BILL ANALYSIS Ó
AB 197
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Date of Hearing: August 24, 2016
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
AB 197
(Eduardo Garcia) - As Amended August 19, 2016
SUBJECT: State Air Resources Board: greenhouse gases:
regulations
SUMMARY: Creates the Joint Legislative Committee on Climate
Change Policies (JLCCCP), requires the Air Resources Board (ARB)
to prioritize direct emission reductions and consider social
costs when adopting regulations to reduce greenhouse gas (GHG)
emissions beyond the 2020 statewide limit, requires ARB to
prepare reports on sources of GHGs and other pollutants,
establishes six-year terms for voting members of ARB, and adds
two legislators as non-voting members of ARB. Specifically,
this bill:
1)State the following findings:
a) The California Global Warming Solutions Act of 2006 [AB
32 (Núñez), Chapter 488] authorizes ARB to adopt
regulations to achieve the maximum technologically feasible
and cost-effective GHG emissions reductions.
b) AB 32 requires ARB to reduce statewide GHG emissions to
at least the 1990 emissions level by 2020 and to maintain
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and continue reductions thereafter.
c) Continuing to reduce GHG emissions is critical for the
protection of all areas of the state, but especially for
the state's most disadvantaged communities, as those
communities are affected first, and most frequently, by the
adverse impacts of climate change, including an increased
frequency of extreme weather events, such as drought, heat,
and flooding. The state's most disadvantaged communities
also are disproportionately impacted by the deleterious
effects of climate change on public health.
d) ARB's actions to reduce GHG emissions must be done in a
manner that is transparent and accountable to the public
and the Legislature. To this end, ARB must enhance the
accessibility of information used to inform and evaluate
regulatory measures developed to reduce GHG emissions.
e) Transparency and accountability also are essential to
ensuring the state's actions are done in an equitable
fashion that is protective and mindful of the effects on
the state's most disadvantaged communities.
f) In recognition of the need for ongoing, permanent
oversight over the implementation of the state's climate
policies, the Joint Legislative Committee on Climate Change
Policies will be established. The committee will uniquely
provide an oversight perspective that connects the
jurisdictions of several legislative standing committees,
including those that have the issues of air quality,
transportation, energy, and local government within their
jurisdiction, which is critical given that the state has
integrated climate change policies throughout the
activities of many state agencies in addition to ARB.
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2)Create the JLCCCP, consisting of at least three Senators and
three Assembly Members, and require the committee to make
recommendations concerning the state's programs, policies, and
investments related to climate change.
3)Authorize the JLCCCP to establish a panel of experts to
provide an independent analysis of the state policies.
4)Define, for purposes of AB 32, "social costs" as an estimate
of the economic damages, including, but not limited to,
changes in net agricultural productivity; impacts to public
health; climate adaptation impacts, such as property damages
from increased flood risk; and changes in energy system costs,
per metric ton of GHG emission per year.
5)Require ARB to publish emissions of GHGs, criteria pollutants
and, no later than January 1, 2018, toxic air contaminants,
for each facility that is a major source of GHG emissions
required to report its emissions pursuant to AB 32.
6)Require ARB to annually appear before the JLCCCP to present
ARB's informational report on emissions of GHGs, criteria
pollutants, and toxic air contaminants from all sectors
covered by the AB 32 scoping plan.
7)Require ARB, when it adopts regulations to achieve GHG
emission reductions beyond the statewide limit, to consider
social costs and prioritize direct emission reductions at
large stationary, mobile, and other sources.
8)Require each scoping plan update to identify for each emission
reduction measure:
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a) The range of projected GHG emissions reductions that
result from the measure;
b) The range of projected air pollution reductions that
result from the measure; and
c) The cost-effectiveness, including avoided social costs,
of the measure.
9)Establish terms of six years for each of the 14 voting members
of ARB, require ARB to establish initial staggered terms,
permit reappointment, and provide that the six local air
district representatives must maintain their air district
board membership to remain on ARB.
10)Add two members of the Legislature as ex officio, non-voting
members, one appointed by the Senate Rules Committee and one
appointed by the Speaker of the Assembly.
