California Releases Draft Scoping Plan for GHG Emissions Reduction
This post was written by Todd Maiden, Lawrence Demase, Jennifer Smokelin, Louis Naugle, and John Lynn Smith.
On June 26, 2008 the California Air Resources Board (“CARB”) released a draft of California’s scoping plan for the reduction of greenhouse gas (“GHG”) emissions. This was a major step towards the implementation of Assembly Bill (“AB”) 32, the California Global Warming Solutions Act of 2006. CARB will continue to solicit public input on the draft scoping plan until early October. A revised proposed scoping plan will be then released and will be considered by the CARB in November.
The draft plan calls for cutting greenhouse gas emissions to 1990 levels by the year 2020. While this is a 30% reduction from “business-as-usual” emission levels (the level that emissions would reach by 2020 without any attempts at reduction), it is only about a 10% reduction from today’s levels. The 2020 goal is not the end of the emission reduction effort. By 2050, California hopes to reduce emissions to 80% below 1990 levels. The reduction plan for 2020 will provide the framework for successful implementation of the long-term reduction plan.
The scoping plan envisions a California at the cutting edge of green technology, much of which is already available. With better building techniques and increased use of existing technologies, new homes will have a near-zero carbon footprint. Hybrid vehicles, which are already widely available, will grow in variety and popularity. Municipal development will also evolve, as cities will be designed to increase walkability. Public transportation will become a more universally available option and the development of a statewide highspeed rail system will provide an alternative to air travel.
This plan demonstrates California’s commitment to remaining at the forefront of environmental protection, while at the same time promoting statewide economic growth. Rather than advocating only a few methods of emission reduction, the scoping plan calls for a comprehensive approach. CARB recommends more than 20 different methods for cutting emissions. Key elements of the draft scoping plan include:
- Expansion and strengthening of existing energy efficiency programs and building and appliance standards.
- Expansion of the use of renewable energy.
- Development of a cap-and-trade system, in conjunction with the other states and Canadian provinces that make up the Western Climate Initiative.
- Implementation of increased fuel efficiency standards.
The cap-and-trade system, which could engender large-scale emission reductions, is potentially controversial for both industry and environmental groups. The system, which the scoping plan envisions as functional by 2012, has yet to be fully developed. In theory, the cap-and-trade system will improve the costeffectiveness for industries which traditionally have high rates of emission, and which would incur high technological costs to reduce their emissions . The system will allow these businesses to obtain “allowances” from other businesses for whom it is feasible to reduce emissions beyond the capped levels. A major potential issue is how business would trade these allowances and how much emissions could be offset through allowances. Most likely, California will implement a system which combines the giving of allowances by the state with the auctioning of allowances by businesses.
While there are certain costs associated with emission reduction, on the whole CARB estimates that the scoping plan will actually grow the California economy slightly. With more energy efficient facilities, businesses could reduce energy costs per-square-foot by as much as 40%. Furthermore, the improvement of air quality should increase the health of the work-force, reducing the number of work days lost. Implementation of the scoping plan will also continue to make California an attractive economy for clean tech venture capital investment. In 2006, California received just over $1 billion in clean tech investment, approximately 40% of the entire clean tech investment market.
