BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                         AB 21|
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                                   THIRD READING 


          Bill No:  AB 21
          Author:   Perea (D), et al.
          Amended:  5/5/15 in Assembly
          Vote:     21  

           SENATE ENVIRONMENTAL QUALITY COMMITTEE:  7-0, 6/17/15
           AYES:  Wieckowski, Gaines, Bates, Hill, Jackson, Leno, Pavley

          SENATE APPROPRIATIONS COMMITTEE:  Senate Rule 28.8

           ASSEMBLY FLOOR:  73-0, 5/18/15 - See last page for vote

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


          SOURCE:    Author


          DIGEST:  This bill revises the list of energy-related matters  
          upon which the California Air Resources Board (ARB) must consult  
          with other relevant state agencies when preparing the AB 32  
          Scoping Plan and adds cost-effectiveness considerations to AB 32  
          intent language. 




          ANALYSIS:


          Existing law, under the California Global Warming Solutions Act  
          of 2006 (Health and Safety Code §38500 et seq.):
          
          1) Requires the ARB to determine the 1990 statewide greenhouse  








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             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.  

          2) Requires the ARB to prepare and approve a scoping plan by  
             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, and requires the ARB  
             to consult with all state agencies with jurisdiction over  
             sources of GHGs, including the Public Utilities Commission  
             (PUC) and the State Energy Resources Conservation and  
             Development Commission (CEC) on all elements of its plan that  
             pertain to energy-related matters, as specified, to ensure  
             that the ARB's GHG reduction activities are complementary,  
             non-duplicative, and can be implemented in an efficient and  
             cost-effective manner.

          This bill:

          1)Specifies legislative intent that the ARB design emissions  
            reduction measures meet the statewide emissions limit for GHG  
            in a manner that cleans the environment in ways that are cost  
            effective for California residents.

          2)Requires the ARB to also consult with relevant state agencies,  
            including the PUC and CEC, in developing all elements of its  
            Scoping Plan that pertain to energy efficiency, and the  
            facilitation of the electrification of the transportation  
            sector.  

          Background
          
          1) Climate change.  The fifth assessment report from the  
             Intergovernmental Panel on Climate Change notes that  
             atmospheric concentrations of global warming pollutants have  
             risen to levels unseen in the past 800,000 years.  Carbon  
             dioxide concentrations have increased by 40% since  
             pre-industrial times.  There is broad scientific consensus  
             that these global GHG emission increases are leading to  








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             higher air and water temperatures as well as rising sea  
             levels.  Sea level is expected to rise 17 to 66 inches by  
             2100, and the frequency of extreme events such as heat waves,  
             wildfires, floods, and droughts is expected to increase.  

          2) The Global Warming Solutions Act of 2006.  The Global Warming  
             Solutions Act of 2006, AB 32 (Núńez and Pavley, Chapter 488,  
             Statutes of 2006), 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. 

             AB 32 requires the ARB, among other things, to:

                  Inventory GHG emissions in California.

                  Implement regulations that achieve the maximum  
                technologically feasible and cost-effective reduction of  
                GHG emissions and impose fees for administrative  
                implementation costs.

                  Identify and adopt regulations for discrete early  
                action measures.

                  Prepare and approve a scoping plan to achieve the  
                maximum technologically feasible and cost-effective  
                reduction of GHG emissions by 2020, to be updated every  
                five years.

             The statute also specifies that the ARB may include  
             market-based compliance mechanisms in the AB 32 regulations,  
             after considering the potential for direct, indirect, and  
             cumulative emission impacts from these mechanisms.

          1) AB 32 Scoping Plan.  Pursuant to AB 32, the ARB approved the  
             first Scoping Plan in 2008.  The Scoping Plan outlined a  
             suite of measures aimed at achieving 1990-level emissions, a  
             reduction of 80 million metric tons of carbon dioxide  
             equivalent (MMTCO2e).  Average emission data in the Scoping  
             Plan reveal that transportation accounts for almost 40% of  
             statewide GHG emissions, and electricity and commercial and  
             residential energy sector account for over 30% of statewide  








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             GHG emissions.  The industrial sector, including refineries,  
             oil and gas production, cement plants, and food processors,  
             was shown to contribute 20% of California's total GHG  
             emissions. 

             The 2008 Scoping Plan recommended that reducing GHG emissions  
             from the wide variety of sources that make up the state's  
             emissions profile could best be accomplished through a  
             cap-and-trade program along with a mix of other strategies  
             including a low carbon fuel standard (LCFS), light-duty  
             vehicle GHG standards, expanding and strengthening existing  
             energy efficiency programs, and building and appliance  
             standards, a 33% Renewable Portfolio Standard (RPS), and  
             regional transportation-related GHG targets. Pursuant to  
             authority under AB 32, the ARB adopted a Low Carbon Fuel  
             Standard in 2009, and a cap-and-trade program, approved on  
             December 13, 2011.

