1 2017 Scoping Plan Update - PowerPoint Presentation

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2017 Scoping Plan Update

John GioiaMay 9, 2018

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California’s GHG Reduction Targets

Assembly Bill 32 (AB 32) California Global Warming Solutions Act of 2006Requires California to reduce its GHG emissions to 1990 levels by 2020CARB must adopt regulations to achieve the maximum technologically feasible and cost-effective GHG emissions reductionsExecutive Order B-30-15Reduce GHG emissions 40% below 1990 levels by 2030Update Scoping Plan to incorporate 2030 GHG targetSenate Bill 32 (SB 32)Codifies the 2030 GHG target through

GHG Targets in Statute

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AB 398 provides direction on a post-2020 Cap-and-Trade Program and required CARB to update the Scoping Plan by Jan. 1, 2018 2017 Scoping Plan finalized in DecemberAB 617 requires CARB to develop and implement a program to reduce exposure to criteria and toxic pollutants in California’s most burdened communitiesWork underway to implement new community-focused air quality program including monitoring and emission reduction plansCollaborative process involving CARB, air districts, and community representativesAB 197 provided direction on development of the Scoping Plan and broader access to criteria, toxics, and emissions data

Recent Legislation

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https://www.arb.ca.gov/cc/inventory/data/data.htm

Natural & working lands are

not included in the scope of the statewide limit~898 MMT carbon in “live stocks” – forests, grasses, scrub

GHG Emissions Sources by Sector

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* GWP= Global Warming Potential

2020 Target

Progress to Date Reducing GHGs

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Current modeling shows GHG emissions will be below the 2020 target

* MRR = Mandatory Reporting Regulation

Scoping Plan Development Process

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Coordination with State agencies and Legislature since 2015

Extensive public engagement

15 Public Workshops

Over 20 Environmental Justice Advisory Committee (EJAC) Meetings and 19 EJAC Statewide Community Meetings

Significant review, analysis, and coordination

Consultation with economic reviewers

Economic, AB 197, and environmental analyses

Coordination with other plans (Sustainable Freight Strategy, California Transportation Plan (CTP) 2040, Mobile Source Strategy, etc.), including those which primarily address criteria and toxic pollutants

Over 500 public comments received and reviewed

Objectives for Scoping Plan Update

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Achieve

2030

target

Provide direct GHG emissions reductions

Provide air quality co-benefits

Protect public health

Minimize emissions “leakage” – increase to non-CA GHG emissions

Support climate investment in disadvantaged communities

Facilitate sub-national and national collaboration

Support cost-effective and flexible compliance

Support Clean Power Plan and other federal

action

Climate Change Scoping Plan

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Comprehensive strategy to meet California’s 2030 GHG target

Approved by CARB in December 2017

Suite of complementary measures builds on past success

Mobile Source Strategy - help State achieve its federal and state air quality standards

Sustainable Freight Action Plan

SB 375 – support sustainable community development

Enhanced Low Carbon Fuel Standard (LCFS)

SB 350 - increase renewable energy and energy efficiency

SB 1383 - Short-Lived Climate Pollutant Plan

Post-2020 Cap-and-Trade Program

Estimated Cumulative GHG Emissions Reductions by Measure (2021-2030)

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Scoping Plan Key Points Summary

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Plan provides an achievable path for reaching the 2030 GHG target

2030 target is a milestone on the way to achieve greater reductions needed to stave off the catastrophic impacts of climate change

CARB will continue to evaluate and incorporate additional opportunities to reduce GHGs, criteria, and air toxics emissions as they become cost-effective and technologically feasible

Implementation of the Scoping Plan measures must not disproportionately impact low-income communities

Continue to monitor, adjust, and enforce existing air quality programs, in addition to implementing AB 617

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Cap-and-Trade Program

Emily WimbergerCalifornia Air Resources BoardMay 9, 2018

Part of a suite of climate policiesEnsure GHG targets are realized through an emissions limitProvide compliance flexibility to achieve cost-effective reductionsAllow price signals to motivate long-term investment in cleaner fuel and energy efficiencyComplement existing programs to reduce smog and air toxics Facilitate integration of regional, national, and international GHG reduction programs

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Cap-and-Trade Program

Program Scope

Program covers about ~85% of State’s EmissionsStationary sources with emissions ≥25,000 metric tons of carbon dioxide equivalent (MTCO2e) per yearImporters of electricityEmissions from the combustion of supplied fuels, including natural gas and transportation fuelsCarbon dioxide (CO2), methane (CH4), nitrous oxide (N2O)

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How Are Allowances Distributed?

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Industrial allowance allocation to prevent emissions leakage

Based on output to encourage GHG-efficient production

Allocation decreases over time in step with decline of overall Program emissions

Allocation to electric and natural gas distribution companies on behalf of ratepayers. Existing uses include:

Residential climate credit on electricity bills

Energy efficiency projects

Advanced technology rebate programs

Price reserve to help contain high prices

Remaining allowances are auctioned and proceeds used for California Climate Investment programs

How Are Allowances Distributed?

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Industrial allowance allocation to prevent emissions leakage

Based on output to encourage GHG-efficient production

Allocation decreases over time in step with decline of overall Program emissions

Allocation to electric and natural gas distribution companies on behalf of ratepayers. Existing uses include:

Residential climate credit on electricity bills

Energy efficiency projects

Advanced technology rebate programs

Price reserve to help contain high prices

Remaining allowances are auctioned and proceeds used for California Climate Investment programs

Cap-and-Trade Program Allowance Budgets

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Cap-and-Trade Design Features

Allocation to industrial sources to prevent leakage ~41.6 million allowances for vintage 2018 (based on 2016 Mandatory Reporting Rule data)Multiyear compliance periodsBankingOffsetsCompliance FlexibilityAllowance Price Containment ReserveAuction with price floor for carbon price discovery to inform investment and compliance decisions State-owned allowances for sale: ~174 / ~151 million in 2017 / 2018

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Reporting and Enforcement

Robust annual GHG emissions reporting and verificationUse consistent methods for reporting within a sector and across sectorsThird-party verification to ensure accurate reportingOffset projects must comply with CARB-adopted protocols and undergo third-party verificationAutomatic 4x increase in compliance obligation if an entity misses the compliance deadline

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~450 covered entities in the Cap-and-Trade ProgramProgram linked with Québec’s cap-and-trade program on January 1, 2014, and with Ontario’s program on January 1, 2018>1.4 billion compliance instruments held in private accounts (~$21 billion in value)>$6.4 billion generated for California Climate InvestmentsHigh levels of compliance with Program requirementsCarbon price is being incorporated into compliance, investment decisions, and electricity market

Cap-and-Trade Program

Facts and Figures

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Additional Resources

California Air Resources Board:

https://www.arb.ca.gov/homepage.htm

Cap-and-Trade Program:

https://www.arb.ca.gov/cc/capandtrade/capandtrade.htm

California’s Climate Change Scoping Plan:

https://www.arb.ca.gov/cc/scopingplan/scopingplan.htm

Mandatory Greenhouse Gas Emissions Reporting:

https://ww2.arb.ca.gov/our-work/programs/mandatory-greenhouse-gas-emissions-reporting