Briefing Report: Scope of AB 32 Scoping Plan Update is Far-Reaching

Wednesday, January 22, 2014

According to the World Resources Institute’s most recent data, California produces roughly 1 percent of worldwide greenhouse gas (GHG) emissions.i  Nonetheless, the Air Resources Board (ARB) is currently in the process of updating the AB 32 Scoping Plan with recommendations on ways to further slash the state’s emissions.  Like the initial 2008 Scoping Plan, the Scoping Plan Update lays out targets for virtually every sector of the economy, including automobiles, refineries, buildings and landfills.  If approved, the updated plan will not only serve as a guide but is also intended to aid the state in measuring our progress in reducing GHG emissions.

The Initial Plan

The California Global Warming Solutions Act of 2006, established an overall goal to reduce emissions to 1990 levels by the year 2020.ii The legislation directed the ARB to develop a Scoping Plan “for achieving the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions from sources or categories of sources of greenhouse gases.”  In theory, the Scoping Plan is intended to serve as a blueprint for achieving the required reductions.

Key elements of the initial Scoping Plan includediii:

  • Expanding energy efficiency programs, including building and appliance standards
  • Increasing electricity generation from renewable resources to at least 33 percent of the statewide electricity mix by 2020iv
  • Establishing targets for transportation-related GHG emissions for regions throughout California, and pursue policies and incentives to achieve those targetsv
  • Implementing California’s clean car standards, goods movement measures, and the Low Carbon Fuel Standard
  • Developing a California cap-and-trade program

AB 32 requires the Scoping Plan be updated at least once every five years, a process that is currently underway.

So What’s In The Update?

On October 1, 2013, the ARB released the first draft of its AB 32 Climate Change Scoping Plan Update for public review and comment (Discussion Draft).  The Discussion Draft focuses on three issues: operation of the program over the past five years, what is needed to achieve the requirement of reducing GHG emissions to 1990 levels by 2020, and what is needed to continue reducing GHG emissions to meet long-term goals.  It focuses on six areas comprising major components of the State’s economy: energy, transportation and fuels, agriculture, water, waste management, and natural and working lands.  These “topic areas were chosen based on their ability to address concerns that underlie all sectors of the economy.  As such, each of the focus areas are not contained to a single economic sector, but have far-reaching impacts within many sectors.”vi

To meet the 2020 goal, the Discussion Draft identifies the need for increased use of renewable energy, continued improvements in energy efficiency, and increased use of zero-emission vehicles powered by electricity or hydrogen.  It also emphasizes reducing high global warming potential chemicals through ARB's Refrigerant Management Program and reducing short-lived climate pollutants such as black carbon, diesel smoke, and methane.

The draft also contains some important new policy recommendations, including the call for a 2030 midterm target for statewide emissions in order to drive progress toward a 2050 goal.  The 2050 goal is not in statute, and was instead established by two Executive Orders which call for California to reduce GHG emissions to 80 percent below 1990 levels by 2050.vii  The Governor’s 2013 Environmental Goals and Policy Report also calls for a midterm emission reduction target to bridge the gap between 2020 and 2050.viii

In order to meet the longer term 2050 goal, the Discussion Draft stresses that California will need to accelerate the pace of emission reductions achieved over the coming decades.  Specifically, “emissions from 2020 to 2050 will have to decline at more than twice the rate needed to reach the 2020 emissions limit.”  Further, “…natural gas use will have to be mostly phased out…” in order to meet the 2050 target.  In line with this statement, the Discussion Draft encourages the ARB and the California Energy Commission (CEC) to “…analyze alternatives to the use of natural gas for heating, cooking, and industrial processes, such as electrification or other non-GHG emitting alternatives, and assess the potential economic and technological barriers to switching to these alternatives.”ix

The following table contains some of the recommendations from the Discussion Draft:

Sector                                                                                                      Recommended Actions

Energy
(A full list of the recommendations can be found on pg. 85 of the Discussion Draft)

  • Develop efficiency standards for new and existing residential and commercial buildings and appliances.
  • Develop appropriate financing systems or mechanisms for energy efficiency retrofits and clean energy investment markets.
  • Energy agencies should develop a framework for the use of demand response as an electricity grid services provider.
  • Evaluate the potential for expanding or revising the Renewable Portfolio Standard to maximize GHG reductions.
  • Expand and upgrade the transmission and distribution system.
  • Decarbonize natural gas generation via carbon capture, use, and storage or other mechanisms.

