Implementing AB 32 and the Scoping Plan

1. Implementing AB 32 and the Scoping Plan CAPCOA Engineering Managers Annual Conference June 16, 2009 Edie Chang California Air Resources Board Office of Climate Change

2. AB 32 established the first U.S. economy-wide climate change regulatory program California’s leadership helps set direction for national program AB 32 sets GHG emission cap for 2020 at 1990 level (427 MMT) Points way toward 80% reduction by 2050 ARB adopted Scoping Plan in December 2008 Plan provides a framework for achieving AB 32’s GHG emissions reduction target What is AB 32?The Global Warming Solutions Act of 2006 2

3. California’s GHG Emissions ARB, “California 1990 Greenhouse Gas Emissions Level and 2020 Emissions Limit” (2007), www.arb.ca.gov/cc/ccei/inventory/1990_level.htm 3

4. Magnitude of the Challenge 169 MMT CO2e Reduction (Scoping Plan) 1990 Emission Baseline 80% Reduction 341 MMT CO2e 4

5. Scoping Plan Recommendations Combination of market mechanisms, other regulations, voluntary measures, and fees Cap-and-trade program covers 85 percent of emissions Complementary measures: Energy efficiency Renewable energy Regional targets for transportation-related emissions Existing laws and policies (e.g. Pavley, LCFS) Fees: public goods charge on water, fee for AB 32 implementation 5

6. Adopted To Date – Met AB 32 Timelines • Pavley AB 1493 passenger car rule • Inventory and Mandatory reporting • Ship electrification in ports • Port and rail yard cargo trucks • Scoping Plan adopted • Reduce GWP in consumer products • Heavy duty truck efficiency • Motor vehicle DIY refrigerant cans

7. Adopted to Date (2) • SB 375 Regional Targets Advisory Committee • High GWP in semi-conductors • Sulfur Hexafluoride reductions • Auto tire inflation • Low Carbon Fuel Standard • Small business toolkit • Local government toolkit

8. Currently In Progress Energy Commission Public Utilities Commission Waste Board Water Board Dept. of Water Resources Dept. of Government Services High Speed Rail Authority • Cap and trade program being developed in coordination with Western Climate Initiative • More economic and health analysis • Extensive public outreach on all measures • Rules must be adopted by end of 2011 – in effect by 2012 Other State Agencies Also Involved: 8

9. For Future ARB Adoption Seven Rules Scheduled for 2009 Including at June 25 Board meeting: • Landfill methane control • Cool cars • Fees and minor changes to reporting rules Nine ARB Rules Scheduled for 2010 9

10. Scoping Plan Emissions Reductions MMTCO2e by sector 10

11. Energy Efficiency: Build on Past Success New Challenge: Reduce Total Electricity and Natural Gas Consumption 11

12. Residential & Industrial Energy Efficiency • Reduce electricity consumption by 32,000 GWh compared to business-as-usual • New more stringent building and appliance standards • Local government initiatives, including tax bill financing for efficiency and distributed renewables (AB 811) • Industrial reductions: • Water & wastewater energy efficiency • Combined heat and power • Large industry energy audits 12

13. Renewable Energy Renewable Portfolio Standard • 14% of retail sales currently met by renewable resources • Short term goal of 20% by 2010; Long term goal of 33% by 2020 • RETI – planning the transmission for the 2020 goal • Smart grid – supply and demand side strategies that can enable renewables while improving reliability • Million Solar Roofs program • Voluntary renewables 13

14. Coordination With Districts • Local districts are partners in air pollution programs • State climate program consistent with and use district permitting and compliance, where appropriate • Funding for district implementation and enforcement • Continuing work on joint climate change work plan 14

15. Cap-and-Trade Rulemaking Broad-based California cap-and-trade program to provide a declining fixed limit on emissions Link to other Western Climate Initiative Partner programs Complements health-based air quality programs and EJ policies Consider effects of the program on the California economy and public health 15

16. Western Climate Initiative • Partners: • Arizona • British Columbia • California • Manitoba • Montana • New Mexico • Ontario • Oregon • Quebec • Utah • Washington 16

17. WCI Benefits to California • Regional approach can double emission reductions over California-only approach • Regional harmonization reduces potential for emissions “leakage” and supports jobs retention • Broader market increases opportunities for low-cost greenhouse gas reductions • Increased leverage on Federal climate policy development 17

18. Linking to a Regional Program • Each partner adopts and implements its own program, consistent with WCI partner programs • Trading across jurisdictions through administrative agreements among partner jurisdictions • One auction design and coordinated auctions • Consistent rulemaking provisions, including: • Offset protocols and criteria for use • Reporting protocols and thresholds • Address potential competitiveness issues in allocation formula 18

19. California’s Interaction with the Federal Government • State recommendations can influence federal climate policies and regulations • New National GHG auto standards are based on California’s Pavley rule • Invite participation by U.S. EPA and other federal agencies • Promote federal actions, funding opportunities and incentives supporting California’s 2020 cap 19

20. ARB’s ACESA Priority Issues • American Clean Energy and Security Act of 2009 (ACESA) • Oppose 2012-17 moratorium on state cap programs • Allow states more stringent standards than Federal standards in most sectors • Approve allowance auctions & return some revenues to states for specific purposes • Permit regional growth standards as in SB 375 20

21. 2009 2011 2012 2010 The Next Chapters Return to 1990 Emissions Adoption of Scoping Plan Measures 2013 through 2020 Measure Implementation Scoping Plan Adopted 12/08 Work Toward 2050 21

22. More Information and Contacts ARB’s Climate Change Website: http://www.arb.ca.gov/climatechange California’s Climate Change Website: http://climatechange.ca.gov/ ARB Office of Climate Change contact: Richard Varenchik (626) 575-6730 rvarench@arb.ca.gov 22