BILL ANALYSIS                                                                                                                                                                                                    

                                                                      SB 32  

                                                                    Page  1

          Date of Hearing:  August 19, 2015


                                 Jimmy Gomez, Chair

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

          |Policy       |Natural Resources              |Vote:|6 - 3        |
          |Committee:   |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |

          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          This bill requires the Air Resources Board (ARB) to approve  
          statewide greenhouse gas (GHG) emissions limits equivalent to  
          40% below 1990 levels by 2030 and 80% below 1990 levels by 2050.  
           Specifically, this bill: 


                                                                      SB 32  

                                                                    Page  2

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

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

          3)States the intent of the Legislature that policies adopted to  
            achieve the 2030 and 2050 limits advance the following:

               a)     Job growth and local economic benefits in  

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

               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:

          1)Unknown annual costs, at least in the hundreds of millions of  
            dollars, from various special funds for additional programs to  
            achieve the new required emissions reductions.


                                                                      SB 32  

                                                                    Page  3

          2)Minor, absorbable costs for the ARB to set the 2030, 2040 and  
            2050 GHG targets (Cost of Implementation Account).


          1)Purpose.  According to the author, an enforceable GHG target  
            of 80 percent below 1990 levels by 2050 is 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.  

            This bill adopts that target, but provides the same  
            flexibility in the existing AB 32 framework to make  
            adjustments based on changing technological and economic  
            conditions, and ongoing evaluations of policy efficacy.  

          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,  
            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  


                                                                      SB 32  

                                                                    Page  4

          3)AB 32 Scoping Plan Update.  ARB approved an update to the AB  
            32 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 update 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  

            Consistent with this recommendation , this bill provides a  
            mid-term statewide emission reduction target of 45% below 1990  
            levels by 2030.

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

          Analysis Prepared by:Jennifer Galehouse / APPR. / (916)  


                                                                      SB 32  

                                                                    Page  5