• Draft Framework for Climate Change Restrictions
  • July 25, 2008
  • Law Firm: Best Best & Krieger LLP - Riverside Office
  • On June 26, 2008, the California Air Resources Board (“ARB”) announced the release of its Climate Change Draft Scoping Plan (the “Draft Plan”).  As proposed, the Draft Plan would have widespread impacts on governments, industries, and individuals throughout California.  The Draft Plan proposes concrete actions that can be taken to meet the mandate of the California Global Warming Solutions Act of 2006 (“AB 32”).  AB 32 requires reducing California’s greenhouse gas emissions to 1990 levels, a reduction of 30 percent, over the next 12 years. 

    What will it do?  Who will it impact?

    The Draft Plan seeks to benefit the environment and public health while simultaneously improving efficiency, driving innovation, and stimulating growth in the “cleantech” sector.  The Draft Plan would affect many sectors of California’s economy, primarily through the following programs:

    Cap-and-Trade System – The Draft Plan proposes a broad cap-and-trade program that would be linked to the Western Climate Initiative being implemented in seven states and three Canadian provinces.  The program would allow emitters of greenhouse gases to purchase credits when they exceed their permitted levels.  This program will impact all industries and agencies that will need to obtain permits for emitting greenhouse gases.

    Cleaner Automobiles – The Draft Plan would establish new restrictions on the maintenance of light-duty vehicles and retrofitting of medium/heavy-duty vehicles.  If implemented, these restrictions would apply to industries and public agencies that service their own vehicle fleets.  The Draft Plan also seeks to implement the California Clean Car Law, which requires automobile manufacturers to lower greenhouse gas emissions to the maximum extent technologically feasible.  Some uncertainty exists for passing this law because the federal EPA originally prevented California from adopting it in December 2007, but ARB is apparently assuming that California will be allowed to eventually implement it.

    Renewable Energy Production – The Draft Plan would require that California utility providers generate at least one-third of their energy from renewable energy sources.  This will create growth in renewable energy industries such as wind, solar, and geothermal energy production.  

    Efficient Energy Use – The Draft Plan also seeks to increase appliance energy efficiency standards and create new “green building” standards that will make the design and construction of buildings more focused on conserving energy and preventing waste.

    Local Government Actions – The Draft Plan encourages local governments to set targets for reducing emissions within their jurisdictions, and incorporate reduction measures into their general plans.  The Draft Plan discusses several community-based climate change initiatives that local governments will be responsible for, including: energy use, waste and recycling, water and wastewater systems, transportation, and community design.  If adopted, these requirements will impact many of the planning decisions made by cities and counties.

    Water Conveyance and Use – The Draft Plan seeks to reduce per capita water use by twenty percent in the next twelve years.  This would be achieved through improvements in water use efficiency and water recycling, which would reduce electricity demand from the water sector.  The Plan discusses implementing a new charge on water bills for end-user water efficiency improvements, system-wide efficiency projects, and water recycling programs. 

    Other Initiatives – The Draft Plan highlights other programs, including: developing a new low-carbon fuel standard; reducing the release of greenhouse gases from leaking and disposed refrigeration systems; enhancing carbon sequestration through forest biomass preservation; improving efficiency in moving goods on trucks and cargo ships; creating a high-speed rail system to reduce emissions from other transportation sources; increasing waste diversion and recycling to control landfill methane; increasing efficiency and use of agricultural wastes for sustainable energy production; and assessing large industrial sources. 

    ARB anticipates that implementing the Plan will increase California’s gross domestic product from the improved efficiencies.  The Plan also recommends that carbon fees should be implemented to help fund the State’s commitment to reducing greenhouse gases.  These fees would either be widely spread across sectors of the economy that emit the majority of greenhouse gases or levied on fossil fuels produced in or imported to California. 

    The Next Step

    Currently, ARB is inviting public comments on the Plan through a series of public workshops across the State from July 8th to August 15th.  A final draft is scheduled to be completed in early October and adopted by the end of the year.  Over the next two years, ARB anticipates that all measures of the Plan will be reviewed and formalized through the regulatory process.