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Climate Change Scoping Plan a framework for change DECEMBER 2008

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Climate Change Scoping Plan a framework for change DECEMBER 2008
Climate Change
Scoping Plan
a framework for change
DECEMBER 2008
Pursuant to AB 32
The California Global Warming Solutions Act of 2006
Prepared by
the California Air Resources Board
for the State of California
Arnold Schwarzenegger
Governor
Linda S. Adams
Secretary, California Environmental Protection Agency
Mary D. Nichols
Chairman, Air Resources Board
James N. Goldstene
Executive Officer, Air Resources Board
Table of Contents
EXECUTIVE SUMMARY ................................................................
...........................................................................
........................................... ESES-1
I.
INTRODUCTION: A FRAMEWORK
FRAMEWORK FOR CHANGE...............................
CHANGE............................... 1
A. Summary of Changes from the Draft Scoping Plan................................
Plan.......................................
....................................... 2
1. General
General................................
................................................................
................................................................................................
................................................................................................
.......................................................................
....................................... 2
2. Proposed Measures ................................................................
................................................................................................
..................................................................................
.................................................. 3
B. Background ................................................................
................................................................................................
...................................................................
................................... 4
1.
2.
3.
4.
5.
6.
Climate Change Policy in California................................
California................................................................
.........................................................................................
......................................................... 4
Assembly Bill 32: The Global
Global Warming Solutions Act ...........................................................
........................................................... 5
Climate Action Team................................
Team................................................................
................................................................................................
.................................................................................
................................................. 6
Development of the Greenhouse Gas Emission Reduction Strategy................................
Strategy ....................................
.................................... 8
Implementation of the Scoping Plan................................
Plan ................................................................
.......................................................................................
....................................................... 9
Climate Change in California................................
California................................................................
................................................................................................
..................................................................
.................................. 10
C. California’s Greenhouse Gas Emissions and the 2020 Target
Target....................
.................... 11
II.
RECOMMENDED ACTIONS................................
ACTIONS...............................................................
............................................................... 15
A. The Role of State Government:
Government: Setting an Example ..................................
.................................. 24
B. The Role of Local Government: Essential Partners .....................................
..................................... 26
C. Emissions Reduction Measures ................................................................
..................................................................
.................................. 27
1. California CapCap-andand-Trade Program Linked to Western Climate Initiative Partner
Jurisdictions ................................................................
................................................................................................
................................................................................................
..................................................................
.................................. 30
2. California LightLight-Duty Vehicle Greenhouse
Greenhouse Gas Standards ...................................................
................................................... 38
3. Energy Efficiency ................................................................
................................................................................................
.....................................................................................
..................................................... 41
4. Renewables Portfolio Standard ................................................................
.............................................................................................
............................................................. 44
5. Low Carbon Fuel Standard ................................................................
................................................................................................
.....................................................................
..................................... 46
6. Regional TransportationTransportation-Related Greenhouse Gas Targets ................................................
................................................ 47
7. Vehicle Efficiency
Efficiency Measures ................................................................
................................................................................................
...................................................................
................................... 51
8. Goods Movement ................................................................
................................................................................................
....................................................................................
.................................................... 52
9. Million Solar Roofs Program ................................................................
................................................................................................
..................................................................
.................................. 53
10. Medium/HeavyMedium/Heavy-Duty Vehicles................................
Vehicles ................................................................
..............................................................................................
.............................................................. 53
11. Industrial Emissions................................
Emissions................................................................
................................................................................................
..............................................................................
.............................................. 54
12. High Speed Rail................................
Rail ................................................................
................................................................................................
.....................................................................................
..................................................... 56
13. Green Building Strategy................................
Strategy................................................................
................................................................................................
........................................................................
........................................ 57
14. High Global Warming Potential Gases ................................................................
................................................................................
................................................ 59
15. Recycling
Recycling and Waste ................................................................
................................................................................................
............................................................................
............................................ 62
16. Sustainable Forests ................................................................
................................................................................................
..............................................................................
.............................................. 64
17. Water ................................................................
................................................................................................
................................................................................................
.....................................................................
..................................... 65
18. Agriculture
Agriculture ................................................................
................................................................................................
.............................................................................................
............................................................. 67
D. Voluntary Early Actions and Reductions .....................................................
..................................................... 68
1. Voluntary Early Action ................................................................
................................................................................................
.............................................................................
............................................. 68
2. Voluntary Reductions ................................................................
................................................................................................
..............................................................................
.............................................. 69
E. Use of Allowances and Revenues................................
Revenues................................................................
................................................................ 69
i
III.
EVALUATIONS ................................................................
..................................................................................
.................................................. 73
A. Economic Modeling................................
Modeling................................................................
.....................................................................................
..................................................... 73
1.
2.
3.
4.
B.
C.
D.
E.
MacroMacro-economic Modeling Results ................................................................
........................................................................................
........................................................ 74
Impact on Specific
Specific Business Sectors................................
Sectors ................................................................
.....................................................................................
..................................................... 75
Household Impacts ................................................................
................................................................................................
.................................................................................
................................................. 78
WCI Economic Analysis................................
Analysis ................................................................
................................................................................................
...........................................................................
........................................... 79
Green Technology................................
Technology................................................................
........................................................................................
........................................................ 80
CostCost-Effectiveness ................................................................
......................................................................................
...................................................... 84
Small Business Impact................................
Impact................................................................
................................................................................
................................................ 85
Public Health/Environmental Benefits Analyses .......................................
....................................... 86
1.
2.
3.
4.
5.
6.
Key Air QualityQuality-Related Public Health Benefits................................
Benefits................................................................
.....................................................................
..................................... 87
Approach ................................................................
................................................................................................
................................................................................................
..................................................................
.................................. 90
Existing Programs for Air Quality Improvement in California ..............................................
.............................................. 90
Statewide Analysis ................................................................
................................................................................................
..................................................................................
.................................................. 91
Regional Assessment: South Coast Air Basin Example .......................................................
....................................................... 92
Community Level Assessment: Wilmington Example .........................................................
......................................................... 92
F. Summary of Societal Benefits................................
Benefits................................................................
.....................................................................
..................................... 94
1. Energy Diversification................................
Diversification................................................................
................................................................................................
..............................................................................
.............................................. 94
2. Mobility and Shifts in Land
Land Use Patterns................................
Patterns................................................................
...............................................................................
............................................... 95
G. California Environmental Quality Act Functional Equivalent Document .... 95
H. Administrative Burden ................................................................
................................................................................
................................................ 96
I. De Minimis Emission Threshold ................................................................
..................................................................
.................................. 96
IV.
IMPLEMENTATION: PUTTING
PUTTING THE PLAN INTO ACTION
ACTION...................
CTION................... 99
A. Personal Action ................................................................
...........................................................................................
........................................................... 99
B. Public Outreach and Education ................................................................
................................................................ 100
1.
2.
3.
Involving the Public and Stakeholders in Measure Development .....................................
.....................................101
..... 101
Education and Workforce Development................................
Development................................................................
..............................................................................
..............................................101
.............. 101
Small Businesses ................................................................
................................................................................................
..................................................................................
..................................................104
.................. 104
C. Implementation of the Plan ................................................................
......................................................................
...................................... 104
D. Tracking and Measuring Progress ............................................................
............................................................ 107
1.
2.
3.
4.
E.
F.
G.
H.
Report Card ................................................................
................................................................................................
............................................................................................
............................................................107
............................107
Tracking Progress by Implementing Agencies................................
Agencies ................................................................
....................................................................
....................................108
.... 108
Progress Toward the State Government Target................................
Target ................................................................
..................................................................
..................................108
.. 108
Mandatory Reporting Regulation ................................................................
.........................................................................................
.........................................................108
.........................108
Enforcement................................
Enforcement ................................................................
..............................................................................................
.............................................................. 109
State and Local Permitting Considerations................................
Considerations ..............................................
.............................................. 110
Role of Local Air Districts ................................................................
.........................................................................
......................................... 111
Program Funding................................
Funding................................................................
.......................................................................................
....................................................... 112
ii
V.
A VISION FOR THE FUTURE
FUTURE ...........................................................
........................................................... 113
A. Collaboration ................................................................
.............................................................................................
.............................................................113
............................. 113
1. Working Closely with Key Partners ................................................................
......................................................................................
......................................................113
...................... 113
2. International ................................................................
................................................................................................
..........................................................................................
..........................................................114
.......................... 114
B. Research................................
Research ................................................................
................................................................................................
....................................................................
....................................116
.... 116
Private
ivate Sector ..............................116
1. Unleash the Potential of California’s Universities and Pr
.............................. 116
2. PublicPublic-Private Partnerships ................................................................
................................................................................................
..................................................................
..................................116
.. 116
C. Reducing California’s Emissions Further – A Look Forward to 2030 ......117
...... 117
D. Conclusion ................................................................
................................................................................................
.................................................................
................................. 120
ACKNOWLEDGMENTS ................................................................
.............................................................................
............................................. 122
BOARD RESOLUTION ................................................................
...............................................................................
............................................... 123
APPENDICES
Appendix A:
Appendix B:
Appendix C:
Appendix D:
Appendix E:
Appendix F:
Appendix G:
Appendix H:
Appendix I:
Appendix J:
Assembly Bill 32: The Global Warming Solutions Act of 2006
List of Acronyms and Glossary
Sector Overviews and Emission Reduction Strategies
Western Climate Initiative
Initiative Documentation
List of Measures
California’s Greenhouse Gas Emissions Inventory
Economic Analysis
Public Health Benefits Analyses
Measure Documentation
California Environmental Quality
Quality Act Functional Equivalent Document
iii
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Scoping Plan
Executive Summary
EXECUTIVE SUMMARY
On September 27, 2006, Governor Schwarzenegger signed Assembly Bill 32, the Global
Warming Solutions Act of 2006 (Núñez, Chapter 488, Statutes of 2006). The event marked a
watershed moment in California’s history. By requiring in law a reduction of greenhouse gas
(GHG) emissions to 1990 levels by 2020, California set the stage for its transition to a
sustainable, clean energy future. This historic step also helped put climate change on the
national agenda, and has spurred action by many other states.
The California Air Resources Board (ARB or Board) is the lead agency for implementing
AB 32, which set the major milestones for establishing the program. ARB met the first
milestones in 2007: developing a list of discrete early actions to begin reducing greenhouse
gas emissions, assembling an inventory of historic emissions, establishing greenhouse gas
emission reporting requirements, and setting the 2020 emissions limit.
ARB must develop a Scoping Plan outlining the State’s strategy to achieve the 2020
greenhouse gas emissions limit. This 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.
This “Approved Scoping Plan” was adopted by the Board at its December 11, 2008 meeting.
The measures in this Scoping Plan 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
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Executive Summary
Scoping Plan
to cleaner and more secure sources of energy, and adopting 21st century land use planning
and development practices.
A Clean Energy Future
Getting to the 2020 goal is not the end of the State’s effort. According to climate scientists,
California and the rest of the developed world will have to cut emissions by 80 percent from
today’s levels to stabilize the amount of carbon dioxide in the atmosphere and prevent the
most severe effects of global climate change. This long range goal is reflected in California
Executive Order S-3-05 that requires an 80 percent reduction of greenhouse gases from 1990
levels by 2050.
Reducing our greenhouse gas emissions by 80 percent will require California to develop new
technologies that dramatically reduce dependence on fossil fuels, and shift into a landscape
of new ideas, clean energy, and green technology. The measures and approaches in this plan
are designed to accelerate this necessary transition, promote the rapid development of a
cleaner, low carbon economy, create vibrant livable communities, and improve the ways we
travel and move goods throughout the state. This transition will require close coordination of
California’s climate change and energy policies, and represents a concerted and deliberate
shift away from fossil fuels toward a more secure and sustainable future. This is the firm
commitment that California is making to the world, to its children and to future generations.
Making the transition to a clean energy future brings with it great opportunities. With these
opportunities, however, also come challenges. As the State moves ahead with the
development and implementation of policies to spur this transition, it will be necessary to
ensure that they are crafted to not just cut greenhouse gas emissions and move toward cleaner
energy sources, but also to ensure that the economic and employment benefits that will
accompany the transition are realized in California. This means that particular attention must
be paid to fostering an economic environment that promotes and rewards California-based
investment and development of new technologies and that adequate resources are devoted to
building and maintaining a California-based workforce equipped to help make the transition.
A Public Process
Addressing climate change presents California with a challenge of unprecedented scale and
scope. Success will require the support of Californians up and down the state. At every step
of the way, we have endeavored to engage the public in the development of this plan and our
efforts to turn the tide in the fight against global warming.
In preparing the Draft Scoping Plan, ARB and CAT subgroups held dozens of workshops,
workgroups, and meetings on specific technical issues and policy measures. Since the
release of the draft plan in late June, we have continued our extensive outreach with
workshops and webcasts throughout the state. Hundreds of Californians showed up to share
their thoughts about the draft plan, and gave us their suggestions for improving it. We’ve
received thousands of postcards, form letters, emails, and over 1,000 unique comments
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Scoping Plan
Executive Summary
posted to our website or sent by mail. All told, more than 42,000 people commented on the
draft Plan.
ARB catalogued and publicly posted all the comments we received. In many instances, we
engaged experts and staff at our partner agencies for additional evaluation of comments and
suggestions.
This plan reflects the input of Californians at every level. Our partners at other State
agencies, in the legislature, and at the local government level have provided key input.
We’ve met with members of community groups to address environmental justice issues, with
representatives of California’s labor force to ensure that good jobs accompany our transition
to a clean energy future, and with representatives of California’s small businesses to ensure
that this vital part of our state’s economic engine flourishes under this plan. We’ve heeded
the advice of public health and environmental experts throughout the state to design the plan
so that it provides valuable co-benefits in addition to cutting greenhouse gases. We’ve also
worked with representatives from many of California’s leading businesses and industries to
craft a plan that works in tandem with the State’s efforts to continue strong economic growth.
In short, we’ve heard from virtually every sector of California’s society and economy,
reflecting the fact that the plan will touch the life of almost every Californian in some way.
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;
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Executive Summary
•
•
Scoping Plan
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.1
2. CEQA Evaluation: This plan includes an evaluation of the potential
environmental impacts of the Scoping Plan under the California Environmental
Quality Act (CEQA).2
Programmatic
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.
1
2
Staff will provide an update to the Board to respond to comments received on these analyses.
This evaluation is contained in Appendix J.
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Scoping Plan
Executive Summary
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, the role of voluntary renewable power
purchases, 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
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Executive Summary
Scoping Plan
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.3
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 HeavyDuty 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.
3
Research to help quantify these greenhouse gas emissions reductions is continuing, so only 1 MMTCO2E of
these reductions are currently counted toward the AB 32 goal in this plan. Additional tons will be considered
part of the safety margin.
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Scoping Plan
Executive Summary
A Balanced and Comprehensive
Comprehensive Approach
Meeting the goals of AB 32 will require a coordinated set of strategies to reduce emissions
throughout the economy. These strategies will fit within the comprehensive tracking,
reporting, and enforcement framework that is already being developed and implemented. By
2020, a hard and declining cap will cover 85 percent of California’s greenhouse gas
emissions, helping to ensure that we meet our reduction targets on time.
AB 32 lays out a number of important factors that have helped to guide the development of
this plan and will continue to be considered as regulations are developed over the next few
years. Some of the key criteria that have and will be further considered are: costeffectiveness; overall societal benefits like energy diversification and public health
improvements; minimization of leakage; and impacts on specific sectors like small business
and disproportionately impacted communities. The comprehensive approach in the plan
reflects a balance among these and other important factors and will help to ensure that
California meets its greenhouse gas reduction targets in a way that promotes and rewards
innovation, is consistent with and helps to foster economic growth, and delivers
improvements to the environment and public health.
Many of the measures in this plan complement and reinforce one another. For instance, the
Low Carbon Fuel Standard, which reduces the carbon intensity of transportation fuels sold in
California, will work in tandem with technology-forcing regulations designed to reduce
greenhouse gas emissions from cars and trucks. Improvements in land use and the ways we
grow and build our communities will further reduce emissions from the transportation sector.
Many of the measures also build on highly successful long-standing practices in California—
such as energy efficiency and the use of renewable energy resources—that can be accelerated
and expanded. Increasing the amount of energy we get from renewable energy sources,
including placing solar arrays and solar water heaters on houses throughout California, will
be supported by an increase in building standards for energy efficiency. Other measures
address the transport and treatment of water throughout the state, reduce greenhouse gas
emissions that come from ships in California’s ports, and promote changes to agricultural and
forestry practices. There are also measures designed to safely reduce or recover a range of
very potent greenhouse gases – refrigerants and other industrial gases – that contribute to
global warming at a level many times greater per ton emitted than carbon dioxide.
Many of the measures in this plan are designed to take advantage of the economic and
innovation-related benefits that market-based compliance strategies can provide. Particularly
in light of current economic uncertainty, it is important to ensure that California’s climate
policies be designed to promote and take advantage of economic opportunities while also
cutting greenhouse gas emissions. For instance, the cap-and-trade program creates an
opportunity for firms to seek out cost-effective emission reduction strategies and provides an
incentive for technological innovation. California’s clean car standards, which require
manufacturers to meet annual average levels of greenhouse gas emissions for all cars they
sell in California, also offer flexibility to help ensure compliance. Under California’s clean
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Executive Summary
Scoping Plan
car standards, manufacturers who exceed compliance standards are permitted to bank credits
for future use or sell them to other manufacturers. These types of compliance options will be
key in ensuring that we are able to meet our reduction targets in a cost-effective manner.
Working with the Western Climate Initiative
California is working closely with six other states and four Canadian provinces in the
Western Climate Initiative (WCI) to design a regional greenhouse gas emissions reduction
program that includes a cap-and-trade approach. California’s participation in WCI creates an
opportunity to provide substantially greater reductions in greenhouse gas emissions from
throughout the region than could be achieved by California alone. The larger scope of the
program also expands the market for clean technologies and helps avoid leakage, that is, the
shifting of emissions from sources within California to sources outside the state.
The WCI partners released the recommended design for a regional cap-and-trade program in
September 2008.4 ARB embraces the WCI effort, and will continue to work with WCI
partners. The creation of a robust regional trading system can complement the other policies
and measures included in this plan, and provide the means to achieve the reduction of
greenhouse gas emissions needed from a wide range of sectors as cost-effectively as possible.
California’s Economy,
Economy, Environment, and Public Health
The approaches in this plan are designed to maximize the benefits that can accompany the
transition to a clean energy economy. California has a long and successful track record of
implementing environmental policies that also deliver economic benefits. This plan
continues in that tradition.
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.5 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 Scoping Plan indicates that projected economic benefits
in 2020 compared to the business-as-usual scenario include:
•
4
5
Increased economic production of $33 billion
Details of the WCI recommendation are provided in Appendix D.
See Appendix G.
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Scoping Plan
Executive Summary
•
•
•
•
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.
AB 32: The Environmental and Public Health Costs of Inaction
A key factor that was not weighed in the overall economic analysis is the potential
cost of doing nothing. When these costs are taken into account, the benefits
associated with implementing a comprehensive plan to cut greenhouse gas emissions
become even clearer. As a state, California is particularly vulnerable to the costs
associated with unmitigated climate change.
A summary report from the California Climate Change Center notes that a warming
California climate would generate more smoggy days by contributing to ozone
formation while also fostering more large brush and forest fires. Continuing
increases in global greenhouse gas emissions at business-as-usual rates would result,
by late in the century, in California losing 90 percent of the Sierra snow pack, sea
level rising by more than 20 inches, and a three to four times increase in heat wave
days. These impacts will translate into real costs for California, including flood
damage and flood control costs that could amount to several billion dollars in many
regions such as the Central Valley, where urbanization and limited river channel
capacity already exacerbate existing flood risks.6 Water supply costs due to scarcity
and increased operating costs would increase as much as $689 million per year by
2050.7 ARB analysis shows that due to snow pack loss, California’s snow sports
sector would be reduced by $1.4 billion (2006 dollars) annually by 2050 and shed
14,500 jobs; many other sectors of California’s economy would suffer as well.
Failing to address climate change also carries with it the risk of substantial public
health costs, primarily as a result of rising temperatures. Sustained triple-digit heat
waves increase the health risk for several segments of the population, especially the
elderly. But higher average temperatures will also increase the interactions of smogcausing chemicals with sunlight and the atmosphere to produce higher volumes of
toxic byproducts than would otherwise occur. In the 2006 report to the Governor
6
A Summary Report from: California Climate Change Center. Our Changing Climate: Assessing the Risks to
California. Document No. CEC-500-2006-077. July 2006. http://www.energy.ca.gov/2006publications/CEC500-2006-077/CEC-500-2006-077.PDF (accessed October 12, 2008)
7
A Report from: California Climate Change Center. Climate Warming and Water Supply Management in
California. Document No. CEC-500-2005-195-SF. March 2006. pp.13-14
http://www.energy.ca.gov/2005publications/CEC-500-2005-195/CEC-500-2005-195-SF.PDF (accessed
October 12, 2008).
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Executive Summary
Scoping Plan
from the California Climate Center, it was reported that global increases in
temperature will lead to increased concentrations and emissions of harmful pollutants
in California.8 Some cities in California are disproportionately susceptible to
temperature increases since they already have elevated pollution levels and are
subject to the heat-island effect that reduces nighttime cooling, allowing heat to build
up and magnify the creation of additional harmful pollution. Low-income
communities are disproportionately impacted by climate change, lacking the
resources to avoid or adapt to these impacts. For example, low-income residents are
less likely to have access to air conditioning to prevent heat stroke and death in heat
waves. For California, then, taking action with other regions and nations to help
mitigate the impacts of climate change will help slow temperature rise. This in turn
will likely result in fewer premature deaths from respiratory and heat-related causes,
and many thousands fewer hospital visits and days of illness.
California cannot avert the impacts of global climate change by acting alone. We
can, however, take a national and international leadership role in this effort by
demonstrating that taking firm and reasoned steps to address global warming can
actually help spur economic growth.
AB 32: Providing Savings for Households and Businesses
This plan builds upon California’s thirty-year track record of pioneering energy
efficiency programs. Many of the measures in the plan will deliver significant gains
in energy efficiency throughout the economy. These gains, even after increases in per
unit energy costs are taken into account, will help deliver annual savings of between
$400 and $500 on average by 2020 for households, including low-income
households.
Businesses, both large and small, will benefit too. By 2020, the efficiency measures
in the plan will decrease overall energy expenditures for businesses even after taking
into account projected rises in per unit energy costs. Since small businesses spend a
greater proportional share of revenue on energy-related costs, they are likely to
benefit the most. Furthermore, businesses throughout the state will benefit from the
overall economic growth that is projected to accompany implementation of AB 32
between now and 2020.
Similar savings are projected in the transportation sector. By reducing greenhouse
gas pollution from more efficient and alternatively-fueled cars and trucks under
California’s Clean Car law (the Pavley greenhouse gas standards), consumers save on
operating costs through reduced fuel use. Although cars will be marginally more
expensive, owners will be paid back with savings over the lifetime of the car, and the
average new car buyer will have an extra $30 each month for other expenditures.
Current estimates indicate that consumer savings in 2020 for California’s existing
8
A Report from: California Climate Change Center. Scenarios of Climate Change in California: An Overview.
Document No. CEC-500-2005-186-SF. February 2006. http://www.energy.ca.gov/2005publications/CEC-5002005-186/CEC-500-2005-186-SF.PDF (accessed October 12, 2008)
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Scoping Plan
Executive Summary
clean car standards will be over $12 billion. These savings give Californians the
ability to invest their dollars in other sectors of the state’s economy.
AB 32: Driving Investment and Job Growth
Addressing climate change also provides a strong incentive for investment in
California. Our leadership in environmental and energy efficiency policy has already
helped attract a large and growing share of the nation’s venture capital investment in
green technologies. Since AB 32 was signed into law, venture capital investment in
California has skyrocketed. In the second quarter of 2008 alone, California
dominated world investment in clean technology venture capital, receiving $800
million of the global total of $2 billion.9
These investments in building a new clean tech sector also translate directly into job
growth. A study by U.C. Berkeley’s Energy and Resources Group and Goldman
School of Public Policy found that investments in green technologies produce jobs at
a higher rate than investments in comparable conventional technologies.10 And the
National Venture Capital Association estimates that each $100 million in venture
capital funding helps create 2,700 jobs, $500 million in annual revenues for two
decades and many indirect jobs.11
AB 32: Improving Public Health
The public health analysis conducted for this Plan indicates that cutting greenhouse
gases will also provide a wide range of additional public health and environmental
benefits. By 2020, the economic value alone of the additional air-quality related
benefits is projected to be on the order of $4.4 billion. Our analysis indicates that
implementing the Scoping Plan will result in a reduction of 15 tons per day of
combustion-generated soot (PM 2.5) and 61 tons per day of oxides of nitrogen
(precursors to smog). These reductions in harmful air pollution would provide the
following estimated health benefits in 2020, above and beyond those projected to be
achieved as a result of California’s other existing public health protection and
improvement efforts:
•
•
An estimated 780 premature deaths statewide will be avoided
Almost 12,000 incidences of asthma and lower respiratory symptoms will be
avoided
9
Press Release from Cleantech Network LLC, Cleantech Venture Investment Reaches Record of $2 Billion in
2008. July 08, 2008. http://cleantech.com/about/pressreleases/011008.cfm (accessed October 12, 2008)
10
Report of the Renewable and Appropriate Energy Laboratory. Putting Renewables to Work: How Many Jobs
Can the Clean Energy Industry Generate? Energy and Resources Group/Goldman School of Public Policy at
University of California, Berkeley. April 13, 2004. http://rael.berkeley.edu/old-site/renewables.jobs.2006.pdf
(accessed October 12, 2008)
11
Report prepared for the National Venture Capital Association. Venture Impact 2004: Venture Capital
Benefits to the U.S. Economy. Prepared by: Global Insight. June 2004.
http://www.globalinsight.com/publicDownload/genericContent/07-20-04_fullstudy.pdf (accessed October 12,
2008)
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Executive Summary
•
Scoping Plan
77,000 work loss days will be avoided
In addition to the quantified health benefits, our analysis also indicates that
implementation of the measures in the plan will deliver a range of other public health
benefits. These include health benefits associated with local and regional
transportation-related greenhouse gas targets that will facilitate greater use of
alternative modes of transportation such as walking and bicycling. These types of
moderate physical activities reduce many serious health risks including coronary
heart disease, diabetes, hypertension and obesity.12 Furthermore, as specific measures
are developed, ARB and public health experts will work together to ensure that they
are designed with an eye toward capturing a broad range of public health co-benefits.
The results of both the economic and public health analyses are clear: guiding
California toward a clean energy future with reduced dependence on fossil fuels will
grow our economy, improve public health, protect the environment and create a more
secure future built on clean and sustainable technologies.
State Leadership
California is committed to once again lead and support a pioneering effort to protect the
environment and improve public health while maintaining a vibrant economy. Every agency,
department and division will bring climate change considerations into its policies, planning
and analysis, building and expanding current efforts to green its fleet and buildings, and
managing its water, natural resources, and infrastructure to reduce greenhouse gas emissions.
In all these efforts, California is exercising a leadership role in global action to address
climate change. It is also exemplifying the essential role states play as the laboratories of
innovation for the nation. As California has done in the past in addressing emissions that
caused smog, the State will continue to develop innovative programs that benefit public
health and improve our environment and quality of life.
Moving Beyond 2020
AB 32 requires a return to 1990 emission levels by 2020. The 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 emissions 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
12
Appendix H contains a reference list of studies documenting the public health benefits of alternative
transportation.
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Scoping Plan
Executive Summary
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 capand-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 Agreement13 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 walkable, public transport will improve, and high-speed rail will give travelers a
new clean transportation option.
13
Mayors Climate Protection Center. List of Participating Mayors.
http://www.usmayors.org/climateprotection/list.asp (accessed October 12, 2008)
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Executive Summary
Scoping Plan
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.”
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Scoping Plan
I.
I. Introduction
INTRODUCTION: A Framework for Change
California strengthened its commitment to address climate change when Governor
Schwarzenegger signed Assembly Bill 32 (AB 32), the Global Warming Solutions Act of
2006 (Núñez, Chapter 488, Statutes of 2006). This groundbreaking legislation represents a
turning point for California and makes it clear that a business-as-usual approach toward
greenhouse gas emissions is no longer acceptable. In light of the need for strong and
immediate action to counter the growing threat of global warming, AB 32 sets forth an
aggressive timetable for achieving results.
AB 32 embodies the idea that California can continue to grow and flourish while reducing its
greenhouse gas emissions and continuing its long-standing efforts to achieve healthy air, and
protect and enhance public health. Achieving these goals will involve every sector of the
state’s $1.7 trillion economy and touch the life of every Californian.
As the lead agency for implementing AB 32, the California Air Resources Board (ARB or
the Board) released a Draft Scoping Plan on June 26, 2008, which laid out a comprehensive
statewide plan to reduce California’s greenhouse gas emissions to 1990 levels by 2020.
This draft plan set forth a comprehensive reduction strategy that combines market-based
regulatory approaches, other regulations, voluntary measures, fees, policies, and programs
that will significantly reduce emissions of greenhouse gases and help make our state cleaner,
more efficient and more secure.
Based upon the numerous comments received on the draft, as well as additional staff
analysis, ARB released a Proposed Scoping Plan on October 15, 2008. At its November 20
and 21, 2008 meeting, the Board heard staff presentations on the Proposed Scoping Plan and
directed staff to make a number of modifications. This Approved Scoping Plan incorporates
these modifications, as well as corrections from the November 14, 2008 errata sheet, but
otherwise reflects the same measures of the Proposed Scoping Plan.
The Board approved this Scoping Plan at its December 11, 2008 meeting, providing specific
direction for the State’s greenhouse gas emissions reduction program. The recommended
measures will be developed into regulations over the next two years, to go into effect by
January 1, 2012. As specific measures in the plan are developed, we will update and adjust
our regulatory proposals as necessary to ensure that they reflect any new information,
additional analyses, new technologies or other factors that emerge during the process.
ARB has conducted a transparent, wide-ranging public process to develop the Scoping Plan,
including numerous meetings, workshops, and seminars with stakeholders. Substantial input
on the development of the Scoping Plan came from formal advisory committees, meetings
with industrial and business groups, non-profit organizations and members of the public, as
1
I. Introduction
Scoping Plan
well as written comments on the Draft Scoping Plan. ARB will continue its outreach
activities to seek ongoing public input and will encourage early and continued involvement
in the implementation of the plan from all Californians.
A.
Summary of Changes from the Draft Scoping Plan
ARB released the June Draft Scoping Plan and requested public comment and input, while
continuing to analyze the measures and their impact on California. Since the Draft Scoping
Plan release, ARB received almost 1,000 unique written comments as well as hundreds of
verbal comments at workshops and in meetings. Taking into account that some written
comments were submitted by multiple individuals, all told more than 42,000 people have
commented on the draft plan. ARB has also completed detailed economic and public health
evaluations of its recommendations.
The key changes between the Draft Scoping Plan and the Scoping Plan are summarized
below. The Scoping Plan includes the following modifications:
1. General
•
•
•
•
•
•
•
Incorporates economic and public health analyses of the Scoping Plan. These
analyses show that the recommendations in the Scoping Plan will have a net
positive impact on both the economy and public health. These analyses follow
the same methodology used to evaluate the Draft Scoping Plan.
Provides a “margin of safety” by recommending additional greenhouse gas
emissions reduction strategies to account for measures in uncapped sectors that do
not achieve the greenhouse gas emissions reductions estimated in the Scoping
Plan. Along with the certainty provided by the cap, this will ensure that the 2020
target is met.
Expands the discussion of workforce development, education, and labor to more
fully reflect existing activities and the role of other state agencies in ensuring an
adequate green technology workforce.
Assesses how well the recommended measures put California on the long-term
reduction trajectory needed to do our part to stabilize the global climate.
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, and expresses support for nearterm advancement of the technology and monitoring of its development.
Acknowledges the important role of terrestrial sequestration.
Provides greater detail on the mechanisms to be developed to encourage voluntary
early action.
Provides additional detail on implementation, tracking and enforcement of the
recommended actions, including the important role of local air districts.
2
Scoping Plan
•
I. Introduction
Evaluates the potential environmental impacts of the Scoping Plan under the
California Environmental Quality Act (CEQA). This evaluation is contained in
Appendix J.
2. Proposed Measures
•
•
•
•
•
•
•
•
Provides greater detail on the proposed cap-and-trade program including more
detail on the allocation and auction of allowances, and clarification of the
proposed role of offsets.
Re-evaluates 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 greenhouse gas emissions reductions for Regional TransportationRelated Greenhouse Gas Targets from 2 to 5 million metric tons of CO2
equivalent (MMTCO2E).
In recognition of the importance of local governments in the successful
implementation of AB 32, adds a section describing this role and recommends a
greenhouse gas emissions reduction target for local government municipal and
community-wide emissions of a 15 percent reduction from current levels by 2020
to parallel the State’s target.
Adds four measures to address emissions from industrial sources. These proposed
measures would regulate fugitive emissions from oil and gas recovery and gas
transmission activities, reduce refinery flaring, and remove the methane
exemption for refineries. These proposed measures are anticipated to provide
1.5 MMTCO2E of greenhouse gas reductions in 2020.
In consultation with the California Integrated Waste Management Board, reassesses potential measures in the Recycling and Waste sector. As a result of this
assessment, ARB increased the reduction of greenhouse gas emissions that can
ultimately be anticipated from the Recycling and Waste Sector from 1 to
10 MMTCO2E, recommending measures to move toward high recycling and zerowaste. Research to help quantify these greenhouse gas emissions is continuing, so
only 1 MMTCO2E of these reductions is currently counted towards the AB 32
goal in this plan.
Estimates the potential reduction of greenhouse gas emissions from the Green
Building sector. Green building systems have the potential to reduce
approximately 26 MMTCO2E of greenhouse gas emissions. Since most of these
emissions reductions are counted in the Electricity, Commercial/Residential
Energy, Water or Waste sectors, emission reductions in the Green Building sector
are not separately counted toward the AB 32 goal.
Adds a High Global Warming Potential (GWP) Mitigation Fee measure to ensure
that the climate impact of these gases is reflected in their price to encourage
reduced use and end-of-life losses, as well as the development of alternatives.
Reduces the expected greenhouse gas emissions reduction from the Heavy-Duty
Vehicle Greenhouse Gas Emissions Reduction (Aerodynamic Efficiency)
measure and the Tire Inflation measure based on ongoing regulatory
3
I. Introduction
•
•
B.
Scoping Plan
development. The Heavy-Duty Vehicle Greenhouse Gas Emissions Reduction
(Aerodynamic Efficiency) measure is now expected to achieve 0.9 MMTCO2E
and the Tire Inflation measure is now expected to achieve 0.4 MMTCO2E.
Modifies the expected reduction of greenhouse gas emissions from the Low
Carbon Fuel Standard to account for potential overlap of benefits with the Pavley
greenhouse gas vehicle standards. ARB discounted the expected emission
reductions from the Low Carbon Fuel Standard by 10 percent.
After further evaluation, moves the Heavy-Duty Truck Efficiency measure to the
Goods Movement measure. ARB expects that market dynamics will provide an
inducement to improve heavy-duty truck efficiency, and reductions in greenhouse
gases in the future. ARB would consider pursuing direct requirements to reduce
greenhouse gases if truck efficiency does not improve in the future.
Background
1. Climate Change Policy in California
California first addressed climate change in 1988 with the passage of AB 4420 (Sher,
Chapter 1506, Statutes of 1988). This bill directed the California Energy
Commission (CEC) to study global warming impacts to the state and develop an
inventory of greenhouse gas emissions sources. In 2000, SB 1771 (Sher, Chapter
1018, Statutes of 2000) established the California Climate Action Registry to allow
companies, cities and government agencies to voluntarily record their greenhouse gas
emissions in anticipation of a possible program that would allow them to be credited
for early reductions.
In 2001, the United Nations’ Intergovernmental Panel on Climate Change (IPCC)
reported that “there is new and stronger evidence that most of the warming observed
over the last 50 years is attributable to human activities.” The following year,
AB 1493 (Pavley, Chapter 200, Statutes of 2002) was signed into law, requiring ARB
to develop regulations to reduce greenhouse gas emissions from passenger vehicles,
light-duty trucks and non-commercial vehicles sold in California.
