.

              e)    Coordinate with other state agencies and air districts  
                 to develop and implement measures identified in the SLCP  
                 strategy.

           4) Requires ARB to consult with experts on SLCPs on specified  
              topics.

           5) Requires ARB to hold at least one public workshop during  
              development of the SLCP strategy.

           6) Defines "short-lived climate pollutant" as an agent that has a  
              relatively short lifetime in the atmosphere and a  
              climate-warming influence that is more potent than carbon  
              dioxide.

           7) Provides that the bill does not affect the existing authority  
              of a state agency to adopt and implement rules and regulations  
              that result in the reduction of GHGs or SLCPs to the extent  
              authorized or required by existing law.










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            COMMENTS  :

            1) Back on a 29.10  .  SB 605 was amended in the Assembly  
              Appropriations Committee and subsequently referred back to  
              committee in accordance with Senate Rule 29.10.  As passed by  
              the Senate Environmental Quality Committee, the bill required  
              the ARB to update the Scoping Plan, as specified. The  
              amendments to SB 605 in the Assembly differ from that version  
              of the bill by significantly expanding the scope of bill to  
              require ARB to develop a comprehensive short-lived climate  
              pollutant strategy and to implement that strategy.

            2) Background  .  In 2006, AB 32 required the ARB to develop a  
              Scoping Plan that describes the approach California will take  
              to reduce GHG emissions to achieve the goal of reducing  
              emissions to 1990 levels by 2020.  The Scoping Plan was first  
              approved by the Board in 2008 and must be updated every five  
              years to evaluate the mix of AB 32 policies to ensure that  
              California is on track to achieve the 2020 GHG reductions  
              goal. 

              The 2008 Scoping Plan outlines a suite of measures aimed at  
              achieving 1990-level emissions of 427 million metric tons of  
              carbon dioxide equivalent (MMTCO2e) in 2020, a reduction of  
              about 80 MMTCO2e from California's 2020 "business-as-usual"  
              GHG emissions projection.  The emissions reductions measures  
              outlined in the plan include a cap-and-trade program, the low  
              carbon fuel standard (LCFS), light-duty vehicle GHG standards,  
              energy efficiency actions, the Renewable Portfolio Standard,  
              regional transportation-related GHG targets, as well as a  
              variety of other actions and programs recommended to achieve  
              the 2020 goal. 

               Updated Draft Scoping Plan  .  ARB released a draft of the  
              updated Scoping Plan October 2013, and on May 22, 2014, the  
              first update to the Scoping Plan was approved by the board.

              The update asserts that California is on track to meet the  
              near-term 2020 greenhouse gas limit and is well positioned to  
              maintain and continue reductions beyond 2020 as required by  
              AB 32.

              The updated Scoping Plan describes policies, actions, and  









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              strategies in the energy, transportation, fuels, agriculture,  
              waste, and natural lands sectors as a means to continue  
              emission reductions in each of these sectors.  The draft also  
              emphasizes the need for California to establish a mid-term  
              statewide emission reduction target "informed by climate  
              science, to frame the additional suite of policy measures,  
              regulations, planning efforts, and investments in clean  
              technologies that are needed to continue driving down  
              emissions."

              The updated Scoping Plan includes a summary of the recent  
              climate science, including short-lived climate pollutants.  
              Scientific research indicates that an increase in the global  
              average temperature of 2?C (3.6?F) above pre-industrial  
              levels, which is only 1.1?C (2.0?F) above present levels,  
              poses severe risks to natural systems and human health and  
              well-being. 

              However, even with 2?C stabilization, sea level rise of  
              several meters beyond 2100 is likely. To have a good chance  
              of avoiding temperatures above those levels, studies have  
              focused on a goal of stabilizing the concentration of  
              heat-trapping gases in the atmosphere at or below the 450  
              parts per million (ppm) CO2-equivalent. 

              In early May 2013, the Mauna Loa monitoring station located  
              at the top of Hawaii's Mauna Loa volcano, recorded CO2 of 400  
              ppm (measured at 316 ppm when the station made its first  
              measurements in 1958). 
            
