BILL ANALYSIS                                                                                                                                                                                                    

                             Senator Bob Wieckowski, Chair
                                 2015 - 2016  Regular 

          Bill No:           SB 32            Hearing Date:    4/29/2015
          |Author:   |Pavley                                                |
          |Version:  |3/16/2015                                             |
          |Urgency:  |No                     |Fiscal:      |Yes             |
          |Consultant|Rebecca Newhouse                                      |
          |:         |                                                      |
          Subject:  California Global Warming Solutions Act of 2006:   
          emissions limit

          Existing law, under the California Global Warming Solutions Act of  
          2006 (Health and Safety Code 38500 et seq.):

          1. Requires the California Air Resources Control Board (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.  

          2. Authorizes ARB to adopt a regulation that establishes a system  
             of market-based declining annual aggregate emission limits for  
             sources or categories of sources that emit GHGs, applicable  
             from January 1, 2012, to December 31, 2020, inclusive.

          3. Specifies that the statewide GHG emissions limit remains in  
             effect unless otherwise amended or repealed.

          4. Expresses Legislative intent that the emissions limit be used  
             to maintain and continue in GHG emissions reductions beyond  

          5. Requires ARB to make recommendations to the Governor and the  
             Legislature on how to continue GHG emissions reductions beyond  

          This bill:  


          SB 32 (Pavley)                                          Page 2 of  

          1. Requires ARB to approve in a public hearing a statewide GHG  
             emission limit of 80% below the 1990 level of GHG emissions, to  
             be achieved by 2050 and based on the best available scientific,  
             technological, and economic assessments, and requires the limit  
             include short-lived climate pollutants, as defined.

          2. Authorizes ARB to approve 2030 and 2040 interim GHG emission  
             targets, consistent with the 2050 limit. 

          3. Specifies that the 2050 limit remain in effect and be used to  
             maintain and continue emissions reductions beyond 2050.

          4. Requires ARB to make recommendations to the Governor and the  
             Legislature on how to continue GHG emissions reductions beyond  

          5. Specifies that it is the intent of the Legislature for the  
             Legislature and appropriate agencies, in achieving the 2050 GHG  
             emissions limit, to adopt policies that ensure those long-term  
             emission reductions advance all of the following: 

             A.    Job growth and local economic benefits in the state.

             B.    Public health benefits for Californians, particularly in  
                disadvantaged communities.

             C.    Innovation in technology and energy and resource  
                management practices.

             D.    Regional and international collaboration to adopt similar  
                GHG emission reduction policies.


          1.Climate Change.

            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 greenhouse gases emission increases  
            are leading to higher air and water temperatures as well as rising  


          SB 32 (Pavley)                                          Page 3 of  
            sea levels, with serious consequences for California. 

            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.  

            Higher temperatures will result in more rain and less snow,  
            diminishing the reserves of water in California's Sierra Nevada  
            snowpack.  Even if all GHG emissions ceased today, some of  
            these developments would be unavoidable because the climate  
            system changes slowly.

            There are significant public health risks associated with  
            climate change.  According to the US EPA, warmer average  
            temperatures will likely lead to hotter days and more frequent  
            and longer heat waves and could increase the number of  
            heat-related illnesses and deaths.  Increases in the frequency  
            or severity of extreme weather events could increase the risk  
            of dangerous flooding, high winds, concentrations of unhealthy  
            air, and water pollutants, and potentially enhance the spread  
            of certain diseases. 

            Along with the potential costs associated with public health  
            impacts, climate change also represents a very real threat to  
            California's infrastructure, and could lead to billions of  
            dollars in property damage.  The Pacific Institute estimates  
            that $100 billion worth of property in California is at risk of  
            flooding during a 100-year flood with a projected 1.4 meters of  
            sea level rise. 

            As the evidence for anthropogenic climate change has mounted  
            over the last few decades, the state has implemented a broad  
            climate portfolio to mitigate global warming impacts by  
            pursuing policies that reduce GHGs. 

          2.The Global Warming Solutions Act of 2006.

            In 2006, the Global Warming Solutions Act of 2006, AB 32  
            (Nez, 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  


          SB 32 (Pavley)                                          Page 4 of  
            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  

                 Identify and adopt regulations for discrete early action  

                 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.