Recognizing the value of regional partners in addressing climate change, the
governors of California, Washington, and Oregon created the West Coast Global
Warming Initiative in 2003 with provisions for the states to work together on climate
change-related programs.
Two years later Governor Schwarzenegger signed Executive Order S-3-05, calling for
the State to reduce greenhouse gas emissions to 1990 levels by 2020 and to reduce
greenhouse gas emissions to 80 percent below 1990 levels by 2050. The 2020 goal
was established to be an aggressive, but achievable, mid-term target, and the 2050
greenhouse gas emissions reduction goal represents the level scientists believe is
necessary to reach levels that will stabilize climate.
4
Scoping Plan
I. Introduction
In 2006, SB 1368 (Perata, Chapter 598, Statutes of 2006) created greenhouse gas
performance standards for new long-term financial investments in base-load
electricity generation serving California customers. This law is designed to help spur
the transition toward cleaner energy in California by placing restrictions on the ability
of utilities to build new carbon-intensive plants or enter into new contracts with high
carbon sources of electricity. Expiration of existing utility long-term contracts with
coal plants will reduce greenhouse gas emissions when such generation is replaced by
lower greenhouse gas-emitting resources. These reductions will reduce the need for
utilities to submit allowances to comply with the cap-and-trade program.
2. Assembly Bill 32: The Global Warming Solutions Act
In 2006, the Legislature passed and Governor Schwarzenegger signed AB 32, the
Global Warming Solutions Act of 2006, which set the 2020 greenhouse gas emissions
reduction goal into law. It directed ARB to begin developing discrete early actions to
reduce greenhouse gases while also preparing a Scoping Plan to identify how best to
reach the 2020 limit. The reduction measures to meet the 2020 target are to become
operative by 2012.
AB 32 includes a number of specific requirements for ARB:
•
•
•
•
Identify the statewide level of greenhouse gas emissions in 1990 to serve as the
emissions limit to be achieved by 2020 (Health and Safety Code (HSC) §38550).
In December 2007, the Board approved the 2020 emission limit of 427 million
metric tons of carbon dioxide equivalent (MMTCO2E) of greenhouse gases.
Adopt a regulation requiring the mandatory reporting of greenhouse gas
emissions (HSC §38530). In December 2007, the Board adopted a regulation
requiring the largest industrial sources to report and verify their greenhouse gas
emissions. The reporting regulation serves as a solid foundation to determine
greenhouse gas emissions and track future changes in emission levels.
Identify and adopt regulations for Discrete Early Actions that could be
enforceable on or before January 1, 2010 (HSC §38560.5). The Board identified
nine Discrete Early Action measures including potential regulations affecting
landfills, motor vehicle fuels, refrigerants in cars, port operations and other
sources in 2007. The Board has already approved two Discrete Early Action
measures (ship electrification at ports and reduction of high GWP gases in
consumer products). Regulatory development for the remaining measures is
ongoing.
Ensure early voluntary reductions receive appropriate credit in the
implementation of AB 32 (HSC §38562(b)(3)). In February 2008, the Board
approved a policy statement encouraging voluntary early actions and establishing
a procedure for project proponents to submit quantification methods to be
evaluated by ARB. ARB, along with California’s local air districts and the
California Climate Action Registry, is working to implement this program.
Voluntary programs are discussed further in Chapter II and in Chapter IV.
5
I. Introduction
•
•
Scoping Plan
Convene an Environmental Justice Advisory Committee (EJAC) to advise the
Board in developing the Scoping Plan and any other pertinent matter in
implementing AB 32 (HSC §38591). The EJAC has met 12 times since early
2007, providing comments on the proposed Early Action measures and the
development of the Scoping Plan, and submitted its comments and
recommendations on the draft Scoping Plan in October 2008. ARB will continue
to work with The EJAC as AB 32 is implemented.
Appoint an Economic and Technology Advancement Advisory Committee
(ETAAC) to provide recommendations for technologies, research and greenhouse
gas emission reduction measures (HSC §38591). After a year-long public
process, The ETAAC submitted a report of their recommendations to the Board in
February 2008. The ETAAC also reviewed and provided comments on the Draft
Scoping Plan.
3. Climate Action Team
In addition to establishing greenhouse gas emissions reduction targets for California,
Executive Order S-3-05 established the Climate Action Team (CAT) for State
agencies in 2005. Chaired by the Secretary of the California Environmental
Protection Agency (CalEPA), the CAT has helped to direct State efforts on the
reduction of greenhouse gas
Climate Action Team
emissions and engage key State
California Environmental Protection Agency
agencies including ARB. The
Business,
Transportation, and Housing Agency
Health and Human Services
Health and Human Services Agency
Agency, represented by the
Resources Agency
Department of Public Health, is
State
and
Consumer Services Agency
the newest member of the
Governor’s Office of Planning and Research
CAT. Based on numerous
public meetings and the review
Air Resources Board
of thousands of submitted
California Energy Commission
comments, the CAT released
California Public Utilities Commission
its first report in March 2006,
Department of Food and Agriculture
identifying key carbon
Department of Forestry and Fire Protection
reduction recommendations for
Department of General Services
the Governor and Legislature.
Department of Parks and Recreation
Department of Transportation
In April 2007, the CAT
Department
of Water Resources
released a second report,
Integrated Waste Management Board
“Proposed Early Actions to
State Water Resources Control Board
Mitigate Climate Change in
California,” which details
numerous strategies that should be initiated prior to the 2012 deadline for other
climate action regulations and efforts.
AB 32 recognizes the essential role of the CAT in coordinating overall climate policy.
AB 32 does not affect the existing authority of other state agencies, and in addition to
6
Scoping Plan
I. Introduction
ARB, many state agencies will be responsible for implementing the measures and
strategies in this plan. The CAT is central to the success of AB 32, which requires an
unprecedented level of cooperation and coordination across State government. The
CAT provides the leadership for these efforts and helps ARB work closely with our
state partners on the development and implementation of the strategies in the Scoping
Plan.
There are currently 12 subgroups within the CAT – nine that address specific
economic sectors, and three that were formed to analyze broad issues related to
implementing a multi-sector approach to greenhouse gas emissions reduction efforts.
The CAT sector-based subgroups include: Agriculture, Cement, Energy, Forest,
Green Buildings, Land Use, Recycling and Waste Management, State Fleet, and
Water-Energy. The members of these subgroups are drawn from departments that
work with or regulate industries in the sector. ARB participated in each of the
subgroups. All of the subgroups held public meetings and solicited public input, and
many had multiple public workshops.
In March 2008, the subgroups collectively submitted more than 100 greenhouse gas
emissions reduction measures to ARB for consideration in the Draft Scoping Plan.
Many of those recommendations are reflected in this plan, and a number of them
focus on reducing greenhouse gas emissions from energy production and use.
Through the Energy Subgroup the California Energy Commission (CEC) and the
California Public Utilities Commission (CPUC) are conducting a joint proceeding to
provide recommendations on how best to address electricity and natural gas in the
implementation of AB 32, including evaluation of how the Electricity sector might
best participate in a cap-and-trade program. The two Commissions forwarded interim
recommendations to ARB in March 2008 that supported inclusion of the Electricity
sector in a multi-sector cap-and-trade program, and measures to increase the
penetration of energy efficiency programs in both buildings and appliances and to
increase renewable energy sources. The two Commissions have developed a second
proposed decision that was released in September 2008. This proposed decision
provides more detailed recommendations that relate to the electricity and natural gas
sectors. Because implementation of the Scoping Plan will require careful
coordination with the State’s energy policy, ARB will continue working closely with
the two Commissions on this important area during the implementation of the
recommendations in the Scoping Plan.
There are also three subgroups which are not sector-specific. The Economic
Subgroup reviewed cost information associated with potential measures that were
included in the 2006 CAT report with updates reflected in the report, “Updated
Macroeconomic Analysis of Climate Strategies,” in October 2007. This report
provided an update of the macroeconomic analysis presented in the March 2006 CAT
report to Governor Schwarzenegger and the Legislature. The Research Subgroup
coordinates climate change research and identifies opportunities for collaboration,
and is presently working on a report to the Governor. The State Operations Subgroup
7
I. Introduction
Scoping Plan
has been created to work with State agencies to create a statewide plan to reduce State
government’s greenhouse gas emissions by a minimum of 30 percent by 2020.
In the first quarter of 2009, the Climate Action Team will release a report on its
activities outside of its involvement in the development of the Scoping Plan. The
CAT report will focus on several cross-cutting topics with which members of the
CAT have been involved since the publication of the 2006 CAT report. The topics to
be covered include research on the physical and consequent economic impacts of
climate change as well as climate change research coordination efforts among the
CAT members. There will also be an update on the important climate change
adaptation efforts led by the Resources Agency and a discussion of cross-cutting
issues related to environmental justice concerns. The CAT report will be released in
draft form and will be available for public review in December 2008.
4. Development of the Greenhouse Gas Emission Reduction
Strategy
In developing the Scoping Plan, ARB considered the State’s existing climate change
policy initiatives and the Early Action measures identified by the Board. Several
advisory groups were formed to assist ARB in developing the Scoping Plan,
including the Environmental Justice Advisory Committee (EJAC), the Economic and
Technology Advancement Committee (ETAAC), and the Market Advisory
Committee (MAC).
The Environmental Justice Advisory Committee (HSC §38591(a) et seq) advises
ARB on development of the Scoping Plan and any other pertinent matter in
implementing AB 32. The Board appoints its members, based on nominations
received from environmental justice organizations and community groups.
The Economic and Technology Advancement Advisory Committee (HSC §38591(d))
includes members who are appointed by the Board based on expertise in fields of
business, technology research and development, climate change, and economics. The
ETAAC advises ARB on activities that will facilitate investment in, and
implementation of, technological research and development opportunities, funding
opportunities, partnership development, technology transfer opportunities, and related
areas that lead to reductions of greenhouse gas emissions.
Members of the Market Advisory Committee (created under Executive Order
S-20-06) were appointed by the Secretary of CalEPA based on their expertise in
economics and climate change. The MAC advised ARB on the design of a cap-andtrade program for reducing greenhouse gas emissions.
Along with input from the advisory groups, ARB received submittals to a public
solicitation for ideas, and numerous comments during public workshops, workgroup
meetings, community meetings, and meetings with stakeholder groups. ARB held
numerous workshops on the Draft Scoping Plan and convened workgroup meetings
focused on program design and economic analysis. ARB and other involved State
8
Scoping Plan
I. Introduction
agencies also held sector-specific technical workshops to look in greater detail at
potential emissions reduction measures.
ARB also looked outward to examine programs at the regional, national and
international levels. ARB met with and learned from experts from the European
Union, the United Kingdom, Japan, Australia, the United Nations, the Regional
Greenhouse Gas Initiative, the RECLAIM program, and the U.S. Environmental
Protection Agency (U.S. EPA).
After the release of the Draft Scoping Plan, ARB conducted workshops and
community meetings around the state to solicit public input. The Environmental
Justice Advisory Committee and the Economic and Technology Advancement
Advisory Committee held meetings to review and provide additional comments on
the Draft Scoping Plan. In addition, ARB held meetings with numerous stakeholder
groups to discuss specific greenhouse gas emissions reduction measures.
As described before, ARB has reviewed and considered both the written comments
and the verbal comments received at the public workshops and meetings with
stakeholders. This input, along with additional analysis, has ultimately shaped this
Scoping Plan.
5. Implementation of the Scoping Plan
The foundation of the Scoping Plan’s strategy is a set of measures that will cut
greenhouse gas emissions by nearly 30 percent by the year 2020 as compared to
business as usual and put California on a course for much deeper reductions in the
long term. In addition to pursuing the reduction of greenhouse gas emissions, other
strategies to mitigate climate change, such as carbon capture and storage
(underground geologic storage of carbon dioxide), should also be further explored.
And, as greenhouse gas reduction measures are implemented, we will continually
evaluate how these measures can be optimized to also help deliver a broad range of
public health benefits.
Most of the measures in this Scoping Plan will be implemented through the full
rulemaking processes at ARB or other agencies. These processes will provide
opportunity for public input as the measures are developed and analyzed in more
detail. This additional analysis and public input will likely provide greater certainty
about the estimates of costs and expected greenhouse gas emission reductions, as well
as the design details that are described in this Scoping Plan. With the exception of
Discrete Early Actions, which will be in place by January 1, 2010, other regulations
are expected to be adopted by January 1, 2011 and take effect at the beginning of
2012.
Some of the measures in the plan may deliver more emission reductions than we
expect; others less. It is also very likely that we will figure out new and better ways to
cut greenhouse gas emissions as we move forward. New technologies will no doubt
be developed, and new ideas and strategies will emerge. The Scoping Plan puts
9
I. Introduction
Scoping Plan
California squarely on the path to a clean energy future but it also recognizes that
adjustments will probably need to occur along the way and that as additional tools
become available they will augment, and in some cases perhaps even replace, existing
approaches.
California will not be implementing the measures in this Plan in a vacuum.
Significant new action on climate policy is likely at the federal level and California
and its partners in the Western Climate Initiative are working together to create a
regional effort for achieving significant reductions of greenhouse gas emissions
throughout the western United States and Canada. California is also developing a
state Climate Adaptation Strategy to reduce California’s vulnerability to known and
projected climate change impacts.
ARB and other State agencies will continue to monitor, lead and participate in these
broader activities. ARB will adjust the measures described here as necessary to
ensure that California’s program is designed to facilitate the development of
integrated and cost-effective regional, national, and international greenhouse gas
emissions reduction programs. (HSC §38564)
6. Climate Change in California
The impacts of climate change on California and its residents are occurring now. Of
greater concern are the expected future impacts to the state’s environment, public
health and economy, justifying the need to sharply cut greenhouse gas emissions.
In the Findings and Declarations for AB 32, the Legislature found that:
“The potential adverse impacts of global warming include the exacerbation of
air quality problems, a reduction in quality and supply of water to the state
from the Sierra snowpack, a rise in sea levels resulting in the displacement of
thousands of coastal businesses and residences, damage to the marine
ecosystems and the natural environment, and an increase in the incidences of
infectious diseases, asthma, and other health-related problems.”
The Legislature further found that global warming would cause detrimental effects to
some of the state’s largest industries, including agriculture, winemaking, tourism,
skiing, commercial and recreational fishing, forestry, and the adequacy of electrical
power.
The impacts of global warming are already being felt in California. The Sierra
snowpack, an important source of water supply for the state, has shrunk 10 percent in
the last 100 years. It is expected to continue to decrease by as much as 25 percent by
2050. World-wide changes are causing sea levels to rise – about 8 inches of increase
has been recorded at the Golden Gate Bridge over the past 100 years – threatening
low coastal areas with inundation and serious damage from storms.
10
Scoping Plan
C.
I. Introduction
California’s Greenhouse Gas Emissions and the 2020 Target
California is the fifteenth largest emitter of greenhouse gases on the planet, representing
about two percent of the worldwide emissions. Although carbon dioxide is the largest
contributor to climate change, AB 32 also references five other greenhouse gases: methane
(CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), and
perfluorocarbons (PFCs). Many other gases contribute to climate change and would also be
addressed by measures in this Scoping Plan.
Figure 1 and Table 1 show 2002 to 2004 average emissions and estimates for projected
emissions in 2020 without any greenhouse gas reduction measures (business-as-usual case).
The 2020 business-as-usual forecast does not take any credit for reductions from measures
included in this Plan, including the Pavley greenhouse gas emissions standards for vehicles,
full implementation of the Renewables Portfolio Standard beyond current levels of renewable
energy, or the solar measures. Additional information about the assumptions in the 2020
forecast is provided in Appendix F.
Figure 1: California’s Greenhouse Gas Emissions
(2002-2004 Average)14
Agriculture, 6%
High GWP, 3%
Recycling and Waste, 1%
Transportation, 38%
Industry, 20%
Commercial and
Residential, 9%
Electricity, 23%
As seen in Figure 1, the Transportation sector – largely the cars and trucks that move goods
and people – is the largest contributor with 38 percent of the state’s total greenhouse gas
emissions. Table 1 shows that if we take no action, greenhouse gas emissions in the
14
Air Resources Board. Greenhouse Gas Inventory. http://www.arb.ca.gov/cc/inventory/inventory.htm
(accessed October 12, 2008)
11
I. Introduction
Scoping Plan
Transportation sector are expected to grow by approximately 25 percent by 2020 (an increase
of 46 MMTCO2E).
The Electricity and Commercial/Residential Energy sector is the next largest contributor with
over 30 percent of the statewide greenhouse gas emissions. Although electricity imported
into California accounts for only about a quarter of our electricity, imports contribute more
than half of the greenhouse gas emissions from electricity because much of the imported
electricity is generated at coal-fired power plants. AB 32 specifically requires ARB to
address emissions from electricity sources both inside and outside of the state.
California’s Industrial sector includes refineries, cement plants, oil and gas production, food
processors, and other large industrial sources. This sector contributes almost 20 percent of
California’s greenhouse gas emissions, but the sector’s emissions are not projected to grow
significantly in the future. The sector termed recycling and waste management is a unique
system, encompassing not just emissions from waste facilities but also the emissions
associated with the production, distribution and disposal of products throughout the
economy.
Although high global warming potential (GWP) gases are a small contributor to historic
greenhouse gas emissions, levels of these gases are projected to increase sharply over the
next several decades, making them a significant source by 2020.
The Forest sector is unique in that forests both emit greenhouse gases and uptake carbon
dioxide (CO2). While the current inventory shows forests as a sink of 4.7 MMTCO2E,
carbon sequestration has declined since 1990. For this reason, the 2020 projection assumes
no net emissions from forests.
The agricultural greenhouse gas emissions shown are largely methane emissions from
livestock, both from the animals and their waste. Emissions of greenhouse gases from
fertilizer application are also important contributors from the Agricultural sector. ARB has
begun a research program to better understand the variables affecting these emissions.
Opportunities to sequester CO2 in the Agricultural sector may also exist; however, additional
research is needed to identify and quantify potential sequestration benefits.
In December 2007, ARB approved a greenhouse gas emissions target for 2020 equivalent to
the state’s calculated greenhouse gas emissions level in 1990. ARB developed the 2020
target after extensive technical work and a series of stakeholder meetings. The 2020 target of
427 MMTCO2E requires the reduction of 169 MMTCO2E, or approximately 30 percent, from
the state’s projected 2020 emissions of 596 MMTCO2E (business-as-usual) and the reduction
of 42 MMTCO2E, or almost 10 percent, from 2002-2004 average emissions.
12
Scoping Plan
I. Introduction
Table 1: 2002-2004 Average Emissions and
2020 Projected Emissions (Business-as-Usual)15
(MMTCO2E)
Sector
2002-2004 Average Emissions
Projected 2020 Emissions [BAU]
Transportation
179.3
225.4
Electricity
109.0
139.2
Commercial and Residential
41.0
46.7
Industry
95.9
100.5
5.6
7.7
High GWP
14.8
46.9
Agriculture
27.7
29.8
Forest Net Emissions
-4.7
0.0
Recycling and Waste
Emissions Total
469
596
Figure 2 presents California’s historic greenhouse gas emissions in a different way – based
not on the source of the emissions, but on the end use. This chart highlights the importance
of addressing on-road transportation sources of greenhouse gas emissions, as well as the
significant contribution from the heating, cooling, and lighting of buildings.
Figure 2: California’s Greenhouse Gas Emissions
– A Demand-Side View –
Other Transportation
2%
Cement Plants
2%
Agriculture/Food
Processing
9%
High GWP Gases
3%
On-Road Vehicles
36%
Industrial Manufacturing,
Construction and Mining
12%
Commercial Buildings
8%
Oil and Gas Extraction and
Refining
14%
Residential Buildings
14%
15
Ibid.
13
I. Introduction
Scoping Plan
The data shown in this section provide two ways to look at California’s greenhouse gas
profile – emissions-based and end use (demand side)-based. While it is possible to illustrate
the inventory many different ways, no chart or graph can fully display how diverse economic
sectors fit together. California’s economy is a web of activity where seemingly independent
sectors and subsectors operate interdependently and often synergistically. For example,
reductions in water use reduce the need to pump water, directly lowering electricity use and
associated greenhouse gas emissions. Similarly, reducing the generation of waste reduces the
need to transport the waste to landfills – lowering transportation emissions and, possibly,
landfill methane emissions. Increased recycling or re-use reduces the carbon emissions
embedded in products – it takes less energy to make a soda can made from recycled
aluminum than from virgin feedstock.
The measures included in this Scoping Plan are identified discretely, but many impact each
other, and changes in one measure can directly overlap and have a ripple effect on the
efficacy and success of other measures. The measures and policies outlined in this Plan
reflect these interconnections, and highlight the need for all agencies to work collaboratively
to implement the Scoping Plan.
14
Scoping Plan
II.
II. Recommended Actions
RECOMMENDED ACTIONS
Achieving the goals of AB 32 in a cost-effective manner will require a wide range of
approaches. Every part of California’s economy needs to play a role in reducing greenhouse
gas emissions. ARB’s comprehensive greenhouse gas emissions inventory lists emission
sources ranging from the largest refineries and power plants to small industrial processes and
farm livestock. The recommended measures were developed to reduce greenhouse gas
emissions from key sources and activities while improving public health, promoting a cleaner
environment, preserving our natural resources, and ensuring that the impacts of the
reductions are equitable and do not disproportionately impact low-income and minority
communities. These measures also put the state on a path to meet the long-term 2050 goal of
reducing California’s greenhouse gas emissions to 80 percent below 1990 levels. This
trajectory is consistent with the reductions that are needed globally to help stabilize the
climate. While the scale of this effort is considerable, our experience with cultural and
technological changes makes California well-equipped to handle this challenge.
ARB evaluated a comprehensive array of approaches and tools to achieve these emission
reductions. Reducing greenhouse gas emissions from the wide variety of sources can best be
accomplished though a cap-and-trade program along with a mix of complementary strategies
that combine market-based regulatory approaches, other regulations, voluntary measures,
fees, policies, and programs. ARB will monitor implementation of these measures to ensure
that the State meets the 2020 limit on greenhouse gas emissions.
An overall limit on greenhouse gas emissions from most of the California economy – the
“capped sectors” – will be established by the cap-and-trade program. (The basic elements of
the cap-and-trade program are described later in this chapter.) Within the capped sectors,
some of the reductions will be accomplished through direct regulations such as improved
building efficiency standards and vehicle efficiency measures. Whatever additional
reductions are needed to bring emissions within the cap are accomplished through price
incentives posed by emissions allowance prices. Together, direct regulation and price
incentives assure that emissions are brought down cost-effectively to the level of the overall
cap. ARB also recommends specific measures for the remainder of the economy – the
“uncapped sectors.”
15
II. Recommended Actions
Scoping Plan
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.
The recommended greenhouse gas emissions reduction measures are listed in Table 2 and are
summarized in Section C below. The total reduction for the recommended measures slightly
exceeds the 169 MMTCO2E of reductions estimated in the Draft Scoping Plan. This is the
net effect of adding several measures and adjusting the emission reduction estimates for
some other measures. The 2020 emissions cap in the cap-and-trade program is preserved at
the same level as in the Draft Scoping Plan (365 MMTCO2E).
The measures listed in Table 2 lead to emissions reductions from sources within the capped
sectors (146.7 MMTOCO2E) and from sources or sectors not covered by cap-and-trade (27.3
MMTCO2E). As mentioned, within the capped sectors the reductions derive both from direct
regulation and from the incentives posed by allowance prices. Further discussion of how the
cap-and-trade program and the complementary measures work together to achieve the overall
target is provided below.
Table 2 also lists several other recommended measures which will contribute toward
achieving the 2020 statewide goal, but whose reductions are not (for various reasons
including the potential for double counting) additive with the other measures. Those
measures and the basis for not including their reductions are further discussed in Section C.
16
Scoping Plan
II. Recommended Actions
Table 2: Recommended Greenhouse Gas Reduction Measures
Reductions
Counted Towards
2020 Target (MMTCO2E)
ESTIMATED REDUCTIONS RESULTING FROM THE COMBINATION OF CAP146.7
AND-TRADE PROGRAM AND COMPLEMENTARY MEASURES
California Light-Duty Vehicle Greenhouse Gas Standards
31.7
• Implement Pavley standards
• Develop Pavley II light-duty vehicle standards
Energy Efficiency
• Building/appliance efficiency, new programs, etc.
26.3
• Increase CHP generation by 30,000 GWh
• Solar Water Heating (AB 1470 goal)
Renewables Portfolio Standard (33% by 2020)
21.3
Low Carbon Fuel Standard
15
Regional Transportation-Related GHG Targets16
5
Vehicle Efficiency Measures
4.5
Goods Movement
3.7
• Ship Electrification at Ports
• System-Wide Efficiency Improvements
Million Solar Roofs
2.1
Medium/Heavy Duty Vehicles
• Heavy-Duty Vehicle Greenhouse Gas Emission Reduction
1.4
(Aerodynamic Efficiency)
• Medium- and Heavy-Duty Vehicle Hybridization
High Speed Rail
1.0
Industrial Measures (for sources covered under cap-and-trade program)
0.3
• Refinery Measures
• Energy Efficiency & Co-Benefits Audits
34.4
Additional Reductions Necessary to Achieve the Cap
ESTIMATED REDUCTIONS FROM UNCAPPED SOURCES/SECTORS
27.3
High Global Warming Potential Gas Measures
20.2
Sustainable Forests
5.0
Industrial Measures (for sources not covered under cap and trade program)
1.1
• Oil and Gas Extraction and Transmission
Recycling and Waste (landfill methane capture)
1.0
TOTAL REDUCTIONS COUNTED TOWARDS 2020 TARGET
174
Estimated 2020
Other Recommended Measures
Reductions (MMTCO2E)
State Government Operations
1-2
Local Government Operations
TBD
Green Buildings
26
Recycling and Waste
9
• Mandatory Commercial Recycling
• Other measures
Water Sector Measures
4.8
Methane Capture at Large Dairies
1.0
Recommended Reduction Measures
16
This number represents an estimate of what may be achieved from local land use changes. It is not the
SB 375 regional target. ARB will establish regional targets for each Metropolitan Planning Organization
(MPO) region following the input of the Regional Targets Advisory Committee and a public consultation
process with MPOs and other stakeholders per SB 375.
17
II. Recommended Actions
Scoping Plan
The development of a California cap-and-trade program that links with other Western
Climate Initiative partner programs to create a regional market system is a central feature of
the overall recommendation. This program will lead to prices on greenhouse gas emissions,
prices that will spur reductions in greenhouse gas emissions throughout the California
economy, through application of existing technologies and through the creation of new
technological and organizational options. The rationale for combining a cap-and-trade
program with complementary measures was outlined by the Market Advisory Committee,
which noted the following in its recommendations to the ARB:
Before setting out the key design elements of a cap-and-trade program it is important
to explain how the proposed emissions trading approach relates to other policy
measures. The following considerations seem especially relevant:
• The emissions trading program puts a cap on the total emissions generated by
facilities covered under the system. Because a certain number of emissions
allowances are put in circulation in each compliance period, this approach
provides a measure of certainty about the total quantity of emissions that will
be released from entities covered under the program.
• The market price of emissions allowances yields an enduring price signal for
GHG emissions across the economy. This price signal provides incentives for
the market to find new ways to reduce emissions.
• By itself, a cap-and-trade program alone will not deliver the most efficient
mitigation outcome for the state. There is a strong economic and public policy
basis for other policies that can accompany an emissions trading system. 17
The Economic and Technology Advancement Advisory Committee (ETAAC) also addressed
the benefits associated with a combined policy of cap and trade and complementary
measures.
A declining cap can send the right price signals to shape the behavior of consumers
when purchasing products and services. It would also shape business decisions on
what products to manufacture and how to manufacture them. Establishing a price for
carbon and other GHG emissions can efficiently tilt decision-making toward cleaner
alternatives. This cap and trade approach (complemented by technology-forcing
performance standards) avoids the danger of having government or other centralized
decision-makers choose specific technologies, thereby limiting the flexibility to allow
other options to emerge on a level playing field.
17
Recommendations of the Market Advisory Committee to the California Air Resources Board.
Recommendations for Designing a Greenhouse Gas Cap-and-Trade System for California. June 30, 2007.
p. 19. http://www.climatechange.ca.gov/publications/market_advisory_committee/2007-0629_MAC_FINAL_REPORT.PDF (accessed October 12, 2008)
18
Scoping Plan
II. Recommended Actions
If markets were perfect, such a cap and trade system would bring enough new
technologies into the market and stimulate the necessary industrial RD&D to solve
the climate change challenge in a cost effective manner. As the Market Advisory
Committee notes, however, placing a price on GHG emissions addresses only one of
many market failures that impede solutions to climate change. Additional market
barriers and co-benefits would not be addressed if a cap and trade system were the
only state policy employed to implement AB 32. Complementary policies will be
needed to spur innovation, overcome traditional market barriers (e.g., lack of
information available to energy consumers, different incentives for landlords and
tenants to conserve energy, different costs of investment financing between
individuals, corporations and the state government, etc.) and address distributional
impacts from possible higher prices for goods and services in a carbon-constrained
world.18
The Environmental Justice Advisory Committee (EJAC) also supports an approach that
includes a price on carbon along with complementary measures. Although the EJAC
recommends that the carbon price be established through a carbon fee rather than through a
cap-and-trade program, they recognize the importance of mutually supportive policies:
California should establish a three-pronged approach for addressing greenhouse
gases: (1) adopting standards and regulations; (2) providing incentives; and
(3) putting a price on carbon via a carbon fee. The three pieces support one another
and no single prong can work without equally robust support from the others.19
In keeping with the rationale outlined above, ARB finds that it is critically important to
include complementary measures directed at emission sources that are included in the capand-trade program. These measures are designed to achieve cost-effective emissions
reductions while accelerating the necessary transition to the low-carbon economy required to
meet the 2050 target:
• The already adopted Light-Duty Vehicle Greenhouse Gas Standards are designed to
accelerate the introduction of low-greenhouse gas emitting vehicles, reduce emissions
and save consumers money at the pump.
• The Low Carbon Fuel Standard (LCFS) is a flexible performance standard designed
to accelerate the availability and diversity of low-carbon fuels by taking into
consideration the full life-cycle of greenhouse gas emissions. The LCFS will reduce
emissions and make our economy more resilient to future petroleum price volatility.
• The Regional Transportation-Related Greenhouse Gas Targets provide incentives for
channeling investment into integrated development patterns and transportation
18
Recommendations of the Economic and Technical Advancement Advisory Committee (ETAAC), Final
Report. Technologies and Policies to Consider for Reducing Greenhouse Gas Emissions in California.
February 14, 2008. pp. 1-4 http://www.arb.ca.gov/cc/etaac/ETAACFinalReport2-11-08.pdf (accessed October
12, 2008)
19
Recommendations and Comments of the Environmental Justice Advisory Committee on the Implementation
of the Global Warming Solutions Act of 2006 (AB32) on the Draft Scoping Plan. October 2008. p. 10.
http://www.arb.ca.gov/cc/ejac/ejac_comments_final.pdf (accessed October 12, 2008)
19
II. Recommended Actions
•
•
•
•
•
Scoping Plan
infrastructure, through improved planning. Improved planning and the resulting
development are essential for meeting the 2050 emissions target.
In the Energy sector, measures will provide better information and overcome
institutional barriers that slow the adoption of cost-effective energy efficiency
technologies. Enhanced energy efficiency programs will provide incentives for
customers to purchase and install more efficient products and processes, and building
and appliance standards will ensure that manufacturers and builders bring improved
products to market.
The Renewables Portfolio Standard (RPS) promotes multiple objectives, including
diversifying the electricity supply. Increasing the RPS to 33 percent is designed to
accelerate the transformation of the Electricity sector, including investment in the
transmission infrastructure and system changes to allow integration of large quantities
of intermittent wind and solar generation.
The Million Solar Roofs Initiative uses incentives to transform the rooftop solar
market by driving down costs over time.
The Goods Movement program is primarily intended to achieve criteria and toxic air
pollutant reductions but will provide important greenhouse gas benefits as well.
Similar to the light duty vehicle greenhouse gas standards, the heavy duty and
medium duty vehicle measures and the additional light duty vehicle efficiency
measures aim to achieve cost-effective reductions of GHG emissions and save fuel.
Each of these complementary measures helps to position the California economy for the
future by reducing the greenhouse gas intensity of products, processes, and activities. When
combined with the absolute and declining emissions limit of the cap-and-trade program,
these policies ensure that we cost-effectively achieve our greenhouse gas emissions goals and
set ourselves on a path towards a clean low carbon future.
Figure 3 illustrates how the recommended emission reduction measures together put
California on a path toward achieving the 2020 goal. The left hand column in Figure 3
shows total projected business as usual emissions in 2020, by sector (596 MMTCO2E). The
right hand column shows 2020 emissions after applying the Scoping Plan recommended
reduction measures (422 MMTCO2E). The measures that accomplish the needed reductions
are listed in between the columns. As Figure 3 shows, there are a total of 27.3 MMTCO2E in
reductions from uncapped sectors, and 146.7 MMTCO2E in reductions from capped sectors.
20
Scoping Plan
II. Recommended Actions
Figure 3: California Greenhouse Gas Emissions in 2020 and
Recommended Reduction Measures
MMTCO2E
Reduction Measures
700
Total Emissions:
596 MMTCO2E
600
Reductions from uncapped sectors:
Total reductions of 27.3 MMT
Industrial measures:
1.1 MMT
High GWP measures: 20.2 MMT
Recycling & waste:
1.0 MMT
Sustainable forests:
5.0 MMT
Agriculture
High GWP
Recycling & waste
500
Total Emissions
422 MMTCO2E
Industry
400
300
Agriculture
Natural gas
Electricity
200
100
Transportation
Reductions from
capped sectors:
Total reductions of 146.7 MMT
(including 112.3 MMT
from specified measures):
Pavley standards: 31.7 MMT
Energy efficiency: 26.3 MMT
33% RPS:
21.3 MMT
LCFS:
15.0 MMT
Regional targets: 5.0 MMT
Vehicle efficiency: 4.5 MMT
Goods movement: 3.7 MMT
Million solar roofs: 2.1 MMT
Heavy/medium veh: 1.4 MMT
Industrial measures: 0.3 MMT
High speed rail:
1.0 MMT
High GWP
Recycling & waste
Cap is set at 365 MMT
Capped sectors
0
Business-as-Usual
Scoping Plan
The recommended cap-and-trade program provides covered sources with the flexibility to
pursue low cost reductions. It is important to recognize, however, that other recommended
measures also provide compliance flexibility. As is often the case with ARB regulations,
many of the measures establish performance standards and allow regulated entities to
determine how best to achieve the required emission level. This approach rewards
innovation and allows facilities to take advantage of the best way to meet the overarching
environmental objective.
Table 3 lists the proposed measures that include compliance flexibility or market
mechanisms. This flexibility ranges from the potential for tradable renewable energy credits
in the Renewables Portfolio Standard to the incentives to encourage emission reductions in
electricity and natural gas efficiency programs to the averaging, banking and trading
mechanisms in the Pavley and Low Carbon Fuel Standard programs to a multi-sector capand-trade program.
21
II. Recommended Actions
Scoping Plan
Table 3: Measures With Flexible Market Compliance Features
Measure
Estimated Reductions
Additional Reductions from Capped Sectors
34.4
California Light-Duty Vehicle Greenhouse Gas Standards
(Pavley I & II)
31.7
Renewables Portfolio Standard
21.3
Electricity Efficiency
15.2
Low Carbon Fuel Standard
15.0
Mitigation Fee on High GWP Gases
5.0
Natural Gas Efficiency
4.3
Goods Movement Systemwide Efficiency
3.5
Medium/Heavy Duty Vehicle Hybridization
Total
0.5
130.9
The recommended mix of measures builds on a strong foundation of previous action in
California to address climate change and broader environmental issues. The program
recommended here relies on implementing existing laws and regulations that were adopted to
reduce greenhouse gas emissions and other policy goals; strengthening and expanding
existing programs; implementing the discrete early actions adopted by the Board in 2007;
and new measures developed during the Scoping Plan process itself.
