BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                      AB 21

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          Date of Hearing:  April 27, 2015


                                 Das Williams, Chair

          AB 21  
          (Perea) - As Introduced December 1, 2014

          SUBJECT:  California Global Warming Solutions Act of 2006:   
          emissions limit:  scoping plan

          SUMMARY:  Requires the Air Resources Board (ARB) to recommend a  
          greenhouse gas (GHG) emissions reduction target for 2030 to the  
          Governor and the Legislature by January 1, 2018.

          EXISTING LAW requires ARB, pursuant to California Global Warming  
          Solutions Act of 2006 (AB 32), to: 

          1)Adopt a statewide GHG emissions limit equivalent to 1990  
            levels by 2020 and adopt regulations to achieve maximum  
            technologically feasible and cost-effective GHG emission  

          2)Prepare and approve a scoping plan, on or before January 1,  
            2009 and once every five years thereafter, for achieving the  
            maximum technologically feasible and cost-effective reductions  
            in GHG emissions from sources or categories of sources of GHGs  
            by 2020.

          THIS BILL:


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          1)Requires ARB, no later than January 1, 2018, to recommend to  
            the Governor and the Legislature a specific target of  
            statewide GHG emissions reductions for 2030 to be achieved in  
            a cost-effective manner.

          2)Adds "energy efficiency" and "facilitation of the  
            electrification of the transportation sector" to the list of  
            energy-related matters that ARB must consult with other  
            relevant state agencies when preparing the AB 32 Scoping Plan  
            to ensure that ARB's GHG reduction activities are  
            complementary, non-duplicative, and can be implemented in an  
            efficient and cost-effective manner.

          3)Makes related amendments to AB 32's findings.

          FISCAL EFFECT:  Unknown


          1)Background.  As part of AB 32's direction that ARB adopt a  
            statewide GHG emissions limit equivalent to 1990 levels by  
            2020 and adopt regulations to achieve maximum technologically  
            feasible and cost-effective GHG emission reductions, AB 32  
            requires ARB to prepare and approve a scoping plan at  
            five-year intervals.  
            The first AB 32 scoping plan, adopted by ARB in 2008,  
            described the specific measures ARB and others must take to  
            reduce statewide GHG emissions to 1990 levels by 2020.   
            Pursuant to AB 32, the reduction measures identified in the  
            scoping plan had to be proposed, reviewed, and adopted as  
            individual regulations by January 1, 2011, to become operative  
            beginning on January 1, 2012.  According to ARB, a total  


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            reduction of 80 million metric tons (MMT), or 16% compared to  
            business as usual, is necessary to achieve the 2020 limit.   
            Approximately 78% of the reductions will be achieved through  
            identified direct regulations.  ARB proposes to achieve the  
            balance of reductions necessary to meet the 2020 limit  
            (approximately 18 MMT) through a cap-and-trade program that  
            covers an estimated 600 entities.

            In May 2014, ARB adopted a scoping plan update.  The scoping  
            plan update discusses the objective of achieving an 80%  
            reduction by 2050 and the need for a midterm target, but does  
            not propose or adopt a specific target.  According to ARB, the  
            update defines ARB's climate change priorities for the next  
            five years and sets the groundwork to reach California's  
            long-term climate goals.

          2)Governor's goals.  In his January 5, 2015 Inaugural Address,  
            Governor Brown announced the following "objectives for 2030  
            and beyond":

               Toward that end, I propose three ambitious goals to be  
               accomplished within the next 15 years:

                           Increase from one-third to 50 percent our  
                    electricity derived from renewable sources;
                           Reduce today's petroleum use in cars and  
                    trucks by up to 50 percent; and,

                           Double the efficiency of existing buildings  
                    and make heating fuels cleaner.


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               We must also reduce the relentless release of methane,  
               black carbon and other potent pollutants across industries.  
                And we must manage farm and rangelands, forests and  
               wetlands so they can store carbon.  All of this is a very  
               tall order.  It means that we continue to transform our  
               electrical grid, our transportation system and even our  

               I envision a wide range of initiatives:  more distributed  
               power, expanded rooftop solar, micro-grids, an energy  
               imbalance market, battery storage, the full integration of  
               information technology and electrical distribution and  
               millions of electric and low-carbon vehicles.  How we  
               achieve these goals and at what pace will take great  
               thought and imagination mixed with pragmatic caution.  It  
               will require enormous innovation, research and investment.   
               And we will need active collaboration at every stage with  
               our scientists, engineers, entrepreneurs, businesses and  
               officials at all levels.

               Taking significant amounts of carbon out of our economy  
               without harming its vibrancy is exactly the sort of  
               challenge at which California excels.  This is exciting, it  
               is bold and it is absolutely necessary if we are to have  
               any chance of stopping potentially catastrophic changes to  
               our climate system.

          1)Purpose of the bill.  According to the author, "in order to  
            continue California's leadership in establishing a low-carbon  
            future and addressing climate change, new legislation must be  
            adopted to establish a post-2020 GHG emissions reduction  
            target."  The author further states the AB 32 scoping plan  
            "should include energy efficiency and the facilitation of the  
            electrification of the transportation sector."


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          2)Now or later?  In addition to ARB's ongoing planning and  
            regulatory efforts, pending legislation would set targets for  
            2030 and beyond for statewide GHG emissions and for specific  
            sectors.  Bills include AB 645 (Williams and Rendon), which  
            establishes a 50% renewable energy target for 2030, SB 350 (De  
            León), which establishes 50% targets for renewable energy,  
            energy efficiency, and petroleum reduction, and SB 32  
            (Pavley), which requires ARB to approve a statewide GHG target  
            for 2050 that is 80% below 1990 levels, and authorizes ARB to  
            approve interim targets for 2030 and 2040.  

            This bill represents an alternative approach - ask ARB to  
            develop recommended targets and report to the Legislature by  
            2018.  Presumably, ARB's recommendation would serve as the  
            basis for legislation to be enacted in 2018 or after.  The  
            author and the committee may wish to consider whether 2018 is  
            too late and whether the addition of "cost-effective" is  
            duplicative and unnecessary given that ARB's regulations must  
            be both cost-effective and technologically feasible under  
            current law.



          Agricultural Council of California


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          California Asian pacific Chamber of Commerce

          California Business Properties Association

          California Business Roundtable

          California Chamber of Commerce

          California Manufacturers & Technology Association

          California Retailers Association

          California Trucking Association

          Industrial Environmental Association

          National Federation of Independent Business


          California State Association of Electrical Workers

          California State Pipe Trades Council


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          Elevator Constructors Union

          Western States Council of Sheet Metal Workers

          Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916)