Transportation, Land Use, Fuels, and Infrastructure
(A full list of the recommendations can be found on pgs. 90-91 of the Discussion Draft)

  • Support growing markets for clean passenger transportation, advanced technology trucks and equipment; low carbon transportation fuels and energy.
  • Provide funding for advanced technology freight demonstration projects and pilot deployments of vehicles and equipment.
  • Support investment in active transportation and other vehicle miles traveled reduction strategies.
  • Support development of large-scale renewable and low carbon fuel production facilities.
  • Evaluate reactivity of and leak rates from compressed natural gas/liquefied natural gas storage/vehicles and the ability of natural gas infrastructure to be utilized for hydrogen distribution.
  • Assess the role of natural gas in the low carbon transportation fuel future and evaluate the benefits and availability of renewable transportation fuels.

Agriculture
(A full list of the recommendations can be found on pgs. 93-94 of the Discussion Draft)

  • Conduct research to understand and quantify the impacts of practices to reduce direct methane emissions from livestock manure and digestive processes.
  • Develop programs and inter-agency efforts to promote and incentivize precision irrigation, monitoring of water use, maximization of existing agricultural pump efficiency, and replacement of diesel agricultural water pumps with electric pumps, to reduce GHG emissions from water use in agricultural operations.
  • Develop programs to promote the use of the clean and efficient equipment for agricultural operations and fuel equipment with on-site or nearby generated fuels such as biomass and biogas.
  • Evaluate and leverage existing and ongoing State agency efforts for the reporting of synthetic fertilizer usage in agriculture to provide baseline emissions and guide the development of potential emission reduction measures.

Water
(A full list of the recommendations can be found on pgs. 96-97 of the Discussion Draft)

  • Increase non-traditional water supplies and make water and wastewater conveyance, treatment, and distribution systems more energy efficient.
  • Provide regional funding for local water management plans, water and energy efficiency projects, and climate change mitigation and adaptation activities.
  • Update and implement new water-related energy conservation measures and energy efficiency standards for water use.
  • Assess impacts of decoupled water rates and develop rate and revenue structures to decouple municipal utility programs.
  • Develop pricing and rate structure policies that promote water use efficiency.
  • Modify State and regional water board policies, permits, and monitoring guidelines to reflect regional climate change scenarios and other best-available climate science.

Waste
(A full list of the recommendations can be found on pg. 99 of the Discussion Draft)

  • Consider regulatory actions to further reduce GHG emissions and remove organic wastes at landfills.
  • Explore funding mechanisms for GHG and waste reduction goals, and to build recycling manufacturing and composting infrastructure for non-landfill alternatives.
  • Develop standardized product quality requirements from composting and anaerobic digestion processes.
  • Expand waste management infrastructure, and grow markets for recycled, reused, and remanufactured products.
  • Identify opportunities to expand and maximize various waste management alternatives.

Natural and Working Lands
(A full list of the recommendations can be found on pg. 103 of the Discussion Draft)

  • Evaluate and make recommendations to ensure that the State’s forests are operating as a net carbon sink and establishing realistic quantitative carbon sequestration goals.
  • Convene a forest climate investment working group to develop specific recommendations regarding approaches for funding actions to ensure that California’s forests provide net carbon storage.
  • Expand urban forestry and green infrastructure programs and investments.
  • Investigate funding opportunities to protect rangelands and wetlands from conversion pressures and degradation that could result in carbon emissions and to enable restoration and improved management practices to increase carbon storage.

