BILL ANALYSIS Ó
AB 1288
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Date of Hearing: May 27, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
1288 (Atkins) - As Introduced February 27, 2015
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Urgency: No State Mandated Local Program: NoReimbursable:
No
SUMMARY:
This bill allows AB 32 market-based regulations adopted by the
Air Resources Board (ARB) to remain operable beyond December 31,
2020.
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FISCAL EFFECT:
Minor, absorbable costs for ARB to continue its cap-and trade
program beyond 2020.
COMMENTS:
1)Rationale. According to the author, through the AB 32
cap-and-trade program, an overall limit is placed on carbon
emissions (the cap) and, in turn, regulated entities can
acquire allowances through a variety of mechanisms including
participating in carbon auctions to purchase allowances.
Entities can use allowances to help meet their GHG reduction
requirements or trade allowances to others if they are able to
cost-effectively lower their own emissions (the trade).
The cap is reduced each year and only a specific amount of
allowances are available for purchase. Funding generated from
the sale of allowances is invested into programs that reduce
GHG emissions.
Currently, the cap and trade program developed by ARB only
includes emissions reduction requirements through 2020.
This bill recognizes and clarifies the importance of
continuing ambitious GHG emissions reductions beyond 2020 and
the important on-going role of market-based mechanisms in that
effort.
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 adopt regulations,
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including market-based compliance mechanisms, to achieve
maximum technologically feasible and cost-effective GHG
emission reductions.
As part of the implementation of AB 32 market-based compliance
measures, ARB adopted a cap-and-trade program that caps the
allowable statewide emissions and provides for the auctioning
of emission credits, the proceeds of which are quarterly
deposited into the GGRF available for appropriation by the
Legislature.
3)Cap-and-Trade Revenues. The 2014-15 Budget Act allocates
cap-and-trade revenues for the 2014-15 fiscal year and
establishes a long-term plan for the allocation of
cap-and-trade revenues beginning in fiscal year 2015-16.
The Budget continuously appropriates 35% of cap-and-trade
funds for investments in transit, affordable housing, and
sustainable communities. Twenty-five percent of the revenues
are continuously appropriated to continue the construction of
high-speed rail. The remaining 40% will be appropriated
annually by the Legislature for investments in programs that
include low-carbon transportation, energy efficiency and
renewable energy, and natural resources and waste diversion.
The Governor's 2015-16 budget assumes the receipt of $650
million in state revenue from cap-and-trade auctions in
2014-15 and $1 billion in 2015-16.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
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319-2081