The mix of measures recommended in this Plan provides a comprehensive approach to
reduce emissions to achieve the 2020 target, and to initiate the transformations required to
achieve the 2050 target. The cap-and-trade program and complementary measures will cover
about 85 percent of greenhouse gas emissions throughout California’s economy. ARB
recognizes that due to several factors, including information discovered during regulatory
development, technology maturity, and implementation challenges, actual reductions from
individual measures aimed at achieving the 2020 target may be higher or lower than current
estimates. The inclusion of many of these emissions within the cap-and-trade program, along
with a margin of safety in the uncapped sectors, will help ensure that the 2020 target is met.
The combination of approaches provides certainty that the overall program will meet the
target despite some degree of uncertainty in the estimates for any individual measure.
Additionally, by internalizing the cost of CO2E emissions throughout the economy, the capand-trade program supports the complementary measures and provides further incentives for
innovation and continuing emissions reductions from energy producers and consumers
setting us on a path toward our 2050 goals.
Some emissions sources are not currently suitable for inclusion in the cap-and-trade program
due to challenges associated with precise measurement, tracking or sector structure. For
these emissions sources, ARB is including measures designed to focus on waste
management, agriculture, forestry, and certain emissions of high GWP gases, a rapidly
growing component of California’s greenhouse gas emissions inventory.
22
Scoping Plan
II. Recommended Actions
California’s economy is expected to continue to experience robust growth through 2020.
Economic modeling, including evaluation of the effects on low-income Californians, shows
that the measures included within this Scoping Plan can be implemented with a net positive
effect on California’s long-term economic growth. The evaluation of related public health
and environmental benefits of the various measures also shows that implementation will
result in not only reduced greenhouse gas emissions and improved public health, but also in a
beneficial effect on California’s environment. The results of these evaluations are presented
in Chapter III.
AB 32 includes specific criteria that ARB must consider before adopting regulations for
market-based compliance mechanisms to implement a greenhouse gas reduction program,
and directs the Board, to the extent feasible, to design market-based compliance mechanisms
to prevent any increase in the emissions of toxic air contaminants or criteria air pollutants. In
the development of regulations that contain market mechanisms, ARB will consider the
economic, environmental and public health effects, and the evaluation of potential localized
impacts. These results will be used to institute appropriate economic, environmental and
public health safeguards.
ARB has also designed the recommendation to ensure that reductions will come from
throughout the California economy. Transportation accounts for the largest share of
California’s greenhouse gas emissions. Accordingly, a large share of the reduction of
greenhouse gas emissions from the recommended measures comes from this sector.
Measures include the inclusion of transportation fuels in the cap-and-trade program, the Low
Carbon Fuel Standard to reduce the carbon intensity of transportation fuels, enforcement of
regulations that reduce greenhouse gas emissions from vehicles, and policies to reduce
transportation emissions by changes in future land use patterns and community design as
well as improvements in public transportation.
In the Energy sector, the recommended measures increase the amount of electricity from
renewable energy sources, and improve the energy efficiency of industries, homes and
buildings. The inclusion of these sectors and the Industrial sector in the cap-and-trade
program provides further assurance that significant cost-effective reductions will be achieved
from the sectors that contribute the greatest emissions. Additional energy production from
renewable resources may also rely on measures suggested in the Agriculture, Water, and the
Recycling and Waste Management Sectors.
Other sectors are also called upon to cut emissions. The cap-and-trade program covers
industrial sources and natural gas use. The recommended measures would require industrial
processes to examine how to lower their greenhouse gas emissions and be more energy
efficient, and would require goods movement operations through California’s ports to be
more energy efficient. Other measures address waste management, agricultural and forestry
practices, as well as the transport and treatment of water throughout the state. Finally, the
recommended measures address ways to reduce or eliminate the emissions of high global
warming potential gases that, on a per-ton basis, contribute to global warming at a level
many times greater than carbon dioxide.
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II. Recommended Actions
Scoping Plan
As the Scoping Plan is implemented, ARB and other agencies will coordinate with the Green
Chemistry Initiative, particularly in the Green Building and Recycling/Waste sectors. Green
Chemistry is a fundamentally new approach to environmental protection that emphasizes
environmental protection at the design stage of product and manufacturing processes, rather
than focusing on end-of-pipe or end-of-life activities, or a single environmental medium,
such as air, water or soil. This new approach will reduce the use of harmful chemicals,
generate less waste, use less energy, and, accordingly, will contribute toward California’s
greenhouse gas reduction goals.
A.
The Role of State Government: Setting an Example
For many years California State government has successfully incorporated environmental
principles in managing its resources and running its business. The Governor has directed
State agencies to sharply reduce their building-related energy use and encouraged our Staterun pensions to invest in energy efficient and clean technologies.20 The State also has been
active in procuring low-emission, alternative fuel vehicles in its large fleet.
While State government has already accomplished much to reduce its greenhouse gas
emissions, it can and must do more. State agencies must lead by example by continuing to
reduce their greenhouse gas emissions. Therefore, California State government has
established a target of reducing its greenhouse gas emissions by a minimum of 30 percent
below its estimated business-as-usual emissions by 2020 – approximately a 15 percent
reduction from current levels.
As an owner-operator of key infrastructure, State government has the ability to ensure that
the most advanced, cost-effective environmental performance requirements are used in the
design, construction, and operation of State facilities. As a purchaser with significant market
power, State government has the ability to demand that the products and services it procures
contribute positively toward California’s targets to reduce greenhouse gas emissions, such as
through the efforts of Environmentally Preferable Purchasing. As an investor of more than
$400 billion,21 State government has the ability to prioritize low-carbon investments. With
more than 350,000 employees, State government is uniquely situated to adopt and implement
policies that give State workers the ability to decrease their individual carbon impact,
including encouraging siting facilities within communities to enhance balance in jobs and
housing, encouraging carpooling, biking, walking, telecommuting, the use of public transit,
and the use of alternative work schedules.
20
Governor Schwarzenegger signed Executive Order Executive Order S-20-04 on December 14, 2004. This
Order contains a number of directives, including a set of aggressive goals for reducing state building energy use
and requested the California Public Employees Retirement System (CalPERS) and the California State Teachers
Retirement System (CalSTRS) to target resource-efficient buildings for real estate investments and commit
funds toward clean, efficient and sustainable technologies.
21
CalPERS and CalSTRS are the two largest pension systems in the nation with investments in excess of
$400 billion as of August 2008.
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II. Recommended Actions
Myriad opportunities exist for California State government to operate more efficiently.
These opportunities will not only reduce greenhouse gas emissions but also will produce
savings for California taxpayers. Initiatives now underway that will contribute to the State
government reduction target include the Governor’s Green Building Initiative and the
Department of General Services’ efforts to increase the number of fuel-efficient vehicles in
the State fleet.
Major efforts to expand renewable energy use and divest from coal-fired power plants are
currently underway. Together with energy conservation and efficiency strategies on water
projects, roadways, parks, and bridges, these efforts all play major roles in reducing the
State’s greenhouse gas emissions. State agencies should review their travel practices and
make greater use of teleconferencing and videoconferencing to reduce the need for business
travel, particularly air travel.
State agencies are now examining their policies and operations to determine how they can
reduce their greenhouse gas emissions. These findings will be instrumental as each cabinetlevel agency registers with the California Climate Action Registry (CCAR) to record and
report their individual carbon footprints. The Climate Action Team has created a new State
Government Operations sub-group that will work closely with the agencies to review the
results of their evaluations and the CCAR reports to determine how best to achieve the
maximum reductions possible.
State agencies must take the lead in driving this low-carbon economy by reducing their own
emissions, and also by serving as a catalyst for local government and private sector activity.
New “Best Practices” implemented by State agencies can be transferred to other entities
within California, the nation, and internationally. By increasing cooperation and
coordination across organizational boundaries, State government will maximize the
experience and contributions of each agency involved to achieve the 30 percent reduction of
greenhouse gas emissions while growing the economy and protecting the environment.
State government’s impact on emissions goes far beyond its own buildings, vehicles,
projects, and employees. State government casts a sizable “carbon shadow”– that is, the
climate change impact of legislative, executive, and financial actions of State agencies that
affect Californians now and in the future. For example, the California Energy Commission
(CEC) recently initiated a proceeding to consider how to align its permitting process with the
State’s greenhouse gas and renewable energy policy goals. ARB intends to work closely
with the CEC during this proceeding. New power plants, both fossil-fuel fired and renewable
generation, will be a critical part of the state’s electricity mix in coming decades. The
investments that are made in this new infrastructure in the next several years will become
part of the backbone of the state’s electricity supply for decades to come. This timely
investigation will be a critical element of California’s ability to meet the AB 32 emissions
reduction target for 2020, the ambitious target set by the Governor for 2050, and also the
specific goal of achieving 33 percent renewables in the state’s electricity mix. The
Governor’s Office of Planning and Research and the Resources Agency are developing
proposed amendments to the California Environmental Quality Act (CEQA) Guidelines to
25
II. Recommended Actions
Scoping Plan
provide guidance on how to address greenhouse gases in CEQA documents. As required by
SB 97 (Chapter 185, Statutes of 2007), the amended CEQA guidelines will be adopted by
January 1, 2010.
In addition, agencies such as the California Labor and Workforce Development Agency, the
Business, Transportation and Housing Agency and the newly created Green Collar Jobs
Council (AB 3018, Chapter 312, Statutes of 2008) are dedicated to economic development,
training, safety, labor relations, and employment development throughout the State. ARB
will coordinate with the Council and also with other State agencies to address workforce
needs and facilitate a smooth transition to California’s emerging low-carbon economy that
maximizes economic development and employment opportunities in California.
The State expends funds to provide services to California residents – from preserving our
natural resources to building and maintaining infrastructure like roads, bridges and dams.
California residents should reap all of the benefits of these projects, including any associated
quantifiable and marketable reductions in greenhouse gas emissions. Because of this,
California should retain ownership of these greenhouse gas emissions reductions and use
them to promote the goals of AB 32 and other goals of the state.
California State government can also lead through example by aligning its efforts to reduce
greenhouse gas emissions with efforts to protect and improve public health. As a new
member of the Climate Action Team, the Department of Public Health will help ensure that
measures to combat global warming also incorporate public health protection and
improvement strategies. As discussed below, these and many other State leadership efforts
can be built upon at the local level as well.
B.
The Role of Local Government: Essential Partners
Local governments are essential partners in achieving California’s goals to reduce
greenhouse gas emissions. They have broad influence and, in some cases, exclusive
authority over activities that contribute to significant direct and indirect greenhouse gas
emissions through their planning and permitting processes, local ordinances, outreach and
education efforts, and municipal operations. Many of the proposed measures to reduce
greenhouse gas emissions rely on local government actions.
Over 120 California cities have already signed on to the U.S. Conference of Mayors Climate
Protection Agreement. In addition, over 30 California cities and counties have committed to
developing and implementing Climate Action Plans. Many local governments and related
organizations have already begun educating Californians on the benefits of energy efficiency
measures, public transportation, solar homes, and recycling. These communities have not
only demonstrated courageous leadership in taking initiative to reduce greenhouse gas
emissions, they are also reaping important co-benefits, including local economic benefits,
more sustainable communities, and improved quality of life.
26
Scoping Plan
II. Recommended Actions
Land use planning and urban growth decisions are also areas where successful
implementation of the Scoping Plan relies on local government. Local governments have
primary authority to plan, zone, approve, and permit how and where land is developed to
accommodate population growth and the changing needs of their jurisdictions. Decisions on
how land is used will have large impacts on the greenhouse gas emissions that will result
from the transportation, housing, industry, forestry, water, agriculture, electricity, and natural
gas sectors.
To provide local governments guidance on how to inventory and report greenhouse gas
emissions from government buildings, facilities, vehicles, wastewater and potable water
treatment facilities, landfill and composting facilities, and other government operations, ARB
recently adopted the Local Government Operations Protocol. ARB encourages local
governments to use this protocol to track their progress in achieving reductions from
municipal operations. ARB is also developing an additional protocol for community
emissions. This protocol will go beyond just municipal operations and include emissions
from the community as a whole, including residential and commercial activity. These local
protocols will play a key role in ensuring that strategies that are developed and implemented
at the local level, like urban forestry and greening projects, water and energy efficiency
projects, and others, can be appropriately quantified and credited toward California’s efforts
to reduce greenhouse gas emissions.
In addition to tracking emissions using these protocols, ARB encourages local governments
to adopt a reduction goal for municipal operations emissions and move toward establishing
similar goals for community emissions that parallel the State commitment to reduce
greenhouse gas emissions by approximately 15 percent from current levels by 2020. To
consolidate climate action resources and aid local governments in their emission reduction
efforts, the ARB is developing various tools and guidance for use by local governments,
including the next generation of best practices, case studies, a calculator to help calculate
local greenhouse gas emissions, and other decision support tools.
The recent passage of SB 375 (Steinberg, Chapter 728, Statutes of 2008) creates a process
whereby local governments and other stakeholders work together within their region to
achieve reduction of greenhouse gas emissions through integrated development patterns,
improved transportation planning, and other transportation measures and policies. The
implementation of regional transportation-related greenhouse gas emissions targets and
SB 375 are discussed in more detail in Section C.
C.
Emissions Reduction Measures
The Scoping Plan will build on California’s successful history of balancing effective
regulations with economic progress. Several types of measures have been recommended.
The plan includes a California cap-and-trade program that will be integrated with a broader
regional market to maximize cost-effective opportunities to achieve GHG emissions
reductions. The plan also includes transformational measures that are designed to help pave
the path toward California’s clean energy future. For example, the Low Carbon Fuel
27
II. Recommended Actions
Scoping Plan
Standard (LCFS) is a performance standard with flexible compliance mechanisms that will
incent the development of a diverse set of clean, low-carbon transportation fuel options.
Similarly, the plan recognizes the importance of local and regional government leadership in
ensuring that California’s land use and transportation planning processes are designed to be
consistent with efforts to achieve a clean energy future and to protect and enhance public
health and safety.
The Scoping Plan also contains a number of targeted measures that are designed to overcome
existing barriers to action such as lack of information, lack of coordination, or other
regulatory and institutional factors. Energy efficiency is a classic example where costeffective action often is not taken due to lack of complete information, relatively high initial
costs, and mismatches between who pays for and who benefits from efficiency investments.
These problems often mean that efficiency measures are not taken that would save money in
the long term for small businesses, home owners and renters. While California has a long
history of success in implementing regulations and programs to encourage energy efficiency,
innovative methods to overcome these economic and information barriers are needed to
provide the benefits of increased efficiency to more Californians and to meet our greenhouse
gas emissions reduction goals.
Several of the recommended measures complement each other. For example, the LCFS will
provide clean transportation fuel options. The Pavley performance standards help deploy
vehicles that can use many of the low-carbon fuels, including advanced biofuels, electricity
and hydrogen. The combined operation of both programs will make it more likely that more
efficient, less polluting vehicles will use the cleanest possible fuels. In addition, both of
these programs will benefit from ARB’s zero-emission vehicle program, which focuses on
deployment of plug-in battery-electric and fuel cell vehicles. All of these strategies are
expandable beyond 2020, and are needed as vital components to reach the State’s 2050 goal.
The cap-and-trade program creates an emissions limit or “cap” on the sectors responsible for
the vast majority of California’s greenhouse gas emissions and provides capped sources
significant flexibility in how they collectively achieve the reductions necessary to meet the
cap. The other measures in these capped sectors provide a clear path toward achieving
reductions required by the cap, while simultaneously addressing market barriers and creating
the low-carbon energy options needed to achieve our long term climate goals. In the design
of the cap-and-trade program, ARB will also evaluate possible ways to include features that
complement the other measures, such as consideration of allowance set-asides that could be
used to help achieve or exceed the aggressive energy efficiency goals included in this Plan.
Both required measures and other cost-effective actions by capped sectors will contribute
toward achievement of the cap. For example, increasing energy efficiency will reduce
electricity demand, thereby reducing the need for utilities to submit allowances to comply
with the cap-and-trade program. In this way, energy efficiency contributes to real reductions
toward the cap. Expiration of existing utility long-term contracts with coal plants will reduce
GHG emissions when such generation is replaced by renewable generation, coal with carbon
sequestration, or natural gas generation, which emits less CO2 per megawatt-hour.
28
Scoping Plan
II. Recommended Actions
Additionally, measures and other actions that result in reductions in energy demand
‘downstream’ of capped sectors will help achieve the cap. For example, the Pavley vehicle
standards, building efficiency standards, and land use planning that contributes to reduced
transportation fuel demand will all reduce emissions by reducing the demand for upstream
energy production. These downstream entities will further benefit from these reductions by
avoiding any costs that would be passed through from a cap-and-trade system.
Discrete Early Actions
In September 2007, ARB approved a list of nine Discrete Early Actions to reduce
greenhouse gas emissions and is currently in the process of developing regulations
and programs based on these measures. Regulations implementing the Discrete Early
Action measures must be adopted and in effect by January 1, 2010
(HSC §38560.5 (b)). All the Discrete Early Actions are included in the recommended
measures and are shown below in Table 4.
Table 4: Anticipated Board Consideration Dates
for Discrete Early Actions
Discrete Early Action
Green Ports – Ship Electrification at Ports
Reduction of High GWP Gases in Consumer Products
SmartWay – Heavy-Duty Vehicle Greenhouse Gas Emission
Reduction (Aerodynamic Efficiency)
Reduction of Perfluorocarbons from Semiconductor
Manufacturing
Improved Landfill Gas Capture
Reduction of HFC-134a from Do-It-Yourself Motor Vehicle
Servicing
SF6 Reductions from the Non-Electric Sector
Tire Inflation Program
Low Carbon Fuel Standard
Anticipated Board
Consideration
December 2007 – Adopted
June 2008 – Adopted
December 2008
February 2009
January 2009
January 2009
January 2009
March 2009
March 2009
The following sections describe the recommended measures in this Scoping Plan.
Additional information about these measures is provided in Appendix C.
29
II. Recommended Actions
Scoping Plan
1. California CapCap-andand-Trade Program Linked to
Western Climate Initiative Partner Jurisdictions
Implement a broad-based California cap-and-trade program to provide a firm limit
on emissions. Link the California cap–and-trade program with other Western
Climate Initiative Partner programs to create a regional market system to achieve
greater environmental and economic benefits for California. Ensure California’s
program meets all applicable AB 32 requirements for market-based mechanisms.
California is working closely with other states and provinces in the Western Climate
Initiative (WCI) to design a regional cap-and-trade program that can deliver
reductions of greenhouse gas emissions throughout the region. ARB will develop a
cap-and-trade program for California that will link with the programs in the other
WCI Partner jurisdictions to create a regional cap-and-trade program. The WCI
Partner jurisdictions released the program design document on September 23, 2008
(see Appendix D). ARB will continue to work with the WCI Partner jurisdictions to
develop and implement the cap-and-trade program. ARB will also design the
California program to meet the requirements of AB 32, including the need to consider
any potential localized impacts and ensure that reductions are enforceable by the
Board.
Based on the requirements of AB 32, regulations to implement the cap-and-trade
program need to be developed by January 1, 2011, with the program beginning in
2012. This rule development schedule will be coordinated with the WCI timeline for
developing a regional cap-and-trade program. Preliminary plans for this rulemaking
are described later in this section.
A cap-and-trade program sets the total amount of greenhouse gas emissions allowable
for facilities under the cap and allows covered sources, including producers and
consumers of energy, to determine the least expensive strategies to comply. The
emissions allowed under the cap will be denominated in metric tons of CO2E. The
currency will be in the form of allowances which the State will issue based upon the
total emissions allowed under the cap during any specific compliance period.
Emission allowances can be banked for future use, encouraging early reductions and
reducing market volatility. The ability to trade allows facilities to adjust to changing
conditions and take advantage of reduction opportunities when those opportunities are
less expensive than buying additional emissions allowances.
Provisions could be made to allow a limited use of surplus reductions of greenhouse
gas emissions that occur outside of the cap. These additional reductions are known as
offsets and are discussed further below. In order to be used to meet a source’s
compliance obligation, offsets will be subject to stringent criteria and verification
procedures to ensure their enforceability and consistency with AB 32 requirements.
Appendix C describes the fundamentals of a cap-and-trade program and program
design elements. Appendix D contains the WCI Design Recommendations and
related background documents.
30
Scoping Plan
II. Recommended Actions
California CapCap-andand-Trade Program
By providing a firm cap on 85 percent of the state’s greenhouse gas emissions, the
cap-and-trade regulatory program is an essential component of the overall plan to
meet the 2020 target and provides a robust mechanism to achieve the additional
reductions needed by 2050. To meet the emissions reduction target under AB 32, the
limit on emissions allowed under the cap, plus emissions from uncapped sources,
must be no greater than the 2020 emissions goal.
By setting a limit on the quantity of greenhouse gases emitted, a well-designed capand-trade program will complement other measures for entities within covered
sectors. Additionally, starting a cap-and-trade program now will set us on a course to
achieve further emissions cuts well beyond 2020 and ensure that California is primed
to take advantage of opportunities for linking with other programs, including future
federal and international efforts.
The proposed cap-and-trade measure phases in the following sectors:
Starting in the first compliance period (2012):
• In-state electrical generating facilities that emit over 25,000 metric tons CO2E
per year,22 including imports not covered by a WCI Partner jurisdiction.
• Large industrial facilities that emit over 25,000 metric tons CO2E per year,
including high global warming potential gases.
Starting in the second compliance period (2015):
• Upstream treatment of industrial fuel combustion at facilities with emissions
at or below 25,000 metric tons CO2E per year, and all commercial and
residential fuel combustion regulated where the fuel enters into commerce
• Transportation fuel combustion regulated where the fuel enters into
commerce.
For some energy-intensive industrial sources such as cement, stringent requirements
in California, either through inclusion in a cap-and-trade program or through sourcespecific regulation, have the potential to create a disadvantage for California facilities
relative to out-of-state competitors unless those locations have similar requirements
(e.g., through the WCI). If production shifts outside of California in order to operate
without being subject to these requirements, emissions could remain unchanged or
even increase. This is referred to as “leakage.” AB 32 requires ARB to design
measures to minimize leakage. Minimizing leakage will be a key consideration when
developing the cap-and-trade regulation and the other AB 32 program measures.23
22
Allowances will not be required for combustion emissions from carbon-neutral projects.
The cement industry is an example of a sector that may be susceptible to this type of leakage, and the Draft
Scoping Plan included consideration of a measure to institute an intensity standard at concrete batch plants that
would consider this type of life-cycle emissions. ARB will evaluate whether this type of intensity standard
could be incorporated into the cap-and-trade program or instituted as a complementary measure during the capand-trade rulemaking.
23
31
II. Recommended Actions
Scoping Plan
As shown in Table 5, the preliminary estimate of the cap on greenhouse gas
emissions for sectors covered by the cap-and-trade program is 365 MMTCO2E in
2020, which covers about 85 percent of California’s total greenhouse gas emissions.24
Greenhouse gas emissions from most of the sectors covered by a cap-and-trade
program will also be governed by other measures, including performance standards,
efficiency programs, and direct regulations. These other measures will provide real
reductions which will contribute reductions toward the cap.
In addition, ARB will work closely with the CPUC, CEC, and The California
Independent System Operator to ensure that the cap-and-trade program works within
the context of the State’s energy policy and enables the reliable provision of
electricity.
Table 5: Sector Responsibilities Under Cap-and-Trade Program
(MMTCO2E in 2020)
Sector
Transportation
Electricity
Commercial and Residential
Industry
Projected 2020
Business-as-Usual
Emissions
By Sector
225
139
47
101
Total
Preliminary 2020
Emissions Limit
under Cap-andTrade Program
512
365
Linkage with the Western Climate Initiative Partner Jurisdictions
The WCI was formed in 2007. Members are California, Arizona, New Mexico,
Oregon, Washington, Utah, and Montana, and the Canadian provinces of British
Columbia, Manitoba, Ontario, and Quebec. The WCI Partner jurisdictions, including
California, have adopted goals to reduce greenhouse gas emissions that, in total,
reduce regional emissions to 15 percent below 2005 levels by 2020. This regional
goal is approximately equal to California’s goal of returning to 1990 levels by 2020.
A cap-and-trade program is one element of the effort by the WCI Partner jurisdictions
to identify, evaluate, and implement ways to reduce greenhouse gas emissions and
achieve related co-benefits.
24
The actual cap for the program will be established as part of the rulemaking process. The preliminary cap of
365 MMTCO2E in 2020 assumes that all of California’s electricity imports would be covered under a California
cap. Because a significant portion of California’s imported electricity is from power plants located in other
WCI Partner Jurisdictions, emissions from those sources could be included in the cap of the states within which
the power plants are located. In establishing the California cap, ARB will need to consider the degree to which
emissions from these sources are addressed as part of the WCI regional market.
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Scoping Plan
II. Recommended Actions
The WCI Partner jurisdictions released their recommendation for the design of a
regional cap-and-trade program in September 2008. This design document and the
background paper that accompanied it are presented in Appendix D. These
recommendations were developed collaboratively by the WCI Partner jurisdictions,
including California, with a goal of achieving regional targets to reduce greenhouse
gas emissions equitably and effectively. The WCI Partner jurisdictions’
recommendations are generally consistent with the recommendations provided in
June 2007 by the California Market Advisory Committee,25 the recommendations
provided to ARB by the California Public Utilities Commission and the California
Energy Commission in March 2008,26 and the proposed opinion released by the two
Commissions in September 2008.27
Participating in a regional system has several advantages for California. The
reduction of greenhouse gas emissions that can be achieved collectively by the WCI
Partner jurisdictions are approximately double what can be achieved through a
California-only program. The broad scope of a WCI-wide market will provide
additional opportunities for reduction of emissions, therefore providing greater
market liquidity and more stable carbon prices within the program. The regional
system also significantly reduces the potential for leakage, which is a shift in
economic and emissions activity out of California that could hurt the state’s economy
without reducing global greenhouse gas emissions. Harmonizing the approach and
timing of California's requirements for reducing greenhouse gas emissions with other
states and provinces in the region can encourage retention of local businesses in the
state. Further, by creating a cost-effective regional market system, California and the
other WCI Partner jurisdictions will continue to demonstrate leadership in preparation
for future federal and international climate action.
To achieve the individual WCI Partner jurisdiction goals and the regional goal, each
WCI Partner jurisdiction will have an allowance budget based on its goal that
declines to 2020. For example, California’s allowance budget will be based on the
level of emissions needed to achieve the AB 32 target for 2020, as described above.
Once California links with the other WCI Partner jurisdictions, allowances could be
25
Recommendations of the Market Advisory Committee to the California Air Resources Board.
Recommendations for Designing a Greenhouse Gas Cap-and-Trade System for California. June 30, 2007.
p. 19. http://www.climatechange.ca.gov/publications/market_advisory_committee/2007-0629_MAC_FINAL_REPORT.PDF (accessed October 12, 2008) Cal/EPA The Market Advisory Committee
(MAC) consisted of a consortium of economists, policy makers, academics, government representatives, and
environmental advocates who came together through the auspices of CalEPA, pursuant to Executive Order
S-20-06 from Governor Schwarzenegger.
26
Joint Agency Decision of the CEC and the CPUC. Final Adopted Interim Decision on Basic Greenhouse Gas
Regulatory Framework for Electricity and Natural Gas Sectors, March 13, 2008. Document number CEC-1002008-002-F. http://www.energy.ca.gov/2008publications/CEC-100-2008-002/CEC-100-2008-002-F.PDF
(accessed October 12, 2008)
27
Joint Agency proposed final opinion of the CEC and the CPUC. Proposed Final Opinion on Greenhouse Gas
Regulatory Strategies. Published September 12, 2008 and to be considered for adoption on October 16, 2008 by
the CEC and the CPUC. Document Number CEC-100-2008-007-D
http://www.energy.ca.gov/ghg_emissions/index.html (accessed October 12, 2008)
33
II. Recommended Actions
Scoping Plan
traded across state and provincial boundaries. As a result of trading, emissions in a
state may vary from its allowance budget, although total regional emissions will not
exceed the regional cap.
The overall number of allowances issued in a given year by the WCI Partner
jurisdictions will set a limit on emissions from sectors covered by the program for the
region. Details of distribution of allowances will be established by each partner
within the general guidelines set forth in the WCI program design framework. The
WCI Partner jurisdictions have agreed to consider standardizing allowance
distribution across specific sectors if necessary to address competitiveness issues. In
addition, the WCI Partner jurisdictions have agreed to phase in regionally coordinated
auctions of allowances, with a minimum percentage of allowances auctioned in each
period starting with 10 percent in the first compliance period and increasing to 25
percent in 2020. WCI partners aspire to reach higher auction percentages over time,
possibly to 100 percent. Under the program design, each WCI Partner jurisdiction,
including California, can auction a greater portion of its allowance budget in any
compliance period. The distribution of California’s allowances will be determined
during the cap-and-trade rulemaking process, as discussed below.
The WCI Partner jurisdictions are also proposing the use of an allowance reserve
price for the first 5 percent of the auctioned allowances in the regional cap. A reserve
price will help to ensure that the cap is set at a level that will motivate real emissions
reductions and may provide an opportunity for the regional cap-and-trade program to
provide reductions that exceed the regional target.
A regional coordinated cap-and-trade program with strong reporting and enforcement
rules will provide a high degree of certainty that emissions will not exceed targeted
levels and that leakage will not occur.
Federal Action
A cap-and-trade program is expected to be a significant element in any future federal
action taken to reduce greenhouse gas emissions. ARB’s efforts to design a broad
cap-and-trade system that works in concert with sector- or source-related measures
and meets the requirements of AB 32 can serve as a model for a federal program. An
effective, enforceable regional cap-and-trade program can promote the type of federal
legislation needed to meet the pressing challenge of climate change. In the event that
California businesses, organizations, or individuals hold regional allowances when a
federal system is implemented, California will work to ensure that those allowances
continue to have value, either in a continuing regional program or within the federal
program.
CapCap-andand-Trade Rulemaking
To implement the cap-and-trade program, ARB will embark on regulatory
development that includes extensive and broad-based public participation. Major
program design elements will include setting an emissions cap in conjunction with the
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Scoping Plan
II. Recommended Actions
WCI Partner jurisdictions, determining the method of distributing both allowances
and revenues raised through auctions, and establishing the rules for the use of offsets.
ARB will continue to work with all affected stakeholders, State and local agencies,
and our WCI partners to create a robust regional market system.
After adoption of the Scoping Plan, ARB will establish a formal structure to elicit
ongoing participation in the rulemaking process from a wide range of affected
stakeholders. While the process will be open to involvement by all interested parties,
ARB anticipates creation of a series of focused working groups that include
participation by representatives of the regulated community, environmental and
community advocates and other public interest groups, prominent academics with
expertise in cap-and-trade issues and new technology development, local air pollution
control districts, stakeholders in the WCI, and other State agencies with existing
authority for regulating capped sectors.
This process will integrate economic and administrative design considerations and
include consideration of environmental and public health issues. ARB will convene a
series of technical workshops to examine mechanisms to address the concerns related
to the cap-and-trade program raised by the Environmental Justice Advisory
Committee and other stakeholders. The first workshop will explore cap-and-trade
program design options that could provide incentives to maximize additional
environmental and economic benefits, and to analyze the proposed program to
prevent increases in emissions of toxic air contaminants or criteria pollutants through
the design and architecture of the program itself. Similar technical workshops will
focus on issues related to offsets and the WCI proposal.
Allowances and Revenues
Emission allowances represent a significant economic value whether they are freely
allocated or sold through auction. Section E includes a preliminary discussion of
some of the options that have been suggested for use of allowance value or revenues.
ARB will evaluate the possible uses of allowances or revenues as part of the
rulemaking process. One approach would be to dedicate a portion of the allowances
for such purposes as rewarding early actions to reduce emissions, providing
incentives for local governments and others to promote energy efficiency, better land
use planning, and other reduction strategies, and targeting projects to reduce
emissions in low-income or disadvantaged communities. This type of dedicated use
of allowances is typically referred to as an allowance ‘set-aside.’
The California Public Utilities Commission and the California Energy Commission
addressed the question of allocation and auction of allowances in their joint
proceeding on implementation of AB 32 for the Electricity and Natural Gas sectors.
They have recently released a proposed opinion that recommends to ARB a transition
35
II. Recommended Actions
Scoping Plan
to 100 percent auction for the Electricity sector by 2016.28 The CPUC and CEC
included in their draft opinion the recommendation that all auction revenues be used
for purposes related to AB 32, and all revenue from allowances allocated to the
Electricity sector and received by retail providers would be used for the benefit of the
Electricity sector to support investments in renewable energy, efficiency, new energy
technology, infrastructure, customer bill relief, and other similar programs.
The Market Advisory Committee also recommended the eventual transition to full
auction within the cap-and-trade program, noting that a system in which California
ultimately auctions all of its emission allowances is consistent with fundamental
objectives of cost-effectiveness, fairness and simplicity.29 ARB agrees that the
transition to a 100 percent auction, with auction revenue going to further the policy
objectives of California’s climate change program, is a worthwhile goal. ARB
expects that California will auction significantly more than the WCI minimum levels
and will transition to 100 percent auction. However a broad set of factors must be
considered in evaluating the potential timing of a transition to a full auction including
competiveness, potential for emissions leakage, the effect on regulated vs.
unregulated industrial sectors, the overall impact on consumers, and the strategic use
of auction revenues.
Allowance allocation and revenue use decisions can greatly affect the equity of a capand-trade system. Addressing both these issues will be a major part of the
rulemaking process. ARB will seek input from a broad range of experts in an open
public process regarding the options for allocation and revenue use under
consideration by ARB and the WCI Partner jurisdictions. This process will evaluate
various mechanisms ARB is considering for allowance distribution and potential uses
of allowance value, including the recommendations offered by CPUC and CEC.
Issues to be considered will include the appropriate timing and structure of a
transition to full auction of allowances, the potential need to harmonize the allocation
process regionally for certain sectors subject to inter-state competition, and equity
across the various sectors here in California.
Offsets
Individual projects can be developed to achieve the reduction of emissions from
activities not otherwise regulated, covered under an emissions cap, or resulting from
government incentives. These projects can generate "offsets,” i.e., verifiable
reductions of emissions whose ownership can be transferred to others. The cap-andtrade rulemaking will establish appropriate rules for use of offsets. As required by
28
Op. Cit. The proposed opinion has not yet been voted on by either the CPUC or the CEC. The Commissions
are expected to vote on this proposed opinion before the December Board meeting when the Proposed Scoping
Plan will be considered for approval.
29
Recommendations of the Market Advisory Committee to the California Air Resources Board.
Recommendations for Designing a Greenhouse Gas Cap-and-Trade System for California. June 30, 2007.
p. 55. http://www.climatechange.ca.gov/publications/market_advisory_committee/2007-0629_MAC_FINAL_REPORT.PDF (accessed October 12, 2008)
36
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II. Recommended Actions
AB 32, any reduction of greenhouse gas emissions used for compliance purposes
must be real, permanent, quantifiable, verifiable, enforceable, and additional (HSC
§38562(d)(1) and (2)). Offsets used to meet regulatory requirements must be
quantified according to Board-adopted methodologies, and ARB must adopt a
regulation to verify and enforce the reductions (HSC §38571). The criteria developed
will ensure that the reductions are quantified accurately and are not double-counted
within the system.
Offsets can provide regulated entities a source of low-cost emissions reductions.
Reductions from compliance offset projects must be quantified using rigorous
measurement and enforcement protocols that provide a basis to determine whether the
reductions are also additional, i.e., beyond what would have happened in the absence
of the offset project. Establishing that reductions are additional is one of the major
challenges in establishing the validity of particular offset projects. Once a project can
quantify emissions using an approved methodology, the reductions of emissions must
be verified to ensure that reductions actually occurred.
While some offsets provide benefits, allowing unlimited offsets would reduce the
amount of reductions of greenhouse gas emissions occurring within the sectors
covered by the cap-and-trade program. This could reduce the local economic,
environmental and public health co-benefits and delay the transition to low-carbon
energy systems within the capped sectors that will be necessary to meet our long term
climate goals. The limit on the use of offsets and allowances from other systems
within the WCI Partner jurisdiction program design assures that a majority of the
emissions reductions required from 2012 to 2020 occur at entities and facilities
covered by the cap and trade program. Consequently, the use of offsets and
allowances from other systems are limited to no more than 49 percent of the required
reduction of emissions. This quantitative limit will help provide balance between the
need to achieve meaningful emissions reductions from capped sources with the need
to provide sources within capped sectors the opportunity for low-cost reduction
opportunities that offsets can provide. The WCI offset program may incorporate
flexibility to use offsets and non-WCI allowances across the three compliance
periods, which each WCI Partner jurisdiction could use at its discretion. ARB will
apply the limit on offsets that is within its jurisdiction, such that the allowable offsets
in each compliance period is less than half of the emissions reductions expected from
capped sectors in that compliance period. Each WCI Partner jurisdiction may choose
to adopt a more stringent limit on the use of offsets and non-WCI allowances.