 

Preliminary Questions

While the Scoping Plan Update is still a work in progress, it raises a few preliminary questions:

  1. Should the discussion of post-2020 goals be included in this Scoping Plan Update?  The Scoping Plan is the guiding document for the state’s emission reduction goals.  It is required to be updated every five years in order to ensure the state is on track to meeting the target set forth in AB 32 (namely reducing GHG emissions to 1990 levels by the year 2020).  The Discussion Draft includes a number of comments and recommendations relating to the post-2020 environment; however, some stakeholders believe the post-2020 discussion should be pulled out of the Discussion Draft and implemented as part of a later update.  Separating these elements would give lawmakers and other interested parties more time to discuss how best to proceed in the later years.
  2. Does the ARB have the authority to regulate post-2020 targets?   AB 32 gives ARB the authority to reduce GHG emissions to 1990 levels by 2020, but there is disagreement on whether it allows ARB to go any further than the 2020 reduction goals.  AB 32 states quite clearly that the “statewide greenhouse gas emissions limit shall remain in effect unless otherwise amended or repealed.”  In addition, it states that “it is the intent of the Legislature that the statewide greenhouse gas emissions limit continue in existence and be used to maintain and continue reductions in emissions of greenhouse gasses beyond 2020.”  This has led many industry stakeholders to argue the ARB does not possess the authority to mandate additional reductions beyond 1990 levels, and instead can merely “…make recommendations to the Governor and the Legislature on how to continue reductions of greenhouse gas emissions beyond 2020.”x
  3. Should other jurisdictions also be held accountable for reducing their GHG emissions?  Even before the implementation of the state’s cap-and-trade program, California had already significantly reduced the carbon-intensity of its economy by lowering GHG emissions.  The Discussion Draft indicates that total statewide GHG emissions decreased by 2.7 percent between 2000 and 2011, and per capita GHG emissions decreased by 11.9 percent.  The transportation sector reduced its GHG emissions by 4.4 percent, the electric power sector about 37 percent, and the industrial sector by 2.4 percent.xi  Despite the reductions made in California, between 2009 and 2010 global output of greenhouse gases increased 6 percent, the largest increase calculated by the U.S. Department of Energy on record.xii  While the Discussion Draft stresses that California must accelerate the pace of emissions reductions in order to meet long-term emissions targets, Japan recently scaled back its reduction target.  Japan will now aim for a 3.8-percent cut in emissions by 2020 from 2005 levels, replacing a more ambitious goal to slash them by 25 percent from 1990 levels.xiii

What’s On The Horizon?

Many important decisions are set to be finalized and approved by ARB in the next few months.  On November 22, 2013, the ARB announced they were revising the schedule for the Proposed Update to the AB 32 Scoping Plan (Proposed Update), citing the need “…to provide adequate time for staff to review, consider and incorporate stakeholder comments.”  ARB anticipates releasing another version of the Proposed Update in late January, which is intended to reflect some of the feedback received from the circulation of the Discussion Draft.  In late spring 2014, ARB will hold a Board Hearing to consider approval of the Final Scoping Plan Update and Environmental Assessment. 

The finalized Scoping Plan Update will set the ground rules and select the primary strategies for emission reductions in the state.  As the state looks towards 2020, and possibly beyond to 2050, it is important that California balance the interests of key stakeholders in order to reduce GHG emissions in a cost-effective manner to protect jobs and the economy. 

 


i World Resource Institute Climate Data Explorer.  2010 California Profile.
ii AB 32 (Nunez, Ch. 488, Stats. of 2006).
iii California Air Resources Board, Climate Change Scoping Plan, December 2008
iv SBX1 2 (Simitian, Ch. 1, Stats. of 2011-12, First Extraordinary Session).
v SB 375 (Steinberg, Ch. 728, Stats. of 2008).
vi California Air Resources Board, Climate Change Scoping Plan First Update, October 1, 2013.
vii Governor Schwarzenegger’s Executive Order S-3-05 and Governor Brown’s Executive Order B-16-2012.
viii State of CA Governor’s Office of Planning and Research, California @ 50 Million: The Environmental Goals and Policy Report, Draft for Discussion - September 2013.
ix California Air Resources Board, Climate Change Scoping Plan First Update, October 1, 2013.
x California Health & Safety Code § 38551.
xi California Air Resources Board, Climate Change Scoping Plan First Update, October 1, 2013.
xii Borenstein, Seth. “Jump In Greenhouse Gases Is Biggest Ever Seen, U.S. Department of Energy Calculates.” Huffington Post.  3 November 2011.
xiii “Japan defends greenhouse gas U-turn at climate talks.”  Australian Associated Press.  16 November 2013.

For more information on this report or other Environmental Quality issues, contact Amber Alexander, Senate Republican Office of Policy at 916/651-1501.