FRAN PAVLEY Senior Climate Advisor Natural Resources Defense Council CLIMATE CHANGE AND CALIFORNIA

AB 32 Main Provisions  Mandates reporting of emissions from significant sources by January 1,  Requires the California Air Resources Board (CARB) to cap GHG emissions at 1990 levels.  Emission reductions to begin in 2012 and be achieved by 2020.

3 AB 32 Additional Provisions  Develops a list of early actions by July 1, 2007 and adopts regulations by January 1,  Includes a scoping plan to achieve statewide GHG emissions reductions by January 1,  Allows CARB to adopt regulations on the use of market mechanisms to achieve reductions.

AB 32 Timeline to Implementation June 30, 2007: Early Action Emission Reduction Measures July 1, 2007: Environmental Justice and Economic/Tech advisory boards convene Jan. 1, 2008: Determination of 1990 baseline levels and report on biggest emitters Jan. 1, 2009: Approval of plan for maximum reduction by 2020 (update every 5 years) Jan. 1, 2010: Adopt regulations for early action measures Jan. 1, 2011: Adopt regulations on emission limits and reduction measure which must be real, permanent, quantifiable, verifiable, and enforceable, in addition to cap, in same period Jan. 1, 2012: Emission limits begin Jan. 2, 2020: Emission reductions achieved and stay in force beyond 2020

GHG Emissions (469 MMTCO2E) Draft Scoping Plan

6 Draft Scoping Plan Recommendations Mix of strategies that combine market mechanisms, regulations, voluntary measures, fees, and other programs Key elements: – – Energy efficiency programs – – 33 percent Renewables Portfolio Standard – – California cap-and-trade program linked to Western Climate Initiative – – Existing laws and policies, including California’s clean car standards, goods movement measures, and the Low Carbon Fuel Standard – – Targeted fees to fund implementation

7 Recommended Measures Preliminary Recommendation

AB 1493 The Regulations  Requires carmakers to reduce GHG from their vehicle fleets by approximately 30% by 2016  Developed two standards --  Cars and lightest trucks  Heavier vehicles  Created near-term ( ) and mid-term standards ( )  CARB approximates cost for new cars to increase by $300

AB 1493 Implementation Under the Clean Air Act, other states can adopt California standards or Federal standards. The following states have adopted or will adopt California’s “Clean Car” regulations.  Connecticut  Maine  Massachusetts  New Jersey  New York  Oregon  Pennsylvania  Rhode Island Governors of Arizona, Florida and other states have signed executive orders stating their intent to adopt these standards.  Vermont  Washington  Maryland  New Mexico

10 E.P.A Denies California Waiver December 19, 2007 President Bush signs Energy Bill increasing federal fuel efficiency standards, but C.A.F.E. is not a substitute for California’s stronger GHG regulations. E.P.A. Administrator Johnson states that California has not met required criteria of “compelling and extraordinary” conditions since the impacts are not “unique” to California. E.P.A. undermines California Authority under Clean Air Act. This is the first waiver ever denied. California and 14 other states and 5 environmental organizations file suit January 2008 in S.F. Federal Court.

11 What Else is California Doing?  Renewable Portfolio Standards - 20%  Million Solar Roofs  AB Alternative Fuels  Fuel Cell Partnership  Local Government Actions  Energy Efficient Appliances  Green Building Designs  SB 1368 (Greenhouse Gas Performance Standard)  Low Carbon Fuel Standard  Decoupling  AB 1470 – Solar Water Heating

12 Energy Efficiency Works

13 Water/Energy Efficiency programs to reduce energy use – – Water use efficiency – – Water recycling – – Water system efficiency – – Reuse of urban run-off – – Increase renewable energy production Public goods charge – – Fund investments in water efficiency and recycling Preliminary Recommendation

14 Local Government Actions SB 375 (Steinberg) strengthens regional planning and empowers local governments to work with CARB to draft long-range transportation plans for California’s 17 Metropolitan Planning Organizations (MPO’s) Transportation Planning – Sets regional GHG emission reduction targets Housing Planning – Matches regional housing needs to regional transportation plan updates CEQA Reform – Residential and mixed-use projects that are transit priority projects will be subject to new CEQA procedures to encourage those developments

15 California Cap-and-Trade Linked to Regional Market Enforceable cap on GHG emissions from sources beginning in 2012 Cap declines over time to meet 2020 targets; will continue to decline to help meet the 2050 target Limited use of offsets Strong enforcement and monitoring Must include safeguards for regional and local co-pollutants Preliminary Recommendation

16 Potential Use of Revenues California Carbon Trust – – Use of revenues for the public good Other potential uses: – – Support AB 32 reduction goal – – Achieve environmental co-benefits – – Local government incentives & consumer rebates – – Climate change adaptation – – Community benefits – – Consumer rebates – – RD&D funding – – Worker transition assistance Under Evaluation

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19 Challenges/Opportunities EPA Waiver for AB 1493 Federal incentives/tax credits Transmission Lines for renewables Planes, trains, trucks, and ships Environmental Justice (localized impacts) Green Jobs Out of State “Leakage” Co-Benefits (air quality & public health) Role of Local Government Market Mechanisms Integrating energy policies such as RPS, efficiency standards, etc. with other states Emission Reductions have to be real, permanent, quantifiable, verifiable, and enforceable

20 What’s Driving Green-tech Investment?  Rising cost of fuel.  Economic expansion of China, India and other Asian nations.  Growing concerns on global warming.  War in the Middle East and too much reliance on foreign oil.  Desire for a secure energy future. AB 32 sends a strong signal to the market for clean technologies by adopting an enforceable cap.

We’re in an Environmental and Economic Race  Impacts of Global Warming are visible and accelerating.  The U.S. should seize this opportunity to become the home of clean technologies and alternative fuels.