BILL ANALYSIS                                                                                                                                                                                                    

                                                                      SB 32

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          Date of Hearing:  June 27, 2016


                                 Das Williams, Chair

          32 (Pavley) - As Amended June 10, 2016

          SENATE VOTE:  24-15

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

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

          EXISTING LAW:   

          1)Requires ARB, pursuant to California Global Warming Solutions  
            Act of 2006 [AB 32 (Nunez), Chapter 488, Statutes of 2006], 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  

          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  

          3)Requires ARB, pursuant to SB 605 (Lara), Chapter 523, Statutes  
            of 2014, to complete, by January 1, 2016, a comprehensive  
            strategy to reduce emissions of short-lived climate pollutants  
            (SLCPs) in the state.

          THIS BILL:

          1)Requires ARB to approve in a public hearing, based on the best  
            available scientific, technological, and economic assessments,  
            a statewide limit on GHG emissions, including SLCPs, that is  
            equivalent to 40% below the 1990 level, to be achieved by  

          2)Requires ARB to consider historic efforts to reduce GHG  
            emissions and objectively seek and account for cost-effective  
            actions to reduce GHG emissions across all sectors.

          3)Makes conforming amendments to other provisions of AB 32 to  
            reflect the addition of a 2030 target, except for the  
            market-based compliance mechanism authority.


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          4)States that the provisions of the bill are severable.

          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee (prior version):

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


          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  
            achieving 1990-level emissions, a reduction of 80 million  
            metric tons of CO2 (MMT CO2e).  Average emission data in the  


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            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),  
            are relatively short-lived (anywhere from a few weeks to 15  
            years), but have much higher global warming potentials than  


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            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)Post-2020 Executive Actions.  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  
            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 order 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 reduction targets.

            On June 17, ARB released a "2030 Target Scoping Plan Update  
            Concept Paper."  The paper includes four potential high-level  
            concepts for achieving a 40% GHG reduction by 2030.  Concept 1  
            calls for enhancements to existing, successful programs and  
            implementation of SB 350.  It suggests investment of funds  
            from the cap-and-trade program in areas that would further the  
            goals of AB 32.  Concept 2 extends the actions in Concept 1 to  
            specifically address the industrial sector through industrial  
            facility caps.  It would have no cap-and-trade regulation  
            post-2020 and no statewide limit on GHG emissions.  Concept 3  
            focuses on transportation-oriented policy aimed at ambitious  
            reductions in VMT and increased number of zero-emission and  
            plug-in vehicles by 2030.  It would not continue cap-and-trade  
            regulation post-2020.  Concept 4 includes the same  


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            complementary policies as Concept 1, but in lieu of a  
            cap-and-trade program, suggests a carbon tax applied at a  
            value predetermined by a method such as economic modeling or  
            the use of United States Environmental Protection Agency (US  
            EPA) social cost of carbon.  It is not clear if this scenario  
            would ultimately achieve the 2030 target because it would not  
            include a statewide limit on GHG emissions, and it is unknown  
            how the monies generated by a carbon tax would be used.  

          3)Author's statement:

               There are three major problems this bill is attempting to  
               solve: dangerous climate pollution, an uncertain investment  
               environment for clean energy businesses, and an inequitable  
               distribution of both the consequences of climate change and  
               the benefits of the state's policy to address it.

               First, it will bring the state's economy-wide climate  
               pollution targets in line with the mandates of the  
               scientific community, by increasing the limits the state  
               imposes on the biggest polluters.  Second, it will send a  
               clear signal to the market, that will allow for business  
               certainty and predictability, so that California companies  
               can continue building jobs for the clean energy economy.   
               And third, as part of a broader legislative package to  
               ensure that the state makes investments where they are  
               needed most, it serves as the foundation for the next  
               chapter of California's leadership in environmental  

               Executive Order S-03-05 established a target to reduce GHG  
               emissions, by 2050, to 80 percent below 1990 levels.  On  
               April 29, 2015, Governor Brown issued Executive Order  
               B-30-15 establishing a midterm target to reduce GHG  
               emissions, by 2030, to 40 percent below 1990 levels.   


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               Neither executive order has been codified into statute.   
               While ARB retains authority under existing law to adopt a  
               variety of regulatory mechanisms to reduce greenhouse gas  
               emissions and short lived climate pollutants beyond 2020,  
               codifying a 2030 pollution reduction target provides broad  
               market certainty to businesses investing in emissions  
               reductions technologies, practices and projects, which  
               often require multi-year planning horizons to finance  
               cost-effectively?Existing law would be strengthened by  
               providing additional certainty regarding the Legislature's  
               long term commitment to decoupling economic growth from  

               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.  However, the  
               Legislature has not yet given direction to shape future  
               reduction strategies.

               Setting clear, achievable climate pollution reduction  
               targets in law and identifying priorities to guide  
               implementation will provide critical accountability, as  
               well as certainty to businesses investing for the long term  
               in California.

          4)What about cap-and-trade?  In addition to requiring ARB to  
            approve a statewide GHG emissions limit for 2030, 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  


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            auction of emissions allowances, produces revenues that are  
            invested in programs to produce additional GHG emission  

          5)Where will the emission reductions come from?  The author and  
            the committee may wish to consider restoring an amendment the  
            author agreed to when the committee approved this bill last  
            July to require ARB to report annually regarding the amounts,  
            sources, and locations of GHG reductions achieved toward the  
            statewide limits.



