BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 32| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 32 Author: Pavley (D), et al. Amended: 6/1/15 Vote: 21 SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-2, 4/29/15 AYES: Wieckowski, Hill, Jackson, Leno, Pavley NOES: Gaines, Bates SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/28/15 AYES: Lara, Beall, Hill, Leyva, Mendoza NOES: Bates, Nielsen SUBJECT: California Global Warming Solutions Act of 2006: emissions limit SOURCE: Author DIGEST: This bill requires the California Air Resources Board (ARB) to approve statewide greenhouse gas (GHG) emissions limits of 40% below the 1990 level of GHG emissions, to be achieved by 2030, and 80% below the 1990 level, to be achieved by 2050. Senate Floor Amendments of 6/1/15 require ARB to establish a statewide GHG emissions limit of 40% below the 1990 level of GHG emissions, to be achieved by 2030 based on the best available scientific, technological, and economic assessments, and which includes short-lived climate pollutants. SB 32 Page 2 ANALYSIS: Existing law, under the California Global Warming Solutions Act of 2006 (Health and Safety Code §38500 et seq.): 1) Requires the 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, and to adopt GHG emissions reductions measures by regulation. 2) Authorizes the 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31, 2020, inclusive. 3) Specifies that the statewide GHG emissions limit remains in effect unless otherwise amended or repealed. 4) Expresses Legislative intent that the statewide emissions limit continue in existence and be used to maintain and continue GHG emissions reductions beyond 2020. 5) Requires the ARB to make recommendations to the Governor and the Legislature on how to continue GHG emissions reductions beyond 2020. This bill: 1) Requires the ARB to approve in a public hearing a statewide GHG emissions limit of 40% below the 1990 level of GHG emissions, to be achieved by 2030, and a statewide GHG emissions limit of 80% below the 1990 level of GHG emissions, to be achieved by 2050, and requires both limits be based on the best available scientific, technological, and economic assessments, and include short-lived climate pollutants, as defined. 2) Authorizes the ARB to approve a 2040 interim GHG emission target, consistent with the 2030 and 2050 statewide GHG emissions limits. SB 32 Page 3 3) Specifies that the statewide GHG emissions limits remain in effect unless otherwise amended or repealed. 4) Specifies legislative intent that the statewide GHG limits continue in existence and be used to maintain and continue GHG emissions reductions. 5) Requires the ARB to make recommendations to the Governor and the Legislature on how to continue GHG emissions reductions beyond 2050. 6) 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 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. Background 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 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. SB 32 Page 4 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), requires the 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 the ARB, among other things, to: Inventory GHG 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. The statute also specifies that the 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. AB 32 Scoping Plan. Pursuant to AB 32, the 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 SB 32 Page 5 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, 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. Scoping Plan update. ARB approved an update to the Scoping Plan on May 22, 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. Short-lived climate pollutants. CO2 remains in the atmosphere for centuries, which makes it the most critical GHG to reduce in order to limit long-term climate change. However, climate pollutants including methane, 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 aggressively reducing these short-lived climate pollutants in the short-term, compared to only cutting CO2 emissions, can do more to slow sea level rise and other climate change impacts in the near-term. SB 605 (Lara, Chapter 523, Statutes of 2014) requires the ARB to complete a comprehensive strategy to reduce emissions of short-lived climate pollutants by January 1, 2016. Executive Orders. 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 percent below 1990 SB 32 Page 6 levels by 2050." The EO 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 greenhouse gas emissions reductions targets. Comments 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 (Núñez-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 the 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 science, but this bill provides the flexibility inherent in the existing AB 32 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 SB 32 Page 7 advance job creation; public health improvement, especially in disadvantaged communities; innovation; and policy collaboration beyond our borders. "By simply amending the existing AB 32 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." Related/Prior Legislation AB 32 (Núñez, Pavley, Chapter 418, Statutes of 2006) required the ARB to establish a GHG emissions limit equal to 1990 level of emissions, to be achieved by 2020. SB 1125 (Pavley, 2014) would have required the 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. SB 1125 was held on the Senate Appropriations Committee suspense file. