9.2: California’s Climate Legislation

California’s recent wave of legislative efforts on climate change, summarized in Table 9.2.1, was built on the air quality and energy efficiency regulation described in the previous section and can be traced back to 2000. In a piece of legislation authored by state senator Byron Sher, California created the California Climate Action Registry to enable major sources of greenhouse gases to report their emissions and gain credit for “early action” to reduce CO₂ and other greenhouse gases. These efforts to collect baseline data helped build technical expertise, as California’s regulators partnered with other regions, cities, states, and countries around the world to pool information and refine the methodologies for counting greenhouse gases.

Table 9.2.1 Major climate policy legislation in California

Year Enacted	Bill	Key Provisions
2000	SB 1771	Established the California Climate Action Registry to enable polluters to report their emissions
2002	AB 1493 (Pavley bill)	Required CARB to adopt regulations that achieve the “maximum feasible and cost-effective reduction of greenhouse gas emissions” from cars and light trucks
2002	SB 1078	Required 20% of retail electricity sales to come from renewables by 2017 (Renewables Portfolio Standard)
2006	AB 32 (California Global Warming Solutions Act of 2006)	Set target of reducing greenhouse gas emissions to 1990 levels by 2020, required CARB to develop a plan to achieve that target, and authorized the use of cap and trade
2008	SB 375 (Sustainable Communities and Climate Protection Act of 2008)	Required CARB to develop regional targets for greenhouse gas emissions and required regional agencies to develop integrated land use and transportation plans to achieve those targets
2011	SB 2-IX	Increased Renewables Portfolio Standard to 33% by 2020
2012	SB 535	Required at least 25% of cap-and-trade revenue in the Greenhouse Gas Reduction Fund to be spent on projects that benefit disadvantaged communities
2015	SB 350 (Clean Energy and Pollution Reduction Act of 2015)	Increased Renewables Portfolio Standard to 50% by 2030
2016	SB 32	Set target of reducing greenhouse gas emissions to 40% below 1990 levels by 2030
2016	AB 197	Required CARB to prioritize regulations that result in direct emission reductions (implicitly, command and control)
2017	AB 398	Extended cap-and-trade program through 2030
2017	AB 617	Required CARB to monitor and address local air pollution in the worst-affected communities, addressing some environmental justice concerns from cap and trade
2018	SB 100	Increased Renewables Portfolio Standard to 60% by 2030 and set goal of zero-carbon retail electricity by 2045

Source: Adapted from California Air Resources Board. California Climate Change Legislation. https://www.climatechange.ca.gov/sta...gislation.html.

Cleaner cars

The first major step toward regulating emissions, rather than just counting carbon, came in 2002, with the passage of a bill (AB 1493) from assembly member Fran Pavley to regulate the climate impact of motor vehicles. At the time, advocacy group Environmental Defense called it “the most important climate bill passed anywhere in the U.S. in the past two decades.” Prior to the “Pavley bill,” as it came to be known, emissions regulations for cars and light trucks had been limited to the pollutants that affect local air quality, such as carbon monoxide, oxides of nitrogen, and hydrocarbons. Carbon dioxide was not considered a “pollutant.”

Car and light truck emissions are regulated by the Environmental Protection Agency (EPA). Because of long-standing smog in Southern California, however, California has a unique position under the federal Clean Air Act and can set its own, more stringent standards subject to a “waiver” from the EPA. Other states can follow California’s stricter standards or default to the EPA rules. It was California’s special status that the Pavley bill made use of, in order to add greenhouse gases to the list of regulated pollutants. The Bush administration first delayed and then rejected California’s waiver request, which would have allowed the new standards to take effect, but the waiver was quickly approved in 2009 once the Obama administration took office. Thus, while California continued to be at the forefront of national climate policy efforts, it could be most effective when its policies had the support of—or at least no opposition from—the federal government.

In what would become a common refrain for California’s climate legislation, the Pavley bill did not set specific mandates for emission reductions. Instead, it required CARB to “develop and adopt regulations that achieve the maximum feasible and cost-effective reduction of GHG emissions from motor vehicles.” Under the subsequent regulations, CARB required manufacturers to reduce per-mile emissions by about 30% by 2016, and by about 45% by 2020. Most of this reduction was to be achieved through improved fuel economy—for example, using turbochargers and more efficient transmissions in new cars—but the targets could also be satisfied through reductions in hydrofluorocarbon (HFC) emissions from air conditioners. HFCs are an important short-lived climate pollutant, as discussed in Chapter 15.

