Regulatory Developments

Two Major Air Bills Passed by California Lawmakers

By a two-thirds super majority, the California Legislature passed Assembly Bill (AB) 398 to extend the state’s greenhouse gas (GHG) cap-and-trade program to 2030.  Cap-and-trade is the state’s main tool—and, many believe, the most effective tool—for meeting its 2030 goal of a 40 percent reduction in GHGs over 1990 levels. Given the Trump administration’s withdrawal from the Paris Climate Accord, California, under the leadership of Governor Jerry Brown and a supportive legislature, has aggressively assumed the role of the nation’s primary force for climate action.

AB 398 is one of two bills in an environmental package.  The second bill, AB 617, which also passed by a two-thirds majority, establishes a community-based air pollution monitoring program and requirements for the California Air Resources Board (CARB) to develop a statewide strategy to reduce emissions of toxic air contaminants and criteria pollutants in communities affected by a high cumulative exposure burden.

Climate Action

AB 398 takes the following actions regarding the state’s cap-and-trade program:

  • Ensures that carbon pollution will decrease as the program’s emissions cap declines;
  • Cuts the use of out-of-state carbon offsets and brings those environmental benefits back to California;
  • Designates CARB as the statewide regulatory body responsible for ensuring that California meets its statewide carbon pollution reduction targets, while retaining local air districts’ responsibility and authority to curb toxic air contaminants and criteria pollutants from local sources that severely impact public health;
  • Decreases free carbon allowances by over 40 percent by 2030; and
  • Prioritizes cap-and-trade spending to ensure funds go where they are needed most, including the reduction of diesel emissions in the most impacted communities.

Local Air Pollution

Specific provisions of AB 617 would:

  • Expedite retrofits of large industrial emitters by no later than 2023 to clean up old polluting units.
  • Create a state clearinghouse for air quality technology standards to spread best practices and increase accountability on air districts.
  • Enhance fence-line monitoring and reporting of criteria and toxic air pollutants.
  • Implement community-level plans to reduce toxic and criteria emissions from both stationary and mobile sources in hardest-hit areas. Plans must include reduction targets, regulatory measures, deadlines, and an enforcement plan that CARB must approve.
  • Increase air district penalty authority and indexes to inflation to hold polluters accountable for health and safety violations.

Support from Oregon Lawmakers

Following passage of the bills, Brown’s office released a list of 150 “environmental; climate; public health; clean energy and technology; agriculture; food processing; business; labor; local government; community; and utility leaders; researchers and economists; and newspaper editorial boards from across California” that endorse the package (complete list here).

Those applauding AB 398 include two legislators from Oregon, who chair the energy and environment committees in that state’s house and senate.

“Oregon is positioned to be the next state to adopt a similar carbon pricing program that is designed to join the regional trading system, but we need the certainty that California remains committed to its pioneering program beyond 2020,” said Representative Ken Helm and Senator Michael Dembrow. “As the anchor of North America’s regional carbon trading system, California’s leadership to date means smaller states such as ours can more readily and cost-effectively adopt similar systems and link together. This regional approach can extend a carbon price across most of the West Coast, serving as an inspiring model for other states to replicate and similarly benefit from.”