CARB Releases Updated AB 32 Scoping Plan; Approval Expected in December

AB 32, also known as the California Global Warming Solutions Act of 2006, is on the cutting edge of state and federal legislation addressing cimate change and greenhouse gas emissions. Two years after California's legislation was signed by Governor Schwarzenegger, AB 32 has entered the implementation process, with the California Air Resources Board having released draft and final versions of the AB 32 Scoping Plan for approval on December 11th. With this landmark legislation expected to engage every sector of the state's economy, VerdeXchange News is pleased to present the following excerpts from the CARB Scoping Plan's Executive Summary.

EXECUTIVE SUMMARY

…ARB must develop a Scoping Plan outlining the State’s strategy to achieve the 2020 greenhouse gas emissions limit. This Proposed Scoping Plan, developed by ARB in coordination with the Climate Action Team (CAT), proposes a comprehensive set of actions designed to reduce overall greenhouse gas emissions in California, improve our environment, reduce our dependence on oil, diversify our energy sources, save energy, create new jobs, and enhance public health. It will be presented to the Board for approval at its meeting in December 2008. The measures in the Scoping Plan approved by the Board will be developed over the next two years and be in place by 2012.

Reduction Goals

This plan calls for an ambitious but achievable reduction in California’s carbon footprint.
Reducing greenhouse gas emissions to 1990 levels means cutting approximately 30 percent from business-as-usual emission levels projected for 2020, or about 15 percent from today’s levels. On a per-capita basis, that means reducing our annual emissions of 14 tons of carbon dioxide equivalent for every man, woman and child in California down to about 10 tons per person by 2020. This challenge also presents a magnificent opportunity to transform California’s economy into one that runs on clean and sustainable technologies, so that all Californians are able to enjoy their rights in the future to clean air, clean water, and a healthy and safe environment.

Significant progress can be made toward the 2020 goal relying on existing technologies and improving the efficiency of energy use. A number of solutions are “off the shelf,” and many—especially investments in energy conservation and efficiency—have proven economic benefits. Other solutions involve improving our state’s infrastructure, transitioning to cleaner and more secure sources of energy, and adopting 21st century land use planning and development practices.

Proposed Scoping Plan Recommendations

The recommendations in this plan were shaped by input and advice from ARB’s partners on the Climate Action Team, as well as the Environmental Justice Advisory Committee (EJAC), the Economic and Technology Advancement Advisory Committee (ETAAC), and the Market Advisory Committee (MAC). Like the Draft Scoping Plan, the strength of this plan lies in the comprehensive array of emission reduction approaches and tools that it recommends.

Key elements of California’s recommendations for reducing its greenhouse
gas emissions to 1990 levels by 2020 include:

• Expanding and strengthening existing energy efficiency programs as well as building and appliance standards;
• Achieving a statewide renewables energy mix of 33 percent;
• Developing a California cap-and-trade program that links with other Western Climate Initiative partner programs to create a regional market system;
• Establishing targets for transportation-related greenhouse gas emissions for regions throughout California, and pursuing policies and incentives to achieve those targets;
• Adopting and implementing measures pursuant to existing State laws and policies, including California’s clean car standards, goods movement measures, and the Low Carbon Fuel Standard; and
• Creating targeted fees, including a public goods charge on water use, fees on high global warming potential gases, and a fee to fund the administrative costs of the State’s long-term commitment to AB 32 implementation.

After Board approval of this plan, the measures in it will be developed and adopted through the normal rulemaking process, with public input.

Key Changes

This plan is built upon the same comprehensive approach to achieving reductions as the draft plan. However, as a result of the extensive public comment we received, this plan includes a number of general and measure-specific changes. The key changes and additions follow.

Additional Reports and Supplements

1. Economic and Public Health Evaluations: This plan incorporates an evaluation of the economic and public health benefits of the recommended measures. These analyses follow the same methodology used to evaluate the Draft Scoping Plan.

2. CEQA Evaluation: This plan includes an evaluation of the potential environmental impacts of the Proposed Scoping Plan under the California Environmental Quality Act (CEQA).

Programmatic Changes

1. Margin of Safety for Uncapped Sectors: The plan provides a ‘margin of safety,’ that is, additional reductions beyond those in the draft plan to account for measures in uncapped sectors that do not, or may not, achieve the estimated reduction of greenhouse gas emissions in this plan. Along with the certainty provided by the cap, this will ensure that the 2020 target is met.