11)Require ARB to make available on its Web site the emissions
of GHGs, criteria pollutants, and toxic air contaminants
throughout the state broken down to a local and sub-county
level for stationary sources and to at least a county level
for mobile sources. Requires the emissions reported to
include data on the emissions of criteria pollutants and toxic
air contaminants emitted by stationary sources as provided to
ARB by air districts. Requires the information to be
displayed graphically and updated at least once a year.
12)Provide the bill becomes operative only if SB 32 (Pavley) of
the current legislative session is enacted and becomes
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effective on or before January 1, 2017.
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EXISTING LAW:
1)Establishes ARB consisting of 14 members. Twelve members
serve at the pleasure of the Governor and are subject to
confirmation by the Senate. These members are appointed on
the basis of interest and ability in the field of air
pollution control, understanding of the needs of the general
public in connection with air pollution problems, and
additional specific qualifications, including six members from
specified air districts. Two members are appointed by
Legislature, one by the Senate Committee on Rules, and one by
the Speaker of the Assembly. These members must work directly
with communities in the state that are most significantly
burdened by, and vulnerable to, high levels of pollution,
including communities with diverse racial and ethnic
populations and low-income populations. Members serve
part-time, with the exception of the Chair, who is appointed
by the Governor and serves full-time. ARB's primary duties
are controlling motor vehicle emissions, coordinating
activities of air districts for the purposes of the federal
Clean Air Act, and implementing AB 32.
2)Requires ARB, pursuant to AB 32, to adopt a statewide GHG
emissions limit equivalent to the 1990 level by 2020 and adopt
regulations to achieve maximum technologically feasible and
cost-effective GHG emission reductions.
FISCAL EFFECT: According to the Senate Appropriations Committee
(prior version):
1)One-time costs of $100,000 (various special funds) to the ARB
for construction to enlarge the hearing room dais and to
provide the equipment needed to accommodate two additional
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board members.
2)$233,000 annually (Cost of Implementation Fund) to the ARB for
staffing needs to support new board members and develop
ranking criteria.
COMMENTS: The 5th assessment report from the Intergovernmental
Panel on Climate Change (IPCC) 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 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.
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
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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.
ARB approved an update to the Scoping Plan in 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 as
required by AB 32.
In 2005, Governor Schwarzenegger issued Executive Order S-3-05
and called for GHG emissions reductions to 1990 levels by 2020
and 80% below 1990 levels by 2050. 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% 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 reduction targets.
On June 17, 2016, ARB released a "2030 Target Scoping Plan
Update Concept Paper." The paper includes four potential
high-level concepts for achieving a 40% GHG reduction by 2030.
Concept 1 calls for enhancements to existing, successful
programs and implementation of SB 350. It suggests investment
of funds from the cap-and-trade program in areas that would
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further the goals of AB 32. Concept 2 extends the actions in
Concept 1 to specifically address the industrial sector through
industrial facility caps. It would have no cap-and-trade
regulation post-2020 and no statewide limit on GHG emissions.
Concept 3 focuses on transportation-oriented policy aimed at
ambitious reductions in vehicle miles traveled (VMT) and
increased number of zero-emission and plug-in vehicles by 2030.
It would not continue cap-and-trade regulation post-2020.
Concept 4 includes the same complementary policies as Concept 1,
but in lieu of a cap-and-trade program, suggests a carbon tax
applied at a value predetermined by a method such as economic
modeling or the use of United States Environmental Protection
Agency (US EPA) social cost of carbon. It is not clear if this
scenario would ultimately achieve the 2030 target because it
would not include a statewide limit on GHG emissions, and it is
unknown how the monies generated by a carbon tax would be used.
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."
This bill provides direction to ARB regarding its actions to
achieve GHG reductions beyond the 2020 statewide limit,
including reiterating existing requirements of AB 32 and
introducing the consideration of "social costs," as defined.
Some elements of social cost, such as public health impacts, are
accounted for in ARB's current approach to analyzing economic
impacts and cost-effectiveness. Other elements, changes to
agricultural productivity and property damage, are new and their
impact is unclear.
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The bill further requires ARB to prioritize regulations that
result in direct emission reductions at large stationary, mobile
and other sources. While this appears to favor direct "command
and control" regulation over market-based compliance mechanisms
or incentive programs, it is essentially consistent with the
current program and structure of AB 32, where ARB is required to
adopt regulations to achieve the maximum technologically
feasible and cost-effective GHG reductions, and authorized to
include the use of market-based compliance mechanisms. In
practice, direct regulations are prioritized over cap-and-trade,
which operates as a backstop to achieve the reductions in excess
of reductions achieved by direct regulations that are necessary
to achieve the statewide limit.
