Yesterday, Governor Jerry Brown signed Senate Bill (SB) 32 into law, extending and expanding California’s 10-year old greenhouse gas (GHG) emissions reductions mandate under Assembly Bill (AB) 32.  SB 32 provides for a 40% reduction in GHG emissions from 1990 levels by 2030.  This builds on AB 32’s existing mandate to reduce statewide emissions to 1990 levels by 2020.  In negotiations to pass SB 32 in the final weeks of the state legislative session, the bill was trimmed to add only one sentence to existing statute, to insert the 2030 target.  Left unaddressed was one question of the moment, can the cap and trade program authorized by AB 32 legally continue past 2020?  The California Air Resources Board (ARB) has its own answer to the question, the subject of this earlier post.  The courts will no doubt end up as the final arbiter.  Whether post-2020 GHG emissions reductions are met through a cap and trade program or other screws and hammers in ARB’s toolbox, the 2030 target is now written into law, rather than just Executive Order B-30-15.

The vital component of the compromise to pass SB 32 was companion bill AB 197.  AB 197 establishes legislative oversight of ARB’s actions to implement AB 32 and SB 32, by creating a Joint Legislative Committee on Climate Change Policies and adding two ex officio nonvoting members to the Board.  AB 197 also puts a new twist on ARB’s broad authority to adopt rules and regulations to achieve emissions reductions.  AB 32 requires ARB to achieve maximum technologically feasible and cost-effective emissions reductions from sources or categories of sources.  AB 197 further requires ARB to prioritize direct emissions reductions, including from large stationary sources and mobile sources, when adopting rules and regulations to achieve reductions.

In addition to headliner SB 32, the Legislature passed one additional bill with direct emissions reduction mandates, SB 1383.

SB 1383 targets short-lived climate pollutants and requires reductions by 2030 in statewide emissions of methane and hydrofluorocarbon gases by 40% below 2013 levels and anthropogenic black carbon by 50% below 2013 levels.  Methane reductions are targeted through diversion of organic waste from landfills and reductions in emissions from livestock and dairy manure management operations.  The bill calls for a 50% reduction in disposal of organic waste from 2014 levels by 2020, rising to 75% of 2014 levels by 2025.  The livestock and dairy sectors are to achieve a 40% reduction of 2013 levels of methane by 2030.  Regulations affecting dairy and livestock operations will not go into effect until 2024 and only if they are technologically feasible, economically feasible, and cost effective.

SB 32 and SB 1383 emerged as the biggest news for regulated industries.  Relevant to other sectors was the tangle over allocation of $1.4 billion in the state’s greenhouse gas reduction fund from cap and trade revenues.  AB 1613 divvied up over $940 million of the funds, with several other bills making adjustments to guidelines and programs on spending those allocations.  Mobile source-related programs, such as the Clean Vehicle Rebate Program, received the largest slice of funding, with transit, disadvantaged communities, and forestry programs also at the top of the list.  See AB 1613 or the Governor Brown’s press release for the full breakdown.

The focus on spending cap and trade funds for the benefit of low-income and disadvantaged communities was the subject of AB 1550 and AB 2722.  AB 1550 will provide more flexibility in the existing mandatory allocation of 10% of GHG reduction fund monies to projects located in disadvantaged communities.  It require 5% of such monies to go to projects that benefit low-income households or projects located in or benefiting low-income communities, with the other 5% to projects that benefit low-income households within 1/2 mile of disadvantaged communities or that benefit or are located in low-income communities within 1/2 mile of disadvantaged communities.  Monies for projects in disadvantaged communities will be granted through the Transformative Climate Communities Program under AB 2722.  The Program was allocated $140 million in AB 1613.