BILL ANALYSIS                                                                                                                                                                                                    



                                                                      SB 32


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          Date of Hearing:  July 13, 2015


                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES


                                 Das Williams, Chair


          SB  
          32 (Pavley) - As Amended June 1, 2015


          SENATE VOTE:  24-15


          SUBJECT:  California Global Warming Solutions Act of 2006:  
          emissions limit.


          SUMMARY:  Requires the Air Resources Board (ARB) to approve  
          statewide greenhouse gas (GHG) emissions limits equivalent to  
          40% below the 1990 level by 2030 and 80% below the 1990 level by  
          2050.


          EXISTING LAW:


          1)Requires ARB, pursuant to California Global Warming Solutions  
            Act of 2006 (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.



          2)Authorizes ARB to permit the use of market-based compliance  
            mechanisms, applicable from January 1, 2012 to December 31,  








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            2020, to comply with GHG reduction regulations, once specified  
            conditions are met.  Pursuant to this authority, ARB has  
            adopted a cap-and-trade regulation which applies to large  
            industrial facilities and electricity generators emitting more  
            than 25,000 metric tons of CO2 equivalent per year, as well as  
            distributors of fuels, including gasoline, diesel and natural  
            gas.

          THIS BILL:


          1)Requires ARB to approve, based on the best available  
            scientific, technological, and economic assessments, the  
            following statewide limits on GHG emissions, including  
            short-lived climate pollutants:


               a)     40% below the 1990 level by 2030.


               b)     80% below the 1990 level by 2050.


          2)Authorizes ARB to approve an interim GHG emissions target to  
            be achieved by 2040.


          3)States the intent of the Legislature for the Legislature and  
            appropriate agencies to adopt complementary policies that  
            ensure the long-term emissions reductions adopted pursuant to  
            the 2030 and 2050 limits advance all of the following:


               a)     Job growth and local economic benefits in  
                 California.


               b)     Public health benefits for California residents,  
                 particularly in disadvantaged communities.








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               c)     Innovation in technology and energy, water, and  
                 resource management practices.


               d)     Regional and international collaboration to adopt  
                 similar GHG emissions reduction policies.


          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, minor and absorbable costs to the Cost of  
          Implementation Account to ARB to set the 2050 target and 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. 





          COMMENTS:  


          1)Background.  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  








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            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  
            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 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.


            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),  








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            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.  


          2)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 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  
            GHG emissions reductions targets.


          3)Author's statement:


               SB 32 sets an enforceable greenhouse gas reduction target  
               of 80 percent below 1990 levels by 2050, the level  
               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  








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               greenhouse gas reductions advance job creation; public  
               health improvement, especially in disadvantaged  
               communities; innovation; and policy collaboration beyond  
               our borders. 


               To ensure that the state accomplishes our 2050 target  
               through the most cost-effective pathway, SB 32 incorporates  
               the Governor's midterm target of reducing climate pollution  
               to 40 percent below 1990 levels by 2030.


               By simply amending the existing AB 32 framework without any  
               major mechanical changes to the regulatory implementation  
               process, SB32 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.


          4)What about-cap and-trade?  In addition to requiring ARB to  
            approve 2030 and 2050 statewide GHG emissions limits, this  
            bill makes conforming changes to other sections of AB 32 that  
            refer to the 2020 limit to reflect the commitment to continue  
            the AB 32 program beyond 2020.  However, the bill does not  
            extend the "market-based compliance mechanism" provision,  
            under which ARB has adopted a cap-and-trade regulation  
            applicable through 2020.  The cap-and-trade regulation is a  
            key element in the regulatory program to achieve the 2020  
            limit and, through the auction of emissions allowances,  
            produces revenues that are invested in programs to produce  
            additional GHG emission reductions.









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          5)When will the 2030 and 2050 limits be adopted?  Unlike AB 32,  
            which required ARB to approve the 2020 limit one year after  
            the bill was enacted, this bill provides no deadline for ARB  
            to approve the 2030 and 2050 limits.  Because the 1990 level  
            has already been determined by ARB and this bill prescribes  
            the reduction percentages, there is little question about what  
            the limits will be.  The main question is when will ARB  
            approve them?


