BILL ANALYSIS Ó SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Wieckowski, Chair 2015 - 2016 Regular Bill No: AB 197 ----------------------------------------------------------------- |Author: |Eduardo Garcia | ----------------------------------------------------------------- |-----------+-----------------------+-------------+----------------| |Version: |6/8/2016 |Hearing |6/29/2016 | | | |Date: | | |-----------+-----------------------+-------------+----------------| |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Rebecca Newhouse | | | | ----------------------------------------------------------------- SUBJECT: State Air Resources Board: greenhouse gases. ANALYSIS: Existing law: 1) Establishes the California Air Resources Board (ARB) with 14 members, 12 of which are appointed by the Governor with consent of the Senate, and two members appointed by the Senate Committee on Rules and the Speaker of the Assembly, respectively. Of the 12 members appointed by the Governor, six must have specified qualifications and six must be board members from air districts, and the two members of the Legislature are required to be persons who work directly with pollution-burdened and vulnerable communities. (Health and Safety Code §39510) 2) Existing law, under the California Global Warming Solutions Act of 2006 (HSC §38500 et seq.): a) Requires 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 to achieve the maximum technologically feasible and cost-effective reductions in GHG emissions in furtherance of achieving the statewide GHG emissions limit. b) Requires ARB when adopting regulations, to the extent feasible and in furtherance of achieving the statewide GHG goal, to do the following: AB 197 (Eduardo Garcia) Page 2 of ? i) Ensure that activities undertaken to comply with the regulations do not disproportionately impact low-income communities. ii) Ensure that activities pursuant to the regulations do not interfere with efforts to achieve and maintain federal and state ambient air quality standards and to reduce toxic air contaminant emissions, and consider cost-effectiveness of these regulations. iii) Consider overall societal benefits, including reductions in other air pollutants, diversification of energy sources, and other benefits to the economy, environment, and public health. iv) Consider cost-effectiveness of these regulations. c) Authorizes ARB to include the use of market-based mechanisms to comply with the regulations. This bill: 1) Establishes the Joint Legislative Committee on Climate Change Policies, consisting of three members of the Senate and three members of the Assembly, to ascertain facts and make recommendations to the Legislature concerning the state's climate change programs and policies. 2) Requires ARB to consider adopting measures to achieve the statewide GHG emissions limit based on the following priority: a) Measures that result in direct GHG emissions reductions from large stationary sources, such as refineries, and the transportation sector in the most technologically feasible and cost effective manner possible that accounts for the societal costs of GHG emissions. b) Measures that result in direct reductions in GHG emissions from sources other than large stationary sources and transportation in the most technologically feasible and cost effective manner possible that accounts for the societal costs of GHG emissions. 3) Requires ARB rank GHG emission reduction measures based on the AB 197 (Eduardo Garcia) Page 3 of ? reductions in GHG emissions, criteria pollutants, and toxic air contaminants, and cost-effectiveness. 4) Requires ARB to make all data related to the above ranking available to the public and present on the rankings annually at a regular ARB meeting. 5) Establishes six-year terms for voting members of ARB. 6) Specifies that a member of ARB whose appointment satisfies local air district membership requirements for ARB's makeup, shall not be a member of ARB effective immediately if they cease to hold the qualifying membership of a local air district. 7) Requires that two Legislative members serve as ex-officio, nonvoting members of ARB, with one member appointed by the Senate Committee on Rules, and the other member appointed by the Speaker of the Assembly. 8) Provides that the provisions of this bill are only operative if SB 32 (Pavley) is enacted and becomes law on or before January 1, 2017. Background 1) Air Resources Board. The Air Resources Board was created in 1967 through the Mulford-Carrell Act, which combined two Department of Health bureaus, the Bureau of Air Sanitation and the Motor Vehicle Pollution Control Board. AB 1062 (Costa, Chapter 579, Statutes of 1993) added a public member and a permanent member representing the San Joaquin Valley Unified Air District, to increase the board's membership from 9 to 11. In 2012, AB 146 (Dickinson, Chapter 522, Statutes of 2012) expanded the board membership from 11 to 12, adding a requirement that one member represent an air district in the Sacramento region. Six of the board members must have certain qualifications (e.g., automotive engineering; chemistry, meteorology, or