             Of the 80 MMTCO2e of GHG emissions reductions required to  
             reach the 2020 AB 32 target, four programs are estimated by  
             the ARB to result in the largest emissions reductions,  
             including cap and trade, LCFS, energy efficiency measures and  
             the RPS.  Together, they are projected to result in 70% of  
             the total emissions reductions necessary to meet the 2020  
             goal.  The measures that make up the other 30% include the  
             Advanced Clean Cars program, which sets GHG emissions  
             standards for passenger vehicles, the Sustainable Communities  
             and Climate Protection Act of 2008, created by SB 375  
             (Steinberg, Chapter 728, Statutes of 2008), which requires  
             the ARB to set regional targets for GHG emissions reductions  
             from passenger vehicle use, programs for the reduction of  
             high global warming potential gasses, and others.   

             Scoping Plan update.  The ARB approved an update to the  
             Scoping Plan on May 22, 2014.  The update describes policies,  
             actions, and strategies in the energy, transportation, fuels,  
             agriculture, waste, and natural lands sectors as a means to  
             continue emissions reductions in each of these sectors.  The  
             update also asserts that California is on track to meet the  
             near-term 2020 GHG limit and is well positioned to maintain  
             and continue reductions beyond 2020.









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          2) Zero emission vehicles (ZEVs).  The ARB's ZEV regulation  
             requires that by 2025 about 15% of new car sales will be zero  
             emission and requires automakers to produce and sell ZEVs,  
             which include plug-in electric vehicles and fuel cell  
             vehicles, in order to achieve this mandate.  Automakers may  
             also produce and sell vehicles that are partially zero  
             emission or help transition to ZEVs in order to meet the  
             mandate.  The goal of the regulation is to ensure that there  
             will be 1.5 million ZEVs on the road by 2025 in line with  
             Governor Brown's Executive Order B-16-2012, which directed  
             that the ARB and other state agencies establish benchmarks to  
             achieve over 1.5 million ZEVs will be on California roads by  
             2025.

          3) Executive Order.  On April 29, 2015, Governor Brown issued  
             Executive Order B-30-15, which established an interim  
             statewide GHG emission reduction target to reduce GHG  
             emissions to 40% below 1990 levels by 2030, "in order to  
             ensure California meets its target of reducing greenhouse gas  
             emissions to 80 percent below 1990 levels by 2050."  The  
             Order also directed all state agencies with jurisdiction over  
             sources of GHG emissions to implement measures, pursuant to  
             statutory authority, to achieve reductions of GHG emissions  
             to meet the 2030 and 2050 GHG emissions reductions targets.
          
          Comments
          
          Purpose of Bill.  According to the author, "In order to ensure  
          the scoping plan asses all major aspects of energy-related  
          matters including meeting long-term goals, it should include  
          energy efficiency and the facilitation of the electrification of  
          the transportation sector.  There is a clear need and desire to  
          increase energy efficiency and the amount of electric vehicles  
          on our roads by California's leadership.  For example, the  
          Governor has announced ambitious policy goals of 1.5 million  
          electric vehicles on California roads by 2025 and the need to  
          double the efficiency in existing buildings by 2030.  In order  
          to achieve them, there must be a comprehensive strategy that is  
          thoroughly analyzed to ensure those goals are met."

          Related/Prior Legislation









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          SB 32 (Pavley, 2015) requires ARB to approve statewide GHG  
          emissions limits of 40% below the 1990 GHG emissions level, to  
          be achieved by 2030, and 80% below the 1990 GHG emissions level,  
          to be achieved by 2040.  SB 32 is currently in the Assembly  
          Natural Resources Committee. 

          SB 350 (De León, 2015) establishes the following goals to be  
          achieved by 2030:  1) 50% reduction in petroleum use, 2)  
          doubling of the energy efficiency in existing buildings, and 3)  
          generating 50% of total retail sales of electricity from  
          renewable resources.  SB 350 is currently in the Assembly  
          Utilities and Commerce Committee. 

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          SUPPORT:   (Verified6/29/15)


          Agricultural Council of California
          California Asian Pacific Chamber of Commerce
          California Business Properties Association
          California Business Roundtable
          California Chamber of Commerce
          California Grocers Association
          California Independent Oil Marketers Association
          California Manufacturers and Technology Association
          California Retailers Association
          California Taxpayers Association
          Industrial Environmental Association
          Pacific Merchant Shipping Association
          Western States Petroleum Association


          OPPOSITION:   (Verified6/29/15)


          None received


          ARGUMENTS IN SUPPORT:     Supporters note that it is important  








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          that California consider the cost effectiveness of various  
          emissions reduction measures, and they note that AB 21 adds an  
          important criterion to help ensure that California investments  
          in GHG emission reductions make the best use of the funding made  
          available. 

          ASSEMBLY FLOOR:  73-0, 5/18/15
          AYES:  Achadjian, Alejo, Baker, Bigelow, Bloom, Bonilla, Bonta,  
            Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez,  
            Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd,  
            Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia,  
            Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,  
            Grove, Hadley, Roger Hernández, Holden, Irwin, Jones,  
            Jones-Sawyer, Lackey, Levine, Linder, Low, Maienschein,  
            McCarty, Medina, Mullin, Nazarian, Obernolte, O'Donnell,  
            Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas,  
            Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond,  
            Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
          NO VOTE RECORDED:  Travis Allen, Harper, Kim, Lopez, Mathis,  
            Mayes, Melendez

          Prepared by:Rebecca Newhouse / E.Q. / (916) 651-4108
          8/20/15 14:25:57


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