Offsets can also encourage the spread of clean, low carbon technologies outside
California. High quality offset projects located outside the state can help lower the
compliance costs for regulated entities in California, while reducing greenhouse gas
emissions in areas that would otherwise lack the resources needed to do so.
International projects may also have significant environmental, economic and social
benefits. Projects in the Mexican border region may be of particular interest,
considering the opportunity to realize considerable co-benefits on both sides of the
border. The Governor has recently signed a Memorandum of Understanding with the
37
II. Recommended Actions
Scoping Plan
six Mexican border states that calls for cooperation on the development of project
protocols for Mexican greenhouse gas emissions reduction projects.30 Additionally,
defining project types related to imported commodities (such as cement) would
enable California to provide incentives to reduce emissions associated with products
that are imported into the state for our consumption.
California is committed to working at the international level to reduce greenhouse gas
emissions globally and finding ways to support the adoption of low-carbon
technologies and sustainable development in the developing world. ARB will work
with WCI Partner jurisdictions and within the rulemaking process to establish an
offsets program without geographic restrictions that includes sufficiently stringent
criteria for creating offset credits to ensure the overall environmental integrity of the
program.
One concept being evaluated for accepting offsets from the developing world is to
limit offsets to those jurisdictions that demonstrate performance in reducing
emissions and/or achieving greenhouse gas intensity targets in certain carbon
intensive sectors (e.g., cement), or in reducing emissions or enhancing sequestration
through eligible forest carbon activities in accordance with appropriate national or
sub-national accounting frameworks. This could be achieved through an agreement
to work jointly to develop minimum performance standards or sectoral benchmarks,
backed by appropriate monitoring and accounting frameworks. Such agreements
would encourage early action in developing countries toward binding commitments,
and could also reduce concerns about competitiveness and risks associated with
carbon leakage.
2. California LightLight-Duty Vehicle Greenhouse Gas Standards
Implement adopted Pavley standards and planned second phase of the program.
Align zero-emission vehicle, alternative and renewable fuel and vehicle technology
programs with long-term climate change goals.
Passenger vehicles are responsible for almost 30 percent of California’s greenhouse
gas emissions. To address these emissions, ARB is proposing a comprehensive threeprong strategy – reducing greenhouse gas emissions from vehicles, reducing the
carbon content of the fuel these vehicles burn, and reducing the miles these vehicles
travel. Transportation fuels and regional transportation-related greenhouse gas targets
are discussed later in the recommendations.
There are a number of efforts intended to reduce greenhouse gas emissions from
California’s passenger vehicles, including the Pavley greenhouse gas vehicle
30
Memorandum of Understanding on Environmental Cooperation between the California Environmental
Protection Agency, the California Department of Food and Agriculture and the California Resources Agency of
the State of California, United States of America and the Ministry of Environment and Natural Resources of the
United Mexican States. February 13, 2008. http://gov.ca.gov/pdf/press/021308_MOU_English.pdf (accessed
October 12, 2008)
38
Scoping Plan
II. Recommended Actions
standards to achieve near-term emission reductions, the zero-emission vehicle (ZEV)
program to transform the future vehicle fleet, and the Alternative and Renewable Fuel
and Vehicle Technology Program created by AB 118 (Núñez, Chapter 750, Statutes
of 2007).
Pavley Greenhouse Gas Vehicle Standards
AB 1493 (Pavley, Chapter 200, Statutes of 2002) directed ARB to adopt vehicle
standards that lowered greenhouse gas emissions to the maximum extent
technologically feasible, beginning with the 2009 model year. ARB adopted
regulations in 2004 and applied to the U.S. Environmental Protection Agency
(U.S. EPA) for a waiver under the federal Clean Air Act to implement the regulation.
The Pavley regulations incorporate both performance standards and market-based
compliance mechanisms. To obtain additional reductions from the light duty fleet,
ARB plans to adopt a second, more stringent, phase of the Pavley regulations.
Table 6 summarizes the estimated reduction of emissions for the Pavley regulations.
In addition to delivering greenhouse gas emissions reductions, the standards will save
money for Californians who purchase vehicles that comply with the Pavley
standards – an estimated average of $30 each month in avoided fuel costs.
To date, 13 other states have adopted California’s existing greenhouse gas standards
for vehicles. Under federal law, California is the only state allowed to adopt its own
vehicle standards (though other states are permitted to adopt California’s more
rigorous standards), but California cannot implement the regulations until U.S. EPA
grants an administrative waiver. In December 2007, U.S. EPA denied California’s
waiver request to implement the Pavley regulations. California and others are
challenging that denial in Federal court. The regulations have also been challenged
by the automakers in federal courts, although to date, those challenges have been
unsuccessful.
ARB is evaluating the use of feebates as a measure to achieve additional reductions
from the mobile source sector, either as a backstop to the Pavley regulation if the
regulation cannot be implemented, or as a supplement to Pavley if the waiver is
approved and the regulation takes effect. AB 32 specifically states that if the Pavley
regulations do not remain in effect, ARB shall implement alternative regulations to
control mobile sources to achieve equivalent or greater reductions of greenhouse gas
emissions (HSC §38590). ARB is currently evaluating the use of a feebate program
as the mechanism to secure these reductions. A feebate regulation would combine a
rebate program for low-emitting vehicles with a fee program for high-emitting
vehicles. This program would be designed in a way to generate equivalent or greater
cumulative reductions of greenhouse gas emissions compared to what would have
been achieved under the Pavley regulations. ARB would also evaluate the potential
to expand the program to include additional vehicle classes not currently included in
the Pavley program for further greenhouse gas benefits.
If the U.S. EPA grants California’s request for a waiver to proceed with
implementation of the Pavley regulations, we will analyze the potential for pursuing a
39
II. Recommended Actions
Scoping Plan
feebate program that could complement the Pavley regulations and achieve additional
reductions of greenhouse gas emissions.
ZeroZero-Emission Vehicle Program
The Zero Emission Vehicle (ZEV) program will play an important role in helping
California meet its 2020 and 2050 greenhouse gas emissions reduction requirements.
Through 2012, the program requires placement of hundreds of ZEVs (including
hydrogen fuel cell and battery electric vehicles) and thousands of near-zero emission
vehicles (plug-in hybrids, conventional hybrids, compressed natural gas vehicles). In
the mid-term (2012-2015), the program will require placement of increasing numbers
of ZEVs and near-zero emission vehicles in California. In 2009, the Board will
consider a proposal that is currently being developed to ensure that the ZEV program
is optimally designed to help the State meet its 2020 target and put us on the path to
meeting our 2050 target of an 80 percent reduction in greenhouse gas emissions.
It is important to note that while the use of both battery-powered electric vehicles and
plug-in hybrids (which can be plugged in to recharge batteries) is not expected to
increase electricity demand in the near term, over the longer term these technologies
could result in meaningful new electricity demand. However, the expected increased
electricity demand is likely to be met by off peak vehicle battery charging
(i.e., overnight) to provide a means of load leveling and other possible benefits.31
Vehicle
ehicle
Air Quality Improvement Program/Alternative and Renewable Fuel and V
Technology Program
Under AB 118 (Núñez, Chapter 750, Statutes of 2007), ARB is administering the Air
Quality Improvement Program, which provides approximately $50 million per year
for grants to fund clean vehicle/equipment projects and research on the air quality
impacts of alternative fuels and advanced technology vehicles.
AB 118 also created the Alternative and Renewable Fuel and Vehicle Technology
Program and authorized CEC to spend up to $120 million per year for over seven
years (from 2008-2015) to develop, demonstrate, and deploy innovative technologies
to transform California’s fuel and vehicle types. This program creates the
opportunities for investment in technologies and fuels that will help meet the Low
Carbon Fuel Standard, the AB 1007 (Pavley, Chapter 371, Statutes of 2005) goal of
increasing alternative fuels, the AB 32 goal of reducing greenhouse gas emissions to
1990 levels by 2020, and the State’s overall goal of reducing greenhouse gas
emissions 80 percent below 1990 levels by 2050. CEC and ARB are coordinating
closely in the implementation of AB 118. In the long-term, programs to reduce
greenhouse gas emissions from cars would reduce highway funds because less fuel
would be sold, reducing tax revenue. In coordination with other State agencies, ARB
31
There is also a potential for battery-electric and hybrid vehicles (both plug-in and traditional hybrid-electric)
to be used in the future to provide electricity back into the electricity grid during times of especially high
demand (peak periods).
40
Scoping Plan
II. Recommended Actions
will continue to evaluate the potential impacts of these shifts and identify potential
solutions.
Table 6: California Light-Duty Vehicle Greenhouse Gas Standards
Recommendation
(MMTCO2E in 2020)
Measure No.
T-1
Measure Description
Pavley I and II – Light-Duty Vehicle Greenhouse Gas Standards
Total
Reductions
31.7
31.7
3. Energy Efficiency
Maximize energy efficiency building and appliance standards, and pursue additional
efficiency efforts including new technologies, and new policy and implementation
mechanisms. Pursue comparable investment in energy efficiency from all retail
providers of electricity in California (including both investor-owned and publiclyowned utilities).
Energy-efficiency measures for both electricity and natural gas can reduce
greenhouse gas emissions significantly. In 2003, the CPUC and CEC adopted an
Energy Action Plan that prioritized resources for meeting California’s future energy
needs, with energy efficiency being first in the “loading order,” or highest priority.
Since then, this policy goal has been codified into statute through legislation that
requires electric utilities to meet their resource needs first with energy efficiency.32
This measure would set new targets for statewide annual energy demand reductions
of 32,000 gigawatt hours and 800 million therms from business as usual33 – enough to
power more than 5 million homes, or replace the need to build about ten new large
power plants (500 megawatts each). These targets represent a higher goal than
existing efficiency targets established by CPUC for the investor-owned utilities due to
the inclusion of innovative strategies above traditional utility programs. Achieving
the State’s energy efficiency targets will require coordinated efforts from the State,
the federal government, energy companies and customers. ARB will work with CEC
and CPUC to facilitate these partnerships. A number of these measures also have the
potential to deliver significant economic benefits to California consumers, including
low-income households and small businesses. California’s energy efficiency
programs for buildings and appliances have generated more than $50 billion in
32
SB 1037 (Kehoe, Chapter 366, Statutes of 2005) and AB 2021 (Levine, Chapter 734, Statutes of 2006)
directed electricity corporations subject to CPUC’s authority and publicly-owned electricity utilities to first
meet their unmet resource needs through all available energy efficiency and demand response resources that are
cost effective, reliable and feasible.
33
The savings targeted here are additional to savings currently assumed to be incorporated in CEC’s 2007
demand forecasts. However, CEC has initiated a public process to better determine the quantity of energy
savings from standards, utility programs, and market effects that are embedded in the baseline demand forecast.
41
II. Recommended Actions
Scoping Plan
savings over the past three decades. Tables 7 and 8 summarize the reduction of
greenhouse gas emissions.
Efficiency
Achieving the energy efficiency target will require redoubled efforts to target
industrial, agricultural, commercial, and residential end-use sectors, comprised of
both innovative new initiatives that have been embraced by CEC’s energy policy
reports and CPUC’s long-term strategic plan, and improvements to California’s
traditional approaches of improved building standards and utility programs.
High-efficiency distributed generation applications like fuel cell technologies can also
play an important role in helping the State meet its requirements for reduction of
greenhouse gas emissions. Key energy efficiency strategies, grouped by type,
include:
Cross-cutting Strategy for Buildings
• “Zero Net Energy” buildings34
Codes and Standards Strategies
• More stringent building codes and appliance efficiency standards
• Broader standards for new types of appliances and for water efficiency
• Improved compliance and enforcement of existing standards
• Voluntary efficiency and green building targets beyond mandatory codes
Strategies for Existing Buildings
• Voluntary and mandatory whole-building retrofits for existing buildings
• Innovative financing to overcome first-cost and split incentives for energy
efficiency, on-site, renewables, and high efficiency distributed generation
Existing and Improved Utility Programs
• More aggressive utility programs to achieve long-term savings
Other Needed Strategies
• Water system and water use efficiency and conservation measures
• Local government programs that lead by example and tap into local
authority over planning, development, and code compliance
• Additional industrial and agricultural efficiency initiatives
• Providing real time energy information technologies to help consumers
conserve and optimize energy performance
With the support of key State agencies, utilities, local governments and others, the
CPUC has recently adopted the California Long Term Energy Efficiency Strategic
34
Zero net energy refers to building energy use over the course of a typical year. When the building is
producing more electricity than it needs, it exports its surplus to the grid. When the building requires more
electricity than is being produced on-site, it draws from the grid. Generally, when constructing a ZNE building,
energy efficiency measures can result in up to 70% savings relative to existing building practices, which then
allows for renewables to meet the remaining load.
42
Scoping Plan
II. Recommended Actions
Plan.35 Released September 2008, this Plan sets forth a set of strategies toward
maximizing the achievement of cost-effective energy efficiency in California’s
Electricity and Natural Gas sectors between 2009 and 2020, and beyond. Its
recommendations are the result of a year-long collaboration by energy experts,
utilities, businesses, consumer groups, and governmental organizations in California,
throughout the west, nationally and internationally.
For many of the above goals and others, the Strategic Plan discusses practical
implementation strategies, detailing necessary partnerships among the state, its
utilities, the private sector, and other market players and timelines for near-term, midterm and long-term success. While the Strategic Plan is the most current and
innovative summary of energy efficiency strategies needed to meet State goals,
additional planning and new strategies will likely be needed, both to achieve the 2020
emissions reduction goals and to set the State on a trajectory toward 2050.
Other innovative approaches could also be used to motivate private investment in
efficiency improvements. One example that will be evaluated during the
development of the cap-and-trade program is the creation of a mechanism to make
allowances available within the program to provide incentives for local governments,
third party providers, or others to pursue projects to reduce greenhouse gas emissions,
including the bundling of energy efficiency improvements for small businesses or in
targeted communities.
Solar Water Heating
Solar water heating systems offer a potential for natural gas savings in California. A
solar water heating system offsets the use of natural gas by using the sun to heat
water, typically reducing the need for conventional water heating by about two-thirds.
Successful implementation of the zero net energy target for new buildings will require
significant growth in California’s solar water heating system manufacturing and
installation industry. The State has initiated a program to move toward a self
sustaining solar water heater industry. The Solar Hot Water and Efficiency Act of
2007 (SHWEA) authorized a ten year, $250-million incentive program for solar water
heaters with a goal of promoting the installation of 200,000 systems in California by
2017.36
Combined Heat and Power
Combined heat and power (CHP), also referred to as cogeneration, produces
electricity and useful thermal energy in an integrated system. The widespread
development of efficient CHP systems would help displace the need to develop new,
or expand existing, power plants. This measure sets a target of an additional
35
California Public Utilities Commission. California Long Term Energy Efficiency Strategic Plan. September
2008. http://www.californiaenergyefficiency.com/docs/EEStrategicPlan.pdf (accessed October 12, 2008).
36
Established under Assembly Bill 1470 (Huffman, Chapter 536, Statues of 2007).
43
II. Recommended Actions
Scoping Plan
4,000 MW of installed CHP capacity by 2020, enough to displace approximately
30,000 GWh of demand from other power generation sources.37
California has supported CHP for many years, but market and other barriers continue
to keep CHP from reaching its full market potential. Increasing the deployment of
efficient CHP will require a multi-pronged approach that includes addressing
significant barriers and instituting incentives or mandates where appropriate. These
approaches could include such options as utility-provided incentive payments, the
creation of a CHP portfolio standard, transmission and distribution support payments,
or the use of feed-in tariffs.
Table 7: Energy Efficiency Recommendation - Electricity
(MMTCO2E in 2020)
Measure No.
Measure Description
Reductions
E-1
Energy Efficiency
(32,000 GWh of Reduced Demand)
• Increased Utility Energy Efficiency Programs
• More Stringent Building & Appliance Standards
• Additional Efficiency and Conservation Programs
15.2
E-2
Increase Combined Heat and Power Use by 30,000 GWh
6.7
Total
21.9
Table 8: Energy Efficiency Recommendation - Commercial and Residential
(MMTCO2E in 2020)
Measure No.
CR-1
CR-2
Measure Description
Energy Efficiency (800 Million Therms Reduced Consumption)
• Utility Energy Efficiency Programs
• Building and Appliance Standards
• Additional Efficiency and Conservation Programs
Solar Water Heating (AB 1470 goal)
Total
Reductions
4.3
0.1
4.4
4. Renewables Portfolio Standard
Achieve 33 percent renewable energy mix statewide.
CEC estimates that about 12 percent of California’s retail electric load is currently
met with renewable resources. Renewable energy includes (but is not limited to)
wind, solar, geothermal, small hydroelectric, biomass, anaerobic digestion, and
landfill gas. California’s current Renewables Portfolio Standard (RPS) is intended to
37
Accounting for avoided transmission line losses of seven percent, this amount of CHP would actually
displace 32,000 GWh from the grid.
44
Scoping Plan
II. Recommended Actions
increase that share to 20 percent by 2010. Increased use of renewables will decrease
California’s reliance on fossil fuels, thus reducing emissions of greenhouse gases
from the Electricity sector. Based on Governor Schwarzenegger’s call for a statewide
33 percent RPS, the Plan anticipates that California will have 33 percent of its
electricity provided by renewable resources by 2020, and includes the reduction of
greenhouse gas emissions based on this level.
Senate Bill 107 (Simitian, Chapter 464, Statutes of 2006) obligates the investorowned utilities (IOUs) to increase the share of renewables in their electricity
portfolios to 20 percent by 2010. Meanwhile, the publicly-owned utilities (POUs) are
encouraged but not required to meet the same RPS. The governing boards of the
state’s three largest POUs, the Los Angeles Department of Water and Power
(LADWP), the Sacramento Municipal Utility District (SMUD), and the Imperial
Irrigation District (IID), have adopted policies to achieve 20 percent renewables by
2010 or 2011. LADWP and IID have established targets of 35 and 30 percent,
respectively, by 2020.
In 2005, CEC and CPUC committed in the Energy Action Plan II to “evaluate and
develop implementation paths for achieving renewable resource goals beyond 2010,
including 33 percent renewables by 2020, in light of cost-benefit and risk analysis, for
all load serving entities.” The proposed opinion in the CPUC/CEC joint proceeding
lends strong support for obtaining 33 percent of California’s electricity from
renewables, and states the two Commissions’ belief that this target is achievable if the
State commits to significant investments in transmission infrastructure and key
program augmentation. As with the energy efficiency target, achieving the 33 percent
goal will require broad-based participation from many parties and the removal of
barriers. CEC, CPUC, California Independent System Operator (CAISO), and ARB
are working with California utilities and other stakeholders to formally establish and
meet this goal.
A key prerequisite to reaching a target of 33 percent renewables will be to provide
sufficient electric transmission lines to renewable resource zones and system changes
to allow integration of large quantities of intermittent wind and solar generation. The
Renewable Energy Transmission Initiative (RETI) is a broad collaborative of State
agencies, utilities, the environmental community, and renewable generation
developers that are working cooperatively to identify and prioritize renewable
generation zones and associated transmission projects. Although biomass,
geothermal, and small-scale hydroelectric generation can provide steady baseload
power, other renewable generation is intermittent (wind) or varies over time (solar).
Therefore, integration of intermittent generation into the electricity system will
require grid improvements so that fluctuations in power availability can be
accommodated. Improved communications technology, automated demand
response, electric sub-station improvements and other modern technologies must be
implemented both to facilitate intermittent renewables, and to improve grid reliability.
45
II. Recommended Actions
Scoping Plan
Another key action that may help to achieve the renewable energy goals is to reduce
the complexity and cost faced by small renewable developers in contracting with
utilities to supply renewable generation. This is particularly important for projects
offering below 20 megawatts of generation capacity. One such option may be a feedin tariff for all RPS-eligible renewable energy facilities up to 20 megawatts in size.
This mechanism was recommended in CEC’s 2007 Integrated Energy Policy Report.
Such a tariff, set at an appropriate level, could benefit small-scale facilities by
allowing them to be brought into the electricity grid more rapidly.
For the purposes of calculating the reduction of greenhouse gas emissions in this
Scoping Plan, ARB is counting emissions avoided by increasing the percentage of
renewables in California’s electricity mix from the current level of 12 percent to the
33 percent goal, as shown in Table 9.
Table 9: Renewables Portfolio Standard Recommendation
(MMTCO2E in 2020)
Measure No.
E-3
Measure Description
Reductions
Achieve a 33% renewables mix by 2020
21.3
Total
21.3
5. Low Carbon Fuel Standard
Develop and adopt the Low Carbon Fuel Standard.
Because transportation is the largest single source of greenhouse gas emissions in
California, the State is taking an integrated approach to reducing emissions from this
sector. Beyond including vehicle efficiency improvements and lowering vehicle
miles traveled, the State is proposing to reduce the carbon intensity of transportation
fuels consumed in California.
To reduce the carbon intensity of transportation fuels, ARB is developing a Low
Carbon Fuel Standard (LCFS), which would reduce the carbon intensity of
California's transportation fuels by at least ten percent by 2020 as called for by
Governor Schwarzenegger in Executive Order S-01-07.
LCFS will incorporate compliance mechanisms that provide flexibility to fuel
providers in how they meet the requirements to reduce greenhouse gas emissions.
The LCFS will examine the full fuel cycle impacts of transportation fuels and ARB
will work to design the regulation in a way that most effectively addresses the issues
raised by the Environmental Justice Advisory Committee and other stakeholders.
ARB identified the LCFS as a Discrete Early Action item, and is developing a
regulation for Board consideration in March 2009. A 10 percent reduction in the
intensity of transportation fuels is expected to equate to a reduction of
16.5 MMTCO2E in 2020. However, in order to account for possible overlap of
46
Scoping Plan
II. Recommended Actions
benefits between LCFS and the Pavley greenhouse gas standards, ARB has
discounted the contribution of LCFS to 15 MMTCO2E.
Table 10: Low Carbon Fuel Standard Recommendation
(MMTCO2E in 2020)
Measure No.
T-2
Measure Description
Low Carbon Fuel Standard (Discrete Early Action)
Total
Reductions
15
15
6. Regional TransportationTransportation-Related Greenhouse Gas Targets
Develop regional greenhouse gas emissions reduction targets for passenger vehicles.
Establishment of Regional Targets
On September 30, 2008, Governor Arnold Schwarzenegger signed Senate Bill 375
(Steinberg) which establishes mechanisms for the development of regional targets for
reducing passenger vehicle greenhouse gas emissions. Through the SB 375 process,
regions will work to integrate development patterns and the transportation network in
a way that achieves the reduction of greenhouse gas emissions while meeting housing
needs and other regional planning objectives. This new law reflects the importance of
achieving significant additional reductions of greenhouse gas emissions from changed
land use patterns and improved transportation to help achieve the goals of AB 32.
SB 375 requires ARB to develop, in consultation with metropolitan planning
organizations (MPOs), passenger vehicle greenhouse gas emissions reduction targets
for 2020 and 2035 by September 30, 2010. It sets forth a collaborative process to
establish these targets, including the appointment by ARB of a Regional Targets
Advisory Committee to recommend factors to be considered and methodologies for
setting greenhouse gas emissions reduction targets. SB 375 also provides
incentives – relief from certain California Environmental Quality Act (CEQA)
requirements for development projects that are consistent with regional plans that
achieve the targets.
Reaching the Targets
Transportation planning is done on a regional level in major urban areas, through the
Metropolitan Planning Organizations. These MPOs are required by the federal
government to prepare regional transportation plans (RTPs) in order to receive federal
transportation dollars. These plans must reflect the land uses called out in city and
county general plans. Regional planning efforts provide an opportunity for
community residents to help select future growth scenarios that lead to more
sustainable and energy efficient communities. Such plans should be developed
through an extensive public process to provide for local accountability.
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II. Recommended Actions
Scoping Plan
SB 375 requires MPOs to prepare a sustainable communities strategy to reach the
regional target provided by ARB. MPOs would use the sustainable communities
strategy for the land use pattern underlying the region’s transportation plan. If the
strategy does not meet the target, the MPO must document the impediments and show
how the target could be met with an alternative planning strategy. The CEQA relief
would be provided to those projects that are consistent with either the sustainable
communities strategy or alternative planning strategy, whichever meets the target.
Many regions in California have conducted comprehensive scenario planning, called
Blueprint planning, that engages a broad set of stakeholders at the local level on the
impacts of land use and transportation choices. The State has allocated resources to
initiate or augment existing Blueprint efforts of MPOs. These efforts focus on
fostering efficient land use patterns that not only reduce vehicle travel but also
accommodate an adequate supply of housing, reduce impacts on valuable habitat and
productive farmland, increase resource use efficiency, and promote a prosperous
regional economy. Blueprint planning can play an important role in the SB 375
process by helping inform target-setting efforts and building strong sustainable
communities strategies.
Local governments will play a significant role in the regional planning process to
reach passenger vehicle greenhouse gas emissions reduction targets. Local
governments have the ability to directly influence both the siting and design of new
residential and commercial developments in a way that reduces greenhouse gases
associated with vehicle travel, as well as energy, water, and waste. A partnership of
local and regional agencies is needed to create a sustainable vision for the future that
accommodates population growth in a carbon efficient way while meeting housing
needs and other planning goals. Integration of the sustainable communities strategies
or alternative planning strategies with local general plans will be key to the
achievement of these goals. State, regional, and local agencies must work together to
prioritize and create the supporting policies, programs, incentives, guidance, and
funding to assist local actions to help ensure regional targets are met.
Enhanced public transit service combined with incentives for land use development
that provides a better market for public transit will play an important role in helping
to reach regional targets.
SB 375 maintains regions’ flexibility in the development of sustainable communities
strategies. There are many different ways regions can plan and work toward reducing
the growth in vehicle travel. Increasing low-carbon travel choices (public transit,
carpooling, walking and biking) combined with land use patterns and infrastructure
that support these low-carbon modes of travel, can decrease average vehicle trip
lengths by bringing more people closer to more destinations. The need for integrated
strategies is supported by the current transportation and land use modeling literature.
Supporting measures that should be considered in both the regional target-setting and
sustainable communities strategy processes include the following:
48
Scoping Plan
II. Recommended Actions
•
Congestion pricing strategies can provide a method of efficiently managing traffic
demand while raising funds for needed transit, biking and pedestrian
infrastructure investment. Regional and local agencies, however, do not have the
authority to pursue these strategies on their own, as federal approval and State
authorization must be provided for regional implementation of most pricing
measures.
•
Indirect source rules for new development have already been implemented by
some local air districts and proposed by others for purposes of criteria pollution
reduction. Regions should evaluate the need for measures that would ensure the
mitigation of high carbon footprint development outside of the sustainable
communities strategies or alternative planning strategies that meet the targets
established under SB 375.
•
Programs to reduce vehicle trips while preserving personal mobility, such as
employee transit incentives, telework programs, car sharing, parking policies,
public education programs and other strategies that enhance and complement land
use and transit strategies can be implemented and coordinated by regional and
local agencies and stakeholder groups.
Another way to encourage greenhouse gas reductions from vehicle travel is through
pay as you drive insurance (PAYD), a structure in which drivers realize a direct
financial benefit from driving less. The California Insurance Commissioner recently
announced support for PAYD and has proposed regulations to permit PAYD on a
voluntary basis.
Separate emissions reduction estimates for these strategies are not quantified here.
As regional targets are developed in the SB 375 process, ARB will work with regions
to quantify the benefits in the context of the targets.
Estimating the Benefits of Regional Targets
The ARB estimate of the statewide benefit of regional transportation-related
greenhouse gas emissions reduction targets is based on analysis of research results
quantifying the effects of land use and transportation strategies. The emissions
reduction number in Table 11 is not the statewide metric for regional targets that must
be developed as SB 375 is implemented. The emissions target will ultimately be
determined during the SB 375 process.
The possible impacts of land use and transportation policies have been well
documented. Most recently, a 2008 U.C. Berkeley study38 reviewed over 20
38
Rodier, Caroline. U.C. Berkeley, Transportation Sustainability Research Center, “A Review of the
International Modeling Literature: Transit, Land Use, and Auto Pricing Strategies to Reduce Vehicle Miles
Traveled and Greenhouse Gas Emissions,” August 2008. http://www.arb.ca.gov/planning/tsaq/docs/rodier_8-108_trb_paper.pdf (accessed October 12, 2008)
49
II. Recommended Actions
Scoping Plan
modeling studies from California (including the State’s four largest MPOs), other
states and Europe. The study found a range of 0.4 to 7.7 percent reduction in vehicle
miles traveled (VMT) resulting from a combination of land use and enhanced transit
policies compared to a business-as-usual case over a 10-year horizon, with benefits
doubling by 2030, as shown in Figure 4. With the inclusion of additional measures
such as pricing policies, the reduction of greenhouse gas emissions can be greater.
These strategies will be considered during the target-setting process. Sophisticated
land use and transportation models can best assess these effects. As part of the
development of regional targets, technical tools will need to be refined to ensure
sound quantification techniques are available.
Figure 4
The potential benefits of this measure that can be realized by 2020 (as shown in
Table 11) were estimated after first accounting for the benefits of the vehicle
technology and efficiency measures in the plan. It was calculated based on the U.C.
Berkeley study’s median value of 4 percent per capita VMT reduction over a 10-year
time horizon. This value should not be interpreted as the final estimate of the benefits
of this measure. The current academic literature supports this realistic statewide
estimate of potential benefits, but the ultimate benefit will be determined as an
outcome of SB 375 implementation on a regional level. The incentives for
sustainable planning in SB 375 can set California on a new path. ARB’s
establishment of regional targets in 2010, combined with the Regional Targets
Advisory Committee process, required by the legislation, provides a clear mechanism
for maximizing the benefits of this measure.
Additional Benefits of Regional Targets and Land Use Strategies
Land use and transportation measures that help reduce vehicle travel will also provide
multiple benefits beyond greenhouse gas reductions. Quality of life will be improved
50
Scoping Plan
II. Recommended Actions
by increasing access to a variety of mobility options such as transit, biking, and
walking, and will provide a diversity of housing options focused on proximity to jobs,
recreation, and services. Other important state and community goals that could be
met through better integrated land use and transportation planning include
agricultural, open space and habitat preservation, improved water quality, positive
health effects, and the reduction of smog forming pollutants.
Growing more sustainably has the potential to provide additional greenhouse gas and
energy savings by encouraging more compact, mixed-use developments resulting in
reduced demand for electricity and heating and cooling energy. These land userelated energy savings will contribute toward the Plan’s energy efficiency measures
to achieve the goal of reducing electricity and natural gas usage. ARB is continuing
to evaluate the greenhouse gas emissions reductions that may be additional to the
proposed measures in this plan.
Table 11: Regional Transportation-Related Greenhouse Gas Targets
Recommendation
(MMTCO2E in 2020)
Measure No.
T-3
Measure Description
Regional Transportation-Related Greenhouse Gas Targets39
Total
Reductions
5
5
7. Vehicle Efficiency Measures
Implement light-duty vehicle efficiency measures.
Several additional measures could reduce light-duty vehicle greenhouse gas
emissions. The California Integrated Waste Management Board (CIWMB) with
various partners continues to conduct a public awareness campaign to promote
sustainable tire practices. ARB is pursuing a regulation to ensure that tires are
properly inflated when vehicles are serviced. In addition, CEC in consultation with
CIWMB is developing an efficient tire program focusing first on data gathering and
outreach, then on potential adoption of minimum fuel-efficient tire standards, and
lastly on the development of consumer information requirements for replacing tires.
ARB is also pursuing ways to reduce engine load via lower friction oil and reducing
the need for air conditioner use. ARB is actively engaged in the regulatory
development process for the tire inflation component of this measure. Current
information indicates the reduction of greenhouse gas emissions is likely to be less
than estimated in the Draft Scoping Plan. ARB has adjusted the estimated reductions
shown in Table 12 to reflect this.
39
This number represents an estimate of what may be achieved from local land use changes. It is not the
SB 375 regional target. ARB will establish regional targets for each MPO region following the input of the
Regional Targets Advisory Committee and a public consultation process with MPOs and other stakeholders per
SB 375.
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II. Recommended Actions
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Table 12: Vehicle Efficiency Recommendation
(MMTCO2E in 2020)
Measure No.
T-4
Measure Description
Vehicle Efficiency Measures
Total
Reductions
4.5
4.5
8. Goods Movement
Implement adopted regulations for the use of shore power for ships at berth. Improve
efficiency in goods movement activities.
A significant portion of greenhouse gas emissions from transportation activities
comes from the movement of freight or goods throughout the state. Activity at
California ports is forecast to increase by 250 percent between now and 2020. Both
the Goods Movement Emission Reduction Plan (GMERP) and the 2007 State
Implementation Plan (SIP) contain numerous measures designed to reduce the public
health impact of goods movement activities in California. ARB has already adopted a
regulation to require ship electrification at ports. Proposition 1B funds, as well as
clean air plans being implemented by California’s ports, will also help reduce
greenhouse gas emissions while cutting criteria pollutant and toxic diesel emissions.
ARB is proposing to develop and implement additional measures to reduce
greenhouse gas emissions due to goods movement from trucks, ports and other
related facilities. The anticipated reductions would be above and beyond what is
already expected in the GMERP and the SIP. This effort should provide
accompanying reductions in air toxics and smog forming emissions. The estimated
reduction of greenhouse gas emissions is shown in Table 13.
After further evaluation, ARB incorporated the Draft Scoping Plan’s Heavy-Duty
Vehicle-Efficiency measure into the Goods Movement measure. A Heavy-Duty
Engine Efficiency measure could reduce emissions associated with goods movement
through improvements which could involve advanced combustion strategies, friction
reduction, waste heat recovery, and electrification of accessories. ARB will consider
setting requirements and standards for heavy-duty engine efficiency in the future if
higher levels of efficiency are not being produced either in response to market forces
(fuel costs) or federal standards.
Table 13: Goods Movement Recommendation
(MMTCO2E in 2020)
Measure No.
T-5
T-6
Measure Description
Ship Electrification at Ports (Discrete Early Action)
Goods Movement Efficiency Measures
• System-Wide Efficiency Improvements
Reductions
0.2
3.5
Total
52
3.7
Scoping Plan
II. Recommended Actions
9. Million Solar Roofs
Roofs Program
Install 3,000 MW of solar-electric capacity under California’s existing solar
programs.
As part of Governor Schwarzenegger’s Million Solar Roofs Program, California has
set a goal to install 3,000 megawatts (MW) of new solar capacity by 2017 – moving
the state toward a cleaner energy future and helping lower the cost of solar systems
for consumers. The Million Solar Roofs Initiative is a ratepayer-financed incentive
program aimed at transforming the market for rooftop solar systems by driving down
costs over time. Created under Senate Bill 1 (Murray, Chapter 132, Statutes of 2006),
the Million Solar Roofs Program includes CPUC’s California Solar Initiative and
CEC’s New Solar Homes Partnership, and requires publicly-owned utilities (POUs)
to adopt, implement and finance a solar incentive program. This measure would
offset electricity from the grid, thereby reducing greenhouse gas emissions. The
estimated emissions reductions are shown in Table 14.
Obtaining the incentives requires the building owners or developers to meet certain
efficiency requirements: specifically, that new construction projects meet energy
efficiency levels that exceed the State’s Title 24 Building Energy Efficiency
Standards, and that existing commercial buildings undergo an energy audit. Thus, the
program is also a mechanism for achieving the efficiency targets for the Energy
sector. By requiring greater energy efficiency for projects that seek solar incentives,
the State would be able to reduce both electricity and natural gas needs and their
associated greenhouse gas emissions.
Table 14: Million Solar Roofs Recommendation
(MMTCO2E in 2020)
Measure No.
