2030 Carbon Caps to Become Law

The California Legislature moved swiftly this week to adopt legislation expanding climate change emission goals.

SB 32 (Pavley; D-Agoura Hills) mandates a reduction in greenhouse gas emissions (GHG) of at least 40% below 1990 levels by 2030 with no consideration of the economic side effects or ongoing oversight for the Legislature.

The California Chamber of Commerce labeled SB 32 a job killer because it requires the California Air Resources Board (ARB) to impose severe command-and-control regulations to further reduce GHG emissions.

Also passed was a CalChamber-opposed companion measure, AB 197 (E. Garcia; D-Coachella), which creates the guise of regulatory accountability and legislative oversight regarding the blank check granted to the ARB for implementing the post-2020 climate change goals.

Following final passage of both bills, Governor Edmund G. Brown Jr., Senate President Pro Tem Kevin de León (D-Los Angeles) and Assembly Speaker Anthony Rendon (D-Paramount), joined the authors of both bills at a press conference to tout the state’s leadership in combating climate change.

The Governor has said he will sign both bills, which passed by simple majority votes.

Not included in the legislation is the market-based system for reducing emissions that was part of AB 32, the 2006 legislation calling for GHG emissions to be reduced to 1990 levels by 2020.

The Governor acknowledged the need to find the most cost-effective way to reduce carbon emissions.

Since a market-based system could have been included in the legislation and passed by a simple majority, it appears that proponents of the bills are seeking to leverage a legitimate and legal revenue stream from the auction system, which would require support from two-thirds of the Legislature.

The CalChamber supported the market-based cap-and-trade program set up by AB 32, but is litigating the auction the state is using to distribute many of the emission allowances under the system.

The ARB allocates to itself up to half of the allowances and then auctions them off to raise revenues for various state programs and subsidies.

Because the auction is not needed for a successful cap-and-trade program, the CalChamber argues the auction is an illegal tax because AB 32 did not pass with the two-thirds legislative supermajority that Proposition 13 requires for tax increases. The case is being considered by the Third District Court of Appeal.

Cleanup Needed

In addition to providing a market-based program to find the most cost-effective way to reduce emissions, the ARB should be required to publicly review the procedures that have worked best so that economic and quality of life concerns can be considered in establishing the 2030 regulatory process.

AB 32 has been in place for nearly 10 years without a transparent evaluation of which parts of the program have been costly and not worked as well as others.

Staff Contact: Amy Mmagu