Southern California Water Dialogue April 23, 2008 Jon Costantino Climate Change Planning Manager

1. AB 32 California Global Warming Solutions Act of 2006 and the Scoping Plan Southern California Water Dialogue April 23, 2008 Jon Costantino Climate Change Planning Manager California Air Resources Board

2. What Is AB 32? • Sets in statute 2020 GHG emissions limit at 1990 level • Acknowledges that 2020 is not the endpoint • Air Resources Board (ARB) to monitor/regulate GHG sources • Extensive collaboration with other agencies • Mandates that a Scoping Plan be adopted by January 1, 2009, with ARB as lead

3. AB 32 Timeline 2012 2011 2010 2008 2009 2020 2007 Identification/ implementation of further emission reduction strategies GHG reduction measures enforceable Publish list of early actions Early action regulations enforceable Mandatory reporting & 1990 Baseline Adopt scoping plan Reduce GHG emissions to 1990 levels Adopt GHG reduction measures Adopt enforceable early action regulations

4. California GHG Emissions ARB, “California 1990 Greenhouse Gas Emissions Level and 2020 Emissions Limit” (2007), www.arb.ca.gov/cc/ccei/inventory/1990_level.htm

5. Water, Energy and GHG Emissions • Approximately 19 percent of electricity demand and 32 percent of non-generation natural gas demand is due to water use • The CAT estimated that California’s water-related emissions total about 44 MMTCO2e • A lot of interest in how water can help the State reduce its GHG emissions • The Wet CAT is developing GHG emission reduction strategies and measures including

6. ~173 MMT CO2e Reduction 1990 Emission Baseline 80% Reduction ~341 MMT CO2e Magnitude of the Challenge

7. ARB 2020 Emission ReductionsMoving towards the 2020 Target (Already Identified 72 of 173 MMTCO2e) MMTCO2e

8. What Is the Scoping Plan? • California’s plan, developed by ARB, to reduce the State’s emissions to 1990 levels by 2020 • A model for other states, regions or nations • A process to develop cost-effective GHG emission reductions • A tool to identify economic benefits from improved efficiency and business creation • An opportunity to provide co-benefits and additional reductions in criteria and toxic emissions • A vision for a low carbon future beyond 2020

9. Who Is Developing the Scoping Plan? • ARB is responsible for developing and approving the Scoping Plan • ARB is working closely with Cal/EPA and the Climate Action Team subgroups • Technical evaluations performed by multi-agency teams • Stakeholder outreach will be a joint effort with other State agencies • Advisory groups (EJAC, ETAAC & MAC) providing recommendations

10. Who Else Is Involved? • Climate Action Team subgroups • Local air districts & other local government • Industrial sources • Transportation sources • Environmental groups • Community groups • Public • California Climate Action Registry • Western Climate Initiative • International organizations

11. Climate Action Team (CAT) • Climate Action Team led by Cal/EPA, includes: • Business, Transportation and Housing Agency, Department of Food and Agriculture, Resources Agency, Air Resources Board, Water Resources Control Board, Energy commission, Department of Water Resources, and Public Utilities Commission • Many GHG reduction activities cut across agency boundaries • Agencies other than ARB are lead for important components • CAT will oversee coordinated effort for implementing global warming emission reduction programs and report on progress

12. Agriculture Energy Forests Waste Management Water/Energy Cement Land Use and Local Government Green Buildings State Fleet Climate Action Team Subgroups

13. Public Process • Stakeholder outreach • Public workshops to discuss plan development • November: scoping plan kick-off workshop (L.A.) • December: sector summary workshop (Sac.) • January: mechanisms workshop (Oakland) • May: scoping plan scenarios workshop (Sac.) • Cat subgroup stakeholder meetings – ongoing • Economic analysis technical workgroup – ongoing • Program design technical workgroup – ongoing • Community meetings – planned

14. What Will Be in the Scoping Plan? • AB 32 requires maximum technologically feasible and cost-effective GHG emission reductions to achieve target of 427 MMTCO2e • Possible components include: • Direct regulations • Alternative compliance mechanisms • Market-based compliance mechanisms • Monetary and non-monetary incentives

15. Mechanisms to be Evaluated for AB 32 Implementation AB 32 requires ARB to achieve the maximum technologically feasible and cost-effective greenhouse gas emission reductions Many possible mechanisms available: Direct Regulations, Voluntary Early Actions Market-Based Mechanisms Cap and trade Offsets Other Mechanisms Incentives, fee-bates, voluntary actions, carbon fee, intensity standards

16. Examples of Direct Regulations Direct regulations are a major part of AB 32 implementation ARB adopted regulations AB 1493 Anti-idling regulations Port electrification Early action regulatory proceedings underway

17. Statutory Framework • In adopting regulations to implement Scoping Plan, the Board shall: • Be equitable, minimize costs and maximize total benefits, encourage early action • Avoid disproportionate impacts • Ensure voluntary reductions get appropriate credit • Consider cost-effectiveness, overall societal benefits • Minimize administrative burden • Minimize leakage • Consider significance of sources

18. Additional Regulations California energy related programs contribute to GHG emission reductions Renewable Portfolio Standards Building standards, utility energy efficiency programs Other State agency regulations CAT Subgroups and associated sector teams are evaluating possible measures that might be basis for source or sector regulations

19. Core Measures in the Scoping Plan • Core emission reduction measures expected to be included in Scoping Plan: • AB 1493 (Pavley) Emission Standards • Low-Carbon Fuel Standard • Reduction of Vehicle Miles Traveled • Other ARB Discrete Early Actions • CAT Early Actions • Energy Efficiency • Renewable Portfolio Standard • High Global Warming Potential Gases • Other Core Measures Identified By CAT Subgroups

20. Importance of Local Action • Cities and residents impacted by climate change • Local governments have authority • Can achieve substantial co-benefits • Serves as a model for residents and other cities

21. 2008 ARB GHG Activities • Hold Scoping Plan scenarios workshop (May 5) • Release draft Scoping Plan release (June 26) • July workshops on draft Plan • July 8, 14, 17 (LA, Fresno, and Sacramento) • Release final plan proposal (October 3) • Hold board hearing on scoping plan (Nov. 20–21)

22. Ultimate GHG Goals • Create model that is copied by other states and nations • Develop least cost approach • Generate economic benefits due to improved efficiency and business creation • Achieve other societal benefits, such as associated reductions in criteria and toxic emissions • Reduce emissions to 1990 levels by 2020 • Provide a vision for a low carbon future - 2050

23. After the Scoping Plan - Next Steps • ARB will update Scoping Plan every five years • Integration with possible regional or federal greenhouse gas programs • Enforcement • Scoping Plan commitments • Adopted regulations • Accountability • State agency (CAT) provided first annual “report card” to legislature March, 2008

24. Contacts and More Information • ARB Climate Change Web Site • http://www.arb.ca.gov/cc/cc.htm • Stay informed - sign up for list serve • California Climate Change Portal • http://www.climatechange.ca.gov • Jon Costantino • (916) 324-0931 • jcostant@arb.ca.gov