related field; surgeon or an authority on health effects). The other 6 members must be board members from the following entities: South Coast AQMD, Bay Area AQMD, San Joaquin Valley AB 197 (Eduardo Garcia) Page 4 of ? AQMD, San Diego APCD, one of six Sacramento region air districts, and a board member from any other district. These board members must reflect the "qualitative requirements" of the other 6 members to the extent practicable. In 2015, AB 1288 (Atkins, Chapter 586, Statutes of 2015) adds two additional members to the board, which increased the membership from 12 to 14, appointed by the Senate Committee on Rules and the Speaker of the Assembly, and requires those members be persons who work directly with pollution-burdened and vulnerable communities. The Board members serve part-time, except the Chairperson, who serves as a full-time member. 2) The Global Warming Solutions Act of 2006. In 2006, the Global Warming Solutions Act of 2006, AB 32 (Núñez, Pavley, Chapter 488, Statutes of 2006) established a statewide GHG emissions limit by 2020. AB 32 defines greenhouse gasses (GHGs) as carbon dioxide (CO2), methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride and requires 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 ARB, among other things, to: Inventory greenhouse gas 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. Convene an Environmental Justice Advisory Committee to advise ARB in the development of the scoping plan. AB 197 (Eduardo Garcia) Page 5 of ? Appoint an economic advisory committee to obtain recommendations for GHG reduction measures. The statute also specifies that 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, including localized impacts in communities that are already adversely impacted by air pollution, and must design any market-based compliance mechanisms to prevent any increase in the emissions of toxic air contaminants or criteria air pollutants. Additionally, AB 32 requires that market-based compliance mechanisms maximize additional environmental and economic benefits for California, as appropriate. 1) AB 32 Scoping Plan. Pursuant to AB 32, 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 CO2 (MMT CO2e). 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 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; achieving a 33% Renewable Portfolio Standard (RPS); regional transportation-related GHG targets; and creating targeted fees on water use and high global warming potential pollutants. The basic design of the program, as recommended by the original Scoping Plan, is that the combination of direct regulatory measures and cap-and-trade is intended to achieve the emission AB 197 (Eduardo Garcia) Page 6 of ? reduction target by 2020. Specifically, the Scoping Plan lays out a strategy where the overall limit on GHG emissions from most of the California economy is "capped" through a cap-and-trade program, and direct regulations within both capped and uncapped sectors would achieve additional emissions reductions. Pursuant to authority under AB 32, ARB adopted a Low Carbon Fuel Standard in 2009, and a cap-and-trade program, approved on December 13, 2011. Of the 80 MMTCO2 of GHG emissions reductions required to reach the 2020 AB 32 target, four programs are estimated by 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 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. ARB approved an update to the Scoping Plan on May 22, 2014. 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. Comments 1) Purpose of Bill. According to the author, "In order for California to remain an economic and environmental leader the state will need to also be a leader on issues related to equity. Placing the health and economic impacts of climate policy on vulnerable populations second will stunt the state's prosperity. A great degree of transparency and investment in California's environmentally and socioeconomically disadvantaged populations has the potential to yield significant climate, economic, public health and quality of life benefits while knocking down barriers to opportunity." AB 197 (Eduardo Garcia) Page 7 of ? 2) Term limits. AB 197 limits the term of office for ARB's voting members to six years. As ARB's jurisdiction includes a number of complex policy issues and growing challenges (e.g., climate change and GHG emissions reductions), it may be prudent to allow voting members serve for additional terms in order to retain institutional knowledge on the Board. The committee may wish to amend the bill to allow voting members serve more than one six-year term. 3) Contingent enactment. AB 197 (E. Garcia) contains contingent enactment language with SB 32 (Pavley), currently in the Assembly Natural Resources Committee, and will only become operative if SB 32 (Pavley) is enacted. Related/Prior Legislation SB 32 (Pavley) requires ARB to approve a statewide GHG emissions limit of 40% below the 1990 GHG emissions level to be achieved by 2030. SOURCE: Asian Pacific Environmental Network California Environmental Justice Alliance SUPPORT: None received OPPOSITION: None received -- END --