2. Focus on Labor: The plan includes a discussion of issues directly related to California’s labor interests and working families, including workforce development and career technical education. This additional element reflects ARB’s existing activities and expanded efforts by State agencies, such as the Employment Development Department, to ensure that California will have a green technology workforce to address the challenges and opportunities presented by the transition to a clean energy future.

3. Long Term Trajectory: The plan includes an assessment of how well the recommended measures put California on the long-term reduction trajectory needed to do our part to stabilize the global climate.

4. Carbon Sequestration: The plan describes California’s role in the West Coast Regional Carbon Sequestration Partnership (WESTCARB), a public-private collaboration to characterize regional carbon capture and sequestration opportunities. In addition, the plan expresses support for near-term development of sequestration technology. This plan also acknowledges the important role of terrestrial sequestration in our forests, rangelands, wetlands, and other land resources.

5. Cap-and-Trade Program: The plan provides additional detail on the proposed cap-and-trade program including a discussion regarding auction of allowances, a discussion of the proposed role for offsets, and additional detail on the mechanisms to be developed to encourage voluntary early action.

6. Implementation: The plan provides additional detail on implementation, tracking and enforcement of the recommended actions, including the important role of local air districts.

Changes to Specific Measures and Programs

1. Regional Targets: ARB re-evaluated the potential benefits from regional targets for transportation-related greenhouse gases in consultation with regional planning organizations and researchers at U.C. Berkeley. Based on this information, ARB increased the anticipated reduction of greenhouse gas emissions for Regional Transportation-Related Greenhouse Gas Targets from 2 to 5 million metric tons of CO2 equivalent (MMTCO2E).

2. Local Government Targets: In recognition of the critical role local governments will play in the successful implementation of AB 32, ARB added a section describing this role. In addition, ARB recommended a greenhouse gas reduction goal for local governments of 15 percent below today’s levels by 2020 to ensure that their municipal and community-wide emissions match the State’s reduction target.

3. Additional Industrial Source Measures: ARB added four additional measures to address emissions from industrial sources. These proposed measures would regulate fugitive emissions from oil and gas recovery and transmission activities, reduce refinery flaring, and require control of methane leaks at refineries. We anticipate that these measures will provide 1.5 MMTCO2E of greenhouse gas reductions.

4. Recycling and Waste Re-Assessment: In consultation with the California Integrated Waste Management Board, ARB re-assessed potential measures in the Recycling and Waste sector. As a result of this review, ARB increased the anticipated reduction of greenhouse gas emissions from the Recycling and Waste Sector from 1 to 10 MMTCO2E, incorporating measures to move toward high recycling and zero-waste.

5. Green Building Sector: This plan includes additional technical evaluations demonstrating that green building systems have the potential to reduce approximately 26 MMTCO2E of greenhouse gases. These tools will be helpful in reducing the carbon footprint for new and existing buildings. However, most of these greenhouse gas emissions reductions will already be counted in the Electricity, Commercial/Residential Energy, Water or Waste sectors and are not separately counted toward the AB 32 goal in this plan.

6. High Global Warming Potential (GWP) Mitigation Fee: Currently many of the chemicals with very high Global Warming Potential (GWP)—typically older refrigerants and constituents of some foam insulation products—are relatively inexpensive to purchase. ARB includes in this plan a Mitigation Fee measure to better reflect their impact on the climate. The fee is anticipated to promote the development of alternatives to these chemicals, and improve recycling and removal of these substances when older units containing them are dismantled.

7. Modified Vehicle Reductions: Based on current regulatory development, ARB modified the expected emissions reduction of greenhouse gases from the Heavy- Duty Vehicle Greenhouse Gas Emission Reduction (Aerodynamic Efficiency) measure and the Tire Inflation measure. The former measure is now expected to achieve 0.9 MMTCO2E while the latter is now expected to achieve 0.4 MMTCO2E.

8. Discounting Low Carbon Fuel Standard Reductions: ARB modified the expected emission reductions from the Low Carbon Fuel Standard to reflect overlap in claimed benefits with California’s clean car law (the Pavley greenhouse gas vehicle standards). This has the result of discounting expected reduction of greenhouse gas emissions from the Low Carbon Fuel Standard by approximately 10 percent.

