BILL ANALYSIS
SB 295
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2009-2010 Regular Session
BILL NO: SB 295
AUTHOR: Dutton
AMENDED: April 13, 2009
FISCAL: Yes HEARING DATE: April 20, 2009
URGENCY: Yes CONSULTANT: Randy Pestor
SUBJECT : CLIMATE CHANGE
SUMMARY :
Existing law , under the California Global Warming Solutions
Act of 2006 (CGWSA):
1) Requires the California Air Resources Board (ARB) to
determine the 1990 statewide greenhouse gas (GHG) emissions
level and approve a statewide GHG emissions limit that is
equivalent to that level, to be achieved by 2020. ARB must
adopt regulations for reporting and verification of GHG
emissions, monitoring and compliance with the program, and
achieving GHG emission reductions from sources or
categories of sources by January 1, 2011 to be operative on
January 1, 2012, subject to certain requirements. (Health
and Safety Code 38500 et seq.).
2) Authorizes the ARB to adopt GHG emission limits or emission
reduction measures prior to January 1, 2011, imposing those
limits or measures prior to January 1, 2012, or providing
early reduction credit where appropriate.
3) Authorizes the Governor to adjust applicable deadlines for
regulations to the earliest feasible date after that
deadline in the event of extraordinary circumstances,
catastrophic events, or threat of significant harm. Within
10 days of invoking the adjustment period, the Governor
must provide written notification to the Legislature.
This bill :
1) Prohibits the ARB or its staff from beginning to develop
regulations to achieve GHG emission reductions until all of
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the following occur:
a) July 1, 2009, at the earliest.
b) The ARB has completed an additional peer-reviewed
study to reevaluate the evaluations made regarding the
potential economic and noneconomic benefits of the plan
for reducing GHGs, considering any peer-reviewed
comments on the original evaluations. The additional
study must include other issues (e.g., estimated annual
actual costs of recommendations and not averaged costs,
sensitivity of results to changes in key inputs).
c) The Legislative Analyst has certified that the study
has been completed.
2) Prohibits ARB from implementing regulations to achieve GHG
emission reductions until the state unemployment rate is
below 5.8% for 3 consecutive months.
3) Requires ARB to evaluate and make public the costs of each
regulation to achieve GHG emission reductions.
4) Prohibits ARB from adopting GHG emission limits or emission
reduction measures prior to January 1, 2011, applying those
limits or measures prior to January 1, 2012, or providing
early reduction credit, under the above circumstances.
5) Contains related legislative intent.
COMMENTS :
1) Purpose of Bill . According to the author, "Requiring the
ARB to re-evaluate the cost of the Scoping plan will better
allow lawmakers, businesses, and the public to understand
the true costs of implementing AB 32." The author also
asserts that "Implementing AB 32 will undoubtedly lead to
increased costs for businesses and consumers. Given the
state of California's economy, now is not the time to
introduce costly new regulations."
In response to these concerns, SB 295 prohibits ARB from
enacting regulations to achieve GHG emission reductions
until existing studies are reevaluated, new studies are
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undertaken, and the unemployment rate reaches 5.8%. Costs
of each regulation must be evaluated and made public, and
ARB is prohibited from adopting GHG emission limits or
emission reduction measures, applying those limits or
measures, or providing early reduction credit, prior to the
due dates.
2) Addressing climate change . Climate change refers to
long-term changes in temperature, precipitation, wind
patterns and other parts of earth's climate system. The
Intergovernmental Panel on Climate Change (IPCC) defines
climate change as "any change in climate over time, whether
due to natural variability or as a result of human
activity." For some time, scientific research increasingly
attributes these climate changes to GHGs, especially those
generated from use of fossil fuels. Scientists indicate
that the earth is warming faster than any time in the
previous 1,000 years, and the 10 warmest years of the last
century occurred in the last 15 years. A rise in
temperature accompanied by climate change affects how
organisms live, adapt, and survive.
AB 4420 (Sher) Chapter 1506, Statutes of 1988, required the
State Energy Resources Conservation and Development
Commission (CEC), in consultation with certain entities, to
conduct a study and report to the Legislature and the
Governor by June 1, 1990, on how climate change may affect
the state's energy supply and demand, economy, environment,
agriculture, and water supplies. The study also required
recommendations for avoiding, reducing, and addressing
related impacts - and required the CEC to coordinate the
study and any research with federal, state, academic, and
industry research projects.
AB 4420 led to two reports: "The Impacts of Global Warming on
California" (1989) and "Climate Change Potential Impacts
and Policy Recommendations" (1991). According to the
state's Climate Action Team, "The political discussion
generated from these reports helped pave the way for
implementation of policies to address climate change."
SB 1771 (Sher) Chapter 1018, Statutes of 2000, required the
Secretary of the Resources Agency to establish the
California Climate Change Registry. SB 1771 also required
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the CEC, in consultation with certain entities, to update
the GHG emissions inventory and to develop data and
information on climate change - and to provide certain
entities and interest groups with information on the costs,
technical feasibility, and demonstrated effectiveness of
methods for reducing or mitigating production of GHGs from
in-state sources. SB 1771 required the inventory to be
updated every five years. SB 527 (Sher) Chapter 769,
Statutes of 2001, revised certain California Climate Change
Registry responsibilities.
Governor Schwarzenegger issued Executive Order (EO) S-3-05
June 1, 2005, to establish emission reduction targets for
the state, require the Secretary for Environmental
Protection to coordinate oversight efforts with certain
other entities to meet the targets, and set various
reporting requirements.