              Short-lived Climate Pollutants  . The updated Scoping Plan notes  
              that ARB will develop a short-lived climate pollutant strategy  
              by 2015 that will include an inventory of sources and  
              emissions, the identification of additional research needs,  
              and a plan for developing necessary control measures.  CO2  
              remains in the atmosphere for centuries, which makes it the  
              most critical greenhouse gas to reduce in order to limit  
              long-term climate change.  However, climate pollutants  
              including methane, tropospheric ozone, hydrofluorocarbons  
              (HFCs), and soot (black carbon), are relatively short-lived  
              (anywhere from a few weeks to 15 years), but have much higher  
              global warming potentials than CO2. 










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              New research suggests that black carbon is the second largest  
              man-made contributor to global warming and its influence on  
              the climate has been greatly underestimated. 

              Another recent study published in the journal Nature Climate  
              Change found that reducing emissions of short-lived climate  
              pollutants, including soot and methane, by 30 to 60% by 2050  
              would slow the annual rate of sea level rise by about 18% by  
              2050.  In addition, the study found that, compared to just  
              cutting CO2 emissions, reducing the release of short-lived  
              climate pollutants would do more to slow sea level rise before  
              2050, but that lowering CO2 emissions would be required to  
              limit warming and warming-related impacts beyond that point. 

              According to the updated Scoping Plan, the three short-lived  
              climate pollutants with the greatest implications for  
              California are the following:

              a)    Black carbon:  Black carbon, a component of soot, also  
                 known as PM 2.5, comes from diesel engines and incomplete  
                 burning of carbon sources. Wildfires contribute almost 50%  
                 of the total black carbon emissions in the state.  In  
                 addition to being a powerful global warming pollutant,  
                 black carbon is associated with numerous negative health  
                 impacts and is designated a potential human carcinogen.  
                 Black carbon is not listed under AB 32 as a greenhouse gas  
                 subject to AB 32 regulations.  However, due to known health  
                 and air quality impacts, ARB adopted truck and bus  
                 regulations in 2008 to control diesel PM emissions.  ARB  
                 also administers the Carl Moyer Program, which provides  
                 grants to fund "cleaner than required" engine upgrades or  
                 retrofits that reduce PM 2.5 and other pollutants. 

              b)    Methane:  Methane (CH4) is the principal component of  
                 natural gas and is also produced biologically under  
                 anaerobic conditions in ruminants, landfills, and waste  
                 handling. Atmospheric methane concentrations have been  
                 increasing as a result of human activities related to  
                 agriculture, fossil fuel extraction and distribution, and  
                 waste generation and processing.  Many emissions sources of  
                 methane are unregulated (e.g. methane from dairy production  
                 and fugitive methane emissions from landfills and natural  
                 gas distribution) and recent scientific reports indicate  









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                 that the US Environmental Protection Agency has  
                 underestimated methane emissions by as much as 50%.  ARB  
                 staff plans to bring to the Board's consideration in late  
                 2014 proposed regulations to reduce fugitive methane  
                 emissions from storage tanks, well stimulation, pneumatic  
                 devices, and leaking components. 

              c)    Hydrofluorocarbons (HFC):  HFCs are synthetic gases used  
                 in refrigeration, air conditioning, insulation foams,  
                 solvents, aerosol products, and fire protection.  They are  
                 primarily produced for use as substitutes for  
                 ozone-depleting substances which are currently being  
                 globally phased out. Currently, HFCs are a small fraction  
                 of the total climate forcing (<1%), but their emissions are  
                 growing relatively more rapidly than those of CO2. 

                 ARB has implemented several measures to reduce HFC  
                 emissions including low-global warming potential (GWP)  
                 requirements for aerosol propellants, a deposit-return  
                 recycling program for small cans of air conditioner  
                 refrigerant and a refrigerant management program. 

                 Under the cap-and-trade regulation, offsets may be used to  
                 satisfy up to 8 percent of a covered entity's compliance  
                 obligation. To date, ARB has adopted four protocols,  
                 including a protocol on emission reductions associated with  
                 destruction of ozone-depleting substances. 



            3) Scope of strategy  . ARB currently has broad authority under AB  
              32 to regulate greenhouse gas emissions, including several  
              short-lived climate pollutants such as methane,  
              hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride.  
              AB 32 does not include the significant and potent climate  
              pollutants black carbon, or tropospheric ozone, as greenhouse  
              gasses under the Act. 