E-4
Measure Description
Million Solar Roofs (including California Solar Initiative, New
Solar Homes Partnership and solar programs of publicly owned
utilities)
• Target of 3000 MW Total Installation by 2020
Total
Reductions
2.1
2.1
10. Medium/HeavyMedium/Heavy-Duty Vehicles
Adopt medium and heavy-duty vehicle efficiency measures.
Medium- and heavy-duty vehicles account for approximately 20 percent of the
transportation greenhouse gas inventory. Requiring retrofits to improve the fuel
efficiency of heavy-duty trucks could include a requirement for devices that reduce
aerodynamic drag and rolling resistance. In addition, hybridization of medium- and
53
II. Recommended Actions
Scoping Plan
heavy-duty vehicles would also reduce greenhouse gas emissions through increased
fuel efficiency. Hybrid trucks would likely achieve the greatest benefits in urban,
stop-and-go applications, such as parcel delivery, utility services, transit, and other
vocational work trucks. The recommendation for this sector is summarized in
Table 15.
Table 15: Medium/Heavy-Duty Vehicle Recommendation
(MMTCO2E in 2020)
Measure No.
T-7
T-8
Measure Description
Heavy-Duty Vehicle Greenhouse Gas Emissions Reduction
Measure - Aerodynamic Efficiency (Discrete Early Action)
Medium/Heavy-Duty Vehicle Hybridization
Reductions
0.9
Total
0.5
1.4
11. Industrial Emissions
Require assessment of large industrial sources to determine whether individual
sources within a facility can cost-effectively reduce greenhouse gas emissions and
provide other pollution reduction co-benefits. Reduce greenhouse gas emissions from
fugitive emissions from oil and gas extraction and gas transmission. Adopt and
implement regulations to control fugitive methane emissions and reduce flaring at
refineries.
Energy Efficiency and CoCo-Benefits Audits for Large Industrial Sources
This measure would apply to the direct greenhouse gas emissions at major industrial
facilities emitting more than 0.5 MMTCO2E per year. In general, these facilities also
have significant emissions of criteria air pollutants, toxic air pollutants, or both.
Major industrial facilities include power plants, refineries, cement plants, and
miscellaneous other sources. ARB would implement this measure through a
regulation, requiring each facility to conduct an energy efficiency audit of individual
combustion and other direct sources of greenhouse gases within the facility to
determine the potential reduction opportunities, including criteria air pollutants and
toxic air contaminants. The audit would include an assessment of the impacts of
replacing or upgrading older, less efficient units such as boilers and heaters, or
replacing the units with combined heat and power (CHP) units. The measure is
summarized in Table 16.
The audit would help ARB to identify potential reductions of greenhouse gas
emissions reductions, the associated costs and cost-effectiveness, their technical
feasibility, and the potential to reduce air pollution impacts at the local or regional
level. ARB will use the results to determine if certain emissions sources within a
facility can make cost-effective reductions of greenhouse gas emissions that also
provide reductions in other criteria or toxic pollutants. Where this is the case, rule
provisions or permit conditions would be considered to ensure the best combination
54
Scoping Plan
II. Recommended Actions
of pollution reductions. Nothing in this measure would delay known cost-effective
strategies that otherwise would be required.
The California Long Term Energy Efficiency Strategic Plan (CPUC) discusses a
number of strategies associated with improving industrial sector efficiency and
greenhouse gas emissions reductions, including the development of certification
protocols for industrial efficiency improvements to develop market recognition for
efficiency gains.
Oil and Gas Recovery Operations and Transmission/Refineries
California is a major oil and gas producer. Crude oil, both from in-state and imported
sources, is processed at 21 oil refineries in the state. In addition to conforming to the
requirements of the cap-and-trade program and the audit measure, ARB has identified
four specific measures for development and implementation, two for oil and gas
recovery operations and gas transmission, and two for refineries. Other industrial
measures that were under consideration affect greenhouse gas emissions sources that
are fully regulated under cap and trade, which ARB concluded would provide costeffective reductions of greenhouse gas emissions. All measures would be designed to
secure a combination of cost-effective reductions in greenhouse gas emissions,
criteria air pollutants and air toxics. Two measures would be developed to reduce
methane emissions in the oil and gas production and gas transmission processes from
leaks and incomplete combustion of methane (used as fuel). These measures would
include improved leak detection, process modifications, equipment retrofits,
installation of new equipment, and best management practices. The first measure
would affect oil and gas producers. The second would impact operators of natural
gas pipeline systems. These fugitive emissions are not proposed to be covered by a
cap and trade program, although combustion-related emissions from these operations
are proposed to be covered. The WCI partner jurisdictions are currently evaluating
the inclusion of fugitive methane emissions to the extent that adequate quantification
methods exist. During implementation of this measure, ARB will determine whether
these emissions will also be covered in California’s cap-and-trade program. If the
emissions are covered under the cap, ARB will evaluate the need for the measures
described here.
Two measures would be developed for oil refineries. The first would limit the
greenhouse gas emissions from refinery flares while preserving flaring as needed for
safety reasons. The second would remove the current fugitive methane exemption in
most refinery Volatile Organic Compounds (VOC) regulations. This exemption was
established because methane does not appreciably contribute to urban smog, but is
inappropriate given the role that methane plays in global warming. ARB believes
these measures would provide cost-effective greenhouse gas, criteria pollutants and
air toxics emissions reductions. Most combustion and other process emissions at
refineries would be governed by the cap-and-trade program. As with the oil and gas
production measures above, the need for these measures would be evaluated if
fugitive methane is included in the WCI cap-and-trade program.
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II. Recommended Actions
Scoping Plan
Table 16: Industrial Emissions Recommendation
(MMTCO2E in 2020)
Measure No.
I-1
I-2
I-3
I-4
I-5
Measure Description
Energy Efficiency and Co-Benefits Audits for Large Industrial
Sources
Oil and Gas Extraction GHG Emissions Reduction
GHG Leak Reduction from Oil and Gas Transmission
Refinery Flare Recovery Process Improvements
Removal of Methane Exemption from Existing Refinery
Regulations
Total
Reductions
TBD
0.2
0.9
0.33
0.01
1.4
12. High Speed Rail
Support implementation of a high speed rail system.
A high speed rail (HSR) system is part of the statewide strategy to provide more
mobility choice and reduce greenhouse gas emissions. This measure supports
implementation of plans to construct and operate a HSR system between northern and
southern California. As planned, the HSR is a 700-mile-long rail system capable of
speeds in excess of 200 miles per hour on dedicated, fully-grade separated tracks with
state-of-the-art safety, signaling and automated rail control systems. The system
would serve the major metropolitan centers of California in 2030 and is projected to
displace between 86 and 117 million riders from other travel modes in 2030.
For Phase 1 of the HSR, between San Francisco and Anaheim, 2020 is projected to be
the first year of service, with 26 percent of the projected 2030 full system ridership
levels. The anticipated reduction of greenhouse gas emissions are shown in Table 17.
HSR system ridership and the benefits associated with it are anticipated to increase
over time as additional portions of the planned system are completed. Over the long
term, the system also has the potential to support the reduction of greenhouse gas
emissions in the transportation sector from land use strategies, by providing
opportunities for and encouraging low-impact transit-oriented development.
HSR implementation was initiated recently when California voters approved
Proposition 1A, the “Safe, Reliable High-Speed Passenger Train Bond Act for the
21st Century,” as it appeared on the November 2008 ballot. HSR is anticipated to
begin in 2010, with full implementation anticipated in 2030.
Table 17: High Speed Rail Recommendation
(MMTCO2E in 2020)
Measure No.
T-9
Measure Description
High Speed Rail
Total
56
Reductions
1.0
1.0
Scoping Plan
II. Recommended Actions
13. Green Building Strategy
Expand the use of green building practices to reduce the carbon footprint of
California’s new and existing inventory of buildings.
Collectively, energy use and related activities by buildings are the second largest
contributor to California’s greenhouse gas emissions. Almost one-quarter of
California’s greenhouse gas emissions can be attributed to buildings.40 As the
Governor recognized in his Green Building Initiative (Executive Order S-20-04),
significant reductions in greenhouse gas emissions can be achieved through the
design and construction of new green buildings as well as the sustainable operation,
retrofitting, and renovation of existing buildings.
A Green Building strategy offers a comprehensive approach to reducing direct and
upstream greenhouse gas emissions that cross-cuts multiple sectors including
Electricity/Natural Gas, Water, Recycling/Waste, and Transportation. Green
buildings are designed, constructed, renovated, operated, and maintained using an
integrated approach that reduces greenhouse gas emissions by maximizing energy and
resource efficiency. Employing a whole-building design approach can create
tremendous synergies that result in multiple benefits at little or no net cost, allowing
for efficiencies that would never be possible on an incremental basis.
A Green Building strategy will produce greenhouse gas saving through buildings that
exceed minimum energy efficiency standards, decrease consumption of potable
water, reduce solid waste during construction and operation, and incorporate
sustainable materials. Combined these measures can also contribute to healthy indoor
air quality, protect human health and minimize impacts to the environment. A Green
Building strategy also includes siting considerations. Buildings that are sited close to
public transportation or near mixed-use areas can work in tandem with transportationrelated strategies to decrease greenhouse gas emissions that result from that sector.
In July 2008, the California Building Standards Commission (CBSC) adopted the
Green Building Standards Code (GBSC) for all new construction in the state. While
the current version of the commercial green building code is voluntary, CBSC
anticipates adopting a mandatory code in 2011 which will institute minimum
environmental performance standards for all occupancies. The Green Building
Strategy includes Zero Net Energy (ZNE) goals for new and existing homes and
commercial buildings consistent with the recently-adopted California Long Term
Energy Efficiency Strategic Plan. ARB encourages local governments to raise the bar
by adopting “beyond-code” green building requirements. To assist this effort, State
government would develop and regularly tighten voluntary standards, written in
GBSC language for easy adoption by local jurisdictions.
40
Greenhouse gas emission estimates from electricity, natural gas, and water use in homes and commercial
buildings.
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II. Recommended Actions
Scoping Plan
As we approach the 2020 and 2030 targets for zero energy buildings, these “percent
above code” targets must shift to “percent of ZNE” targets. Zero energy new and
existing buildings can be an overarching and unifying concept for energy efficiency
in buildings, as discussed above (building energy efficiency measures E-1 and CR-1).
In order to achieve statewide GHG emission reductions, these targets should be
expanded to address other aspects of environmental performance. For example, these
targets could be re-framed as a carbon footprint reduction goal for a 35 percent
reduction in both energy and water consumption. For commercial buildings, a 2011
target should be established such that a quarter of all new buildings reduce energy and
water consumption by at least 25 percent beyond code.
Furthermore, retrofitting existing residential and commercial buildings would achieve
substantial greenhouse gas emissions reduction benefits. This Scoping Plan
recommends the establishment of an environmental performance rating system for
homes and commercial buildings and further recommends that California adopt
mechanisms to encourage and require retrofits for buildings that do not meet
minimum standards of performance.
An effective green building framework can operate to deliver reductions of
greenhouse gas emissions in multiple sectors. The green building strategies provide a
vehicle to achieve the statewide electricity and natural gas efficiency targets and
lower greenhouse gas emissions from the waste and water transport sectors.
Achieving these green building emissions reductions will require coordinated efforts
from a broad range of stakeholders, and new financing mechanisms to motivate
investment in green building strategies.
Achieving significant greenhouse gas emissions reductions from new and existing
buildings will require a combination of green building measures for new construction
and retrofits to existing buildings. The State of California will set an example by
requiring all new State buildings to exceed existing Green Building Initiative energy
goals and achieve nationally-recognized building sustainability standards such as
Leadership in Energy and Environmental Design - New Construction (LEED-NC)
“Gold” certification. Existing State buildings would also be retrofitted to achieve
higher standards equivalent to LEED-EB for existing buildings (EB) “Silver.” All
new schools should be required to meet the Collaborative for High Performance
Schools (CHPS) 2009 criteria. Existing schools applying for modernization funds
should also be required to meet CHPS 2009 criteria.
ARB estimates that the greenhouse gas savings from green building measures as
approximately 26 MMTCO2E, as shown in Table 18 below. Most of these reductions
are accounted for in the Electricity, Waste and Water sectors. Because of this, ARB
has assigned all emissions reductions that occur as a result of green building
strategies to other sectors for purposes of meeting AB 32 requirements, but will
continue to evaluate and refine the emissions from this sector. As such, this strategy
will require implementation from various entities within California, including CEC,
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Scoping Plan
II. Recommended Actions
PUC, State Architect, and others, each taking the lead in their area of authority and
expertise.
Table 18: Green Buildings Recommendation
(MMTCO2E in 2020)
Measure No.
GB-1
Measure Description
Green Buildings41
Total
Reductions
26
26
14. High Global Warming Potential Gases
Adopt measures to reduce high global warming potential gases.
High global warming potential (GWP) gases pose a unique challenge. Just a few
pounds of high GWP materials can have the equivalent effect on global warming as
several tons of carbon dioxide. For example, the average refrigerator has about a
half-pound of refrigerant and about one pound of “blowing agents” used to make the
insulating foam. If these gases were released into the atmosphere, they would have a
global warming impact equivalent to five metric tons of CO2.
High GWP chemicals are very common and are used in many different applications
such as refrigeration, air conditioning systems, fire suppression systems, and the
production of insulating foam. Because these gases have been in use for years, old
refrigerators, air conditioners and foam insulation represent a significant “bank” of
these materials yet to be released. High GWP gases are released primarily in two
ways. The first is through leaking systems, and the second is during the disposal
process. Once high GWP materials are released, they persist in the atmosphere for
tens or even hundreds of years. Recommended measures to address this growing
problem take the form of direct regulations and use of mitigation fees.
ARB identified four Discrete Early Action measures to reduce greenhouse gas
emissions from the refrigerants used in car air conditioners, semiconductor
manufacturing, air quality tracer studies, and consumer products. ARB has identified
additional potential reduction opportunities based on specifications for future
commercial and industrial refrigeration, changing the refrigerants used in auto air
conditioning systems, and ensuring that existing car air conditioning systems as well
as stationary refrigeration equipment do not leak. Recovery and destruction of high
GWP materials in the banks described above could also provide significant
reductions.
41
Although some of these emissions reductions may be additional, most of them are accounted for in the
Energy, Waste, Water, and Transportation sectors. In addition, some of these reductions may occur out of state,
making quantification more difficult. Because of this, these emissions reductions are not currently counted
toward the AB 32 2020 goal.
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II. Recommended Actions
Scoping Plan
ARB is also proposing to establish an upstream mitigation fee on the use of high
GWP gases. Even with the reductions from the specific high GWP measures
described above, this sector’s emissions are still projected to more than double from
current levels by 2020. This is because of the high growth in the sector due, in part,
to the replacement of ozone-depleting substances being phased out of production.
These emissions would be difficult to address via traditional approaches since the
gases are used in small quantities in very diverse applications. Additionally, there are
no proven substitutes or alternatives for some uses, and the relative low price of most
high GWP compounds provides little incentive to develop alternatives, reduce
leakage, or recover the gases at end-of-life.
An upstream fee would ensure that the climate impact of these substances is reflected
in the total cost of the product, encouraging reduced use and end-of-life losses, as
well as the development of alternatives. The fee would be variable and associated
with the impact the product makes on public health and the environment. This could
encourage product innovation because fees would correspondingly decrease as the
manufacturer or producer redesigned their product or found lower-cost alternatives.
This mitigation fee would complement many of the downstream high GWP
regulations currently being developed.42 Fees on high GWP gases would be set to be
consistent with the cost of reducing greenhouse gas emissions and could be set to
reduce multiple environmental impacts. Revenues could be used to mitigate
greenhouse gas emissions either from other high GWP compounds or other
greenhouse gases.
Table 19 summarizes the recommendations for measures in the High GWP sector.
These measures address both high GWP gases identified in AB 32 and also other high
GWP gases, such as ozone-depleting substances that are only partially covered by the
Montreal Protocol. The emissions reductions shown are only for the six greenhouse
gases explicitly identified in AB 32.
42
Industrial process emissions of high GWP gases are also expected to be part of the cap-and-trade program.
As ARB moves through the rulemaking for both the high GWP fee and the cap-and-trade program, staff will
evaluate whether these are complementary approaches or if one or the other needs to be adjusted to prevent
duplicative regulation of the industrial process emissions of these gases.
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Scoping Plan
II. Recommended Actions
Table 19: High GWP Gases Sector Recommendation
(MMTCO2E in 2020)
Measure No.
H-1
H-2
H-3
H-4
H-5
H-6
H-7
Measure Description
Motor Vehicle Air Conditioning Systems: Reduction of
Refrigerant Emissions from Non-Professional Servicing (Discrete
Early Action)
SF6 Limits in Non-Utility and Non-Semiconductor Applications
(Discrete Early Action)
Reduction of Perfluorocarbons in Semiconductor Manufacturing
(Discrete Early Action)
Limit High GWP Use in Consumer Products
(Discrete Early Action) (Adopted June 2008)
High GWP Reductions from Mobile Sources
• Low GWP Refrigerants for New Motor Vehicle Air
Conditioning Systems
• Air Conditioner Refrigerant Leak Test During Vehicle
Smog Check
• Refrigerant Recovery from Decommissioned
Refrigerated Shipping Containers
• Enforcement of Federal Ban on Refrigerant Release
during Servicing or Dismantling of Motor Vehicle Air
Conditioning Systems
High GWP Reductions from Stationary Sources
• High GWP Stationary Equipment Refrigerant
Management Program:
o Refrigerant Tracking/Reporting/Repair Deposit
Program
o Specifications for Commercial and Industrial
Refrigeration Systems
• Foam Recovery and Destruction Program
• SF6 Leak Reduction and Recycling in Electrical
Applications
• Alternative Suppressants in Fire Protection Systems
• Residential Refrigeration Early Retirement Program
Mitigation Fee on High GWP Gases43
Total
43
Reductions
0.26
0.3
0.15
0.25
3.3
10.9
5
20.2
The 5 MMTCO2E reduction is an estimate of what might occur with a fee in place. Additional emissions
reductions from a fee would be expected as resulting revenues are used in mitigation programs. Using the funds
to mitigate greenhouse gas emissions could substantially increase the emissions reductions from this measure.
61
II. Recommended Actions
Scoping Plan
15. Recycling and Waste
Reduce methane emissions at landfills. Increase waste diversion, composting and
other beneficial uses of organic materials, and mandate commercial recycling. Move
toward zero-waste.
California has a long track record of reducing greenhouse gas emissions by turning
waste into resources, exemplified by the waste diversion rate from landfills of 54
percent (which exceeds the current 50 percent mandate) resulting from recovery of
recyclable materials. Re-introducing recyclables with intrinsic energy value back into
the manufacturing process reduces greenhouse gas emissions from multiple phases of
product production including extraction of raw materials, preprocessing and
manufacturing. Additionally, by recovering organic materials from the waste stream,
and having a vibrant composting and organic materials industry, there is an
opportunity to further reduce greenhouse gas emissions through the indirect benefits
associated with the reduced need for water and fertilizer for California’s Agricultural
sector. Incentives may also be an effective way to secure greenhouse gas emissions
reductions in this sector. Table 20 summarizes the emissions reductions from
Recycling and Waste sector.
Reduction in Landfill Methane
Methane emissions from landfills, generated when wastes decompose, account for
one percent of California’s greenhouse gas emissions. Greenhouse gas emissions can
be substantially reduced by properly managing all materials to minimize the
generation of waste, maximize the diversion from landfills, and manage them to their
highest and best use. Capturing landfill methane results in greenhouse gas benefits,
as well as reductions in other air pollutants such as volatile organic compounds. ARB
is working closely with the California Integrated Waste Management Board
(CIWMB) to develop a Discrete Early Action measure for landfill methane control
that will be presented to ARB in January.
CIWMB is also pursuing efforts to reduce methane emissions by diverting organics
from landfills, and to promote best management practices at smaller uncontrolled
landfills. Landfill gas may also provide a viable source of liquefied natural gas
(LNG) vehicle fuel. Reductions from these types of projects would be accounted for
in the Transportation sector.
High Recycling / Zero Waste
This measure reduces greenhouse gas emissions primarily by reducing the substantial
energy use associated with the acquisition of raw materials in the manufacturing stage
of a product’s life-cycle. As virgin raw materials are replaced with recyclables, a
large reduction in energy consumption should be realized. Implementing programs
with a systems approach that focus on consumer demand, manufacturing, and
movement of products will result in the reduction of greenhouse gas emissions and
other co-benefits. Reducing waste and materials at the source of generation,
62
Scoping Plan
II. Recommended Actions
increased use of organic materials to produce compost to benefit soils and to produce
biofuels and energy, coupled with increased recycling – especially in the commercial
sector – and Extended Producer Responsibility (EPR) plus Environmentally
Preferable Purchasing (EPP) also have the potential to reduce emissions, both in-state
and within the connected global economy. This measure could also assist in meeting
the 33 percent renewables energy goal through deployment of anaerobic digestion for
production of fuels/energy.
As noted by ETAAC, recycling in the commercial sector could be substantially
increased. This will be implemented through mandatory programs and enhanced
partnerships with local governments. The provision of appropriate financial
incentives will be critical. ARB will work with CIWMB to develop and implement
these types of programs. ARB will also work with CIWMB, the California
Department of Food and Agriculture, the Department of Transportation, and others to
provide direct incentives for the use of compost in agriculture and landscaping.
Further, CIWMB will explore the use of incentives for all Recycling and Waste
Management measures, including for commercial recycling and for local jurisdictions
to encourage the collection of residentially and commercially-generated food scraps
for composting and in-vessel anaerobic digestion.
Table 20: Recycling and Waste Sector Recommendation - Landfill
Methane Capture and High Recycling/Zero Waste
(MMTCO2E in 2020)
Measure No.
RW-1
RW-2
RW-3
Measure Description
Landfill Methane Control (Discrete Early Action)
Additional Reductions in Landfill Methane
• Increase the Efficiency of Landfill Methane Capture
Reductions
1
TBD
High Recycling/Zero Waste
• Mandatory Commercial Recycling
• Increase Production and Markets for Organics Products
• Anaerobic Digestion
• Extended Producer Responsibility
• Environmentally Preferable Purchasing
Total
44
5
2
2
TBD
TBD
10(44)
Reductions from RW-2 and RW-3 are not counted toward the AB 32 goal. ARB is continuing to work with
CIWMB to quantify these emissions and determine what portion of the reductions can be credited to meeting
the AB 32 2020 goal. These measures may provide greater emissions reductions than estimated.
63
II. Recommended Actions
Scoping Plan
16. Sustainable Forests
Preserve forest sequestration and encourage the use of forest biomass for sustainable
energy generation.
The 2020 Scoping Plan target for California’s forest sector is to maintain the current 5
MMTCO2E of sequestration through sustainable management practices, potentially
including reducing the risk of catastrophic wildfire, and the avoidance or mitigation
of land-use changes that reduce carbon storage. California’s Board of Forestry and
Fire Protection has the existing authority to provide for sustainable management
practices, and will, at a minimum, work to maintain current carbon sequestration
levels. The Resources Agency and its departments will also have an important role to
play in implementing this measure.
In addition, the Resources Agency is supporting voluntary actions, including
expenditure of public funds for projects focused largely on conserving biodiversity,
providing recreation, promoting sustainable forest management and other projects
that also provide carbon sequestration benefits. The federal government must also
use its regulatory authority to, at a minimum, maintain current carbon sequestration
levels for land under its jurisdiction in California.
Forests in California are now a carbon sink. This means that atmospheric removal of
carbon through sequestration is greater than atmospheric emissions from processes
like fire and decomposition of wood. However, several factors, such as wildfires and
forest land conversion, may cause a decline in the carbon sink. The 2020 target
would provide a mechanism to help ensure that current carbon stocks are, at a
minimum, maintained and do not diminish over time. The 5 MMTCO2E emission
reduction target is set equal to the magnitude of the current estimate of net emissions
from California’s forest sector. As technical data improve, the target can be
recalibrated to reflect new information.
California’s forests will play an even greater role in reducing carbon emissions for the
2050 greenhouse gas emissions reduction goals. Forests are unique in that planting
trees today will maximize their sequestration capacity in 20 to 50 years. As a result,
near-term investments in activities such as planting trees will help us reach our 2020
target, but will also play a greater role in reaching our 2050 goals.
Monitoring carbon sequestered on forest lands will be necessary to implement the
target. The Board of Forestry and Fire Protection, working with the Resources
Agency, the Department of Forestry and Fire Protection and ARB would be tasked
with developing a monitoring program, improving greenhouse gas inventories, and
determining what actions are needed to meet the 2020 target for the Forest sector.
Future climate impacts will exacerbate existing wildfire and insect disturbances in the
Forest sector. These disturbances will create new uncertainties in reducing emissions
and maintaining sequestration levels over the long-term, requiring more creative
strategies for adapting to these changes. In the short term, focusing on sustainable
management practices and land-use issues is a practical approach for moving forward.
64
Scoping Plan
II. Recommended Actions
Future land use decisions will play a role in reaching our greenhouse gas emissions
reduction goals for all sectors. Loss of forest land to development increases
greenhouse gas emissions levels because less carbon is sequestered. Avoiding or
mitigating such conversions will support efforts to meet the 2020 goal. When
significant changes occur, the California Environmental Quality Act is a mechanism
providing for assessment and mitigation of greenhouse gas emissions.
Going forward there are a number of forestry-related strategies that can play an
important role in California’s greenhouse gas emissions reduction efforts. Biomass
resources from forest residue will factor into the expansion of renewable energy
sources (this is currently accounted for in the Energy sector). Similarly, fuels
management strategies have the potential to reduce the risk of catastrophic fires.
However, fuels management needs to be evaluated to determine whether, and if so
under what circumstances, quantifiable greenhouse gas emission reductions are
achieved. Additionally, public investments to purchase and preserve forests and
woodlands would also provide greenhouse gas emission reductions that will be
accounted for as projects are funded. Urban forest projects can also provide the dual
benefit of carbon sequestration and shading to reduce air conditioning load.
Furthermore, the Forest sector currently functions as a source of voluntary reductions
that would not otherwise occur and this role could expand even further in the future.
ARB has already adopted a methodology to quantify reductions from forest projects,
and recently adopted additional quantification methodologies. Table 21 summarizes
the emission reductions from the forest measure.
Table 21: Sustainable Forests Recommendation
(MMTCO2E in 2020)
Measure No.
F-1
Measure Description
Sustainable Forest Target
Total
Reductions
5
5
17. Water
Continue efficiency programs and use cleaner energy sources to move and treat
water.
Water use requires significant amounts of energy. Approximately one-fifth of the
electricity and one-third of the non-power plant natural gas consumed in the state are
associated with water delivery, treatment and use. Although State, federal, and local
water projects have allowed the state to grow and meet its water demands, greenhouse
gas emissions can be reduced if we can move, treat, and use water more efficiently.
As is the case with energy efficiency, California has a long history of advancing
water efficiency and conservation programs. Without this ongoing, critical work,
65
II. Recommended Actions
Scoping Plan
baseline or business-as-usual greenhouse gas emissions associated with water use
would be much higher than is currently the case.
Six greenhouse gas emissions reduction strategies measures are proposed for the
Water sector, and are shown in Table 22. Three of the measures target reducing
energy requirements associated with providing reliable water supplies and two
measures are aimed at reducing the amount of non-renewable electricity associated
with conveying and treating water. The final measure focuses on providing
sustainable funding for implementing these actions. The greenhouse gas emissions
reductions from these measures are indirectly realized through reduced energy
requirements and are accounted for in the Electricity and Natural Gas sector.
In addition, a mechanism to make allowances available in a cap-and-trade program
could be used to provide additional incentives for local governments, water suppliers,
and third party providers to bundle water and energy efficiency improvements. This
type of allowance set-aside will be evaluated during the rulemaking for the cap-andtrade program.
ARB recommends a public goods charge for funding investments in water
management actions that improve water and energy efficiency and reduce GHG
emissions. As noted by the Economic and Technology Advancement Advisory
Committee, a public goods charge on water can be collected on water bills and then
used to fund end-use water efficiency improvements, system-wide efficiency projects,
water recycling, and other actions that improve water and energy efficiency and
reduce GHG emissions. Depending on how the fee schedule is developed in a
subsequent rulemaking process, a public goods charge could generate $100 million to
$500 million. These actions would also have the co-benefit of improving water
quality and water supply reliability for customers.
Table 22: Water Recommendation
(MMTCO2E in 2020)
Measure No.
W-1
W-2
W-3
W-4
W-5
W-6
Measure Description
Water Use Efficiency
Water Recycling
Water System Energy Efficiency
Reuse Urban Runoff
Increase Renewable Energy Production
Public Goods Charge
Total
45
Reductions
1.4
0.3
2.0
0.2
0.9
TBD
4.8(45)
Greenhouse gas emission reductions from the water sector are not currently counted toward the 2020 goal.
ARB anticipates that a portion of these reductions will be additional to identified reductions in the Electricity
sector and is working with the appropriate agencies to refine the electricity/water emissions inventory.
66
Scoping Plan
II. Recommended Actions
18. Agriculture
In the near-term, encourage investment in manure digesters and at the five-year
Scoping Plan update determine if the program should be made mandatory by 2020.
Encouraging the capture of methane through use of manure digester systems at dairies
can provide emission reductions on a voluntary basis. This measure is also a
renewable energy strategy to promote the use of captured gas for fuels or power
production. Initially, economic incentives such as marketable emission reduction
credits, favorable utility contracts, or renewable energy incentives will be needed.
Quantified reductions for this measure (shown in Table 23) are not included in the
sum of statewide reductions shown in Table 2 since the initial approach is voluntary.
ARB and the California Climate Action Registry worked together on a manure
digester protocol to establish methods for quantifying greenhouse gas emissions
reductions from individual projects; the Board adopted this protocol in September
2008. The voluntary approach will be re-assessed at the five-year update of the
Scoping Plan to determine if the program should become mandatory for large dairies
by 2020.
Nitrogen fertilizer, which produces N2O emissions, is the other significant source of
greenhouse gases in the Agricultural sector. ARB has begun a research program to
better understand the variables affecting fertilizer N2O emissions (Phase 1), and based
on the findings, will explore opportunities for emission reductions (Phase 2).
There may be significant potential for additional voluntary reductions in the
agricultural sector through strategies, such as those recommended by ETAAC. These
opportunities include increases in fuel efficiency of on-farm equipment, water use
efficiency, and biomass utilization for fuels and power production.
Increasing carbon sequestration, including on working rangelands, hardwood and
riparian woodland reforestation, also hold potential as a greenhouse gas strategies.
As we evaluate the role that this sector can play in California’s emissions reduction
efforts, we will explore the feasibility of developing sound quantification protocols so
that these and other related strategies may be employed in the future.
Table 23: Agriculture Recommendation
(MMTCO2E in 2020)
Measure No.
A-1
Measure Description
Methane Capture at Large Dairies46
Total
46
Reductions
1.0
1.0
Because the emission reductions from this measure are not required, they are not counted in the total.
67
II. Recommended Actions
D.
Scoping Plan
Voluntary Early Actions and Reductions
Many individual activities that are not currently addressed under regulatory approaches can
nevertheless result in cost-effective, real, additional, and verifiable greenhouse gas emissions
reductions that will help California meet its 2020 target. Ensuring that appropriate credit is
available to these types of emissions reduction projects will also help jump-start a new wave
of technologies that will feature prominently in California and the world’s long-term efforts
to combat climate change. ARB will pursue several approaches that will recognize and
reward these types of projects.
1. Voluntary
Voluntary Early Action
ARB is required to design regulations to encourage early action to reduce greenhouse
gas emissions, and to provide appropriate recognition or credit for that action.
(HSC §38562(b)(1) and (3)) Recognizing and rewarding greenhouse gas emissions
reductions that occur prior to the full implementation of the AB 32 program can set
the stage for innovation by incentivizing the development and employment of new
clean technologies and by generating economic and environmental benefits for
California.
In February 2008, ARB adopted a policy statement encouraging the early reductions
of greenhouse gas emissions.47 The policy statement describes a process for
interested parties to submit proposed emission quantification methodologies for
voluntary greenhouse gas emissions reductions to ARB for review. The intent is to
provide a rapid assessment of methodologies for evaluating potential greenhouse gas
emissions reduction projects to encourage early actions. Where appropriate, ARB
will issue Executive Orders to confirm the technical soundness of the methodologies,
and the methodology would be available for use by other parties to demonstrate the
creation of voluntary early reductions. ARB is currently in the process of evaluating
a number of submitted project methodologies.
ARB will provide appropriate credit for voluntary early reductions that can be
adequately quantified and verified through three primary means. First, within the
cap-and-trade program, ARB would set aside a certain number of allowances from
the first compliance period to use to reward voluntary reductions that occur before
2012. In addition, ARB will assure that the allocation process in the first compliance
period does not disadvantage facilities that have made reductions after AB 32 went
into effect at the start of 2007 and before 2012.48 The third approach will be to design
47
Board Meeting Agenda. California Air Resources Board. February 28, 2008.
http://www.arb.ca.gov/board/ma/2008/ma022808.htm (accessed October 12, 2008)
48
ARB will evaluate whether some reductions that occurred prior to AB 32 going into effect on
January 1, 2007, should also receive credit under these rules. For example, many facilities in California
registered with the California Climate Action Registry after its creation in 2002 to document early actions to
reduce emissions by having a record of entities profiles and baselines. ARB will evaluate what reductions made
prior to 2007 should be eligible for credit from the allowance set-aside as part of the cap-and-trade program
rulemaking.
68
Scoping Plan
II. Recommended Actions
other regulations, to the extent feasible, to recognize and reward early action. These
approaches are discussed in more detail in Appendix C.
2. Voluntary Reductions
Emissions reduction projects that are not otherwise regulated, covered under an
emissions cap, or undertaken as a result of government incentive programs can
generate “offsets.” These are verifiable reductions whose ownership can be
transferred to others. Voluntary offset markets have recently flourished as a way for
companies and individuals to offset their own emissions by purchasing reductions
outside of their own operations. These sorts of voluntary efforts to reduce greenhouse
gas emissions can play an important role in helping the State meet its overall
greenhouse gas reduction goals.
ARB will adopt methodologies for quantifying voluntary reductions. (HSC §38571)
The Board adopted a methodology for forest projects in October 2007 and for urban
forestry and manure digesters in September 2008. The recognition of voluntary
reduction or offset methodologies does not in any way guarantee that these offsets
can be used for other compliance purposes. The Board would need to adopt
regulations to verify and enforce reductions achieved under these or other approved
methodologies before they could be used for compliance purposes. (HSC §38571)
Allowance set-asides, in addition to being used to potentially reward voluntary early
actions by facilities that will be included in the cap-and-trade program, could also be
used to reward voluntary early action at other facilities not covered by the cap and to
ensure that voluntary actions, such as voluntary renewable power purchases by
individuals, businesses, and others, serve to reduce greenhouse gas emissions under
the cap. An early action allowance set-aside could be utilized both by entities that are
covered by the cap, and by those who develop emissions reducing projects outside of
the cap, or purchase the reductions associated with those projects, and have not sold
or used them. Additional discussion of voluntary offsets is included in Appendix C.
E.
Use of Allowances and Revenues
Revenues may be generated from the implementation of various proposed components of the
Scoping Plan, including by the use of auctions within a cap-and-trade system or through the
imposition of more targeted measures, such as a public goods charge on water. These
revenues could be used to support AB 32 requirements for greenhouse gas emissions
reductions and associated socio-economic considerations. This section summarizes some of
the recommendations and ideas that ARB has received to date. As discussed in the
description of the cap-and-trade measure above, ARB will seek input from a broad range of
experts in an open public process regarding the options for allocation and revenue use under
consideration.
The Economic and Technology Advancement Advisory Committee (ETAAC) recommended
the creation of a California Carbon Trust as a possible mechanism for using revenues
69
II. Recommended Actions
Scoping Plan
generated by the program, leveraged with private funds, to further the overall program goals.
ETAAC’s recommendation is roughly based on the United Kingdom Carbon Trust. The
United Kingdom program was established with public funds, but now functions as a standalone corporation, providing management and consulting services to corporations and small
and medium businesses on reducing greenhouse gas emissions. It also funds innovations in
carbon reduction technologies. ETAAC recommended the creation of a similar organization
that would use revenue from the sale of carbon allowances or from carbon fees to:
•
Fund research, development and demonstration projects,
•
Help bring promising and high potential technologies through the often challenging
early stages of development and get them to market,
•
Manage the early carbon market and mitigate price volatility, purchasing credits and
selling them or retiring them as needed,
•
Dedicate resources to fund projects to achieve AB 32 Environmental Justice goals, or
•
Support a green technology workforce training program.
