BILL ANALYSIS Ó AB 21 Page 1 Date of Hearing: April 27, 2015 ASSEMBLY COMMITTEE ON NATURAL RESOURCES 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 reductions. 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: AB 21 Page 2 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 COMMENTS: 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 AB 21 Page 3 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. AB 21 Page 4 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 communities. 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." AB 21 Page 5 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. REGISTERED SUPPORT / OPPOSITION: Support Agricultural Council of California AB 21 Page 6 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 Opposition California State Association of Electrical Workers California State Pipe Trades Council AB 21 Page 7 Elevator Constructors Union Western States Council of Sheet Metal Workers Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916) 319-2092