AB 32: Evaluating the Economic Effects

The economic analysis of this plan indicates that implementation of the recommended strategies to address global warming will create jobs and save individual households money. The analysis also indicates that measures in the plan will position California to move toward a more secure, sustainable future where we invest heavily in energy efficiency and clean technologies.
The economic analysis indicates that implementation of that forward-looking approach also creates more jobs and saves individual households more money than if California stood by and pursued an unacceptable course of doing nothing at all to address our unbridled reliance on fossil fuels.

Specifically, analysis of the Proposed Scoping Plan indicates that projected economic benefits in 2020 compared to the business-as-usual scenario include:
• Increased economic production of $33 billion
• Increased overall gross state product of $7 billion
• Increased overall personal income by $16 billion
• Increased per capita income of $200
• Increased jobs by more than 100,000

Furthermore, the results of the economic analysis may underestimate the economic benefits of the plan since the models that were used do not account for savings that result from the flexibility provided under market-based programs.

Moving Beyond 2020

AB 32 requires a return to 1990 emission levels by 2020. The Proposed Scoping Plan is designed to achieve that goal. However, 2020 is by no means the end of California’s journey to a clean energy future. In fact, that is when many of the strategies laid out in this plan will just be kicking into high gear.

Take, for example, the regional transportation-related greenhouse gas emission targets. In order to achieve the deep cuts in greenhouse gas emissions we will need beyond 2020 it will be necessary to significantly change California’s current land use and transportation planning policies. Although these changes will take time, getting started now will help put California on course to cut statewide greenhouse gas emissions by 80 percent in 2050 as called for by Governor Schwarzenegger.

Similarly, measures like the cap-and-trade program, energy efficiency programs, the California clean car standards, and the renewables portfolio standard will all play central roles in helping California meet its 2020 reduction requirements. Yet, these strategies will also figure prominently in California’s efforts beyond 2020. Some of these measures, like energy efficiency programs and the renewables portfolio standard, have already delivered greenhouse gas emissions reduction benefits that will expand over time. Others, like the cap-and-trade program, will put in place a foundation on which to build well into the future. All of these measures, and many others in the plan, will ensure that California meets its 2020 target and is positioned to continue its international role as leader in the fight against global warming to 2050 and beyond.

A Shared Challenge

Californians are already responding to the challenge of reducing greenhouse gas emissions. Over 120 California cities and counties have signed on to the U.S. Conference of Mayors Climate Protection Agreement and many have established offices of climate change and are developing comprehensive plans to reduce their carbon footprint. Well over 300 companies, municipalities, organizations and corporations are members of the California Climate Action Registry, reporting their greenhouse gas emissions on an annual basis. Many other businesses and corporations are making climate change part of their fiscal and strategic planning. ARB encourages these initial efforts and has set in place a policy to support and encourage other voluntary early reductions.

Successful implementation of AB 32 will depend on a growing commitment by a majority of companies to include climate change as an integral part of their planning and operations. Individuals and households throughout the state will also have to take steps to consider climate change at home, at work and in their recreational activities. To support this effort, this plan includes a comprehensive statewide outreach program to provide businesses and individuals with the widest range of information so they can make informed decisions about reducing their carbon footprints.

Californians will not have to wait for decades to see the benefits of a low carbon economy. New homes can achieve a near zero-carbon footprint with better building techniques and existing technologies, such as solar arrays and solar water heaters. Many older homes can be retrofitted to use far less energy than at present. A new generation of vehicles, including plug-in hybrids, is poised to appear in dealers’ showrooms, and the development of the infrastructure to support hydrogen fuel cell cars continues. Cities and new developments will be more walk able, public transport will improve, and high-speed rail will give travelers a new clean transportation option.

That world is just around the corner. What lies beyond is even more exciting. Where will California be in 2050? By harnessing the ingenuity and creativity of our society and sparking the imagination of the next generation of Californians, California will make the transition to a clean-energy, low-carbon society and become a healthier, cleaner and more sustainable place to live. This plan charts a course toward that future.

ARB invites comment and input from the broadest array of the public and stakeholders as we move forward over the next two years to develop the individual measures, and develop the policies that will move us toward sustainable clean energy and away from fossil fuels. Your participation will help craft the mechanisms and measures to make this plan a reality. This is California’s plan and together, we need to make the necessary changes to address the greatest environmental challenge we face. As Governor Schwarzenegger stated when he signed AB 32 into law two years ago, “We owe our children and we owe our grandchildren. We simply must do everything in our power to fight global warming before it is too late.”