The most appropriate use for some of the allowances and revenue generated under AB 32
may be to retain it within or return it to the sector from which it was generated. For example,
CEC and CPUC specifically recommended that significant portions of the revenue generated
from the electricity sector under a cap-and-trade program be used for the benefit of that
sector to support investments in renewable energy, efficiency, new energy technology,
infrastructure, customer utility bill relief, and other similar programs. In the case of more
targeted revenues from a public goods charge, the intent would be to use the funds for
program purposes within the sector in which it was raised, for example in the water sector.
ARB will seek input from a broad range of experts in an open public process, and will work
with other agencies, the WCI partner jurisdictions, and stakeholders to consider the options
for use of revenues from the AB 32 program.
Possible uses of allowances and of the revenue generated under the program include:
•
•
Reducing costs of emissions reductions or achieving additional reductions –
Funding energy efficiency and renewable resource development could lower overall
costs to consumers and companies, and provide the opportunity to achieve greater
emissions reductions than would otherwise be possible. Program revenues could be
used to fund programs directly, or create financial incentives for others. Allowance
set-asides could also be used to provide incentives for voluntary renewable power
purchases by individuals and businesses, and for increased energy efficiency.
Achieving environmental co-benefits – Criteria and toxic air pollutants create health
risks, and some communities bear a disproportionate burden from air pollution.
Revenues could be used to enhance greenhouse gas emission reductions that also
provide reductions in air and other pollutants that affect public health.
70
Scoping Plan
•
•
•
•
•
•
•
•
•
II. Recommended Actions
Incentives to local governments – Funding or other incentives to local governments
for well-designed land-use planning and infrastructure projects could lead to shorter
commutes and encourage walking, bicycling and the use of public transit. Funding of
other incentives for local governments could also be used to increase recycling,
composting, and to generating renewable energy from anaerobic digestion.
Consumer rebates – Utilities and other businesses could use revenues to support and
increase rebate programs to customers to offset some of the cost associated with
increased investments in renewable resources and to encourage increased energy
efficiency.
Direct refund to consumers – Revenue from the program could be recycled directly
back to consumers in a variety of forms including per capita dividends, earned
income tax credits, or other mechanisms.
Climate change adaptation programs – Climate change will impact natural and
human environments. Program revenues could be used to help the state adapt to the
effects of climate change which will be detailed in the State’s Climate Adaptation
Strategy being prepared by the Resources Agency to be completed in early 2009.
Subsidies – Revenues could be used to reduce immediate cost impacts to covered
industries required to make substantial upfront capital investments to reduce
greenhouse gas emissions.
RD&D funding – Revenues could be used to support research, development, and
deployment of green technologies.
Worker transition assistance – Regulating greenhouse gas emissions will probably
shift economic growth to some sectors and green technologies and away from higher
carbon intensity industries. Worker training programs could help the California labor
force be competitive in these new industries.
Administration of a greenhouse gas program – A portion of revenues could be
used to underwrite the State’s AB 32 programs and operating costs.
Direct emission reductions – Revenues could be used to purchase greenhouse gas
reductions for the sole purpose of retirement, providing direct additional greenhouse
gas emission reductions. Potential projects, such as afforestation and reforestation,
would both sequester CO2 and provide other environmental benefits.
Many of the potential uses of revenue would help ARB implement the community benefit
section of the AB 32 (HSC §38565) which directs the Board, where applicable and to the
extent feasible, to ensure that the greenhouse gas emissions reduction program directs public
and private investment toward the most disadvantaged communities in California.
71
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72
Scoping Plan
III. Evaluations
III. EVALUATIONS
The primary purpose of the Scoping Plan is to develop a set of measures that will provide the
maximum technologically feasible and cost-effective greenhouse gas emission reductions. In
developing this Plan, ARB evaluated the effect of these measures on California’s economy,
environment, and public health. This Chapter outlines these analyses.
ARB conducted broad evaluations of the potential impacts of the Scoping Plan, and will
conduct more specific evaluations during regulatory development (HSC §38561(d), and
HSC §38562(b)). Prior to inclusion of market-based compliance mechanisms in a regulation,
to the extent feasible, the Board will consider direct, indirect and cumulative emission
impacts, and localized impacts in communities that are already adversely impacted by air
pollution (HSC §38570(b)).
Based on the evaluation of the recommendations included in this Plan, implementing AB 32
is expected to have an overall positive effect on the economy. In addition, implementation of
the measures in the Recommended Actions section (Chapter II) will reduce statewide oxides
of nitrogen (NOx), volatile organic compounds (VOC) and atmospheric particulate matter
(PM) emissions primarily due to reduced fuel consumption, with resulting public health
benefits. ARB will also work at the measure-specific level to further maximize the public
health benefits that can accompany implementation of greenhouse gas emissions reduction
strategies. The following sections provide a summary of the ARB evaluations of the
recommended measures included in this Scoping Plan. More detailed information on the
evaluations and their results are provided in Appendices G and H.
A.
Economic Modeling
To evaluate the economic impacts of the Scoping Plan, ARB compared estimated economic
activity under a business-as usual (BAU) case to the results obtained when actions
recommended in this Plan are implemented. The BAU case is briefly described below. The
estimated costs and savings used as model inputs for individual measures are outlined in
Appendix G, and additional documentation on the calculation of those costs and savings is
provided in Appendix I. All dollar estimates are in 2007 dollars.
Under the BAU case, Gross State Product (GSP) in California is projected to increase from
$1.8 trillion in 2007 to almost $2.6 trillion in 2020. The results of our economic analysis
indicate that implementation of the Scoping Plan will have an overall positive net economic
benefit for the state. Positive impacts are anticipated primarily because the investments
motivated by several measures result in substantial energy savings that more than pay back
the cost of the investments at expected future energy prices.
73
III. Evaluations
Scoping Plan
The business-as-usual case is a representation of what the State of the California economy
will be in the year 2020 assuming that none of the measures recommended in the Scoping
Plan are implemented. While a number of the measures in the plan will be implemented as
the result of existing federal or State policies and do not require additional regulatory action
resulting from the implementation of AB 32, they are not included in the BAU case to ensure
that the economic impacts of all of the measures in the Scoping Plan are fully assessed.
The BAU case is constructed using forecasts from the California Department of Finance, the
California Energy Commission, and other sources, and is described in more detail in
Appendix G. ARB used a conservative estimate of future petroleum price in this analysis,
$89 per barrel of oil in 2020. Aspects of the BAU case are subject to uncertainty, for
example, the possibility that future energy prices could deviate from those that are included
in the BAU case.
1. MacroMacro-economic Modeling Results
Results
Table 24 summarizes the key findings from the economic modeling. Gross State
Product, personal income and employment are shown for 2007 and for two cases for
2020, the BAU case and for implementation of the Scoping Plan. For both the BAU
case and the Scoping Plan case, Gross State Product increases by almost $800 billion
between 2007 and 2020, personal income grows by 2.8 percent per year from $1.5
trillion in 2007 to $2.1 trillion in 2020, and employment grows by 0.9 percent per
year from 16.4 million jobs in 2007 to 18.4 million (BAU) or 18.5 million (Scoping
Plan) in 2020. The results consistently show that implementing the Scoping Plan will
not only significantly reduce California’s greenhouse gas emissions, but will also
have a net positive effect on California’s economic growth through 2020.
Table 24: Summary of Key Economic Findings from
Modeling the Scoping Plan Using E-DRAM
*
Business-as-Usual
Economic Indicator
2007
2020
Average
Annual
Growth
Scoping Plan
2020
Change
from BAU
Average
Annual
Growth
Gross State Product
1,811
2,586
2.8%
2,593
0.3%
2.8%
($Billion)
Personal Income
1,464
2,093
2.8%
2,109
0.8%
2.8%
($Billion)
Employment
16.41
18.41
0.9%
18.53
0.7%
0.9%
(Million Jobs)
Emissions
**
**
**
500
1.4%
-1.2%
596
422
-28%
(MMTCO2E)
Carbon Prices
10.00
NA
(Dollars)
*
Business-as-usual is a forecast of the California economy in 2020 without implementation of any of
the measures identified in the Scoping Plan.
**
Approximate value. ARB is in currently estimating greenhouse gas emissions for 2007.
74
Scoping Plan
III. Evaluations
The macroeconomic modeling results presented here understate the benefits of
market-based policies, including the cap-and-trade program. Consequently, our
estimate of the economic impact of implementing the Scoping Plan understates the
positive impact on the California economy. Nonetheless, using the current best
estimates of the costs and savings of the measures, which are documented in
Appendix I, the models demonstrate that implementing the Plan will have a positive
effect on California’s economy.
The modeling results reflect a carbon price for the cap-and-trade program of $10 perton. It is important to note that the $10 per-ton figure does not reflect the average
cost of reductions; rather it is the maximum price at which reductions to achieve the
cap are pursued based on the marketing program.
The positive impacts are largely attributable to savings that result from reductions in
expenditures on energy. These savings translate into increased consumer spending on
goods and services other than energy. Many of the measures entail more efficient use
of energy in the economy, with savings that exceed their costs. In this way,
investment in energy efficiency results in money pumped back into local economies.
Table 25 summarizes the energy savings that are projected from implementation of
the Scoping Plan. These savings are estimated to exceed $20 billion annually by
2020.
Table 25: Fuels and Electricity Saved in 2020 from
Implementation of the Scoping Plan
Use Avoided**
Value of Avoided Fuel Use
(Million $2007)
Percent Reduction from
BAU
*
**
***
****
Electricity
Natural Gas*
3,400 million
therms
Gasoline
4,600 million
gallons
Diesel
670 million
gallons
$17,000
$2,500
$6,400***
$2,700
25%
17%
22%****
24%
74,000 GWh
Not including natural gas for electric generation.
These estimates are based on reduced use of these fuels due to increased efficiencies,
reduced vehicle miles travelled, etc. Changes to the fuel mix, such as those called for
under the RPS or the LCFS, are not included here. These estimates are not the same as
the estimates of reduced fuel consumption used in the public health analysis.
Based on estimated avoided cost based on average base-load electricity, including
generation, transmission and distribution.
This is as a percentage of BAU total California electricity consumption in 2020.
2. Impact on Specific Business Sectors
As indicated in Table 26 and Table 27, the effects of the Plan are not uniform across
sectors. Implementation of the Scoping Plan would have the strongest positive
impact on output and employment for the agriculture, forestry and fishing sector, the
75
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finance, insurance and real estate sector, and the mining sector. Similar to the
statewide economic impacts projected by the model, however, these results also
indicate that relative to the business-as-usual case, the impacts due to implementation
of the Plan change current growth projections for most sectors by only very small
amounts.
Table 26 and Table 27 also show that a decrease in output is projected for the utility
and retail trade sectors as compared to the business-as-usual case, and a decrease in
employment is projected for the utility sector. In the utility sector, the modeling
indicates that implementation of the Scoping Plan would significantly reduce the need
for additional power generation and natural gas consumption, which subsequently
reduces the growth in output for this sector. This results in a reduction from businessas-usual for economic output and employment of approximately 17 and 15 percent
respectively in 2020. The primary reason for these projections is the implementation
of efficiency measures and programs for both consumers and producers. While
increasing spending on efficiency and renewable energy is expected to increase
employment, many of the resulting jobs will not appear in the utility sector.
The retail trade sector, which is projected to grow by nearly 50 percent in both the
business-as-usual and the Scoping Plan case, is also projected to experience a slight
net decline in output relative to business-as-usual. Since gasoline is considered a
consumer retail purchase under this model, the reduced growth is mostly due to the
decrease of approximately $19 billion in retail transportation fuel purchases, which is
largely offset by the positive $14 billion increase in spending at other retail
enterprises.
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Table 26: Summary of Economic Output by Sector from
Modeling the Scoping Plan Using E-DRAM
Output ($Billions)
Sector
Agriculture, Forestry
and Fishing
Mining
Utilities
Construction
Manufacturing
Wholesale Trade
Retail Trade
Transportation and
Warehousing
Information
Finance, Insurance and
Real Estate
Services
Government
Total
2007
Business-asUsual
Scoping Plan
Percent Change
from BAU
76
109
113
3.9%
27
51
114
673
120
207
29
72
164
943
171
296
31
60
166
948
173
291
7.2%
-16.7%
1.7%
0.5%
1.0%
-1.6%
76
109
111
1.9%
164
235
238
1.1%
391
559
572
2.3%
636
2,535
910
3,597
927
3,630
1.9%
0.8%
Table 27: Summary of Employment Changes by Sector from
Modeling the Scoping Plan Using E-DRAM
Sector
Agriculture, Forestry
and Fishing
Mining
Utilities
Construction
Manufacturing
Wholesale Trade
Retail Trade
Transportation and
Warehousing
Information
Finance, Insurance and
Real Estate
Services
Government
Total
2007
Employment (thousands)
Business-asScoping Plan
Usual
Percent Change
from BAU
398
449
464
3.5%
26
60
825
1,821
703
1,688
26
67
929
2,046
791
1,901
26
57
934
2,057
793
1,916
1.3%
-14.7%
0.5%
0.5%
0.1%
0.8%
447
503
510
1.2%
398
448
450
0.4%
911
1,026
1,046
2.0%
5,975
3,100
16,352
6,729
3,491
18,405
6,773
3,502
18,528
0.7%
0.3%
0.6%
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3. Household Impacts
Implementation of the Scoping Plan will provide low- and middle-income households
savings on the order of a few hundred dollars per year in 2020 compared to the
business-as-usual case, primarily as a result of increased energy efficiencies.
Low-Income Households: Based on current U.S. Department of Health and Human
Services poverty guidelines, we evaluated the projected impacts of the plan on
households with earnings at or below both 100 and 200 percent of the poverty
guidelines. For all households, including those with incomes at 100 percent and
200 percent of the poverty level, implementation of the Scoping Plan produces a
slight increase in per-capita income relative to the business-as-usual case.
At the same time, the analysis projects an increase of approximately 50,000 jobs
available for lower-income workers49 relative to business-as-usual as a result of
implementing the Plan. The largest employment gains come in the retail, food
service, agriculture, and health care fields. A decline in such jobs is projected in the
retail gasoline sector due to the overall projected decrease in output from this sector.
This decline, however, is more than offset by the increases experienced in other areas.
Another important factor to consider when analyzing the impact of the Scoping Plan
on households is how it will affect household expenditures. As indicated in Table 28,
analysis based on the modeling projections estimates a savings (i.e., reduced
expenditures) of around $400 per household in 2020 for low-income households
under both federal poverty guideline definitions. These savings are driven primarily
by the implementation of the clean car standards and energy efficiency measures in
the Scoping Plan that over time are projected to outweigh potential increases in
electricity and natural gas prices that may occur. As the measures in the Scoping Plan
are implemented, ARB will work to ensure that the program is structured so that low
income households can fully participate in and benefit from the full range of energy
efficiency measures. Many of California’s energy efficiency efforts are targeted
specifically at low income populations, and the CPUC’s Long Term Strategic Plan for
energy efficiency has redoubled its objective for the delivery of energy efficiency
measures to low income populations. Additional information regarding the data in
Table 28 can be found in Appendix G.
49
Low-income jobs are defined as those with a median hourly wage below $15 per hour (2007 dollars) based on
wage data and staffing pattern projections from the California Employment Development Department. The
shares of low-wage occupations for each industry are then applied to the corresponding E-DRAM sector
employment projections.
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Table 28: Impact of Implementation of the Scoping Plan on
Total Estimated Household Savings in 2020 (2007 $)
Income at 100%
of Poverty
Guideline
Income at 200%
of Poverty
Guideline
Middle
Income*
High
Income**
All
Households***
$400
$400
$500
$500
$500
*
**
***
All households between 200% and 400% of the poverty guidelines.
All households above 400% of the poverty guidelines.
Average of households of all income levels.
The analysis indicates that implementation of the Scoping Plan is likely to result in
small savings for most Californians, with little difference across income levels.
Largely due to increased efficiencies, low-income households are projected to be
slightly better off from an economic perspective in 2020 as a result of implementing
AB 32.
Middle-Income Households: Implementation of the plan produces a small increase
in household income across all income levels, including middle-income households,
relative to the business-as-usual case.50 In terms of how jobs for middle-income
households51 would be impacted, the modeling indicates a slight overall increase of
almost 40,000 in 2020.
As shown in Table 28, the analysis projects a net-savings in annual household
expenditures of about $500 in 2020 for middle-income households. These savings
are driven by the emergence of greater energy efficiencies that will be implemented
as a result of the plan.
4. WCI Economic Analysis
The Scoping Plan recommends that California develop a cap-and-trade program that
links to the broader regional market being developed by the Western Climate
Initiative (WCI). In order to examine the economic impacts of WCI program design
options, WCI Partner jurisdictions contracted with ICF International and Systematic
Solutions, Inc. (SSI) to perform economic analyses using ENERGY 2020, a multiregion, multi-sector energy model. The WCI economic modeling results are reported
in full in Appendix D and are discussed in the Background Report on the Design
Recommendations for the WCI Regional Cap-and-Trade Program, also included in
Appendix D.
To help inform the program design process, the WCI analysis examined the
implications of key design decisions, including: program scope, allowance banking,
50
For purposes of our analysis we define "middle-income" households as those earning between 200% and
400% of the federal poverty guidelines.
51
Hourly wage between $15 and $30 per hour.
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III. Evaluations
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and the use of offsets. Due to time and resource constraints, the modeling was
limited to the eight WCI Partner jurisdictions in the Western Electric Coordinating
Council (WECC) area, thereby excluding from the analysis three Canadian provinces,
Manitoba, Quebec, and Ontario. Future analyses are planned that will integrate these
provinces so that a full assessment of the WCI Partner jurisdictions can be performed.
The WCI modeling work is not directly comparable to the ARB results reported here.
The WCI analysis relies on a more aggregated set of greenhouse gas emissions
reduction measures rather than the specific individual policies recommended in the
Scoping Plan; it uses somewhat different assumptions regarding what measures are
included in the “business-as-usual” case, and it models the entire WECC rather than
California. Nevertheless, the results of the WCI modeling provide useful insight into
the economic impact of greenhouse gas emissions reduction policies.
Consistent with the conclusions of the ARB evaluation, overall the WCI analysis
found that the WCI Partner jurisdictions can meet the regional goal of reducing
emissions to 15 percent below 2005 levels by 2020 (equivalent to the AB 32 2020
target) with small overall savings due to reduced energy expenditures exceeding the
direct costs of greenhouse gas emissions reductions. The savings are focused
primarily in the residential and commercial sectors, where energy efficiency
programs and vehicle standards are expected to have their most significant impacts.
Energy-intensive industrial sectors are estimated to have small net costs overall (less
than 0.5 percent of output).
The WCI analysis does not examine the potential macroeconomic impacts of the costs
and savings estimated with ENERGY 2020. The WCI Partner jurisdictions are
planning to continue the analysis so that macroeconomic impacts, such as income,
employment, and output, can be assessed. Once completed, the macroeconomic
impacts can be compared to previous studies of cap-and-trade programs considered in
the United States and Canada.
B.
Green Technology
The development of green technologies and a trained workforce equipped to design, develop
and deploy them will be key to the success of California’s long-term efforts to combat global
warming. Bold, long-range environmental policies help drive innovation and investment in
emission-reducing products and services in part by attracting private capital. Typically, the
private sector under invests in research and development for products that yield public
benefits. However, when environmental policy is properly designed and sufficiently robust
to support a market for such products, private capital is attracted to green technology
development as it is to any strategic growth opportunity.
California’s leadership in environmental and energy efficiency policy has helped attract an
increasing share of venture capital investment in green technologies. According to statistics
from PricewaterhouseCoopers and the National Venture Capital Association, California’s
share of U.S. venture capital investment in innovative energy technologies increased
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III. Evaluations
dramatically from 1995 to 2007 (see Figure 5 below).52 The same period saw a stream of
pioneering environmental policy initiatives, including energy efficiency codes for buildings
and appliances, a renewables portfolio standard for electricity generation, climate change
emissions standards for light-duty automobiles and, most recently, AB 32. Flows of venture
capital into California are escalating as a direct result of the focus on reductions of
greenhouse gas emissions. As mentioned above, California captured the largest single
portion of global venture capital investment ($800 million out a total of two billion dollars)
during the second quarter of 2008.
Figure 5
California's Growing Share of Venture Capital Investment
in Energy Innovation, 1995-2007 (current $, % share)
50%
$1,400,000,000
45%
$1,200,000,000
40%
Annual VC Investment
$1,000,000,000
35%
30%
$800,000,000
CA VC $
25%
Linear (CA %)
$600,000,000
20%
15%
$400,000,000
10%
$200,000,000
5%
$0
0%
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: PricewaterhouseCoopers MoneyTree Report, available at: [https://www.pwcmoneytree.com].
A survey of clean technology investors by Global Insight and the National Venture Capital
Association found that public policy influences where venture capitalists invest.53
Furthermore, investments in green technology solutions produce jobs at a higher rate than
investments in comparable conventional technologies.54 Venture capitalists estimate that
52
Based on historical trend data for the ‘Industrial/Energy’ industry for California and the United States from
the PricewaterhouseCoopers MoneyTree Report.
https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=historical (accessed October 12, 2008)
53
Clean Tech Entrepreneurs & Cleantech Venture Network LLC. Creating Cleantech Clusters: 2006 Update.
May 2006. p.43
http://www.e2.org/ext/doc/2006%20National%20Cleantech%20FORMATTED%20FINAL.pdf (accessed
October 12, 2008)
54
Report of the Renewable and Appropriate Energy Laboratory. Putting Renewables to Work: How Many Jobs
Can the Clean Energy Industry Generate? Energy and Resources Group/Goldman School of Public Policy at
81
III. Evaluations
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each $100 million in venture capital funding, over a period of two decades, helps create
2,700 jobs, $500 million in annual revenues, and many indirect jobs.55
Access to capital controlled by institutional investors is also enhanced by policies that
encourage early adoption of green technologies. When California-based corporations use
green technologies to reduce their exposure to climate change risk, institutional investors
reward them by facilitating their access to capital. The Investor Network on Climate Risk –
including institutional investors with more than $8 trillion of assets under management –
endorsed an action plan in 2008 that calls for requiring asset managers to consider climate
risks and opportunities when investing; investing in companies developing and deploying
clean technologies; and expanding climate risk scrutiny by investors and analysts.56
Additional capital for green technologies helps drive increased employment, both indirectly,
as energy savings are plowed back into other sectors of the economy, and directly, as new
green products are successfully commercialized.
McKinsey & Company projects average annual returns of 17 percent on global investments
in energy productivity, and estimates the global investment opportunity at $170 billion
annually through 2020.57 Meanwhile, global investment in energy efficiency and renewable
energy has grown from $33 billion to more than $148 billion in the last four years. Beyond
2020, green technologies are expected to attract investment of more than $600 billion
annually.58 In short, green technology is now a bona fide global growth industry.
Today, green technology businesses directly employ at least 43,000 Californians, primarily in
energy efficiency and energy generation, according to a 2008 study from the California
Economic Strategy Panel. Green jobs are concentrated in manufacturing (41 percent), and
professional, scientific and technical services (28 percent), with median annual earnings of
University of California, Berkeley. April 13, 2004. http://rael.berkeley.edu/old-site/renewables.jobs.2006.pdf
(accessed October 12, 2008)
55
Report prepared for the National Venture Capital Association. Venture Impact 2004: Venture Capital
Benefits to the U.S. Economy. Prepared by: Global Insight. June 2004.
http://www.globalinsight.com/publicDownload/genericContent/07-20-04_fullstudy.pdf (accessed October 12,
2008)
56
The Investor Network on Climate Risk. Final Report, 2008 Investor Summit on Climate Risk. February 14,
2008. http://www.ceres.org//Document.Doc?id=331 (accessed October 12, 2008)
57
McKinsey Global Institute. The Case for Investing in Energy Productivity. McKinsey & Company.
February, 2008. p.8
http://www.mckinsey.com/mgi/reports/pdfs/Investing_Energy_Productivity/Investing_Energy_Productivity.pdf
(accessed October 12, 2008)
58
United Nations Environment Programme-New Energy Finance Ltd. Global Trends in Sustainable Energy
Investment 2008: Analysis of Trends and Issues in the Financing of Renewable Energy and Energy Efficiency
2008. p.12 ISBN: 978-92-807-2939-9 http://www.unep.fr/energy/act/fin/sefi/Global_Trends_____2008.pdf
(accessed October 12, 2008)
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$35,725 and $56,754, respectively.59 By 2030, under a moderate growth scenario, green
businesses nationwide are expected to generate revenues of $2.4 trillion, (2006 dollars), and
employ 21 million Americans.60
As a leader in green technology development and use, California has already realized
substantial economic benefits from the adoption of energy efficiency policies. State energy
efficiency measures have saved enough energy over the past 30 years to avoid construction
of two dozen 500-megawatt power plants. Today, California’s per capita electricity
consumption is 40 percent below the national average, and the carbon intensity of
California’s economy is among the lowest in the nation.61
Renewable energy, such as solar, wind, biomass, geothermal, will also bring new
employment opportunities to Californians while spurring economic growth. California
enjoys significant comparative advantages for renewable energy: concentrated innovation
resources, a large potential customer base, key natural resources such as reliable solar and
wind, and supportive regulatory programs, including the California Renewables Portfolio
Standard, the Million Solar Roofs Initiative, the California Global Warming Solutions Act of
2006, and the Solar Water Heating and Efficiency Act of 2007.
Other researchers have estimated that under a national scenario with 15 percent renewables
penetration by 2020, California will experience a net gain in direct employment of 140,000
jobs.62 Because investments in green technologies produce jobs at a higher rate than
investments in conventional technologies, jobs losses that occur in traditional fossil fuel
industries will be more than compensated for by gains in the clean energy sector.
Furthermore, if California’s renewable energy suppliers field products that are sufficiently
competitive to penetrate the export market, employment and earnings dividends for the state
will also increase. California renewable energy industries servicing the export market can
generate up to 16 times more employment than those that only manufacture for domestic
59
California Economic Strategy Panel with Collaborative Economics. Clean Technology and the Green
Economy. March 2008. P.14-15 http://www.labor.ca.gov/panel/pdf/DRAFT_Green_Economy_031708.pdf
(accessed October 12, 2008)
60
The American Solar Energy Society. Renewable Energy and Energy Efficiency: Economic Drivers for the
21st Century. 2007. p.39 ISBN 978-0-89553-307-3 http://www.ases.org/images/stories/ASES-JobsReportFinal.pdf (accessed October 12, 2008)
61
California Energy Commission. 2007 Integrated Energy Policy Report. Document No. CEC-100-2007-008CMF. 2007. p. 3 http://www.energy.ca.gov/2007publications/CEC-100-2007-008/CEC-100-2007-008CMF.PDF (accessed October 12, 2008)
62
Tellus Institute and MRG Associates. Clean Energy: Jobs for America’s Future. As cited in: Putting
Renewables to Work: How Many Jobs Can the Clean Energy Industry Generate? Energy and Resources
Group/Goldman School of Public Policy at University of California, Berkeley. April 13, 2004.
http://rael.berkeley.edu/old-site/renewables.jobs.2006.pdf (accessed October 12, 2008)
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III. Evaluations
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consumption, according to a study by the Research and Policy Center of Environment
California.63
C.
CostCost-Effectiveness
Effectiveness
As noted in several provisions of AB 32, cost-effectiveness is an important requirement to be
considered in the design and implementation of emission reduction strategies. (See
HSC §§38505, 38560, 38561, 38562.) AB 32 defines “cost-effective” or “costeffectiveness” as “the cost per unit of reduced emissions of greenhouse gases adjusted for its
global warming potential.” (HSC §38505(d)) This definition specifies the metric (i.e., dollars
per ton) by which the Board must express cost-effectiveness, but it does not provide criteria
to assess if a regulation is or is not cost-effective. It also does not specify whether there
should be a specific upper-bound dollar per ton cost that can be considered cost-effective, or
how such a bound would be determined or adjusted over time. ARB has investigated
different approaches that could be used to evaluate the cost-effectiveness of regulations and
is recommending the following approach.
The estimated cost per ton of greenhouse gas emissions reduced by the measures
recommended in this Plan ranges from $-408 (net savings) to $133, with all but one (the
Renewables Portfolio Standard) costing less than $55 per ton. The RPS is being
implemented for energy diversity purposes, not just greenhouse gas reductions, and the $133
per ton figure does not take these other benefits into account. Therefore, it should not be
used as a reference to define the range of cost-effective greenhouse gas measures. These
estimates are based on the best information available as ARB prepared this Plan. Updated
estimates and greater certainty will be provided as the measures are further developed during
the rulemaking process.
In the meantime, the current estimates provide a range illustrating the cost per ton of the mix
of measures that collectively meet the 2020 target. This range will assist the Board in
evaluating the cost-effectiveness of individual measures when considering adoption of
regulations. The range of acceptable cost-effectiveness may change if effective lower-cost
measures and options are identified. Because both the projections of “business-as-usual”
2020 emissions and the degree of reductions from any given measures may be greater or less
than current estimates, the determination should remain flexible to accommodate a higher or
lower estimate of cost-effectiveness. In addition, the approach must provide flexibility to
pursue measures that simultaneously achieve policy objectives other than greenhouse gas
emissions reduction (such as energy diversity).
The criteria for judging cost-effectiveness will be updated as additional technological data
and strategies become available. As ARB moves from adoption of the Scoping Plan to
63
Environment California Research and Policy Center. Renewable Energy and Jobs. Employment Impacts of
Developing Markets for Renewables in California. July 2003. As cited in: Putting Renewables to Work: How
Many Jobs Can the Clean Energy Industry Generate? Energy and Resources Group/Goldman School of Public
Policy at University of California, Berkeley. April 13, 2004. http://rael.berkeley.edu/oldsite/renewables.jobs.2006.pdf (accessed October 12, 2008)
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developing specific regulations, and as regulations continue to be adopted, updated costeffectiveness estimates will be established in a rigorous and transparent process with full
stakeholder participation. As ARB progresses from proposed measures and estimated costs
to actual regulations, the comparison of cost-effectiveness would move toward the well
established practice of comparing the cost-effectiveness of new regulations to the costeffectiveness of previously enacted and/or similar regulations. This approach is consistent
with how cost-effectiveness is evaluated for strategies to reduce criteria and toxic pollutants.
D.
Small Business Impact
Small businesses play an important role in California’s economy. As required under AB 32,
ARB analyzed the impact that implementation of the Scoping Plan would have on small
businesses in the state. The analysis indicates that the primary impacts on small businesses
as a result of AB 32 will come in the form of changes in the costs of goods and services that
they procure, and in particular, changes in energy expenditures. Due to the number of
measures in the plan that will deliver significantly greater energy efficiencies, our analysis
projects that implementation of the plan will have a positive impact on small business in
California even after taking into account the higher per-unit energy prices that are likely to
occur between now and 2020. Small businesses also will benefit as a result of the robust
economic growth and the increases in jobs, production, and personal income that are
projected between now and 2020 as AB 32 is implemented. Additional information is
provided in Appendix G.
Recent analysis from Energy and Environmental Economics, Inc. (E3) forecasts that a
package of greenhouse gas emissions reduction measures similar to those recommended in
this Plan would deliver a five percent decrease in electricity expenditures for the average
California electricity customer relative to business-as-usual in 2020.64 This projection is
based on the assumption that increases in electricity prices will be more than offset by the
continued expansion of energy efficiency measures and that more efficient technologies will
be developed and implemented.65 For purpose of this analysis, expenditures on natural gas
are assumed to remain the same, balancing the projected 29 percent decrease in natural gas
consumption in California with the model's projected natural gas price increase of almost
9 percent.
Based on this assessment, implementation of the Scoping Plan will likely have minor but
positive impacts on small businesses in the state. These benefits are attributable primarily to
the measures in the plan that will deliver significantly greater energy and fuel efficiencies.
Even when higher per unit energy prices are taken into account, these efficiencies will
decrease overall energy expenditures for small businesses. Additionally, as previously
described, the California economy is projected to experience robust economic growth
64
Based on their GHG Calculator, CPUC/CEC GHG Docket (CPUC Rulemaking.06.04.009, CEC Docket 07OIIP-01), available at http://www.ethree.com/cpuc_ghg_model.html.
65
The E3 analysis focuses on direct programmatic measures and does not include the incremental price impact
of the cap-and-trade program, which will depend upon allowance price, allocation strategy, the capped sector
industry response, and other program design decisions.
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III. Evaluations
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between now and 2020 as AB 32 is implemented. Small businesses will experience many of
the benefits associated with this growth in the form of more jobs, greater production activity,
and rising personal income.
The projected decrease in electricity expenditures is especially important for small businesses
since they typically spend more on energy as a percentage of revenue compared to larger
enterprises. For example, firms with a single employee spend approximately 3.3 percent of
each sales dollar on electricity, while businesses with between ten and forty-nine employees
spend around 1.2 percent. As a result, smaller businesses are likely to experience a greater
relative benefit from decreased energy expenditures relative to their larger counterparts.
From the broader economic perspective, these changes will make California more
competitive as a location for small business, moving it from 7th highest to 19th among all
states in terms of the percentage of revenue that businesses expend on electricity.66 As was
noted above for low income households, care must be taken to ensure that the program is
structured to allow small businesses to participate in and benefit from the energy efficiency
measures.
While ARB’s analysis indicates a positive impact on small businesses from AB 32
implementation, to ensure that these benefits are realized to the fullest potential it will take
additional outreach and communication efforts on the part of ARB and many other state and
local entities. There are a number of existing programs that are designed to help small
businesses achieve greater efficiencies in energy use. These programs can be enhanced and
expanded upon, and new programs and efforts can be developed to ensure that all small
businesses in California are aware of and able to take cost-effective steps to reduce energy
use and enjoy the associated economic savings. For example, as discussed more completely
in Chapter IV, ARB and our partners in State government are working together to develop
an on-line small business “toolkit” designed for small and medium-sized businesses to
provide a one-stop shop of technical and financial information resources. As further
development and implementation of the measures in the plan proceeds, we will work with
other state and local partners to ensure that small businesses can both benefit from and play a
role in helping to achieve our greenhouse gas emission reduction requirements.
E.
Public Health/Environmental Benefits Analyses
AB 32 requires ARB to evaluate the environmental and public health impacts of the Scoping
Plan. The analysis of this plan is focused primarily on the quantification of public health
benefits from air quality improvements that would result from implementation. Unlike
traditional pollutants and toxic emissions, global warming pollutants do not typically have
localized impacts. At ambient levels, carbon dioxide, which makes up over 80 percent of
global warming pollutants in California, has no direct environmental or public health
consequences. Climate change caused by greenhouse gas pollutants emitted in another state
66
Although the natural gas data is less specific, a similar scenario is expected where increased prices are
typically offset by greater efficiencies for most small businesses.
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or country has the same potential to damage our public health and the environment as does
climate change due to pollutants emitted within California. Although this analysis does not
consider the public health impacts of climate change, the potential public health impacts are
great, and have been well documented elsewhere. However, many of the measures aimed at
reducing global warming pollutants also provide co-benefits to public health and California’s
natural resources.
The environmental and cumulative impacts of the Plan are discussed in the California
Environmental Quality Act (CEQA) document that is included in Appendix J. As the
Scoping Plan is implemented, and specific measures are developed, ARB will conduct
further CEQA analyses, including cumulative and multi-media impacts. As ARB further
develops its approach for consideration of these issues in future rulemakings, and updates
needed analytical tools and data sets, we will consult with outside experts and the EJAC.
ARB recognizes that the adoption of the Scoping Plan will launch a variety of regulatory
proceedings in many different venues. ARB will work closely with other California State
agencies including: the Office of Planning and Research, Environmental Protection Agency,
Resources Agency, Integrated Waste Management Board, Department of Public Health,
Office of Environmental Health Hazard Assessment, State Water Resources Control Board,
Department of Toxic Substances Control, Department of Water Resources, Board of
Forestry, Department of Fish and Game, Public Utilities Commission, California Energy
Commission, and others to identify and address potential multi-media environmental impacts
early in the regulatory development process.
