BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 32 (Pavley) - California Global Warming Solutions Act of  
          2006:  emissions limit
          
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          |Version: May 5, 2015            |Policy Vote: E.Q. 5 - 2         |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: May 18, 2015      |Consultant: Marie Liu           |
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          This bill meets the criteria for referral to the Suspense File. 


          Bill  
          Summary:  SB 32 would require the California Air Resources Board  
          (ARB) to approve a greenhouse gas (GHG) emission limit that is  
          equivalent to 80% below the 1990 level to be achieved boy 2050.


          Fiscal  
          Impact:  
           Minor and absorbable costs to the Cost of Implementation  
            Account (special) to the Air Resources Board to set the 2050  
            target.
           Unknown annual costs, at least in the hundreds of millions of  
            dollars, from various special funds for additional programs to  
            achieve the required emission reductions. 


          Background:  In 2006, the Legislature passed the California Global Warming  
          Solutions Act of 2006 (Health and Safety Code 38500 et seq.),  
          which is frequently referred to as AB 32. The act requires the  







          SB 32 (Pavley)                                         Page 1 of  
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          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.  ARB is  
          also authorized to adopt 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. This program is known as the  
          cap-and-trade program. 

          AB 32 specifies that the statewide GHG emissions limit remains  
          in effect unless otherwise amended or repealed and that it is  
          the Legislature's intent that the emissions limit be used to  
          maintain and continue in GHG emissions reductions beyond 2020.

          ARB is also required to make recommendations to the Governor and  
          the Legislature on how to continue GHG emissions reductions  
          beyond 2020.


          Proposed Law:  
            This bill would direct the ARB to adopt a 2050 GHG emission  
          limit that is equivalent to 80% of the state's 1990 emission  
          levels, as previously calculated for AB 32. The 2050 emissions  
          limit would be required to include short-lived climate  
          pollutants.
          ARB would be authorized to approve interim GHG emission level  
          targets for 2030 and 2040.


          This bill would also add legislative intent language that  
          appropriate agencies adopt complementary policies that ensure  
          long-term GHG emissions and advance job growth and local  
          economic benefits, public health benefits, and innovation in  
          technology and resource management policies.




          Staff  
          Comments:  Since the ARB has already established the 1990  
          emission levels as part of the AB 32 implementation, calculating  
          80% of this amount to create the 2050 limit as required by this  
          bill would be straightforward. As such, the ARB believes that  








          SB 32 (Pavley)                                         Page 2 of  
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          the requirement to adopt a 2050 limit will require minor and  
          absorbable costs. 
          However, to achieve the new 2050 limit will have significant  
          costs to the state, at least in the tens of millions of dollars,  
          for staff and programs to reduce GHG emissions. ARB notes that  
          their near-term costs will not change as a result of this bill  
          because the ARB has already moved towards a 2050 target in  
          response to executive orders. However, the their near-term costs  
          are not yet covered by the current budget baseline as ARB  
          continues to submit budget change proposals for additional  
          activities to reduce GHG emissions, including this year. 


          While it is not possible to predict how much it will actually  
          cost the state to achieve an 80% reduction in GHG emissions  
          compared to 1990 levels, staff notes that the cost per ton of  
          GHG emissions reduced is expected to increase with time as the  
          relatively simple emissions are generally achieved first. As the  
          emission reductions become more difficult to achieve,  
          implementation costs will increase. 




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