          6)Where will the emission reductions come from?  The author and  
            the committee may wish to consider amending this bill to  
            require ARB to report annually regarding the amounts, sources  
            and locations of GHG reductions achieved toward the statewide  
            limits.


          7)Related legislation.  AB 1288 (Atkins), which is pending in  
            the Senate Environmental Quality Committee, eliminates the  
            December 31, 2020 limit on applicability of a market-based  
            compliance mechanism under AB 32.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          350 Bay Area


          350 Sacramento


          Access to Independence








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          Added Edge


          Advanced Energy Economy (AEE)


          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


          Annie's


          Apricus


          Asthma Coalition of Log Angeles County








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          Audubon California


          Autodesk


          Azul


          Bagito


          Bay Area Air Quality Management District


          Baz Allergy, Asthma & Sinus Center


          Berkeley City Council


          Big Sur Land Trust


          Biodico Sustainable Biorefineries


          Bioenergy Association of California


          Biosynthetic Technologies


          Blue Sky Biochar


          Bonnie J. Adario Lung Cancer Foundation








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          Breathe California


          Building Doctors


          Business for Innovative Climate & Energy Policy


          C&C Development Co.


          CALSTART


          California Bicycle Coalition


          California Biodiesel Alliance


          California Black Health Network


          California Catholic Conference


          California Climate and Agriculture Network


          California Conference of Directors of Environmental Health


          California Energy Efficiency Industry Council


          California Energy Storage Alliance








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          California Equity Leaders Network


          California Green Business Network


          California Interfaith Power & Light


          California League of Conservation Voters


          California Municipal Utilities Association


          California Nurses Association


          Californians Against Waste


          California Pan Ethnic Health Network 


          California Public Health Association


          California Ski Industry Association


          California Thoracic Society


          California Transit Association


          California Voices for Progress








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          California Wind Energy Association


          CalTrout


          Catholic Charities, Diocese of Stockton


          Center for Biological Diversity


          Center for Climate Change and Health


          Center for Climate Change and Health; Public Health Institute


          Center for Climate Protection


          Central California Asthma Collaborative


          Ceres


          ChargePoint


          Circulate San Diego


          City and County of San Francisco


          City Heights Community Development Corporation








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          City of Agoura Hills, Mayor Weber


          City of Calabasas, Mayor, Lucy Martin


          City of Lancaster, Mayor, Rex Parris


          City of Oxnard


          City of Santa Rosa


          City of Santa Monica, Mayor, Kevin McKeown


          City of Simi Valley, Mayor Huber


          City of Thousand Oaks


          City of West Hollywood, Mayor Horvath


          Clean Power Campaign


          Clean Power Finance


          Clean Tech San Diego


          Clean Water Action








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          Cleveland National Forest Foundation


          Climate Action Reserve


          Climate Parents


          Climate Ready Solutions


          Climate Resolve


          Coalition for Clean Air


          Coastal Environmental Right Foundation


          Communitas Financial Planning


          Communications Workers of America, District 9, AFL-CIO


          Consumers Union


          County of Los Angeles, Public Health


          County of Los Angeles, Supervisor Kuehl


          County of Los Angeles, Supervisor Ridley-Thomas








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          County of Los Angeles, Supervisor Solis


          County of Santa Barbara, Board of Supervisors


          Covanta


          Dignity Health


          Distance Learning Consulting


          Doctors for Climate Change


          Eagle Creek


          eBay


          Ecogate


          Endangered Habitats League


          Environment California


          Environmental Defense Action Fund (EDAF)


          Environmental Defense Fund








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          Environmental Entrepreneurs


          EtaGen


          Friends Committee on Legislation of California


          Friends of the River


          Gap, Inc.


          Grand Boulevard Initiative


          Greenbelt Alliance


          Green Education, Inc.


          Harvest Power California


          Health Care Without Harm


          Health Officers Association of California


          House Kombucha


          Humane Society of the United States








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          Klean Kanteen


          Land Trust of Santa Cruz County


          Large Scale Solar Association


          League of Women Voters of California


          League of Women Voters of Orange Coast


          Levy Strauss & Co.