California’s actions to reduce greenhouse gas emissions will help transition the State to new
technologies, improved efficiencies, and land use patterns also necessary to meet air quality
standards and other public health goals. California’s challenging public health issues
associated with air pollution are already the focus of comprehensive regulatory and incentive
programs. These programs are reducing smog forming pollutants and toxic diesel particulate
matter at a rapid pace. However, to meet increasingly stringent air quality standards and air
toxics reduction goals, transformative changes are needed in the 2020 timeframe and beyond.
Implementation of AB 32 will provide additional support to existing State efforts devoted to
protecting and improving public health.
1. Key Air QualityQuality-Related Public Health Benefits
The primary direct public health benefits of the Scoping Plan are reductions in smog
forming emissions and toxic diesel particulate matter. The most significant
reductions are of oxides of nitrogen (NOx), which forms both ozone and particulate
pollution (PM2.5), and directly emitted PM2.5, which includes diesel particulate
matter. The analysis focuses on PM2.5 impacts and quantifies 2020 public health
benefits of this plan in terms of avoided premature deaths, hospitalizations,
respiratory effects, and lost work days. Additional benefits associated with the
reductions in ozone forming emissions were not quantified since statewide 2020
photochemical modeling is not available.
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The estimated air quality-related public health benefits of the Scoping Plan are above
and beyond the much greater benefits of California’s existing programs, which are
reducing air pollutant emissions every year. This continuing progress is the result of
California’s plans for meeting air quality standards (“State Implementation Plans” or
SIPs), reducing emissions from goods movement activities, and addressing health risk
from diesel particulate matter. These programs address both existing and new
sources of air pollution, taking into account population and economic growth. The
additional benefits of the Scoping Plan in 2020 are significant, and in the longer term,
can be expected to increase with further reductions in fossil fuel combustion, the
primary basis for the estimated public health benefits.
The recommended measures in the Scoping Plan that reduce smog forming
(“criteria”) pollutants are shown in Table 29 along with the estimated reductions.
Statewide, these measures would reduce approximately 61 tons per day of NOx and
15 tons per day of PM2.5 in 2020. As shown in Table 30, this equates to an estimated
air quality-related public health benefit of 780 avoided premature deaths statewide.
In comparison, reductions in PM2.5 from California’s existing programs and 2007
SIP measures are estimated to result in 12,000 avoided premature deaths statewide in
the same timeframe.
Table 29: Statewide Criteria Pollutant Emission Reductions in 2020 from
Proposed Scoping Plan Recommendation67
(tons per day)
Measure
Light-Duty Vehicle
• Pavley I and Pavley II GHG Standards
• Vehicle Efficiency Measures
Goods Movement Efficiency Measures
Medium and Heavy-Duty Vehicle GHG Emission Reduction
• Aerodynamic Efficiency
• Hybridization
• Engine Efficiency
Local Government Actions and Regional Targets
Energy Efficiency and Conservation (Electricity)
Energy Efficiency and Conservation (Natural Gas)
Solar Water Heating
Million Solar Roofs
Renewables Portfolio Standard
Total
67
NOx
PM2.5
1.6
1.4
16.9
0.6
5.6
0.2
8.7
7.0
10.4
0.3
1.0
9.8
61
1.4
4.0
0.8
0.03
0.6
5.6
15
Table 29 does not include the criteria pollutant co-benefits of additional greenhouse gas reductions that would
be achieved from the proposed cap-and-trade regulation because we cannot predict in which sectors they would
be achieved.
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Table 30: Estimates of Statewide Air Quality-Related
Health Benefits in 2020
Health Endpoint
Avoided Premature Death
Avoided Hospital Admissions for
Respiratory Causes
Avoided Hospital Admissions for
Cardiovascular Causes
Avoided Asthma and Lower Respiratory
Symptoms
Avoided Acute Bronchitis
Avoided Work Loss Days
Avoided Minor Restricted Activity Days
Health Benefits of
Existing Measures
and 2007 SIP
mean
12,000
Health Benefits of
Recommendations in the
Proposed Scoping Plan
mean
780
1,300
87
2,600
170
190,000
12,000
15,000
1,200,000
7,000,000
980
77,000
450,000
In addition to the quantified air-quality-related health benefits, our analysis indicates
that implementation of the Scoping Plan can deliver other public health benefits as
well. These include potential health benefits associated with local and regional
transportation-related greenhouse gas targets that can facilitate greater use of
alternative modes of transportation, such as walking and bicycling. These types of
moderate physical activities reduce many serious health risks including coronary
heart disease, diabetes, hypertension and obesity.68 Finally, it is important to note
that the steps California is taking to address global warming, along with actions by
other regions, states, and nations, will help mitigate the public health effects of heat
waves, more widespread incidence of illness and disease, and other potentially severe
impacts.
The measures in the Scoping Plan are designed primarily to help spur the transition to
a lower carbon economy. However, in addition to improving air quality, these
measures can also improve California’s environmental resources, including land,
water, and native species. Land resources will be affected by regional transportationrelated targets leading to improved land use planning, and forest carbon sequestration
targets which can result in better stewardship of California lands and reduced wildfire
risk. A number of conservation measures will aid in effective management of the
State’s precious water resources. Demand for waste disposal and hazardous materials
should decrease as measures to encourage recycling and reuse transform our wastes
into fuel, energy, and other useful products are implemented. Additional analysis of
the way that implementation of the Scoping Plan will impact these environmental
resources will be conducted as we proceed. Many of these measures serve the dual
purpose of mitigating greenhouse gas emissions and helping California adapt to the
impacts of climate change.
68
Appendix H contains a reference list of studies documenting the public health benefits of alternative
transportation.
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2. Approach
ARB quantified the potential reductions of NOx and PM2.5 from implementation of
the Plan’s recommendations, and the public health benefits associated with the
resulting potential air quality improvement. These analyses compare NOx and PM2.5
emissions in 2020 with the implementation of the Scoping Plan with NOx and PM2.5
emissions in 2020 in the absence of the Scoping Plan – a “business-as-usual”
scenario. The methodology used to evaluate the public health benefits of the
emission reductions is similar to the methodology used in ARB’s 2006 Goods
Movement Emission Reduction Plan (GMERP), as updated in the recent staff report
for estimating premature death from exposure to particulate matter.69 This
methodology is based on a peer-reviewed methodology developed by the U.S.
Environmental Protection Agency (U.S. EPA). ARB augmented U.S. EPA’s
methodology by incorporating the result of new epidemiological studies relevant to
California’s population, including regionally specific studies, as they became
available.
AB 32 directs ARB to conduct several levels of analysis as we proceed through the
development and implementation of a comprehensive greenhouse gas emissions
reduction strategy. As part of the Scoping Plan development, ARB is required to
assess both the economic and non-economic impacts of the plan as noted above.
Additionally, AB 32 requires ARB to undertake additional analysis at the time of
adoption of regulations, including market-based compliance mechanisms.
Although not yet at the stage of regulatory development and adoption, in this analysis
ARB conducted an evaluation of the air quality-related public health benefits
associated with the Scoping Plan based on a community level emissions analysis
example. As regulations that rely on market-based compliance mechanisms are
further developed for consideration by the Board, more detail about the specific
regulatory proposals will be developed, enabling ARB to more closely evaluate the
potential for direct, indirect and cumulative impacts.
3. Existing Programs for Air Quality Improvement in California
The public health analysis of the Scoping Plan presents air-quality benefits that will
occur in addition to the benefits of California’s comprehensive air quality programs
designed to meet health-based standards and reduce health risk from air toxics. It is
also important to note that under both a “business-as-usual” scenario and under the
implementation of the Scoping Plan, the population and economy of California are
projected to continue to grow. New businesses and industries will continue to be
sited in California, bringing both economic opportunity and potential environmental
impacts. Federal, State, and local laws and regulations have established requirements
to ensure that new and modified sources of pollution are carefully evaluated and that
69
Air Resources Board. Methodology for Estimating Premature Deaths Associated with Long-term Exposure
to Fine Airborne Particulate Matter in California. October 24, 2008.
http://www.arb.ca.gov/research/health/pm-mort/pm-mort_final.pdf (accessed December 9, 2008)
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III. Evaluations
significant impacts are mitigated. Emissions from existing businesses are also tightly
controlled by local air pollution control districts. Statewide programs are in place to
reduce emissions from cars, trucks, and off-road equipment, along with smog check,
cleaner gasoline and diesel fuels, and regulations to reduce evaporative emissions
from consumer products, paints, and refueling. Additional information about the
existing regulatory framework for sources of air pollution is provided in Appendix H.
It is important to evaluate the air quality and public health benefits of the Scoping
Plan in the context of the State’s on-going air quality improvement efforts.
California’s long-standing air pollution control programs have substantially improved
air quality in the state and will continue to do so in the future. By 2020, these
programs will deliver reductions in statewide NOx emissions of 441 tons per day and
direct fine particle emission reductions of 34 tons per day. Through 2020, three key
ARB efforts will deliver deep reductions in air pollutant emissions despite continuing
growth:
•
•
•
Diesel Risk Reduction Plan
Goods Movement Emission Reduction Plan
2007 State Implementation Plan
Measures in these plans will result in the accelerated phase-in of cleaner technology
for virtually all of California’s diesel engine fleets including trucks, buses,
construction equipment, and cargo handling equipment at ports. Adoption and
implementation of these and other measures are critical to achieving clean air and
public health goals statewide.
The U.S. Environmental Protection Agency has set a new, more stringent, national
ambient air quality standard for ozone that will have compliance deadlines well past
2020 for the most severely impacted areas like southern California.70 The
unmitigated impacts of climate change will make it harder to meet this standard and
to provide healthful air to Californians.
4. Statewide Analysis
For this evaluation, ARB examined the recommended measures to determine the
potential for impacts on air, land, water, native species and biological resources, and
waste and hazardous materials. Local government, State government, and green
building sectors were not included in this evaluation as they represent means of
implementation of the greenhouse gas emission reduction measures. As noted, the
main focus of this analysis is on air quality. To the extent feasible, ARB quantified
estimated emissions reductions in criteria pollutants associated with each
recommended measure except cap-and-trade. Reductions in NOx and PM2.5 were
70
U.S. Environmental Protection Agency. National Ambient Air Quality Standards for Ozone. Final Rule. 73
Federal Register 16436. March 27, 2008. http://www.epa.gov/fedrgstr/EPA-AIR/2008/March/Day27/a5645.pdf (accessed October 12, 2008)
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used to estimate public health benefits. The estimated statewide reductions are
61 tons per day of NOx and 15 tons per day of PM2.5. Further analysis of the
potential criteria pollutant benefits of a cap-and-trade program will be done as part of
regulatory development.
5. Regional Assessment: South Coast Air Basin Example
In order to assess potential air quality benefits of the Scoping Plan on a regional level,
ARB evaluated associated criteria pollutant reductions in the South Coast Air Basin
as an example case. Existing programs will reduce current NOx emissions by almost
50 percent in 2020. With the new 2007 SIP measures, NOx emissions will be
reduced almost 60 percent. Because of the large population and high pollutant
concentrations in this region, greater benefits occur from each ton of pollution
reduced. The estimated air quality-related public health benefits of the Scoping Plan
for the South Coast region are shown in Table 31. The significant air quality-related
public health benefits in this region are largely attributed to the additional reductions
in PM2.5.
Table 31: Estimated Air Quality-Related Health Benefits of
Existing Program, 2007 SIP, and Scoping Plan
in the South Coast Air Basin, 2020
Health Impacts / Scenario
Premature Deaths Avoided
Hospitalizations Avoided – Respiratory
Hospitalizations Avoided – Cardiovascular
Asthma & Lower Respiratory Symptoms Avoided
Acute Bronchitis Avoided
Work Loss Days Avoided
Minor Restricted Activity Days Avoided
Benefits from
Existing
Program
4,800
550
1,100
80,000
6,400
510,000
3,000,000
Additional
Benefits from
2007 SIP
2,000
230
440
35,000
2,800
220,000
1,300,000
Additional CoBenefits from
Scoping Plan
360
40
77
6,200
500
38,000
220,000
6. Community Level
Level Assessment: Wilmington Example
ARB also conducted an evaluation of the potential air quality impacts of the Scoping
Plan in the community of Wilmington as an illustration of the potential for localized
impacts. Wilmington is in southern Los Angeles County and includes a diverse range
of stationary and mobile emissions sources, including the ports of Los Angeles and
Long Beach, railyards, major transportation corridors, refineries, power plants, and
other industrial and commercial operations. Like the regional analysis, additional
emission reductions from the 2007 SIP were estimated and show significant
reductions in Wilmington by 2020 – approximately a 45 percent reduction in NOx
and a 40 percent reduction in directly-emitted PM2.5. Mobile source emissions are
projected to continue to be proportionately greater than stationary source emissions in
2020 even as mobile source emissions decline.
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For this assessment, ARB evaluated criteria pollutant emission reductions in the
Wilmington study area assuming that the source-specific quantified measures are
implemented, including measures to reduce emissions from oil and gas extraction and
refineries. It was further assumed that the non-source specific program elements,
such as the proposed cap-and-trade program, result in a 10 percent reduction in fuel
combustion by affected sources within the study area. For example, it is estimated
that industrial sources would achieve greenhouse gas emission reductions through
efficiency measures that reduce on site fuel use by 10 percent either in response to a
cap-and-trade program, or due to the results of the facility energy efficiency audits.
While it is likely that the actual onsite reductions will differ across individual
facilities from the assumed uniform ten percent reduction,71 the analysis identifies
how reductions at these facilities affect the overall level of co-benefits.
The estimated NOx co-benefit of about 1.7 tons per day is small relative to the
projected reductions of 24 tons per day that will occur as a result of the SIP and other
measures. For example, an 8 ton per day NOx reduction is expected from cleaner
port trucks. In comparison, the potential NOx benefit from a 10 percent efficiency
improvement in major goods movement categories is estimated at about 1.5 tons per
day. The estimated PM2.5 co-benefits, on the order of 0.12 tons per day, are also
small relative to the projected reductions of 2.3 tons per day that will occur as a result
of the SIP and other measures. Approximately 30 percent (0.04 ton per day) of the
PM 2.5 co-benefit reduction is associated with assumed energy efficiency measures at
the four large refineries in the study area, while another 30 percent would occur due
to a 10 percent efficiency improvement by goods movement sources.
The co-benefit emissions reductions in the study area would produce regional air
quality-related health benefits. A relatively small portion of these benefits would
occur in the study area (approximately 300,000 area residents). Health benefits due
to reductions in NOx are mostly at the regional levels, since NOx emissions have
usually travelled some distance before they are transformed into PM via atmospheric
reactions. Point source combustion PM emissions persist in the atmosphere and
increase exposures both in the area where they are emitted and broadly throughout the
region. Based on previous modeling studies of the impact of port and rail yard PM
emissions in the South Coast Air Basin conducted by ARB, PM exposures will be
reduced far beyond the study area, and a majority of the health benefits are expected
to occur in areas outside of the Wilmington community.72
Using the previously described methodology that correlates emission reductions in
the air basin with expected regional health benefits there would be an estimated
71
The reductions at any one facility could be much greater or lesser than 10 percent For example, very small
or no reductions might occur because available cost-effective industrial emission reductions have already been
implemented at a particular site.
72
ARB analysis indicates that about 20 percent of the health benefits would occur in the Wilmington area.
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24 avoided premature deaths attributed to emission reductions that occur in
Wilmington as a result of the Scoping Plan.73
F.
Summary of Societal Benefits
AB 32 requires ARB to “consider the overall societal benefits, including reductions in other
air pollutants, diversification of energy sources, and other benefits to the economy,
environment, and public health” (HSC § 38562(b)(6)) when developing regulations to
implement the Scoping Plan. ARB conducted an initial assessment of societal benefits
associated with AB 32 implementation. This section summarizes those that have been
identified during development of the Scoping Plan, including diversification of energy
sources, mobility, regressivity, and job creation. More detailed economic and
environment/public health analyses can be found in Appendix G and H, respectively. The
impact of low income households (regressivity), impacts on small businesses, and impact on
jobs are described in the Economic Analysis section and Appendix G.
1. Energy Diversification
Generally, energy-related measures in this Scoping Plan are expected to result in a
transformation of the State’s energy portfolio, driven primarily by the Low Carbon
Fuel Standard (LCFS), which addresses transportation fuel, and the 33 percent RPS,
which increases renewably-produced electricity production and distribution to
households and businesses.
The LCFS aims to achieve at least a 10 percent reduction in the carbon intensity of
California’s transportation fuels by 2020. As the State moves toward less dependence
upon one source of fuel for transportation, our economy will be less at risk from
significant fluctuations in fuel prices. Measures within the Scoping Plan will force
energy diversification in California toward low-carbon intensive energy sources and
encourage significant growth in infrastructure, capital, and investment in biofuels.
The move toward 33 percent renewables will, by definition, increase the
diversification of California’s electrical supply. Increased use of wind, solar,
geothermal and biomass (including from the organic fraction of municipal solid
waste) generation will all add to ensuring the state has a broader portfolio of energy
inputs.
Based on ARB’s economic analysis, the combined energy diversification and
increased energy efficiency expected from implementation of the Scoping Plan is
predicted to result in: a 25 percent decrease in gasoline usage (4.6 billion gallons), a
17 percent decrease in diesel fuel use (670 million gallons), a 22 percent decrease in
electricity (74,000 GWh reduction) and a 24 percent reduction in natural gas
(3,400 therms).
73
See Appendix H
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The cap-and-trade program, offsets, and other measures that contain market-based
features may also help diversify California’s energy portfolio by incentivizing the
development and deployment of clean and efficient energy generating technologies.
2. Mobility and Shifts in Land Use Patterns
Mobility is analyzed through multiple approaches in the Scoping Plan. Appendix C
includes an analysis of a proposed measure for regional transportation-related
greenhouse targets. Reductions in vehicle miles traveled (VMT) are expected to
result from regional and local planning which target land use, building and zoning
improvements.
As the Scoping Plan is implemented, measures that support shifts in land use patterns
are expected to emphasize compact, low impact growth in urban areas over
development in greenfields. Communities could realize benefits, such as improved
access to transit, improved jobs-housing balance, preservation of open spaces and
agricultural fields, and improved water quality due to decreased runoff. Local and
regional strategies promoting appropriate land use patterns could encourage fewer
miles traveled, lowering emissions of greenhouse gases, criteria pollutants and PM.
More compact communities with improved transit service could increase mobility,
allowing residents to easily access work, shopping, childcare, health care and
recreational opportunities.
Furthermore, if open spaces and desirable locations become more accessible and
communities are designed to encourage walkability between neighborhoods and
shopping, entertainment, schools and other destinations, residents are likely to
increase their levels of physical activity. Research shows that regular physical
activity can reduce health risks, including coronary heart disease, diabetes,
hypertension, anxiety and depression, and obesity. Measures in the Scoping Plan
encourage Californians to use alternatives to personal vehicle travel that could result
in increased personal exercise. To complement these changes, future community
developments may evolve to include trails and pedestrian access to major centers.
However, where compact development may increase proximity to large sources of
pollution, such as high traffic arterials, distribution centers, and industrial facilities, it
will be critical to analyze the anticipated and unanticipated impacts and benefits, to
ensure that increases in exposure to vehicular air pollution and other toxics and
particulates do not occur .
G.
California Environmental Quality Act Functional Equivalent
Document
The California Environmental Quality Act (CEQA) and ARB policy require an analysis to
determine the potential adverse environmental impacts of proposed projects. ARB’s analysis
of the potential adverse environmental impacts of the Scoping Plan is presented in Appendix
J. The analysis summarizes and discusses the specific strategies in the Scoping Plan that, if
adopted and implemented, will reduce greenhouse gas emissions throughout the state. The
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evaluation is programmatic by necessity; it allows consideration of broad policy alternatives
and program-wide mitigation measures at a time when an agency has greater flexibility to
deal with basic problems of cumulative impacts. A programmatic document also plays an
important role in establishing a structure within which future reviews of related actions can
be effectively conducted. The Secretary of California’s Resources Agency determined that
ARB meets the criteria for a Certified Regulatory Program and requires ARB to prepare a
substitute document. This functionally equivalent document (FED) is intended to disclose
potential adverse impacts and identify mitigation measures specific to the actions identified
in the Scoping Plan. The analysis generally found that the proposed Low Carbon Fuel
Standard, Renewables Portfolio Standard and Water measures have the most potential to
cause adverse environmental impacts due to the potential for land conversion when projects
are undertaken. Additional environmental analysis will be needed when regulations are
adopted and at the individual project level to identify mitigation for project specific impacts.
H.
Administrative Burden
ARB conducted a assessment of the administrative burden of implementing the Scoping Plan
recommendation. (HSC §38562 (b)(7)) The recommendation calls for ARB to develop a
cap-and-trade program – a market-based regulatory program to cap and reduce emissions
from the Industrial, Electricity, Natural Gas, and Transportation sectors. This program would
require stringent monitoring and reporting on the part of the regulated community, and
comprehensive enforcement on the part of ARB. Sources under the cap would need to
analyze the best approach for their company to comply with a cap – assessing the cost of
reducing emissions and comparing that to the cost of purchasing emission reductions in a
market. Although ARB has not previously developed this type of market regulation, there is
extensive experience to draw upon from within California, nationally, and internationally. In
addition, the other regulatory components of the recommendation would require ARB and
other State agencies to adopt a series of measures requiring regulatory development, outreach
to stakeholders and the public, implementation by industry, and enforcement for numerous
measures and programs.
I.
De Minimis Emission Threshold
A minimum level at which regulations are determined not to apply is termed the ‘de minimis
threshold.’ In recommending a de minimis level, ARB must take into account the relative
contribution of each source or source category to statewide greenhouse gas emissions and the
adverse effect on small business. (HSC §38561(e)) This threshold acts as a buffer below
which the burden of regulation is determined to outweigh the potential harmful effect of the
minimal level of emissions. However, it should not be assumed that an individual source of
greenhouse gas emissions that is minimal if taken by itself will fall below the threshold.
ARB often looks at the aggregate emissions from a source category or related source
category when determining regulatory applicability.
A source category may be evaluated as the aggregate of businesses doing the same type of
work (e.g., semiconductor manufacturers), a type of equipment (cargo handling equipment,
cars), a process or product (cans of pressurized duster), or other aggregated sources of
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III. Evaluations
emissions. Emissions of greenhouse gases from any individual entity within these source
categories by themselves could be small. However, when emissions from the source
category are evaluated, the relative contribution to climate change can be significant.
As ARB developed the Scoping Plan, potential measures were evaluated against criteria that
included the relative contribution of the source to climate change. After this review and
considering the level of emissions needed to meet the 1990 target established by AB 32,
ARB recommends a de minimis level 0.1 MMTCO2E annual emissions per source
category.74 Source categories whose total aggregated emissions are below this level are not
proposed for emission reduction requirements in the Scoping Plan but may contribute toward
the target via other means.
ARB and other agencies implementing measures included in the Scoping Plan should
carefully consider this de minimis level in developing regulations, and only regulate smaller
source categories if there is a compelling necessity.
As each regulation to implement the Scoping Plan is developed, ARB and other agencies will
consider more specific de minimis levels below which the regulatory requirements would not
apply. These levels will consider the cost to comply, especially for small businesses, and
other factors.
74
The Forest sector was not included in determining the de minimis level because this sector serves both as a
source and a sink for carbon, making the concept of a de minimis level less applicable.
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IV. Implementation
IV. IMPLEMENTATION: Putting the Plan into Action
Adoption of this Scoping Plan will be a groundbreaking step forward for California.
However it is only the beginning of a journey that will last for decades, gradually moving the
State into a low-carbon, clean energy future. Putting the Scoping Plan into action will be
challenging but with adequate commitment and leadership from Californians up and down
the state, it will be a success.
A.
Personal Action
The greenhouse gas emission reductions required under AB 32 cannot be realized without the
active participation of the people of California. While many of the measures in this Plan
must be taken by large sources of emissions, such as power plants and industrial facilities, it
is the voluntary commitment and involvement of millions of individuals and households
throughout the State that will truly make this California’s Plan.
Shifts in individual choices and attitudes drive changes in the economy and in institutions.
This dynamic of changing individual behavior will influence California’s effort to reduce
greenhouse gas emissions. For example, as market forces and environmental awareness
encourage more people to drive low-greenhouse gas emitting vehicles, the auto
manufacturers will respond with more innovative models and more intensive research.
Regulations requiring auto manufacturers to provide these cars will complement the market
demand.
This means that thinking about climate change and our carbon footprint will naturally
become part of how individuals make decisions about travel, work, and recreation. Some
families may choose to purchase a more efficient vehicle when it comes time to replace their
current model. Households may choose to lower their thermostat to 68 degrees Fahrenheit
during the colder months, and raise it to 78 degrees when air conditioning is required. Some
households may choose to swap out incandescent light bulbs for more efficient compact
fluorescent lights. Others may choose to install solar water heaters, or arrays of solar electric
panels on their roofs to take advantage of renewable energy, and lower their household
energy bills. Many households may choose to plant trees to shade and cool their homes, and
use landscaping and plants that require less water.
This Plan recommends measures that will help support many of these individual decisions to
improve energy efficiency. Statewide measures and regional efforts will result in programs
to promote public transportation or riding in carpools, subsidize the purchase of energy
efficient appliances, or provide incentives to better insulate and weatherize older homes.
ARB is fully committed to assuring California consumers have the widest possible choice of
vehicles that emit fewer greenhouse gases than today’s models, including the most advanced
technology vehicles produced anywhere in the world.
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Californians have embraced statewide programs that support positive change in home and
business behavior. In less than two decades, separating household waste and recycling at
home and work have become commonplace, as has the widespread purchase of appliances
with the Energy Star label to save energy. Reducing our carbon footprint by moving toward
a cleaner more efficient economy will produce a wide range of benefits to individuals,
through lower energy bills and a healthier environment for all.
Conservation can also play a key role. By employing practices to use our resources more
sparingly, consumers can both save money and reduce greenhouse gas emissions. On August
18, 2008, Governor Arnold Schwarzenegger launched the EcoDriving program – a
comprehensive effort to save consumers money at the gas pump, reduce fuel use and cut CO2
emissions. By following a set of easy-to-use best practices for driving and vehicle
maintenance, a typical EcoDriver can improve mileage by approximately 15 percent.
Furthermore, safety is improved when driving speeds are reduced, a key EcoDriving strategy.
Similarly, consumers and businesses can save money and reduce greenhouse gas emissions
by conserving resources at homes, offices and commercial buildings. For example, wireless
monitor devices to provide instantaneous energy-usage information inside the home are
being developed to show users how many kilowatt hours they're consuming at any given
moment – as well as how much it’s costing them.75 Providing real-time information on
appliance energy use can greatly assist consumers in conserving electricity use.
Many Californians concerned about climate change have also begun to buy carbon offsets to
mitigate the impact of their daily activities. These can take various forms, including options
that allow consumers to add ‘carbon credits’ when buying airline tickets, or paying a small
monthly charge on utility bills to buy green power. ARB will be working to establish clear
rules for voluntary reductions and offsets that might be used for compliance with AB 32.
These rules will also help establish clear guidelines for these types of voluntary carbon credit
programs and provide California’s businesses and consumers greater assurance that money
spent on these programs result in real reductions in greenhouse gas emissions.
For more information about how to reduce one’s personal carbon footprint, visit
www.coolcalifornia.org. This web site provides a carbon footprint calculator and a “top ten”
list of ways to save energy at home.
B.
Public Outreach and Education
To be successful, a climate action program needs an effective public outreach and education
program. The Plan calls for a robust statewide program designed to generate awareness and
involvement in California’s climate change efforts.
75
The Sacramento Municipal Utility District (SMUD) is subsidizing PowerCost Monitors to 5,000 customers as
a part of a demonstration program. [www.smud.org/residential/saving-energy/monitor.html]
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IV. Implementation
The Climate Action Team will convene a steering team that includes State agencies and other
public agencies such as the state’s air districts, and public and private utilities, which have a
strong track record of successful efforts at public education to reduce driving (Spare the Air)
or promote energy efficiency and reduce energy demand. With the release of the California
Energy Efficiency Strategic Plan, the CPUC has committed to the launch of a new brand for
California Energy Efficiency in 2009, focused on energy efficiency opportunities and
coordinated with climate change messaging under AB 32. The steering committee will
develop a coordinated array of messages and draw upon a wide range of messengers to
deliver them. These will include regional and local governments whose individual outreach
campaigns can reinforce the broader State outreach themes while also delivering more
targeted messages directly tied to specific local and regional programs.
To ensure that all Californians are included in efforts to address climate change, California
will also support highly localized efforts at public education and outreach at the community
and neighborhood level. This includes service club organizations and existing faith-based
communities – churches, mosques and synagogues. Other private-sector entities including
businesses and local chambers of commerce will be invited to partner in spreading the word.
1. Involving the Public and Stakeholders in Measure Development
In keeping with the requirements of AB 32 and the legacy of four decades of
regulatory development at ARB, we have worked to make this process fully
transparent and will continue to do so as regulations to implement the plan are
developed. We will continue our efforts to involve the public to the greatest extent
feasible at every stage of the process, including informal and formal rulemaking
activities. This will include disadvantaged communities and those with localized
concerns, as well as affected industries and small businesses.
Local and community meetings and outreach have been and will continue to be a
central element of all rulemaking, with State agencies working closely with
disadvantaged communities, EJAC, public health experts, and other stakeholders to
fully evaluate the impacts associated with California’s greenhouse gas emissions
reduction strategies. State agencies involved in measure development will continue
to meet periodically with communities to assess any challenges to implementation, or
to discover possible new measures or approaches. Stakeholders will be invited to
participate in the many additional workshops, workgroups and seminars that will be
held as individual measures are developed.
2. Education and Workforce Development
The transition to a clean energy future presents California with a tremendous
opportunity to continue growing its green economy and to expand the growth of
green job opportunities throughout the state. Making this transition will require a
technically educated workforce that is equipped with the skills to develop and deploy
21st century technologies. Investments in training, career technical education, worker
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transition assistance, and collaboration between public and private partners will be
key to ensuring that California fully reaps the economic and job opportunities that
will accompany implementation of AB 32.
Setting California on track to a low-carbon future beyond 2020 will be a multigenerational challenge. To meet this challenge, climate-related education in schools
must be a central element of California’s plan. By 2010, California will develop
climate change education components to the State’s new K-12 model school
curriculum as part of the Education and the Environment Initiative (AB 1548, Pavley,
Chapter 665, Statutes of 2003). Expanding the knowledge and opportunities of young
people to participate in promoting their own and their communities’ environmental
health will be an important theme for all these efforts. In the meantime, ARB’s
educational outreach will continue through the Cool California web pages
(www.coolcalifornia.org) and the continued support of student educators through the
California Climate Champions programs. ARB will also rely on partners throughout
the state to develop and display options for curricula that will enhance the K-12,
community college, trade technical training programs, and programs at four-year
colleges.
The demand for workers to fill green jobs is rising. There are currently more than
3,000 green businesses in the state, accounting for about 44,000 jobs: 36 percent of
these jobs are in professional, scientific, and technical services; 19 percent are in
construction; and 15 percent are in manufacturing.76 Some of these jobs are in new
fields, yet many others are simply augmentations of existing skills and vocations such
as electrical, construction, machining, auto tech, and heating ventilation and air
conditioning. As we move toward 2020, tens of thousands of new green job
opportunities will be created.77 Whether these opportunities come in entirely new
fields of employment or in existing areas, it will be critical for California to have a
trained workforce available.
Ensuring that California can continue to meet the demand for green jobs will require
close coordination between workforce development agencies, businesses, State and
local governments, labor unions, and community colleges and universities. Many
organizations are already developing strategies and identifying steps to
simultaneously meet industry workforce needs and help build a more sustainable
economy. For instance, the California Labor and Workforce Development Agency
(LWDA) provides a comprehensive range of employment and training services in
partnership with State and local agencies and organizations. Similar additional efforts
will be crucial in ensuring that the transition to a green economy benefits working
76
California Economic Strategy Panel. Clean Technology and the Green Economy; Growing Products,
Services, Businesses and Jobs in California’s Value Network, Draft, March 2008.
http://www.labor.ca.gov/panel/pdf/DRAFT_Green_Economy_031708.pdf
77
Tellus Institute and MRG Associates. Clean Energy: Jobs for America’s Future. As cited in: Putting
Renewables to Work: How Many Jobs Can the Clean Energy Industry Generate? Energy and Resources
Group/Goldman School of Public Policy at University of California, Berkeley. April 13, 2004. p. 11
http://rael.berkeley.edu/old-site/renewables.jobs.2006.pdf
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families in California by providing a steady supply of livable-wage jobs. In the area
of energy efficiency, the California Long Term Energy Efficiency Strategic Plan,
adopted by the CPUC, details a vision and supporting strategies for the development
of a workforce trained and engaged to achieve California’s energy-efficiency
objectives.
The following strategies will be key to ensure that California’s workforce is equipped
to help lead the transition to a clean energy future:
•
Strengthen and expand access to Career and Technical Education (CTE) in
California public schools for the next generation of workers who will build a
green economy. Over the past several decades, there has been a steady decline in
career and technical education. In 2007, less than one-third of all high school
students in the state were enrolled in some form of CTE.78 To take full advantage
of the emerging green economy and meet the goals of AB 32, California needs to
expand opportunities for CTE in schools. This could include pursuing strategies
such as requiring CTE coursework for all middle- and high-school students;
increasing the number of CTE credentialed teachers; expanding investment in
facilities and equipment for career and technical education; and aligning
educational curricula more closely with the skill and workforce needs of the
emerging green economy.
•
Ensure an adequate pipeline of skilled workers who are trained in the new
technologies of a greener economy. While some green jobs will be in new
businesses and new occupations, most green jobs are variations of traditional
occupations in sectors like construction, utilities, manufacturing and
transportation.79 In light of the fact that forty percent of the nation’s skilled
workers are slated to retire in the next 5 to 10 years,80 there is an urgent need for
educational and training programs to fill these jobs. Strategies to create a steady
pipeline of skilled workers include expanding curriculum choices in schools,
colleges, and universities to fully reflect career opportunities available in an
economy increasingly centered on clean technologies. Other strategies include
offering a greater array of industry- and technology-specific courses that would
link directly with postsecondary training such as apprenticeship programs,
vocational training, or college.
•
Ensure that California’s higher education institutions continue to produce
the next generation of clean tech engineers, scientists and business leaders. In
addition to providing valuable research on potential climate-change mitigation
and adaptation strategies, California’s world-class research institutions are the
78
Get REAL. Aligning California’s Public Education System with the 21st Century Economy Policy Paper for
Discussion at Governor Arnold Schwarzenegger’s Summit on Career and Technical Education, March 6, 2007
79
Ibid.
80
The New Apollo Program, Clean Energy, Good Jobs: A National Economic Strategy for the New American
Century, July 2008. p. 20 http://apolloalliance.org/downloads/fullreportfinal.pdf (accessed October 12, 2008)
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incubators for many of the clean tech companies that will contribute to
California’s environmental and economic future. It will be critical for California
to continue to cultivate university research and training programs in a way that
takes full advantage of this valuable state resource.
A successful transition to a clean energy future depends heavily on California’s
ability to provide a well-trained workforce to meet the demands of the growing green
economy. ARB and our key partners will continue working throughout the state to
ensure that an adequate supply of skilled workers is positioned to take advantage of
the growing opportunities for high quality jobs and careers that implementation of
AB 32 will bring.
3. Small Businesses
Small businesses play a crucial role in California’s economy. As noted in Chapter III,
our analysis indicates that this plan will have a net positive impact on small
businesses. These impacts are attributable primarily to the measures in the plan that
will deliver significantly greater energy and fuel efficiencies. However, as also noted
in the analysis, ensuring that these benefits are realized to the fullest potential will
require additional outreach and communication efforts by ARB and many other state
and local entities.
One of ARB’s Early Action measures is designed to help businesses during AB 32
implementation. With our State partners, we are developing an on-line small business
“toolkit” designed for small and medium-sized businesses that will provide a one-stop
shop for technical and financial resources. Toolkit components will include a
business-specific calculator to assess a company’s carbon footprint; a voluntary
greenhouse gas inventory protocol for measuring greenhouse gas emissions;
recommended best practices for energy, transportation, building, purchasing, and
recycling; case studies demonstrating how small and medium California businesses
have reduced greenhouse gas emissions; program financing resources; peernetworking opportunities; and an awards program to recognize reductions of
greenhouse gas emissions among California businesses.
