FRANPAVLEYSenior Climate Advisor

Natural ResourcesDefense Council

CLIMATE CHANGEAND CALIFORNIA

AB 32Main Provisions

Mandates reporting of emissions from significant sources by January 1, 2008.

Requires the California Air Resources Board (CARB) to cap GHG emissions at 1990 levels.

Emission reductions to begin in 2012 and be achieved by 2020.

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AB 32Additional Provisions

Develops a list of early actions by July 1, 2007 and adopts regulations by January 1, 2010.

Includes a scoping plan to achieve statewide GHG emissions reductions by January 1, 2009.

Allows CARB to adopt regulations on the use of market mechanisms to achieve reductions.

AB 32Timeline to Implementation

June 30, 2007: Early Action Emission Reduction Measures

July 1, 2007: Environmental Justice and Economic/Tech advisory boards convene

Jan. 1, 2008: Determination of 1990 baseline levels and report on biggest emitters

Jan. 1, 2009: Approval of plan for maximum reduction by 2020 (update every 5 years)

Jan. 1, 2010: Adopt regulations for early action measures

Jan. 1, 2011: Adopt regulations on emission limits and reduction measure which must be real, permanent, quantifiable, verifiable, and enforceable, in addition to cap, in same period

Jan. 1, 2012: Emission limits begin

Jan. 2, 2020: Emission reductions achieved and stay in force beyond 2020

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2002-2004 GHG Emissions (469 MMTCO2E)

Draft Scoping Plan

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Draft Scoping Plan Recommendations

• Mix of strategies that combine market mechanisms, regulations, voluntary measures, fees, and other programs

• Key elements:– Energy efficiency programs– 33 percent Renewables Portfolio Standard– California cap-and-trade program linked to Western

Climate Initiative– Existing laws and policies, including California’s

clean car standards, goods movement measures, and the Low Carbon Fuel Standard

– Targeted fees to fund implementation

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Recommended Measures

Preliminary Recommendation

Table 2: Recommended Greenhouse Gas Reduction Measures

Recommended Reduction Strategies Sector 2020

Reductions (MMTCO2E)

The Role of State Government Various 1-217

California Cap-and-Trade Program Linked to WCI: Emissions cap of 365 MMTCO2E covering electricity, transportation, residential/commercial and industrial sources by 2020. Shaded reductions contribute to achieving the cap.

California Light-Duty Vehicle GHG Standards Transportation 31.7

Energy Efficiency Electricity & Commercial and

Residential 26.4

Renewables Portfolio Standard (33% by 2020) Electricity 21.2 Low Carbon Fuel Standard Transportation 16.5 High Global Warming Potential Gas Measures High GWP 16.2 Sustainable Forests Forests 5 Water Sector Measures Water 4.818 Vehicle Efficiency Measures Transportation 4.8

Goods Movement Transportation 3.7

Heavy/Medium Duty Vehicles Transportation 2.5 Million Solar Roofs (Existing Program Target) Electricity 2.1

Local Government Actions and Regional GHG Targets Land Use and Local Government 2

High Speed Rail Transportation 1 Landfill Methane Control Recycling & Waste 1 Methane Capture at Large Dairies Agriculture 119

Energy Efficiency and Co-Benefits Audits for Large Industrial Sources Industrial TBD

Additional Emissions Reduction from Capped Sectors 35.2 Total Reductions 169

AB 1493The Regulations

Requires carmakers to reduce GHG from their vehicle fleets by approximately 30% by 2016

Developed two standards --

Cars and lightest trucks

Heavier vehicles

Created near-term (2009-2012) and mid-term standards (2013-2016)

CARB approximates cost for new cars to increase by $300

AB 1493Implementation

Under the Clean Air Act, other states can adopt California standards or Federal standards. The following states have adopted or will adopt California’s “Clean Car” regulations.

Connecticut

Maine

Massachusetts

New Jersey

New York

Oregon

Pennsylvania

Rhode Island

Governors of Arizona, Florida and other states have signed executive orders stating their intent to adopt these standards.

Vermont

Washington

Maryland

New Mexico

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E.P.A Denies California WaiverDecember 19, 2007

• President Bush signs Energy Bill increasing federal fuel efficiency standards, but C.A.F.E. is not a substitute for California’s stronger GHG regulations.

• E.P.A. Administrator Johnson states that California has not met required criteria of “compelling and extraordinary” conditions since the impacts are not “unique” to California.

• E.P.A. undermines California Authority under Clean Air Act. This is the first waiver ever denied.

• California and 14 other states and 5 environmental organizations file suit January 2008 in S.F. Federal Court.

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What Else is California Doing?Renewable Portfolio Standards - 20%

Million Solar Roofs

AB 1007 - Alternative Fuels

Fuel Cell Partnership

Local Government Actions

Energy Efficient Appliances

Green Building Designs

SB 1368 (Greenhouse Gas

Performance Standard)

Low Carbon Fuel Standard

Decoupling

AB 1470 – Solar Water Heating

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Energy Efficiency WorksPer Capita Electricity Consumption

kWh/person

0

2000

4000

6000

8000

10000

12000

14000

1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

California

United States

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Water/Energy

• Efficiency programs to reduce energy use– Water use efficiency– Water recycling– Water system efficiency– Reuse of urban run-off– Increase renewable energy production

• Public goods charge– Fund investments in water efficiency and

recycling

Preliminary Recommendation

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Local Government Actions

SB 375 (Steinberg) strengthens regional planning and empowers local governments to work with CARB to draft long-range transportation plans for California’s 17 Metropolitan Planning Organizations (MPO’s)

• Transportation Planning – Sets regional GHG emission reduction targets

• Housing Planning – Matches regional housing needs to regional transportation plan updates

• CEQA Reform – Residential and mixed-use projects that are transit priority projects will be subject to new CEQA procedures to encourage those developments

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California Cap-and-TradeLinked to Regional Market

• Enforceable cap on GHG emissions from sources beginning in 2012

• Cap declines over time to meet 2020 targets; will continue to decline to help meet the 2050 target

• Limited use of offsets• Strong enforcement and monitoring• Must include safeguards for regional and

local co-pollutants

Preliminary Recommendation

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Potential Use of Revenues

• California Carbon Trust– Use of revenues for the public good

• Other potential uses:– Support AB 32 reduction goal– Achieve environmental co-benefits– Local government incentives & consumer rebates– Climate change adaptation– Community benefits– Consumer rebates– RD&D funding– Worker transition assistance

Under Evaluation

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Challenges/Opportunities

• EPA Waiver for AB 1493• Federal incentives/tax credits• Transmission Lines for renewables• Planes, trains, trucks, and ships• Environmental Justice (localized impacts)• Green Jobs• Out of State “Leakage”• Co-Benefits (air quality & public health)• Role of Local Government• Market Mechanisms• Integrating energy policies such as RPS, efficiency

standards, etc. with other states• Emission Reductions have to be real, permanent,

quantifiable, verifiable, and enforceable

2020

What’s DrivingGreen-tech Investment?

Rising cost of fuel.

Economic expansion of China, India and other Asian nations.

Growing concerns on global warming.

War in the Middle East and too much reliance on foreign oil.

Desire for a secure energy future.

AB 32 sends a strong signal to the market for clean technologies by adopting an enforceable cap.

We’re in an Environmental and Economic Race

Impacts of Global Warming are visible and accelerating.

The U.S. should seize this opportunity to become the home of clean technologies and alternative fuels.