                 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.  The statute also  
            specifies that market-based compliance mechanisms must also  
            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  


          SB 32 (Pavley)                                          Page 5 of  
            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  

                 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 reduction target by 2020.  An overall limit on  
             greenhouse gas emissions from most of the California economy  
             will be established by the "cap" portion of a cap-and-trade  
             program, and direct regulations within both capped and  
             uncapped sectors would achieve additional emissions  

             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,  


          SB 32 (Pavley)                                          Page 6 of  
             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.

            The February 2014 updated Scoping Plan draft 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 emphasizes the need for California to establish a  
            mid-term statewide emission reduction target "informed by  
            climate science, to frame the additional suite of policy  
            measures, regulations, planning efforts, and investments in  
            clean technologies that are needed to continue driving down  

            The update also includes a summary of the recent science on  
            short-lived climate pollutants.

          1.Short-lived Climate Pollutants. 

            The updated draft Scoping Plan notes that ARB will develop a  
            short-lived climate pollutant strategy by 2015 that will include  
            an inventory of sources and emissions, the identification of  
            additional research needs, and a plan for developing necessary  
            control measures.  CO2 remains in the atmosphere for centuries,  
            which makes it the most critical greenhouse gas to reduce in  
            order to limit long-term climate change.  However, climate  
            pollutants including methane, tropospheric ozone,  
            hydrofluorocarbons (HFCs), and soot (black carbon), are  
            relatively short-lived (anywhere from a few weeks to 15 years),  
            but have much higher global warming potentials than CO2. 

            New research suggests that black carbon is the second largest  
            man-made contributor to global warming and its influence on the  


          SB 32 (Pavley)                                          Page 7 of  
            climate has been greatly underestimated. 

            Another study published in the journal Nature Climate Change  
            found that reducing emissions of short-lived climate pollutants,  
            including soot and methane, by 30 to 60% by 2050 would slow the  
            annual rate of sea level rise by about 18% by 2050.  In  
            addition, the study found that, compared to just cutting CO2  
            emissions, reducing the release of short-lived climate  
            pollutants would do more to slow sea level rise before 2050, but  
            that lowering CO2 emissions would be required to limit warming  
            and warming-related impacts beyond that point. 

            According to the updated Scoping Plan, the three short-lived  
            climate pollutants with the greatest implications for California  
            are the following:

            Black carbon:  Black carbon, a component of soot, also known as  
            PM 2.5, comes from diesel engines and incomplete burning of  
            carbon sources.  Wildfires contribute almost 50% of the total  
            black carbon emissions in the state.  In addition to being a  
            powerful global warming pollutant, black carbon is associated  
            with numerous negative health impacts and is designated a  
            potential human carcinogen.  Black carbon is not listed under AB  
            32 as a greenhouse gas subject to AB 32 regulations.  However,  
            due to known health and air quality impacts, ARB adopted truck  
            and bus regulations in 2008 to control diesel PM emissions.  ARB  
            also administers the Carl Moyer Program, which provides grants  
            to fund "cleaner than required" engine upgrades, or retrofits  
            that reduce PM 2.5 and other pollutants. 

            Methane:  Methane (CH4) is the principal component of natural  
            gas and is also produced biologically under anaerobic conditions  
            in ruminants, landfills, and waste handling.  Atmospheric  
            methane concentrations have been increasing as a result of human  
            activities related to agriculture, fossil fuel extraction and  
            distribution, and waste generation and processing.  Many  
            emissions sources of methane are unregulated (e.g., methane from  
            dairy production and fugitive methane emissions from landfills  
            and natural gas distribution) and recent scientific reports  
            indicate that the US Environmental Protection Agency has  
            underestimated methane emissions by as much as 50%.  

            Hydrofluorocarbons (HFC):  HFCs are synthetic gases used in  
            refrigeration, air conditioning, insulation foams, solvents,  


          SB 32 (Pavley)                                          Page 8 of  
            aerosol products, and fire protection.  They are primarily  
            produced for use as substitutes for ozone-depleting substances  
            which are currently being globally phased out.  Currently, HFCs  
            are a small fraction of the total climate forcing (<1%), but  
            their emissions are growing relatively more rapidly than those  
            of CO2.  ARB has implemented several measures to reduce HFC  
            emissions including low-global warming potential (GWP)  
            requirements for aerosol propellants, a deposit-return recycling  
            program for small cans of air conditioner refrigerant and a  
            refrigerant management program.