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee: 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. SB 32 Page 8 SUPPORT: (Verified 6/1/15) Barbara Boxer, US Senator, California 350 Bay Area 350 Sacramento Access to Independence Adam Schiff, US Representative, 28th District American Academy of Pediatrics, California American Cancer Society Cancer Action Network, California American College of Physicians, California Service Chapter SB 32 Page 9 American Farmland Trust American Heart Association, California American Lung Association, California Annie's Inc. Asthma Coalition of Los Angeles County Audubon Autodesk Azul SB 32 Page 10 Bagito Bay Area Air Quality Management District Baz Allergy, Asthma and Sinus Center Big Sur Land Trust Biodico Bioenergy Association of California Biosynthetic Technologies Bonnie J. Adario Lung Cancer Foundation Breathe CA SB 32 Page 11 Building Doctors Business for Innovative Climate and Energy Policy C&C Development Company California Bicycle Coalition California Biodiesel Alliance California Black Health Network California Climate & Agriculture Network California Conference of Directors of Environmental Health SB 32 Page 12 California Energy Efficiency Industry Council California Energy Storage Association California Green Business Network 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 SB 32 Page 13 California Ski Industry Association California Solar Energy Industry Association California Thoracic Society California Transit Association California Wind Energy Association Californians Against Waste CALSTART CalTrout Carbon Cycle Institute SB 32 Page 14 Catholic Charities, Diocese of Stockton Center for Biological Diversity Center for Climate Change and Health Center for Food Safety Central California Asthma Collaborative CERES Circulate San Diego City and County of San Francisco SB 32 Page 15 City Heights Community Development Corporation City of Berkeley City of Oxnard City of Santa Monica City of Thousand Oaks City of West Hollywood Clean Power Finance Clean Water Action SB 32 Page 16 Cleveland National Forest Foundation Climate Parents Climate Ready Solutions LLC Climate Resolve Coalition for Renewable Natural Gas Coastal Environmental Rights Foundation Communications Workers of America - District 9 Communitas Financial Planning County of Ventura SB 32 Page 17 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 SB 32 Page 18 Environment California Environmental Action Committee of West Marin Environmental Action Defense Fund Environmental Entrepreneurs EtaGen Friends Committee on Legislation of California Friends of the River Gap, Inc. Global Green USA SB 32 Page 19 Greenbelt Alliance Health Care Without Harm Health Officers Association of California House Kombucha Housing California Humane Society Illece Buckley, Mayor of City of Agoura Hills Klean Kanteen SB 32 Page 20 Land Trust of Santa Cruz County Large Scale Solar League of Women Voters of California League of Women Voters of Orange Coast Levi Strauss & Co Los Angeles Business Council Lucy Martin, Mayor of City of Calabasas MAAC SB 32 Page 21 Medical Advocates for Healthy Air Mercury Press International Moms Clean Air Force Mountains Recreation and Conservation Authority National Parks Conservation Association Natural Resources Defense Council NextGen Climate Patagonia Works Peninsula Open Space Trust SB 32 Page 22 Physicians for Social Responsibility, Los Angeles Physicians for Social Responsibility, San Francisco Bay Area Chapter Power2Sustain Progressive Asset Management, Inc. Public Health Institute Puma Springs Vineyards Purple Wine & Spirits Quest SB 32 Page 23 RC Cubed, Inc Redland's Area Democratic Club Regional Asthma Management and Prevention ReLeaf San Diego Housing Federation San Diego-Imperial Counties Labor Council San Francisco Asthma Task Force Santa Clara County Medical Society SB 32 Page 24 Santa Clara Valley Open Space Authority Santa Clarita Organization for Planning and the Environment Sequioa Riverlands Trust Sidel Systems USA Sierra Business Council Sierra Club Silicon Valley Leadership Group SmartWool Solar Energy Industry Association SB 32 Page 25 Sonoma Agricultural Preservation and Open Space District Sonoma County Asthma Coalition South Coast Air Quality Management District Southwest Wetlands Interpretive Association Sustainable North Bay Symantec Corporation Tamalpais NatureWorks The Hampstead Companies SB 32 Page 26 The Liberty Hill Foundation The Nature Conservancy The North Face TransForm Trust for Public Lands Union of Concerned Scientists US Green Buildings Council Ventura Climate Care Options Organized Locally Wakeland Housing and Development Corporation SB 32 Page 27 Waterplanet Alliance Wholly Hemp 48 Individuals OPPOSITION: (Verified 6/1/15) 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 Construction Trucking Association 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 SB 32 Page 28 California Manufacturers and Technology Association 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 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 Western Agricultural Processors Association Western Growers Association Western Plant Health Association Western States Petroleum Association ARGUMENTS IN SUPPORT: Supporters state that SB 32 provides the regulatory certainty that investors and the business community need in order to make long-term climate goals attainable. They also note that SB 32 would help protect public health of Californians, affirms the state's commitment to provide resources and solutions to communities that will be most impacted by climate change, and advances California's climate leadership on the world stage. Supporters further state that SB 32 is critical to continue the progress that California has made in reducing GHG emissions, attracting investments in clean energy and energy efficiency, and diversifying California's SB 32 Page 29 fuels. ARGUMENTS IN OPPOSITION:Opponents state that SB 32 will increase the cost to California's businesses, make them less competitive, and discourage economic growth by mandating a reduction in the GHG emissions to 80% below 1990 levels by 2050 with no consideration of the economic side effects. Opponents note that before any additional GHG emission reduction targets are set, there must be a credible and independent marginal cost analysis on the strategies adopted thus far in order to educate and guide GHG reductions post 2020, and understand what has and what has not worked. Prepared by:Rebecca Newhouse / E.Q. / (916) 651-4108 6/2/15 11:40:24 **** END ****