AB 32 PROPOSED IMPLEMENTATION PLAN
SUMMARY
What is AB 32?
AB 32, the Global Warming Solutions Act of 2006, is California’s landmark global warming legislation. It will reduce California greenhouse gas emissions (GHGs) to 1990 levels by 2020 and to 80 percent below 1990 levels by 2050.
Agency in charge
and timeline
The California Air Resources Board (ARB) is the government agency charged with determining how the AB 32 goals will be reached. On June 26, 2008, ARB released its AB 32 draft “scoping plan” – the plan describing the measures that will be used to reach AB 32’s GHG reduction goals for 2020. The plan aims to reduce California’s GHG emissions by 169 million metric tons of carbon dioxide equivalent (MMTCO2E) thru a variety of strategies, including sector-specific regulations, market mechanisms, voluntary measures, fees, incentives and other policies and programs.
ARB will hold a series of statewide workshops and accept formal written comments in July and August 2008 to get public comment on its draft scoping plan. The agency will also accept formal written comments thru its website. Based on the comments, ARB staff will revise the draft plan and release a final staff recommendation in October 2008. The Air Resources Board members will vote on the final plan in November. It will actually go into effect in 2012, after several more years of refining the implementation plan. Some “early action measures” will be implemented before 2012.
What’s in the draft
scoping
plan?
Sector-specific
measures:
The sectors that will
be most
significantly impacted by proposed measures are energy, construction,
industry
and transportation.
ENERGY SECTOR: Major
proposed
measures include increasing California’s renewables portfolio standard
(RPS)
from 20% to 33%. The RPS requires that California utilities source 33%
of the
electricity they deliver from renewable resources such as wind, solar,
geothermal and biomass. There is also a measure to encourage the
installation
of solar electric systems, in line with the Million Solar Roofs program.
CONSTRUCTION SECTOR:
There are
measures to increase building and appliance efficiency measures,
including a
major energy efficiency program for state buildings; encourage combined
heat
and power systems; implement stringent efficiency standards for new
construction, and incentivize the installation of solar water heating
systems.
TRANSPORTATION SECTOR:
Major
proposed measures include implementing the Pavley standards (AB 1493),
which
would reduce GHG emissions from passenger vehicles by about 22 percent
by 2012
and about 30 percent by 2016; and moving forward with a Low Carbon Fuel
Standard, which would reduce the carbon content of California’s
transportation
fuels 10 percent by 2020. There are also several early action measures
that target
goods movement, including a measure to improve the efficiency of
heavy-duty
tractors and trailers and a measure to reduce emissions at California
ports.
The only major public transit measure proposes a high speed rail system
between
Northern and Southern California.
INDUSTRY SECTOR: For a broad set of industries including
manufacturing, gas and oil refining, and others, the main proposed
measure thus
far is to conduct energy efficiency and co-benefits audits and require
investments
in cost-effective efficiency measures determined by the audits. These sectors will also be covered by the
proposed cap and trade policy (see below). A key issue that impacts
these
industries is whether ARB will count the emissions produced by
out-of-state
companies whose products are consumed in California. If it does not,
the result
could be a “leakage” of jobs and carbon emissions out of California to
states
and countries with lower environmental standards.
OTHER SECTORS: ARB also proposes measures that target agriculture, forests, high global warming potential greenhouse gases (such as SF6), recycling and waste, and the water sector. ARB also proposes 30% minimum emissions reduction by the state government, and plans to work with local governments on measures under their jurisdiction, including building codes, land use, and transit. For a detailed list of the proposed measures, see the AB 32 draft scoping plan at http://www.arb.ca.gov/cc/scopingplan/document/draftscopingplan.htm
Multi-sector
measures: cap and
trade program
ARB staff propose the implementation of a cap and trade program in California, to be designed and administered in collaboration with other Western States in the US and Canada that are participating in the Western Climate Initiative. The cap and trade program will result in about 20% of the total AB 32 emissions reductions – or 35 out of the total 169 MMTCO2E. Capped sectors would include electricity, transportation fuels, natural gas and large industrial sources.
A cap and trade program is a market mechanism that allows the buying and selling of carbon allowances – allowances that give a firm the right to emit carbon into the atmosphere – by the private sector.
One key issue still to be determined by ARB is whether carbon allowances will be given away for free to carbon emitters, auctioned for a fee or some mix of the two approaches. The more allowances that are auctioned, the more revenues will be generated for the state. A recent estimate of revenues from a cap and trade program is $9 billion per year. Another controversial issue concerns the extent to which companies use “offsets” as part of their emissions compliance. A company can “offset” its own emissions by investing in a project located outside the capped sectors that reduces greenhouse gas emissions, such as a wind farm or solar energy project outside the state. Regarding offsets, the questions are, should they be allowed, to what extent, and should they be limited to California?
How to get involved
Attend a draft scoping
plan
workshop and make a public comment: July 14 (Fresno), July 17
(Sacramento),
August 8 (San Jose), August 15 (San Diego). Details at http://www.arb.ca.gov/cc/scopingplan/meetings/meetings.htm
Submit a comment to
ARB thru its
website: http://www.arb.ca.gov/cc/scopingplan/spcomment.htm
Contact the CA Labor
Federation:
Peter Cooper, 916-444-3676 x13, pcooper@calaborfed.org.