          1. Purpose of Bill.  

             According to the author, "Following the issuance of Executive  
             Order S-03-05, which set a long-term greenhouse gas emissions  
             reduction target for California of 80 percent below 1990 levels  
             by 2050, the Legislature enacted AB 32 (Nez-Pavley, 2006).   
             The express intent of AB 32 was for the California Air  
             Resources Board (ARB) to continue reducing greenhouse gas  
             emissions beyond the 2020 limit established therein. The  
             Legislature also directed ARB to develop regional greenhouse  
             gas emissions reduction targets for automobiles and light  
             trucks for 2035 in SB 375 (Steinberg, 2008). 

             "In the Scoping Plan Update issued in May 2014, the ARB  
             identified a number of cost-effective, technologically feasible  
             pathways to emissions reductions required by 2030, 2040 and  
             2050 to adequately protect the health, safety and welfare of  
             Californians from the mounting costs of unabated climate  
             change.  While the courts have affirmed this ongoing authority  
             to reduce greenhouse gas emissions beyond 2020 (See Cleveland  
             National Forest Foundation v. San Diego Association of  
             Governments (4th Dist., Div. 1, No. D063288, Nov. 24. 2014)),  
             the Legislature has not yet given direction to shape future  
             reduction strategies.

             "SB 32 would provide regulatory certainty by establishing the  
             greenhouse gas reduction limit of 80 percent below 1990 levels  
             by 2050 in law. This level of climate pollution has been  
             identified by the international scientific community as  
             necessary to stave off the worst effects of climate change on  
             California's health and safety.  The target is guided by  


          SB 32 (Pavley)                                          Page 9 of  
             science, but this bill provides the flexibility inherent in the  
             existing AB32 framework to adjust pathways to the goal along  
             the way based on changing technological and economic  
             conditions, and ongoing evaluations of policy efficacy.  The  
             legislation also identifies goals to ensure that greenhouse gas  
             reductions advance job creation; public health improvement,  
             especially in disadvantaged communities; innovation; and policy  
             collaboration beyond our borders.

             "By simply amending the existing AB32 framework without any  
             major mechanical changes to the regulatory implementation  
             process, SB 32 ensures that the policy tools currently being  
             utilized to achieve the existing 2020 greenhouse gas target  
             remain available for the achievement of targets beyond 2020 -  
             including, but not limited to, energy efficiency requirements  
             for buildings and appliances, tailpipe emissions standards for  
             mobile sources, power sector renewable portfolio and emissions  
             performance standards, sustainable land use policies,  
             fuel-related emissions standards, and market based mechanisms -  
             to maximize the effectiveness of our climate policies overall."

          2. Updating the GHGs.

             AB 32 defines GHGs as CO2, methane, nitrous oxide,  
             hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and  
             nitrogen trifluoride.

             However, research since the passage of AB 32 clearly indicates  
             that black carbon is a potent climate forcer, in addition to  
             its numerous negative health impacts.

             Should the list of GHGs in AB 32 be updated with black carbon?   
             Additionally, should the definition of GHG in AB 32 allow for  
             additional GHGs that may be identified pursuant to ARB's  
             short-lived climate pollutant strategy, due in January 2016? 

          3. Technical Amendments for Consistency of the Act.
             Several provisions of AB 32 reference the 2020 greenhouse gas  
             emissions limit.  As the bill establishes a 2050 GHG emissions  
             limit equal to 80% below the 1990 GHG emissions level, several  
             technical, conforming amendments are needed to ensure  
             consistency between the bill and existing law.  


          SB 32 (Pavley)                                          Page 10 of  

          Related/Prior Legislation

          AB 32 (Nez, Pavley), Chapter 418, Statutes of 2006, requires ARB  
          to establish a GHG emissions limit equal to 1990 level of  
          emissions, to be achieved by 2020. 

          SB 1125 (Pavley) of 2014 requires ARB, in consultation with other  
          entities, to develop reduction targets for GHG emissions for 2030  
          in an open and public process by January 1, 2016.
          SOURCE:                    Author  

          American Academy of Pediatrics, California
          American Cancer Society Cancer Action network, California
          American Farmland Trust
          American Heart Association, California
          American Lung Association, California
          Asthma Coalition of Los Angeles County
          Bay Area Air Quality Management District
          Baz Allergy, Asthma and Sinus Center
          Bioenergy Association of California
          Biosynthetic Technologies
          Bonnie J. Adario Lung Cancer Foundation
          Breathe CA
          Building Doctors
          Business for Innovative Climate and Energy Policy
          California Black Health Network
          California Climate and Agriculture Network
          California Conference of Directors of Environmental Health
          California Energy Efficiency Industry Council
          California Interfaith Power & Light
          California League of Conservation Voters
          California Nurses Association
          California Pan Ethnic Health Network
          California Public Health Association, North
          California Service Chapter, American College of Physicians