          350 Bay Area

          350 Sacramento

          Access to Independence

          Added Edge

          Advanced Energy Economy (AEE)

          African American Farmers


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          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



          Asthma Coalition of Log Angeles County

          Audubon California




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          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

          Bolsa Chica Land Trust

          Bonnie J. Adario Lung Cancer Foundation

          Breathe California

          Building Doctors


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          Business for Innovative Climate & Energy Policy

          C&C Development Co.


          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

          California Equity Leaders Network

          California Green Business Network


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          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 Resource Conservation Districts

          California Service Chapter, American College of Physicians

          California Ski Industry Association

          California Thoracic Society

          California Transit Association

          California Urban Forests


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          California Voices for Progress

          California Wind Energy Association

          Calpine Corporation



          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




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          Circulate San Diego

          City and County of San Francisco

          City Heights Community Development Corporation

          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


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          Clean Power Finance

          Clean Tech San Diego

          Clean Water Action

          Cleveland National Forest Foundation

          Climate Action Reserve

          Climate Parents

          Climate Ready Solutions

          Climate Resolve

          Coalition for Clean Air

          Coalition for Renewable Natural Gas

          Coastal Environmental Right Foundation

          Communitas Financial Planning

          Communications Workers of America, District 9, AFL-CIO


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          Consumers Union

          County of Los Angeles, Public Health

          County of Los Angeles, Supervisor Kuehl

          County of Los Angeles, Supervisor Ridley-Thomas

          County of Los Angeles, Supervisor Solis

          County of Santa Barbara, Board of Supervisors

          County of Ventura


          Dignity Health

          Distance Learning Consulting

          Doctors for Climate Change

          Eagle Creek

          East Bay Municipal Utility District


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          El Proyecto del Barrio, Inc.

          Endangered Habitats League

          Environment California

          Environmental Defense Action Fund (EDAF)

          Environmental Defense Fund

          Environmental Entrepreneurs


          Friends Committee on Legislation of California

          Friends of the River

          Gap, Inc.

          Grand Boulevard Initiative


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          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

          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.


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          Liberty Hill Foundation

          Los Angeles Business Council

          Los Angeles County Supervisor Hilda L. Solis



          Marin Agricultural Land Trust

          Marin Clean Energy

          Medical Advocates for Healthy Air

          Mercury Press International

          Moms Clean Air Force

          Mountains Recreation and Conservation Authority

          Move LA

          National Parks Conservation Association


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          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

          Physicians for Social Responsibility, San Francisco

          Planning and Conservation League


          Progressive Asset Management


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          Puma Springs Vineyards

          Public Health Institute

          Purple Wine & Spirits


          RC Cubed

          Regional Asthma Management and Prevention


          San Diego 350

          San Diego Housing Federation

          San Francisco Asthma Task Force

          Santa Clara County Medical Society

          Santa Clara Valley Open Space Authority

          Santa Clarita Organization for Planning and the Environment


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          Save the Redwoods League

          Sequoia Riverlands Trust

          Sidel Systems USA

          Sierra Business Council

          Sierra Club

          Silicon Valley Leadership Group


          Sonoma County Agricultural Preservation and Open Space District

          Sonoma County Asthma Coalition

          Sonoma County Water Agency

          South Coast Air Quality Management District

          Southern California Edison

          Southern California Public Power Authority


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          Southwest Wetlands 


          Sustainable North Bay

          Symantec Corporation

          Tamalpais Nature Works



          Trust for Public Lands

          U.S. Green Building Council, California

          Union of Concerned Scientists

          United States Representative, Adam Schiff

          United States Senator, Barbara Boxer

          Ventura County Board of Supervisors


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          Voices for Progress

          Wakeland Housing and Development Corporation

          Waterplanet Alliance

          West Marin Environmental Action Committee

          31 individuals


          African American Farmers of California

          Agricultural Council of California

          American Alliance Authority & Compliance

          American Alliance Drug Testing

          American Forest and Paper Association

          American Wood Council

          Apartment Association California Southern Cities


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          Apartment Association of Greater Los Angeles

          Apartment Association of Orange County

          Associated Builders and Contractors of California

          BOMA California

          Building Owners and Managers Association

          Brea Chamber of Commerce

          California Agricultural Aircraft Association

          California Apartment Association

          California Association of Nurseries and Garden Centers

          California Building Industry Association

          California Business Properties Association

          California Cattlemen's Association

          California Chamber of Commerce


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          California Concrete Pumpers Alliance

          California Construction Trucking Association

          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 Political Consulting Group

          California Small Business Association


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          California Taxpayers Association

          California Trucking Association

          Camarillo Chamber of Commerce

          Chambers of Commerce Alliance of Ventura and Santa Barbara  

          Coalition of American Latino Truckers

          East Bay Rental Housing Association

          Family Business Association

          Fullerton Chamber of Commerce

          Greater Bakersfield Chamber of Commerce

          Greater Fresno Chamber of Commerce

          Greater Riverside Chambers of Commerce

          Heavy-Haul Conference


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          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

          National Hmong American Farmers

          Nisei Farmers League

          North Orange County Chamber

          North Valley Property Owners

          Orange County Business Council

          Oxnard Chamber of Commerce


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          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

          Western Agricultural Processors Association

          Western Growers Association

          Western Plant Health Association


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          Western States Petroleum Association

          Western Trucking Alliance

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