BILL ANALYSIS Ó
SB 32
Page 1
SENATE THIRD READING
SB
32 (Pavley)
As Amended June 30, 2016
Majority vote
SENATE VOTE: 24-15
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+-----------------------+-------------------|
|Natural |6-2 |Williams, Cristina |Hadley, Harper |
|Resources | |Garcia, Gomez, | |
| | |McCarty, Mark Stone, | |
| | |Wood | |
| | | | |
|----------------+-----+-----------------------+-------------------|
|Appropriations |11-4 |Gonzalez, Bloom, |Bigelow, Chang, |
| | |Bonilla, Bonta, |Jones, Obernolte |
| | |Eggman, Eduardo | |
| | |Garcia, Quirk, | |
| | |Santiago, Weber, Wood, | |
| | |McCarty | |
| | | | |
| | | | |
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SB 32
Page 2
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. Specifically, 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 short-lived
climate pollutants (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
(Núñez), Chapter 488, Statutes of 2006, to reflect the
addition of a 2030 target, except for the market-based
compliance mechanism authority.
4)Require ARB to prepare an annual report detailing the amounts,
sources, and locations of GHG emissions reductions achieved
toward the statewide emissions limits.
5)States that the provisions of the bill are severable.
6)Provides the bill becomes operative only if AB 197 (Eduardo
Garcia) of the current legislative session is enacted and
becomes effective on or before January 1, 2017.
EXISTING LAW:
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1)Requires ARB, pursuant to California Global Warming Solutions
Act of 2006 [AB 32 (Núñez), 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,
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 SLCPs in the state.
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
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 ARB to set the 2030 target (Cost
of Implementation Account).
COMMENTS: 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
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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 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 in 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
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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.
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% 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, 2016, 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 vehicle-miles traveled (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 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
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would not include a statewide limit on GHG emissions, and it is
unknown how the monies generated by a carbon tax would be used.
According to the author, this bill attempts to solve three major
problems: 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.
Analysis Prepared by:
Lawrence Lingbloom / NAT. RES. / (916) 319-2092
FN:
0004077