          SB 32 (Pavley)                                          Page 11 of  
          California Ski Industry Association
          California Solar Energy Industry Association
          California Thoracic Society
          California Wind Energy Association
          Californians Against Waste
          Carbon Cycle Institute
          Catholic Charities, Diocese of Stockton
          Center for Biological Diversity
          Center for Climate Change and Health; Public Health Institute
          Central California Asthma Collaborative
          Circulate San Diego
          Clean Power Finance
          Clean Water Action
          Cleveland National Forest Foundation
          Climate Ready Solutions LLC
          Climate Resolve
                                                                                    Coastal Environmental Rights Foundation
          Communications Workers of America, District 9, AFL-CIO
          Communitas Financial Planning
          Department of Public Health, Los Angeles County
          Dignity Health
          Distance Learning Consulting
          Doctors for Climate Health
          Eagle Creek
          eBay, Inc
          Ecogate, Inc
          Endangered Habitats League
          Environment California
          Environmental Action Committee of West Marin
          Environmental Defense Fund
          Environmental Entrepreneurs
          Friends of the River
          Gap, Inc.
          Greenbelt Alliance
          Health Care Without Harm
          House Kombucha
          Klean Kanteen
          Land Trust of Santa Cruz County
          Large-scale Solar Association
          League of Women Voters of California


          SB 32 (Pavley)                                          Page 12 of  
          Levi Strauss & Co
          Los Angeles Business Council
          Medical Advocates for Healthy Air
          Mercury Press International
          Moms Clean Air Force
          National Parks Conservation Association
          Natural Resources Defense Council
          NextGen Climate
          Physicians for Social Responsibility, Los Angeles
          Physicians for Social Responsibility, San Francisco Bay Area  
          Planning and Conservation League
          Progressive Asset Management, Inc.
          Public Health Institute
          Purple Wine & Spirits
          RC Cubed, Inc
          Regional Asthma Management and Prevention
          San Francisco Asthma Task Force
          Santa Clara County Medical Society
          Sequoia Riverlands Trust
          Sidel Systems USA
          Sierra Club
          Silicon Valley Leadership Group
          Solar Energy Industries Association
          Sonoma County Asthma Coalition
          Southwest Wetlands Interpretive Association
          Sustainable North Bay
          Symantec Corporation
          Tamalpais NatureWorks
          The Humane Society of the United States
          The Nature Conservancy
          The North Face
          Trust for Public Lands
          Union of Concerned Scientists
          Waterplanet Alliance



          SB 32 (Pavley)                                          Page 13 of  
          African American Farmers of California
          Agricultural Council of California
          American Forest and Paper Association
          American Wood Council
          Brea Chamber of Commerce
          Building Owners and Managers Association
          California Agricultural Aircraft Association
          California Association of Nurseries and Garden Centers
          California Business Properties Association
          California Cattlemen's Association
          California Chamber of Commerce
          California Cotton Ginners Association
          California Cotton Growers Association
          California Dairies, Inc.
          California Farm Bureau Federation
          California Fresh Fruit Association
          California Independent Oil Marketers Association
          California Independent Petroleum Association
          California League of Food Processors
          California Taxpayers Association
          California Trucking Association
          Camarillo Chamber of Commerce
          Chamber of Commerce Alliance of Ventura and Santa Barbara
          Fresno Chamber of Commerce
          Fullerton Chamber of Commerce
          Greater Bakersfield Chamber of Commerce
          International Council of Shopping Centers
          Irvine Chamber of Commerce
          Los Angeles County Solid Waste Management Committee/Integrated  
                         Waste Management Task Force
          M-S-R Public Power Agency
          NAIOP-Commercial Real Estate Development Association
          National Federation of Independent Business
          National Hmong American Farmers
          Nisei Farmers League
          Oxnard Chamber of Commerce
          Rancho Cordova Chamber of Commerce
          Redondo Beach Chamber of Commerce and Visitor Bureau
          San Jose Silicon Valley Chamber of Commerce
          Santa Maria Valley Chamber of Commerce and Visitor Bureau
          Simi Valley Chamber of Commerce
          South Bay Association of Chambers of Commerce
          Southwest California Legislative Council
          Torrance Chamber of Commerce


          SB 32 (Pavley)                                          Page 14 of  
          Western Agricultural Processors Association
          Western Growers Association
          Western Plant Health Association
          Western States Petroleum Association
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