AB 32 (Nunez/Pavley) Chapter 488, Statutes of 2006, requires
the ARB to determine the 1990 statewide greenhouse gas
(GHG) emissions level and approve a statewide GHG emissions
limit that is equivalent to that level, to be achieved by
2020 - and sets related requirements (see Summary above).
In implementing AB 32, ARB adopted the first list of early
action measures June 21, 2007, and adopted an augmented
list of early action measures October 25, 2007. Mandatory
reporting regulations for GHGs were adopted and the 2020
GHG emissions target were set December 6, 2007. The
Scoping Plan was adopted December 12, 2008, and ARB
rulemaking continues in 2009 and 2009. First early action
measures take effect January 1, 2010, major GHG reduction
rulemaking concludes January 1, 2011, with rules taking
effect January 1, 2012.
3) Scoping Plan analysis . In response to questions from
Assemblymembers Niello and Villines to Legislative
Analyst's Office (LAO) regarding the AB 32 Scoping Plan and
economic analysis of that plan. In a March 9, 2009, report
to the Assembly Natural Resources Committee, the LAO
recommended: a) legislative oversight "to ensure that AB
32 is implemented cost-effectively and efficiently, and
that the gaps and weaknesses in the economic analysis that
we have identified are addressed;" b) ARB take advantage of
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its economic analysis and modeling "to inform the make-up
of the scoping plan in terms of the mix of measures and
relative importance of particular measures;" and c) the
Legislature "provide policy direction on the use of
market-based compliance mechanisms."
4) Costs of inaction . Delays in acting on climate change can
also result in costs. A recent Climate Action Team (CAT)
draft assessment on climate change provides analyses on
climate change impacts relating to various matters, such as
warming trends, precipitation, sea-level rise, agriculture,
forestry, water resources, and public health.
For example, regarding sea level rise the report notes that
"Sea level measured over several decades at California tide
gage stations has risen at a rate of about 17 cm (7 inches)
per century. The sea-level rise projections in the 2008
Impacts Assessment indicate that the rate and total
sea-level rise in future decades may increase substantially
above the recent historical rates. The 2008 estimates
represent a significant departure from those in the 2006
CAT report." According to the report, "By 2050, sea-level
rise could range from 30 to 45 cm (11 to 18 inches) higher
than in 2000, and by 2100, sea-level rise could be 60 to
140 cm (23 to 55 inches) higher than in 2000. As sea level
rises, there will be an increased rate of extreme high
sealevel events, which can occur when high tides coincide
with winter storms and their associated high wind wave and
beach run-up conditions. The draft CAT report notes that
"analysis reveals that $100 billion of property and 475,000
people are located in Bay and open coast areas vulnerable
to inundation in 2099. However, risk is not evenly
distributed among the counties in the San Francisco Bay,
with San Mateo and Alameda counties having 40 percent of
assets at risk, the greatest amount in the Bay Area.
Marin, Santa Clara, and San Francisco counties are also
exposed to a high degree of risk; exposure to risk in these
counties is higher than in all other counties along the
Pacific coast, with the exception of Orange County.
Exposure to risk in Sonoma and Napa counties is relatively
modest. While all sectors are vulnerable to the impacts
from sea-level rise, 70 percent of all assets at risk are
residential, followed by the commercial sector with 20
percent. In addition to buildings and their contents, a
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wide range of other critical infrastructure, such as roads,
hospitals, schools, emergency facilities, water and
wastewater treatment plants, and others will also be at
increased risk of flooding. Continued development in
vulnerable areas would put additional assets and people at
risk."
5) Support and opposition concerns . According to the author
and sponsor, "California lawmakers drafted AB 32 with good
intentions, attempting to lower [GHG] emissions. In
today's poor economic condition, the legislation will exact
damaging unintended consequences to the state's vulnerable
business community." Other supporters generally cite
current economic conditions and the need for additional
economic analysis of AB 32 measures. According to San
Bernardino County, "With the current recession deepening
and many of the engines and people of our economy
struggling, it is the Board's position that now is not the
time to force new regulations that can exacerbate the
problems of a recessionary period through higher compliance
costs." CalChamber believes additional economic analysis
should guide ARB, but does not want delays in
implementation of AB 32.
In opposing SB 295, the Planning and Conservation League (PCL)
notes that "California's plan to reduce [GHG] emissions
pursuant to AB 32 is our most promising engine to
strengthen our economy by reducing energy consumption and
generating California-based jobs." PCL cites an ARB
economic analysis showing "that AB 32 will boost the
state's economy by $27 billion and create 100,000 new jobs"
and a UC Berkeley economic analysis showing "AB 32 will
increase the Gross State Product (GSP) by about $76
billion, increase household incomes by up to $48 billion,
and create as many as 403,000 new energy efficiency and
climate driven jobs." The California Teachers Association
notes the need to "finally address this serious problem
without further delay," and cites an "up-tick in the
economy with new 'green jobs.'"
SOURCE : Black Chamber of Commerce
SUPPORT : American GI Forum of California, Cal-Tax,
California Alliance for Retired Persons,
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California Small Business Association, Delta
Construction Co., Inc., Greater Riverside
Chambers of Commerce, Lake Forest, Inland
Empire Division of the League of California
Cities, Metal Finishing Association of Northern
California, Metal Finishing Association of
Southern California, Supervisor Ray Nutting (El
Dorado County District 2), Ray Susan Cash (Inyo
County Supervisor, District 2), Tony Oliveira,
(Kings County Supervisor, District 4),
Supervisor Ronn Dominici (Madera District 2),
Orange County, Supervisor Steve Lambert (Butte
County District 4), San Bernardino County
OPPOSITION : California Teachers Association, Planning and
Conservation League