ARB will also continue working with the many business associations, organizations,
and other State partners, such as the Small Business Advocate’s AB 32 Small
Business Task Force, the Labor and Workforce Development Agency, and Business,
Transportation, and Housing Agency that have the resources, input and expertise to
provide. These partners will help to further develop and implement an effective
outreach plan to provide technical assistance to businesses through a variety of
means, including attendance at business events, workshops, and working with local
economic development agencies.
C.
Implementation of the Plan
This Scoping Plan outlines the regulations and other mechanisms needed to reduce
greenhouse gas emissions in California. ARB and other State agencies will work closely
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with stakeholders and the public to develop regulatory measures and other programs to
implement the Plan. ARB and other State agencies will develop any regulations in
accordance with established rulemaking guidelines. Table 32 shows the status of the
proposed measures in the plan.
Table 32: Status of Scoping Plan Measures
Existing Laws, Regulations, Policies And Programs
Light-Duty Vehicle Greenhouse Gas Standards (Pavley I)
Renewables Portfolio Standard (to 20%)
Solar Hot Water Heaters
Million Solar Roofs
High Speed Rail
Measures Strengthening & Expanding Existing Policies & Programs
Electricity Efficiency
Natural Gas Efficiency
Renewables Portfolio Standard (from 20% to 33%)
Sustainable Forests
Light-Duty Vehicle Greenhouse Gas Standards (Pavley II)
Discrete Early Actions
Low Carbon Fuel Standard
High GWP in Consumer Products (Adopted)
Smartways
Landfill Methane Capture
High GWP in Semiconductor Manufacturing
Ship Electrification (Adopted)
SF6 in non-electrical applications
Mobile Air Conditioner Repair Cans
Tire Pressure Program
New Measures
California Cap-and-Trade Program Linked to WCI Partner Jurisdictions
Increase Combined Heat and Power
Regional Transportation-Related GHG Targets
Goods Movement Systemwide Efficiency
Vehicle Efficiency Measures
Medium/Heavy Duty Vehicle Hybridization
High GWP Reductions from Mobile Sources
High GWP Reductions from Stationary Sources
Mitigation Fee on High GWP Gases
Oil and Gas Extraction
Oil and Gas Transmission
Refinery Flares
Removal of Methane Exemption from Existing Refinery Regulations
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Rulemakings will take place over the next two years. As with all rulemaking processes, there
will be ample opportunity for both informal interaction with technical staff in meetings and
workshops, and formal interaction. ARB will consider all information and stakeholder input
during the rulemaking process. Based on this information, ARB may modify proposed
measures to reflect the status of technological development, the cost of the measure, the costeffectiveness of the measures and other factors before presenting them to the Board for
consideration and adoption.
In addition to these existing approaches, AB 32 imposes other requirements for the
rulemaking process. Section 38562(b) explicitly added requirements for any regulations
adopted for greenhouse gas emissions reductions. ARB also recognizes the need to expand
the scope of analysis required when adopting future greenhouse gas emission reduction
regulations. These expanded evaluations include the unique enforcement nature of climate
change-related regulations and the possible extended permitting considerations and timelines
that must be taken into account when establishing compliance dates. An important
consideration in developing regulations will be the potential impact on California businesses.
The potential for leakage, the movement of greenhouse gas emissions (and economic
activity) out of state, will be carefully evaluated during the regulatory development.
As noted above, as the Scoping Plan is implemented and specific measures are developed,
ARB and other implementing agencies will also conduct further CEQA analyses, including
cumulative and multi-media impacts. ARB must design equitable regulations that encourage
early action, do not disproportionately impact low-income and minority communities, ensure
that AB 32 programs complement and do not interfere with the attainment and maintenance
of ambient air quality standards, consider overall societal benefits (such as diversification of
energy resources), minimize the administrative burden, and minimize the potential for
leakage. AB 32 requires that, to the extent feasible and in furtherance of achieving the
statewide greenhouse gas emission limit, ARB must consider the potential for direct, indirect
and cumulative emission impacts from market-based compliance mechanisms, including
localized impacts in communities that are already adversely impacted by air pollution, design
the program to prevent any increase in emissions, and maximize additional environmental
and economic benefits prior to the inclusion of market-based compliance mechanisms in the
regulations. As ARB further develops its approach for consideration of these issues in future
rulemakings, and updates needed analytical tools and data sets, we will consult with outside
experts and the EJAC.
ARB already conducts robust environmental and environmental justice assessments of our
regulatory actions. Many of the requirements in AB 32 overlap with ARB’s traditional
evaluations. In adopting regulations to implement the measures recommended in the
Scoping Plan, or including in the regulations the use of market-based compliance
mechanisms to comply with the regulations, ARB will ensure that the measures have
undergone the aforementioned screenings and meet the requirements established in
HSC §38562 (b) (1-9) and §38570 (b) (1-3).
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IV. Implementation
Tracking and Measuring Progress
Many State agencies, working with the diverse set of greenhouse gas emissions sources, have
collaborated in the process of developing the strategies presented in this plan. As the agency
responsible for ensuring that AB 32 requirements are met, ARB must track the regulations
adopted and other actions taken by both ARB and other State agencies as the plan is
implemented.
The emissions reductions enumerated in this plan are estimates that may be modified based
on additional information. As the proposed measures are developed over the coming years, it
is possible that some of these strategies will not develop as originally thought or not be
technologically feasible or cost-effective at the level given in the plan. It is equally likely
that new technologies and strategies will emerge after the initial adoption schedule required
in AB 32, that is, regulation adoption by January 1, 2011. If promising new tools or
strategies emerge, ARB and other affected State agencies will evaluate how to incorporate
the new measures into the AB 32 program. In this way, new strategies ensuring that the
commitments in the plan remain whole and that the 2020 goal can be met will be
incorporated into the State strategy.
ARB will update the plan at least once every five years (HSC §38561(h)). These updates
will allow ARB to evaluate the progress made toward the State’s greenhouse gas emission
reduction goals and correct the Plan’s course where necessary. This section discusses the
tracking and measurement of progress that ARB envisions. The Report Cards and audits,
along with an evaluation of new technologies – both emerging and those recently
incorporated into the Plan – will also provide valuable input into ARB’s update process.
Continuous atmospheric monitoring of greenhouse gases may also be useful for determining
the effectiveness of emission reduction strategies and for future inventory development.
1. Report Card
SB 85 (Budget Committee, Chapter 178, Statutes of 2007) requires every State
agency to prepare an annual “Report Card,” detailing measures the agency has
adopted and taken to reduce greenhouse gas emissions, including the actual emissions
reduced as a result of those actions. The information must be submitted to CalEPA,
which is then required to compile all the State agency data into a report format, which
is made available on the Internet and submitted to the Legislature. The information
allows comparisons of each agency’s projected and actual greenhouse gas emissions
reductions with the targets established by the CAT or the Scoping Plan. This would
be the State’s ‘Report Card’ on its efforts to reduce greenhouse gas emissions.
Agencies are also required, as funds are available, to have an outside audit of
greenhouse gas-related actions completed every three years to verify actual and
projected reductions.
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2. Tracking Progress by Implementing Agencies
Agencies
As the lead agency responsible for implementing AB 32, ARB must track the
progress of both our efforts and the efforts of our partners in implementing their
respective provisions of this plan. Communication between ARB and the other
implementing agencies will be especially important as regulations and programs are
developed. In support of the Report Card requirement noted above, ARB will work
with CalEPA to develop a process to track and report on progress toward the plan’s
goals and commitments.
3. Progress Toward the State Government Target
The CAT recently established a State Government Subgroup to work with State
agencies to create a statewide approach to meet the Scoping Plan’s commitment to
reduce greenhouse gas emissions by a minimum of 30 percent by 2020 below the
State’s estimated business-as-usual emissions – approximately a 15 percent reduction
from current levels. State agencies must lead by example by doing their part to
reduce emissions and employ practices that can also be transferred to the private
sector. The statewide plan will serve as a guide for State agencies to achieve realistic,
measurable objectives within specific timelines. This newly created State
Government Subgroup will assist State agencies through these steps in a timely
manner.
4. Mandatory Reporting Regulation
ARB’s mandatory reporting rule, adopted in December 2007, will help the State
obtain facility-level data from the largest sources of greenhouse gas emissions in
California. This data will help ARB better understand these sources to develop the
proposed emissions reduction measures outlined in this plan.
The regulation requires annual reporting from the largest facilities in the state,
accounting for 94 percent of greenhouse gas emissions from industrial and
commercial stationary sources in California. There are approximately 800 separate
sources that fall under the new reporting rules, which include electricity generating
facilities, electricity retail providers and power marketers, oil refineries, hydrogen
plants, cement plants, cogeneration facilities, and industrial sources that emit over
25,000 tons of carbon dioxide each year from on-site stationary source combustions
such as large furnaces. This last category includes a diverse range of facilities such as
food processing, glass container manufacturers, oil and gas production, and mineral
processing.
Affected facilities will begin tracking their greenhouse gas emissions in 2008, to be
reported beginning in 2009 with a phase-in process to allow facilities to develop
reporting systems and train personnel in data collection. Emissions for 2008 may be
based on best available data. Beginning in 2010, emissions reports will be more
rigorous and will be subject to third-party verification. Reported emissions data will
allow ARB to improve its facility-based emissions inventory data. Originally, the
statewide greenhouse gas inventory was based on aggregated sector data and could
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not be broken down to the facility level. The facility-level reporting required under
the Mandatory Reporting regulation will improve data on greenhouse gas emissions
for individual facilities and their emitting processes. This information could also help
improve emissions inventories for criteria pollutants, and provide additional data for
assessing cumulative emission impacts on a community level.
ARB emissions reporting requirements are expected to be modified over time as
AB 32 is implemented.
E.
Enforcement
Enforcement is a critical component of all of the State’s regulatory programs, both to ensure
that emissions are actually reduced and to provide a level playing field for entities complying
with the law. To meet the 2020 target this plan calls for aggressive action by a number of
State agencies. Each of those agencies will employ its full range of compliance and
enforcement options to ensure that planned reductions are achieved. The remainder of this
section discusses ARB’s portion of the enforcement program in more detail.
ARB has an extensive and effective enforcement program covering a wide variety of
regulated sources, from heavy-duty vehicle idling, to consumer products, to fuel standards
and off-road equipment. To increase the effectiveness of its enforcement efforts and provide
greater assurance of compliance, ARB also partners with local, State and federal agencies to
carry out inspections and, when necessary, prosecute violators.
ARB will continue its strong enforcement presence as the State's primary air pollution
control agency. A critical function of this responsibility is to ensure that all enforcement
actions are timely, effective, and appropriate with the severity of the situation. ARB will also
continue its close working relationship with local air districts in the development and
enforcement of applicable regulations contained within the Scoping Plan and collaborate
with the appropriate State agencies on greenhouse gas emission reductions measures.
For the stationary source regulations called for in the plan, ARB will work closely with the
local air districts that have primary responsibility for implementing and enforcing criteria
pollutant regulations. Not only are local air districts familiar with the individual facilities
and their compliance history, but information contained in district permits can be used to
verify the accuracy of greenhouse gas emissions reported by sources subject to ARB
mandatory reporting requirements. Using this data, regulators can also examine any
correlation between greenhouse gases and toxic or criteria air pollutants as a result of
emissions trading or direct regulations.
ARB will also continue to partner with the California Highway Patrol and other State and
local enforcement agencies on mobile source and other laws and regulations where joint
enforcement authorities apply.
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Although many of the measures in the Scoping Plan are modeled on existing ARB
regulations, a multi-sector, regional cap-and-trade program would bring unique enforcement
challenges. ARB and CalEPA have begun the process of engaging and consulting with other
State agencies, such as California’s Department of Justice, Public Utilities Commission,
Energy Commission, as well as the Independent System Operator, on market tracking and
enforcement. These working group meetings are ongoing and will culminate in a
comprehensive enforcement plan to accompany the proposed cap-and-trade program when
the Board considers regulatory requirements. This enforcement plan would describe the
administrative structures needed for market monitoring, prosecution, and penalty setting.
Public input regarding these issues would also be a key part of the public stakeholder process
conducted during development of the cap-and-trade programs regulations.
Accurate measurement and reporting of all emissions would be necessary to assure
accountability, establish the integrity of allowances, and provide sufficient transparency to
sustain confidence in the market. To ensure compliance, ARB would administer penalties
for entities that hold an insufficient quantity of allowances to cover their emissions or fail to
report their greenhouse gas emissions. Missed compliance deadlines would also result in the
application of stringent administrative, civil, or criminal penalties.
This plan recommends that California implement a cap-and-trade program that links with
other Western Climate Initiative partner programs to create a regional market system. This
system would require California to formalize enforcement agreements with its WCI partner
jurisdictions for all phases of cap-and-trade program operations, including verification of
emissions, certification of offsets based on common protocols, and detection of and
punishment for non-compliance. As needed, California would also work with federal
regulatory and enforcement agencies that oversee trading markets, such as the Commodity
Futures Trading Commission and the Federal Energy Regulatory Commission. While
California would work with other jurisdictions on joint enforcement activities, ARB will
exercise all of its authority under HSC §38580 and other provisions of law to enforce its
regulations against any violator wherever they may be.
F.
State and Local Permitting Considerations
Some of the proposed emissions reduction strategies in this Scoping Plan may require
affected entities to modify or obtain state or local permits. California’s existing permit
process ensures that health and safety concerns are evaluated, met, and when appropriate,
mitigated. The State recognizes the potential for conflicts between various federal, state and
local permitting requirements, which may cross various media – air, water, etc. CalEPA is
actively involved in identifying and addressing these regulatory overlap issues with the
ultimate goal of consolidating permits where feasible while maintaining all permit
requirements. Two such examples are CalEPA’s digester permit working group and the
CalEPA-Air District Compost Emissions Work Group.
ARB recognizes that the permitting process may affect the viability of certain strategies and
that the length of the permitting process could affect the timing of emissions reductions.
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ARB, along with CalEPA and other State agencies, will continue to evaluate steps to ensure
that permit requirements harmonize across the affected media.
This Plan has been developed with an understanding of the important cross-media impacts.
These efforts will continue during the implementation of the Plan. Particular focus on the
potential permitting impacts and cross-media consequences of a proposed rule will take place
during the rulemaking process.
G.
Role of Local Air Districts
Local air districts are ARB’s partners in addressing air pollution. ARB takes primary
responsibility for transportation, off-road equipment and consumer products. Local districts
lead in controlling industrial, commercial and other stationary sources of air emissions.
AB 32 recognizes the need to develop a program that meshes with local and regional
activities. Although AB 32 does not provide an explicit role for air districts, their local
presence as advocates for clean air and their resources, experience and expertise in regulating
and enforcing rules for stationary sources make them a logical choice to have an important
role in several aspects of implementing California’s greenhouse gas program. ARB would
partner with local air districts to develop and effectively enforce both source-specific
requirements on industrial sources, and to enforce related programs, such as the high GWP
rules, that affect a large number of local businesses.
ARB and local air districts are also actively working to coordinate emission reporting
requirements. Some districts, like the South Coast Air Quality Management District, have
developed software to allow their industrial sources to simultaneously report their criteria
pollutant emissions to the District and their greenhouse gas emissions to ARB. Many air
district staff are being trained as third-party verifiers to confirm the greenhouse gas emissions
information provided by industrial sources under the mandatory reporting regulation, and,
similarly, could provide verification of voluntary greenhouse gas reductions in the future.
Local air districts will be key in both encouraging greenhouse gas emissions reductions from
other regional and local government entities, and providing technical assistance to quantify
and verify those reductions. Local agencies are an important component of ARB’s outreach
strategy.
Many local air districts have already taken a leadership role in addressing greenhouse gas
emissions in their communities. These efforts are intended to encourage early voluntary
reductions. For example, local districts are “lead agencies” under the California
Environmental Quality Act (CEQA) for some projects. In order to ensure high-quality
mitigation projects, some districts have established programs to encourage local greenhouse
gas reductions that could be used as CEQA mitigation. As the State begins to institutionalize
mechanisms to generate and verify greenhouse gas emissions reductions, ARB and the
districts must work together to smoothly transition to a cohesive statewide program with
consistent technical standards.
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IV. Implementation
H.
Scoping Plan
Program Funding
Administration, implementation, and enforcement of the emissions reduction measures
contained in the Scoping Plan will require a stable and continuing source of funding. AB 32
authorizes ARB to collect fees to fund implementation of the statute. ARB recently initiated
a rulemaking for a fee program to fund administration of the program.
Approximately $36 million per year will be needed on an ongoing basis to fund
implementation by ARB and other State agencies, based on the positions and funding
included in the 2009-2010 fiscal year budget. Additional revenues are needed to repay the
loans from State funds that were used to pay ARB and CalEPA expenses in the startup of the
program. ARB is moving on an expedited schedule to develop a fee regulation and expects
to take a regulation to the Board in mid 2009, with the aim of beginning to collect fees in the
2009/2010 fiscal year.
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V.
V. A Vision for the Future
A VISION FOR THE FUTURE
California has the know-how, ingenuity, research capabilities, and culture of innovation to
meet the challenge of addressing climate change. However, reaching the goals we have set
for ourselves will not be easy. Successful implementation of many of the proposed programs
and measures described in this plan will require strong leadership and a shared understanding
of the need to reach viable and lasting solutions quickly.
This challenge will also require establishing a wide range of partnerships, both within
California and beyond our borders. We will need to support additional research, and further
develop our culture of innovation and technological invention. In order to continue the
momentum and the commitment to a clean energy future, we will need to both build on
existing solutions and develop new ones.
The following sections lay out some of the elements that will be necessary to forge a broadbased institutional strategy to address climate change both within California and beyond.
Also discussed is the need to build partnerships on the regional, national and international
levels to ensure that our actions complement and support those being taken on a global scale.
This section also looks forward to 2030, showing that California is on the trajectory needed
to do our part to stabilize global climate.
A.
Collaboration
1. Working Closely with Key Partners
True climate change mitigation will require many parties to work together for a
global mitigation plan. California and other states are filling a vacuum created by the
current lack of leadership at the federal level. By its bold actions, California is
moving the United States closer to a seat at the table among the developed countries
that have agreed to reduce their carbon emissions, and lead a new international effort
for an agreement to replace the Kyoto Protocol that expires in 2012.
Any national climate program must be built on a partnership with State and local
governments to ensure that states can continue their role as incubators of climate
change policy and can implement effective programs such as vehicle standards,
energy efficiency programs, green building codes, and alternative fuel development.
California will work for climate solutions with key federal agencies, including the
U.S. Department of Energy and their national labs, the U.S. Environmental Protection
Agency, the U.S. Bureau of Land Management, the U.S. Department of Agriculture,
the U.S. Department of Transportation, and others.
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Through the Western Climate Initiative and in collaboration with other regional
alliances of states, California can promote its own best practices and learn from others
while helping to formulate the structure of a regional and ultimately national cap-andtrade program.
2. International
As one of the largest economies in the world, California is committed to working at
the international level to reduce global greenhouse gas emissions. As part of this
effort, Governor Schwarzenegger and other U.S. governors taking the lead in climate
change are co-hosting a Global Climate Summit on Finding Solutions Through
Regional and Global Action. This summit, held on November 18th and 19th, 2008,
began a state-province partnership with leaders from the U.S., Australia, Brazil,
Canada, China, India, Indonesia, Mexico, the European Union, and other nations,
taking urgent steps to contain global climate change and jointly setting forth a
blueprint for the next global agreement on climate change solutions.
California is also a charter member of the International Carbon Action Partnership
(ICAP), an organization composed of countries and regions that have adopted carbon
caps and that are actively pursuing the implementation of carbon markets through
mandatory cap-and-trade systems. California’s continued involvement in ICAP will
be very beneficial for sharing experiences and knowledge as we design our own
market program.
In addition to participating in ICAP, California hopes to engage developing countries
to pursue a low-carbon development path. With developing nations expected to
suffer the most from the effects of climate change, California and others have an
obligation to share information and resources on cost-effective technologies and
approaches for mitigating both emissions and future impacts as changes in climate
and the environment occur.
California recognizes the “common but differentiated responsibilities” among
developed and developing countries (as articulated in the Kyoto Protocol), but the
reality is that rapidly escalating greenhouse gas emissions in developing countries
could possibly negate any efforts undertaken in California. To the extent that we are
part of the global economy, California’s demand for goods manufactured in
developing countries further exacerbates growth of greenhouse gas emissions
globally. Therefore, it is critical for California to help support the adoption of lowcarbon technologies and sustainable development in the developing world.
California can advance the international policy debate through state-provincial
partnerships for achieving early climate action in developing countries. This
approach envisions commitments by developed countries to provide capacity building
through technological assistance and investment support in return for developing
countries adopting enhanced mitigation actions. California will consider working
with developing countries or provinces that have, at a minimum, pledged to achieve
greenhouse gas intensity targets in certain carbon-intensive sectors through
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V. A Vision for the Future
mechanisms, such as minimum performance standards or sector benchmarks.
California also recognizes that developing countries have the challenge and
responsibility to reduce domestic emissions in a way that will promote sustainable
development, but not undermine their economic growth.
One possible manifestation of these collaborations could be the establishment of
sectoral agreements that help to grow developing countries’ economies in a lowcarbon manner. In a sectoral approach, energy-intensive sectors adopt programs for
reducing greenhouse gas emissions and/or energy use. Such sector-based approaches
seem likely to win the support of developing countries and could also reduce
concerns in developed countries about international competitiveness and carbon
leakage.
A state-provincial partnership related to imported commodities (such as cement)
would enable California to provide incentives to reduce greenhouse gas emissions
associated with products that are imported by our state. California should continue to
develop current relations and existing partnership arrangements with China – now the
largest emitter of greenhouse gases in the world – because in addition to other
compelling reasons much of the state’s imported cement originates in China.
California should also work to establish similar relations with India and other
countries to share research on both greenhouse gas mitigation and climate change
adaptation activities. Projects in the Mexican border region may also be of particular
interest, considering the opportunity to realize considerable co-benefits on both sides
of the border.
Deforestation accounts for approximately 20 percent of global greenhouse gas
emissions. California has set a strong precedent in the effort to incorporate forest
management and conservation into climate policy by adopting the CCAR forest
methodology in October 2007. California also hopes to engage developing countries,
including Brazil and Indonesia, to reduce emissions and sequester carbon through
eligible forest carbon activities. Activities aimed at Reducing Emissions from
Deforestation and Forest Degradation (REDD) were excluded from the rules
governing the first Kyoto commitment period, but there is considerable momentum
behind the effort to include provisions that would recognize such activities in a post2012 international agreement. Providing incentives to developing countries to help
cut emissions by preserving standing forests, and to sequester additional carbon
through the restoration and reforestation of degraded lands and forests and improved
forest management practices, will be crucial in bringing those countries into the
global climate protection effort. California recognizes the importance of establishing
mechanisms that will facilitate global partnerships and sustainable financing
mechanisms to support eligible forest carbon activities in the developing world.
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V. A Vision for the Future
B.
Scoping Plan
Research
1. Unleash the Potential of California’s Universities and Private
Sector
Bringing greenhouse gas emissions down to a level that will allow the climate to
stabilize will take a generation or longer. Many of the ultimate solutions to achieve
stabilization will be developed and implemented well into the future. Innovation in
energy and climate will come from people who are now in school. These young
people will face unprecedented challenges, and they will need both wisdom and
imagination to craft solutions. California’s respected public and private academic
institutions must continue to develop and fund programs based on climate change
science that cut across disciplines to address the multi-dimensional aspects of climate
change.
2. PublicPublic-Private Partnerships
To most effectively address the climate change dilemma, we must encourage
collaborations between academia and the private sector. Industry is well-positioned
to quickly attack problems. Combining the vast knowledge housed in universities
with businesses’ acumen and agility can unleash a powerful collaborative force to
tackle the problems associated with climate change.
Several important programs have already been initiated at California universities,
including Stanford’s Global Climate and Energy Project and the University of
California at Berkeley’s Energy Biosciences Institute (EBI).81 These and other efforts
need to be recognized and encouraged, along with others that can link the results of
research directly to policy decisions that the State must make.
Carbon Sequestration
In addition to terrestrial carbon sequestration or natural carbon sinks, such as forests
and soil, CO2 can be prevented from entering the atmosphere through carbon capture
and storage (CCS). This consists of separating CO2 from industrial and energyrelated sources and transporting the CO2 to a storage location for long-term isolation
from the atmosphere. Potential technical storage methods include geological storage,
industrial fixation of CO2 into inorganic carbonates, and other strategies. Large point
sources of CO2 that may pursue CCS include large power plants, fossil fuel-based
hydrogen production plants, and oil refineries.82
81
The EBI is being developed in cooperation with Lawrence Berkeley National Laboratory, the University of
Illinois at Urbana-Champaign and BP.
82
Intergovernmental Panel on Climate Change. Carbon Dioxide Capture and Storage: A Special Report of
Working Group III of the IPCC. Cambridge University Press, UK; 2005.
http://www.ipcc.ch/ipccreports/srccs.htm (accessed October 12, 2008)
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V. A Vision for the Future
According to a 2005 report by the Intergovernmental Panel for Climate Change
(IPCC), a power plant with CCS could reduce CO2 emissions to the atmosphere by
approximately 80 to 90 percent compared to a plant without CCS (including the
energy used to capture, compress and transport CO2).83 While more research and
development needs to occur, California should both support near-term advancement
of the technology and ensure that an adequate framework is in place to provide credit
for CCS projects when appropriate.
The State is currently an active member of the West Coast Regional Carbon
Sequestration Partnership (WESTCARB), a public-private collaboration to
characterize regional carbon sequestration opportunities in seven western states and
one Canadian province. Established in 2003, this research project is comprised of
more than 80 public and private organizations. WESTCARB is conducting
technology validation field tests, identifying major sources of CO2 in its territory,
assessing the status and cost of technologies for separating CO2 from process and
exhaust gases, and determining the potential for storing captured CO2 in secure
geologic formations.84
C.
Reducing California’s Emissions Further –
A Look Forward to 2030
In order to assess whether implementing this plan achieves the State’s long-term climate
goals, we must look beyond 2020 to see whether the emissions reduction measures set
California on the trajectory needed to do our part to stabilize global climate.
Governor Schwarzenegger’s Executive Order S-3-05 calls for an 80 percent reduction below
1990 greenhouse gas emission levels by 2050. This results in a 2050 target of about
85 MMTCO2E (total emissions), as compared to the 1990 level (also the 2020 target) of
427 MMTCO2E. Climate scientists tell us that the 2050 target represents the level of
greenhouse gas emissions that advanced economies must reach if the climate is to be
stabilized in the latter half of the 21st century. Full implementation of the Scoping Plan will
put California on a path toward these required long-term reductions. Just as importantly, it
will put into place many of the measures needed to keep us on that path.
Figure 6 depicts what an emissions trajectory might look like, assuming California follows a
linear path from the 2020 AB 32 emissions target to the 2050 goal needed to help stabilize
climate. While the measures needed to meet the 2050 goal are too far in the future to define
in detail, we can examine the policies needed to keep us on track through at least 2030.
83
Ibid
WESTCARB. WESTCARB Overview. http://www.westcarb.org/about_overview.htm (accessed October 12,
2008)
84
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V. A Vision for the Future
Scoping Plan
Figure 6: Emissions Trajectory Toward 2050
20.0
522
500.0
18.0
452
427
16.0
422
400.0
14.0
12.0
14.3
284
300.0
13.3
10.0
13.3
8.0
200.0
185
9.6
6.0
4.0
5.8
100.0
85
3.4
2.0
1.4
0.0
0.0
1990
2000
2010
2020
Per-capita Emissions (MT/person/year)
2030
2040
2050
Emissions (MMTCO2E)
To stay on course toward the 2050 target our State’s greenhouse gas emissions need to be
reduced to below 300 MMTCO2E by 2030. This translates to an average reduction of four
percent per year between 2020 and 2030. An additional challenge comes from the fact that
California’s population is expected to grow by about 12 percent between 2020 and 2030. To
counteract this trend, per-capita emissions must decrease at an average rate of slightly less
than five percent per year during the 2020 to 2030 period.
Are such reductions possible by 2030? What measures might be able to provide the needed
reductions? How do the needed measures relate to the efforts put into place to reach the
2020 goal? All of these are critical questions, and are addressed below.
The answer to the first question is yes, the reductions are possible. Furthermore, the
measures needed are logical expansions of the programs recommended in the Scoping Plan
that get us to the 2020 goal. We could keep on track through 2030 by extending those
programs in the following ways:
•
Using a regional or national cap-and-trade system to further limit emissions from the
85 percent of greenhouse gas emissions in capped sectors (Transportation Fuels and
other fuel use, Electricity, Residential/Commercial Natural Gas, and Industry). By
2030 a comprehensive cap-and-trade program could lower emissions in the capped
sectors from 365 MMTCO2E in 2020 to around 250 MMTCO2E in 2030;
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Scoping Plan
•
•
•
•
•
V. A Vision for the Future
Achieving a 40 percent fleet-wide passenger vehicle reduction by 2030,
approximately double the almost 20 percent expected in 2020;
Increasing California’s use of renewable energy;
Reducing the carbon intensity of transportation fuels by 25 percent (a further decrease
from the 10 percent level set for 2020);
Increasing energy efficiency and green building efforts so that the savings achieved in
the 2020 to 2030 timeframe are approximately double those accomplished in 2020;
and
Continuing to implement sound land use and transportation policies to lower VMT
and shift travel modes.
The effects of these strategies are presented in Table 33.
Table 33: Potential Distribution of California Greenhouse Gas
Emissions by Sector in 2030
Potential Emissions
(MMTCO2E)
102
149
33
284
Sector
Transportation Fuels*
Other Fuel Use*
Uncapped Sectors
Total
*
Capped sector
With these polices and measures in place, per-capita electricity consumption would decrease
by another five percent. Well over half of our electricity demand could be met with zero or
near zero greenhouse gas emitting technologies, assuming nuclear and large hydro power
holds constant at present-day levels. In response to a lower cap on emissions, existing coal
generation contracts would not be renewed, or carbon capture and storage would be utilized
to minimize emissions. The remaining electricity generation would come from natural gas
combustion either in cogeneration applications or from highly efficient generating units.
By 2030, the transportation sector would undergo a similarly massive transition both in terms
of the vehicle fleet and the diversity of fuel supplies. Due to the combination of California’s
clean car standards (ARB’s ZEV program and the Low Carbon Fuel Standard), the number
of battery-electric vehicles, plug-in hybrid electric vehicles, and fuel cell vehicles would
increase dramatically, to about a third of the vehicle fleet. Flex-fuel vehicles would comprise
a large fraction of the remaining fleet, with more efficient gasoline and diesel vehicles
making up the difference. Electricity, advanced biofuels, improved gasoline and diesel,
renewable natural gas and hydrogen would all play a role in powering this high-tech fleet of
efficient vehicles.
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V. A Vision for the Future
Scoping Plan
Regional land use and transportation strategies would grow in importance and would reverse
the trend of per-capita vehicle miles traveled, a reduction of about eight percent below
business-as-usual in 2030. With ambitious but reasonable action, statewide passenger
vehicle greenhouse gas emissions could be reduced to half of 2020 levels in 2030, which is
also about half of business-as-usual for 2030. Efficiency strategies and low carbon fuels for
heavy-duty and off-road vehicles, as well as for ships, rail, and aviation, would need to be
greatly expanded in order to achieve additional reductions from the transportation sector in
2030.
In tandem with efficiency measures that lower demand for electricity, natural gas and
transportation fuels, California’s cap-and-trade program would incent large industrial sources
as well as commercial and residential natural gas customers to further reduce emissions. By
tightening the cap over time, it is expected that facilities in the industrial and natural gas
sectors would achieve reductions well beyond those needed to meet the 2020 emissions cap.
The Scoping Plan proposes several measures for reducing high GWP gases that collectively,
will substantially reduce emissions. With a transition toward reduced consumption of these
gases, improved containment in their end uses, and substitution of low GWP alternative
gases, it is expected that emissions from this sector could decrease by 75 percent between
2020 and 2030.
For uncapped sectors, we assume that the agriculture sector will reduce emissions by about
15 percent between 2020 and 2030. Net forest uptake of CO2 must be preserved or
enhanced, likely through both expansion of forests and reduction in carbon loss from forest
fires, which are predicted to increase over this time period. This example assumes a
10 percent reduction in direct landfill emissions from the recycling and waste sector;
however, aggressive implementation of the suite of measures proposed in this Plan could
further reduce emissions from this sector by 2030.
In total, the measures described above would produce reductions to bring California’s
statewide greenhouse gas emissions to an estimated 284 MMTCO2E in 2030. While the
potential mix of future climate policies articulated in this section is only an example, it serves
to demonstrate that the measures in the Scoping Plan can not only move California to its
2020 goal, but also provide an expandable framework for much greater long-term greenhouse
gas emissions reductions.
D.
Conclusion
California’s commitment to address global warming has never been greater. The vast
amount of interest, support, and input that ARB has received since this plan began to take
shape is evidence of a clear understanding of the need to take action and support for the
State’s efforts to lead the way. The time has come to shift away from a ‘business-as-usual’
approach to climate change and to move toward the lasting and sustainable goal of a clean
energy future.
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Reaching our goals will take a great deal of leadership, commitment, and a willingness to
embrace new approaches and seek out new solutions. California’s plan to reduce greenhouse
gas emissions must also take into account the impacts of this transition and be designed in
particular to address the needs of low-income communities, small businesses, and
California’s working families.
Reaching our goals will also require involvement and support from all levels of government
in California, and a coordinated effort with other states, regions, and countries. The solutions
and technologies we develop here will be used around the world to help others transition to a
clean energy future and contribute to the fight against global warming.
Reaching our goals will also require flexibility. As we move forward, we must be prepared
to make mid-course corrections. AB 32 wisely requires ARB to update its Scoping Plan
every five years, thereby ensuring that California stays on the path toward a low carbon
future.
This plan is part of a new chapter for California that in many ways began with the passage
and signing of AB 32. It proposes a comprehensive set of actions designed to reduce
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.
The challenge California has taken on is large but the opportunities are even greater. It is
now time to turn this plan into action.
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ACKNOWLEDGMENTS
This Scoping Plan was prepared by the Air Resources Board. This document was made
possible by the hard work of numerous contributors. Below is a list of advisory committees
and State agencies that directly provided input to this Scoping Plan.
Team Support
Climate Action Team
Climate Action Team Sector Subgroups
• Agriculture
• Cement
• Energy
• Forest
• Green Buildings
•
•
•
•
•
Land Use
Recycling and Waste Management
State Fleet
Water-Energy
Economics
Advisory Committees
Market Advisory Committee
Environmental Justice Advisory Committee
Economic and Technology Advancement Advisory Committee
State Agencies
Governor’s Office of Planning and Research
California Environmental Protection Agency
Business, Transportation and Housing
Agency
Resources Agency
State and Consumer Services Agency
Department of Food and Agriculture
California Energy Commission
California Public Utilities Commission
California Transportation Commission
Department of Conservation
Department of Forestry and Fire Protection
Department of General Services
Department of Parks and Recreation
Department of Public Health
Department of Toxic Substances Control
Department of Transportation
Department of Water Resources
Housing and Community Development
Integrated Waste Management Board
Office of Environmental Health Hazard
Assessment
State Water Resources Control Board
Department of Pesticide Regulation
& Roberta Fegg
Sharon L. Anderson Darlene Atkinson Barbara Bamberger Bill Blackburn Jeannie Bla kes lee Edie Chang Steve Cliff Jon Cos tantino Cheri Davis Paul Domich Karin Donhowe Brieanne Dou ke Ashley Dunn Rob DuVall Mary Farr Jennifer Gray Jerry Hart Alana Hitchcock L isa Holm Kevin Kennedy Karen Khamou Bill Knox Renae Maher Dennis O’Bry ant Patti Ochoa Ray Olsson Claudia Orlando Johnn ie Ray mond Christine Seghers Charles M. Shu loc k Sandee Smith Gina Sterlin g Bruce Tuter Lucille van Ommering Rich Varenchik Sam Wade Mark Wenzel Tabetha Willmon Matt Zaragoza
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