BILL ANALYSIS Ó
SB 32
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 32
(Pavley) - As Amended June 30, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires the Air Resources Board (ARB) to approve
statewide greenhouse gas (GHG) emissions limits equivalent to
40% below 1990 levels by 2030. Specifically, this bill:
1)Requires ARB to approve the 2030 emission limit in a public
hearing, based on the best available scientific,
technological, and economic assessments.
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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)Requires ARB to annually report to the Legislature, beginning
January 1, 2018, on GHG emissions reductions achieved towards
the 2030 limit.
4)States that the provisions of the bill are serverable.
5)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.
6)Provides the provisions of this bill are only operative if AB
197 (E. Garcia) is enacted and becomes law on or before
January 1, 2017.
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.
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2)Minor, absorbable costs for the ARB to set the 2030 target
(Cost of Implementation Account).
COMMENTS:
1)Purpose. According to the author, there are three major
problems this bill is attempting to solve: a) dangerous
climate pollution; b)an uncertain investment environment for
clean energy businesses; and c) an inequitable distribution of
both the consequences of climate change and the benefits of
the state's policy to address it. This bill addresses those
concerns by setting an achievable target to provide
accountability and certainty.
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 to 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 Greenhouse Gas Reduction Fund (GGRF)
available for appropriation by the Legislature.
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
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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. Consistent with this recommendation, this bill
provides a mid-term statewide emission reduction target of 40%
below 1990 levels by 2030.
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 the implementation of SB 350 (increase retail
sales of renewable electricity to 50% by 2030, and double
the energy efficiency savings in electricity and natural
gas end uses by 2030). 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 on GHG emissions. 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 vehicle miles traveled (VMT) and
increased numbers of zero-emission and plug-in vehicles by
2030. It would not continue cap-and-trade regulation
post-2020.
Concept 4 includes the same complementary policies as
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Concept 1, but in lieu of a cap-and-trade program, suggests
a carbon tax.
4)Beyond 20-20. 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. 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.
ARB staff is currently developing a proposal to amend the
cap-and-trade regulation to extend the program beyond 2020,
broaden the program through linkages with other jurisdictions,
comply with the federal Clean Power Plan, and generally
enhance ARB's ability to oversee and implement the regulation.
ARB plans to consider the amendments at a hearing in
September 2016 and vote at a hearing in spring 2017.
ARB contends the amendments are consistent with their existing
authority to meet the 2020 statewide GHG emissions limit and
maintain and continue emissions reductions beyond 2020. ARB
views a post-2020 Cap-and-Trade program as essential to
meeting these requirements.
In contrast, Legislative Counsel Diane Boyer-Vine issued an
opinion in April, 2016, stating that the governor, and by
extension the ARB, do not have the authority to extend the AB
32 past 2020 without legislative action.
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5)Prior Hearing in this Committee. This committee passed a more
expansive version of this bill on August 28, 2015 that
included 2050 GHG emissions reduction targets and other
provisions relating to job growth, public health and regional
and international collaboration. This bill failed on the
Assembly floor on September 8, 2015, and was amended and
returned to Assembly Natural Resources for further action.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081