This bill creates the JLCCCP to study climate change policies
and make recommendations to the Legislature. In addition to a
broad "study and recommend" role, the committee is the venue for
presentation of annual report on emissions by ARB required by
the bill.
This bill is contingent on SB 32 (Pavley), which requires ARB to
ensure that statewide GHG emissions are reduced to at least 40%
below the 1990 level by 2030.
REGISTERED SUPPORT / OPPOSITION:
Support
Advanced Energy Economy
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African American Farmers
American Academy of Pediatrics
American Cancer Society Cancer Action Network, California
American College of Physicians, California Service Chapter
American Farmland Trust
American Heart Association
American Lung Association in California
American Stroke Association
Asian Pacific Environmental Network
Audubon California
Azul
Biodico Sustainable Biorefineries
Bowman.change
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Breast Cancer Fund
California Association of Local Conservation Corps
California Bicycle Coalition
California Coastal Protection Network
California Compost Coalition
California Council of Carpenters
California Council of Land Trusts
California Council of Sheet Metal Workers
California Electric Transportation Coalition
California Environmental Justice Alliance
California Interfaith Power and Light
California Labor Federation
California League of Conservation Voters
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California Native Plant Society
California Natural Gas Vehicle Coalition
California-Nevada Conference of Operating Engineers
California State Association of Electrical Workers
California State Council of Laborers
California State Pipe Trades Council
California Teamsters Public Affairs Council
California Urban Streams Partnership
California Walks
California Wilderness Coalition
California Wind Energy Association
Californians Against Waste
CalPIRG
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CALStart
CalTrout
Carbon Cycle Institute
Catholic Charities of the Diocese of Stockton
Central Coast Energy Services
CERES
Clean Energy
CleanTech
CleanTech San Diego
Climate Action Campaign
Coalition for Clean Air
Coalition for Renewable Natural Gas
Coalition for Sustainable Transportation
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Community Water Center
Defenders of Wildlife
E2
Environment California
Environmental Defense Center
Environmental Defense Fund
Environmental Working Group
Fresno EOC
Friends Committee on Legislation of California
Greenbelt Alliance
International Association of Bridge, Structural, Ornamental and
Reinforcing Iron Workers
International Association of Heat & Frost Insulators & Allied
Workers
International Association of Operative Plasters and Cement
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Masons
International Union of Bricklayers & Allied Craftworkers
International Union of Elevator Constructors
International Union of Painters & Allied Trades
League of Women Voters of California
Local Government Commission
Los Angeles Business Council
Lutheran Office of Public Policy - California
Mono Lake Committee
Mujeras de la Tierra
National Parks Conservation Association
Natural Resources Defense Council
Ocean Conservancy
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Pacific Ethanol
Pacific Forest Trust
Planning and Conservation League
PolicyLink
Regional Asthma Management & Prevention
Safe Routes to School
Save the Bay
Save the Redwoods
Sequoia Riverlands Trust
Sierra Business Council
Silicon Valley Leadership Group
State Building and Construction Trades Council of California
Sustainable Silicon Valley
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The Nature Conservancy
Tree People
Trust for Public Land
Union of Concerned Scientists
United States Green Building Council California Chapter
United Union of Roofers, Waterproofers & Allied Workers
Voices for Progress
Western States Council of Sheet Metal Workers
Opposition
Agricultural Council of California
American Petroleum and Convenience Store Association
Association of California Egg Farmers
Building Owners & Managers Association of California
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California Association of Wheat Growers
California Bean Shippers Association
California Building Industry Association
California Business Properties Association
California Chamber of Commerce
California Farm Bureau Federation
California Grain and Feed Association
California Independent Oil Marketers Association
California Independent Petroleum Association
California League of Food Processors
California Manufacturers & Technology Association
California Pear Growers Association
California Railroad Industry
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California Seed Association
California Taxpayers Association
Calpine Corporation
Commercial Real Estate Development Association, NAIOP of
California
Family Business Association
Independent Energy Producers Association
International Council of Shopping Centers
National Federation of Independent Business - California
Northern California Power Agency
Western States Petroleum Association
Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916)
319-2092
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