          Liberty Hill Foundation


          Los Angeles Business Council


          MAAC


          Marin Agricultural Land Trust


          Marin Clean Energy


          Medical Advocates for Healthy Air


          Mercury Press International








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          Moms Clean Air Force


          Mountains Recreation and Conservation Authority


          Move LA


          National Parks Conservation Association


          Natural Resources Defense Council


          Nature Conservancy


          Nextgen Climate


          North Face, The


          Pacific Forest Trust


          Patagonia, Inc.


          Patagonia Works


          Peninsula Open Space Trust


          Physicians for Social Responsibility, Los Angeles








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          Physicians for Social Responsibility, San Francisco


          Planning and Conservation League


          Power2Sustain


          Progressive Asset Management


          Puma Springs Vineyards


          Public Health Institute


          Purple Wine & Spirits


          Quest


          RC Cubed


          Regional Asthma Management and Prevention


          Releaf


          San Diego 350


          San Diego Housing Federation








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          San Francisco Asthma Task Force


          Santa Clara County Medical Society


          Santa Clara Valley Open Space Authority


          Santa Clarita Organization for Planning and the Environment


          Sequoia Riverlands Trust


          Sidel Systems USA


          Sierra Business Council


          Sierra Club


          Silicon Valley Leadership Group


          SmartWool


          Sonoma County Agricultural Preservation and Open Space District


          Sonoma County Asthma Coalition


          Sonoma County Water Agency








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          South Coast Air Quality Management District


          Southern California Public Power Authority


          Southwest Wetlands 


          StopWaste


          Sustainable North Bay


          Symantec Corporation


          Tamalpais Nature Works


          TransForm


          TreePeople


          Trust for Public Lands


          U.S. Green Building Council, California


          Union of Concerned Scientists


          United States Representative, Adam Schiff








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          United States Senator, Barbara Boxer


          Ventura County Board of Supervisors


          Voices for Progress


          Wakeland Housing and Development Corporation


          Waterplanet Alliance


          West Marin Environmental Action Committee


          31 individuals




          Opposition


          African American Farmers of California


          Agricultural Council of California


          American Alliance Authority & Compliance


          American Alliance Drug Testing









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          American Forest and Paper Association


          American Wood Council


          Associated Builders and Contractors of California


          Building Owners and Managers Association


          Brea Chamber of Commerce


          California Agricultural Aircraft Association


          California Association of Nurseries and Garden Centers


          California Building Industry Association


          California Business Properties Association


          California Cattlemen's Association


          California Chamber of Commerce


          California Concrete Pumpers Alliance


          California Construction Trucking Association









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          California Cotton Ginners Association


          California Cotton Growers Association


          California Dairies Inc.


          California Farm Bureau Association


          California Fresh Fruit Association


          California Independent Oil Marketers Association


          California Independent Petroleum Association


          California League of Food Processors


          California Manufacturers & Technology Association


          California Taxpayers Association


          California Trucking Association


          Camarillo Chamber of Commerce


          Chambers of Commerce Alliance of Ventura and Santa Barbara  
          Counties








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          Coalition of American Latino Truckers


          Family Business Association


          Fullerton Chamber of Commerce


          Greater Bakersfield Chamber of Commerce


          Greater Fresno Chamber of Commerce


          Heavy-Haul Conference


          Inland Empire Economic Partnership


          International Council of Shopping Centers


          Irvine Chamber of Commerce


          Kern County Board of Supervisors


          Los Angeles County Business Federation


          NAIOP - Commercial Real Estate Development Association


          National Federation of Independent Business








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          National Hmong American Farmers


          Nisei Farmers League


          Orange County Business Council


          Oxnard Chamber of Commerce


          Rancho Cordova Chamber of Commerce


          Redondo Beach Chamber of Commerce
                                                 

          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


          Valley Industry and Commerce Association








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          Western Agricultural Processors Association


          Western Growers Association


          Western Plant Health Association


          Western States Petroleum Association


          Western Trucking Alliance







          Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916)  
          319-2092