While the direct effect of the bill was limited to vehicles sold in California, 14 other states, accounting for almost 40% of US new vehicle sales, followed suit and adopted the Pavley standards, and several more were poised to do so. More importantly, the Obama administration later used them as the basis for even more aggressive federal regulations—negotiated together with California. Thus, California’s law ended up influencing greenhouse gas limits for new vehicles for the entire United States. Without California’s initiative, which demonstrated how ambitious reductions were technologically possible at a reasonable cost, federal regulation may well have been more limited.

Assembly Bill 32

Figure 9.2.1 Fran Pavley. As a state assembly member and senator, Fran Pavley authored several key pieces of climate legislation. Photograph by Jonathan Van Dyke, UCLA. Used by permission.

While the Pavley standards were confined to the transportation sector, economy-wide greenhouse gas reduction goals followed soon after. An executive order from Governor Arnold Schwarzenegger set targets of returning to 2000 levels by 2010, to 1990 levels by 2020, and to 80% below 1990 levels by 2050—some of the most ambitious goals in the country. “I say the debate is over. We know the science. We see the threat, and we know the time for action is now,” said the governor when signing the executive order.

Subsequent legislation gave the 2020 target the force of law and provided the mechanisms to achieve the emission reduction goal. Coauthored by Fran Pavley and Assembly Speaker Fabian Núñez, Assembly Bill 32 (AB 32), named the California Global Warming Solutions Act of 2006, was the centerpiece of the state’s early climate change legislative efforts.

AB 32 is a short and simple bill, coming in at just 13 pages. (For comparison, the Waxman-Markey bill to introduce a federal cap-andtrade system, which passed the US House of Representatives but failed in the Senate, ran to more than 1,400 pages.) The main requirement of AB 32 was simply to return California’s greenhouse gas emissions to 1990 levels by 2020, which in practice meant a reduction of 25% to 30% below business-as-usual emissions. The bill said very little about how to do that and did not even specify what “1990 levels” meant in terms of the number of tons of CO₂. The bill authorized, but did not mandate, a “market-based compliance mechanism” (that is, cap and trade) and more generally did not concern itself with the details of how to reduce greenhouse gas emissions.

Box 9.2.1  Promoting Low-Carbon Fuels

The Low Carbon Fuel Standard (LCFS) is a good example of one of the hybrid policies pursued by CARB to achieve the AB 32 goal. Here, hybrid means that the LCFS combines regulations with market mechanisms to achieve its goal of reducing the carbon intensity of transportation fuels.

The initial LCFS regulation, adopted by CARB in 2009, required a 10% reduction in the greenhouse gas intensity of transport fuels by 2020. In 2018, the program was extended with a target of a 20% reduction by 2030. These targets are the heart of the regulatory portion of the standard.

The market mechanisms allow the targets to be met at lower cost and with increased flexibility. Oil companies that find it difficult or expensive to reduce carbon intensity can purchase credits from other fuel suppliers, such as electric utilities or biofuel producers.

The LCFS factors in the full life cycle emissions of different fuels. Those include emissions from oil extraction and refining, from combustion (burning) of the fuel in a motor vehicle, and from growing the raw materials for biofuels. For example, oil from the Canadian tar sands has a higher carbon intensity than conventional crude oil, while biofuels such as ethanol tend to have a lower carbon intensity, as does electricity

Instead, the bill gave CARB responsibility for determining the 1990 baseline and developing a strategy to achieve the emission reduction target. The bill set a series of interim deadlines and specified objectives such as cost-effectiveness, technological feasibility, and equity. However, it said nothing about the types of regulations and other policies that should be implemented to meet the emissions goal.

CARB’s blueprint to achieve the AB 32 goal is detailed in the Climate Change Scoping Plan, adopted in December 2008 after extensive technical analysis and public process and updated in 2014 and again in 2017. The first Scoping Plan set out both previously approved and new measures to reduce emissions by 174 million metric tons of CO₂ equivalent (MMT CO₂e). The largest cuts (Figure 9.2.2) were to be achieved through the Pavley vehicle emissions standards; a new Low Carbon Fuel Standard (Box 9.2.1); energy efficiency regulations; requirements for 33% of electricity to come from renewable sources (the Renewables Portfolio Standard, or RPS, discussed in Section 9.4); and cap and trade, which is discussed in Section 9.3.

Figure 9.2.2 Planned sources of emission reductions in California’s first Climate Change Scoping Plan. The reductions are those counted toward the 2020 target. Values indicate MMT CO₂e. Data from California Air Resources Board 2008.

