BILL ANALYSIS                                                                                                                                                                                                    



                                                                      AB 33


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          Date of Hearing:  May 6, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          33 (Quirk) - As Amended April 6, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill establishes the Climate Change Advisory Council  
          (Council) to make recommendations to the Air Resources Board  
          (ARB) regarding various greenhouse gas (GHG) emission reduction  
          strategies, including grid integration, building efficiency, and  








                                                                      AB 33


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          advanced transportation.  Specifically, this bill:


          1)Establishes the Council, consisting of the following  
            appointees or their designees:


               a)     Chair of ARB.
               b)     President of Public Utilities Commission (PUC).


               c)     Chair of California Independent System Operator  
                 (CAISO) governing board.


               d)     Chair of State Water Resources Control Board  
                 (SWRCB).


               e)     Chair of California Energy Commission (CEC).





          2)Requires the Council to complete recommendations for inclusion  
            in the AB 32 Scoping Plan consisting of:


               a)     Analyses of various strategies to achieve the  
                 statewide GHG limit, as specified.
               b)     Economic assessment of the various GHG strategies  
                 using the best available models and data.


               c)     Analysis of other benefits of the various  
                 strategies.










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          3)Provides that the Council's analysis is intended to assist in  
            establishing state policy and does not change any statute,  
            regulation, or regulatory decision.


          4)Requires ARB to establish consistent metrics for GHG emission  
            reductions, public health benefits, and cost-effectiveness of  
            the various strategies identified by the Council.


          FISCAL EFFECT:


          1)Ongoing annual cost increases of approximately $700,000 (Cost  
            of Implementation Fund) for the ARB to: 1) design metrics to  
            quantify GHG reductions; 2) quantify public health benefits;  
            and 3) measure the cost effectiveness of GHG reductions  
            strategies.


          2)Increased combined annual costs (various special funds) for  
            PUC, CAISO, SWRCB and CEC of up to $800,000 to perform the  
            duties required by the bill.


          


          COMMENTS:


          1)Purpose.  According to the author, the implementation of (AB  
            32's) ambitious energy and environmental goals are the  
            responsibility of a group of fragmented state agencies that  
            lack a comprehensive plan to effectively move forward and  
            synchronize our policies to ensure maximum efficiency.  This  








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            bill will increase the coordination among ARB, CPUC, CEC,  
            SWRCB, and CAISO by establishing the Climate Change Advisory  
            Council and directing the Council to analyze various GHG  
            emissions reduction strategies in the areas of (1) energy  
            generation; (2) transportation; and (3) energy efficiency.  
          2)Background.  The California Global Warming Solutions Act of  
            2006 (AB 32) requires ARB to adopt:  a) statewide GHG  
            emissions limit equivalent to 1990 levels by 2020; and b)  
            regulations, including market-based compliance mechanisms, 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.  


            According to ARB, a total 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.


          3)Governor's Executive Order B-30-15.  On April 29, 2015, the  
            Governor issued an executive order to establish a new interim  








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            statewide greenhouse gas emission reduction target to reduce  
            greenhouse gas emissions to 40 percent 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.
            


          4)2019 Scoping Plan Update.  The next scoping plan update will  
            be in 2019.  According to the author, the 2014 update to ARB's  
            Scoping Plan, did not provide a robust economic assessment of  
            the strategies implemented to reduce emissions.  This bill is  
            intended to address this shortcoming by requiring the Council  
            to conduct an economic assessment of the various GHG emissions  
            reduction strategies using the best available economic models  
            and data.  



            As many decisions are currently being considered regarding  
            reducing GHG emissions beyond 2020, the author may wish to  
            consider requiring the metrics and analyses provided in  the  
            bill at an earlier date.


          Analysis Prepared by:Jennifer Galehouse / APPR. / (916)  
          319-2081