BILL ANALYSIS Ó
SB 32
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Date of Hearing: June 27, 2016
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
SB
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
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.
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
2030.
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).
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
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
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 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
justice.
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
pollution.
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
reductions.
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.
REGISTERED SUPPORT / OPPOSITION:
Support
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
Annie's
Apricus
Asthma Coalition of Log Angeles County
Audubon California
Autodesk
Azul
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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
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.
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
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
CALPIRG
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
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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
Covanta
Dignity Health
Distance Learning Consulting
Doctors for Climate Change
Eagle Creek
East Bay Municipal Utility District
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eBay
Ecogate
El Proyecto del Barrio, Inc.
Endangered Habitats League
Environment California
Environmental Defense Action Fund (EDAF)
Environmental Defense Fund
Environmental Entrepreneurs
EtaGen
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
Lyft
MAAC
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
Power2Sustain
Progressive Asset Management
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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
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
SmartWool
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
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
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
Opposition
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
Counties
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
SBAPA
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)
319-2092