Leaving the details of how to achieve the AB 32 goal to a technocratic process within an existing regulatory agency brought many advantages. To some extent, it depoliticized decisions over specific emission reduction measures—in stark contrast to the federal Waxman-Markey proposal, which included intricate side deals negotiated with seemingly every affected industry. AB 32 allowed lawmakers to focus on the overall goal rather than the details of how it would be achieved. And it took advantage of the institutional capacity of CARB, which as discussed in Section 9.1, had grown into one of the country’s most technically adept regulators since the 1970s.

The successors to AB 32

Figure 9.2.3 California emissions trends and targets. Reproduced with permission from the California Air Resources Board.

More recent legislation has built on the foundation of AB 32. In particular, SB 32, enacted in 2016, ambitiously and vastly extends the state’s targets beyond the 2020 horizon of AB 32, to enshrine a target of reducing emissions to 40% below 1990 levels by 2030. To the extent that AB 32 picked the low-hanging fruit, SB 32 represents an even greater commitment by the state. Most radically, outgoing Governor Jerry Brown issued an executive order in 2018 committing California to attain total, economy-wide carbon neutrality by 2045 and to achieve and maintain “net negative emissions” thereafter.

More-specific laws have also taken aim at specific sectors or focused on specific policies. The Sustainable Communities and Climate Protection Act of 2008 (SB 375) targets emission reductions from integrated transportation and land use planning; this effort is discussed in detail in Section 9.5. AB 398 extends the cap-and-trade program to 2030, and the accompanying AB 617 seeks to ensure that the benefits are distributed equitably throughout California (Section 9.3). Meanwhile, requirements for renewable energy have been ratcheting up (Section 9.4).

Thus, in the last two decades California’s climate goals have become more ambitious. Not only have the targets been extended and deepened, but they go far beyond aspirational rhetoric and are accompanied by extensive analysis and an effective implementation mechanism. The AB 32 target for 2020 seems likely to be achieved. By 2016, emissions had already fallen to below the required level (Figure 9.2.3), and so, provided that emissions do not tick up between 2017 and 2020, California will attain this major landmark.

California’s steadily increasing commitments may seem inexorable, given the progressive political climate in the state and strong support from successive governors, the legislature, and the voters. Both AB 32 and the earlier Pavley clean-cars legislation were passed by a Democratic-controlled legislature, with support and leadership from Democratic and Republican governors, Gray Davis and Arnold Schwarzenegger. However, they did not become law in a political vacuum or in the absence of political opposition. The car industry vocally opposed the Pavley bill to limit emissions from motor vehicles, on the grounds that it was a “veiled attack on California’s family vehicles,” such as SUVs and pickup trucks. AB 32 itself was the subject of a referendum (Proposition 23) in 2010, which would have effectively repealed the law by suspending its provisions until the statewide unemployment rate fell to 5.5% for a full year. (Rarely has statewide unemployment fallen that low for that long; at the time of the campaign, it was about 12%. Thus, “suspension” would have meant effective repeal.)

Figure 9.2.4 Voting patterns to suspend AB 32. The colors indicate the percentage in each county voting “Yes” on Proposition 23, which would have suspended and effectively repealed AB 32. Note that the support for suspension was strongest in the more remote northern and mountainous counties and was weakest on the coast, including in cities such as San Francisco and Los Angeles. Data from California Secretary of State. Map by Jesus Contreras, UC Santa Cruz.

Figure 9.2.5 Anti–Proposition 23 campaign rally. The “No” campaign against AB 32 suspension focused on the fact that the initiative was backed by out-ofstate oil companies such as Valero. This rally took place at UC Santa Barbara. Photograph by Ron V. Ocampo, The Bottom Line. Used by permission.

The Proposition 23 campaign, however, ended up highlighting the depth of California voters’ support for climate policy and its air quality co-benefits. The anti–AB 32 measure lost by more than 2.2 million votes, with 38% in favor and 62% against (Figure 9.2.4). Campaign contributions from some mainly out-of-state oil companies were outweighed by pro–climate policy donations from individuals, nonprofit organizations, and labor unions. Many key organizations, including electric utilities, the California Chamber of Commerce, and oil companies such as Chevron, remained neutral or were opposed to the repeal measure. Partly, this broad support reflects California’s low-carbon economy; indeed, “green jobs” were a key message of the “No on Proposition 23” campaign. But the referendum also reflected the political interests of many businesses, whose leaders evidently decided that energy conservation, low-carbon fuels, and CO₂ mitigation are the route to a profitable future.