              Under AB 32, this broad authority becomes less clear after  
              2020, as the law specifies that the 2020 statewide GHG  
              emissions limit remains in effect unless amended or repealed.  
              The statute also expresses the Legislature's intent that the  
              2020 GHG limit continue in existence and be used to maintain  









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              and continue reductions in emissions of GHGs beyond 2020.  
              Therefore, it is not clear that the statute grants authority  
              to the ARB to continue emissions reductions, and measures  
              designed to achieve further emissions reductions beyond the  
              2020 GHG limit, after 2020.

              SB 605 creates a new chapter in the code outside of AB 32 that  
              requires ARB, no later than January 1, 2016, to develop a  
              comprehensive strategy to reduce emissions of short-lived  
              climate pollutants in the state notwithstanding the 2020 GHG  
              emissions limit specified in AB 32. Therefore, the strategy  
              required by SB 605 to reduce short-lived climate pollutants is  
              not constrained by the AB 32 framework that potentially limits  
              ARB authority post 2020. In this way, the strategy may extend  
              well into post-2020 territory and plan for significant  
              reductions in short-lived climate pollutants beyond what is  
              required for the 2020 emissions reduction goal.

              Additionally, SB 605 significantly broadens what would be  
              considered a short-lived climate pollutant (capturing black  
              carbon, tropospheric ozone and others), as compared to what is  
              included under AB 32, for the purposes of the short-lived  
              climate pollutant strategy and implementing the strategy  
              required by the bill. 

            4) Expansion of ARB authority  ? SB 605 requires, that as part of  
              developing the comprehensive short-lived climate pollutant  
              strategy, that ARB "coordinate with other state agencies and  
              districts to develop and implement measures identified as part  
              of the comprehensive strategy." In this way, the bill sets up  
              a confusing framework, as the strategy must be completed no  
              later than January 1, 2016, and ARB in the development of the  
              strategy must already be implementing the strategy. 

              This requirement in the bill to implement measures identified  
              in the strategy to reduce short-lived climate pollutants is  
              arguably authority that ARB already has under AB 32, prior to  
              2020. However, because of the fact the strategy can go well  
              beyond the 2020 regime, it is unclear whether the bill expands  
              ARB's authority to implement GHG reduction measures post-2020.  
               The author states that SB 605 does not increase or decrease  
              the existing regulatory authority of ARB to regulate  
              short-lived climate pollutants, but merely binds them to a  









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              pre-2016 deadline to complete their strategy development, and  
              adds key legislative parameters to structure that process,  
              including requirements for interagency coordination, improved  
              emissions data, and public transparency.

              The author may wish to clarify the language in the bill  
              regarding timing for implementing this strategy in clean-up  
              legislation next year, should this bill become law.

           5) Support and Opposition  . Supporters of the bill state that SB  
              605 would put a much needed priority on reducing short-lived  
              climate pollutants, which have been scientifically proven to  
              trigger short-term climate warming as well as have negative  
              public health impacts, particularly in low-income communities.  
               

              Opponents state that the bill will result in duplicative  
              regulations that will drive up cost with regard to  
              environmental or health benefits, and that SB 605 does not  
              include a requirement that emission reduction strategies  
              maximize cost-effectiveness and technological feasibility,  
              which is an important component needed to ensure that the  
              state gets the biggest bang for the buck when choosing to  
              create new regulations. 


            SOURCE  :        Senator Lara  

           SUPPORT  :       Coalition for Clean Air
                          Environmental Defense Fund
                          Natural Resources Defense Council
                          Sierra Club  

           OPPOSITION  :    Agricultural Energy Consumers Association
                          California Chamber of Commerce
                          California Cotton Ginners Association 
                          California Cotton Growers Association
                          California Council for Environmental and Economic  
                          Balance
                          California Farm Bureau Federation
                          California Independent Petroleum Association
                          California League of Food Processors
                          California Manufacturers and Technology  









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                          Association
                          California Poultry Federation
                          Nisei Farmers League
                          Western Agricultural Processors Association
                          Western Growers Association
                          Western States Petroleum Association