Category Archives: California Air Resources Board (CARB)

Air Quality, California Air Resources Board (CARB), California Regulation, Cap-and-trade, Climate action, Climate Change, Greenhouse gas emissions

SF CHRON: Climate bills pass California Legislature, Gov. Brown will sign

Repost from the San Francisco Chronicle

Climate bills pass Legislature, await Brown’s OK

By Melody Gutierrez, August 25, 2016
Gov. Jerry Brown said he plans to sign the bills when they reach his desk. Photo: Lenny Ignelzi, Associated Press
Gov. Jerry Brown said he plans to sign the bills when they reach his desk. Photo: Lenny Ignelzi, Associated Press

SACRAMENTO — The California Legislature passed two bills Wednesday that extend the state’s ambitious goals to reduce the impact of greenhouse gases and provide additional oversight on the agency charged with carrying out climate-change policies.

Gov. Jerry Brown praised lawmakers for passing SB32 and AB197, saying passage was an important milestone after similar efforts failed last year amid intense lobbying by the oil industry. Brown said he plans to sign the bills when they reach his desk.

“Legislation is not like Twitter,” Brown said. “You don’t do it in 140 characters or in a few seconds. It takes months and sometimes years. It takes trying, failing, amending and trying again; negotiation. There are 120 members in the Legislature, and not everyone sees things the same way.”

SB32 calls for the state to reduce its greenhouse gas emissions to 40 percent below 1990 levels by 2030. The bill expands on AB32, the California Global Warming Solutions Act of 2006, which requires the state to reduce greenhouse gases to 1990 levels by 2020. The state is expected to reach that target.

“We have discovered, with these policies, our economy continues to go up, but our emissions are going down,” said termed-out state Sen. Fran Pavley, D-Agoura Hills (Los Angeles County). “It’s not a choice between a healthy environment and sound economy. In California, we can do it both ways.”

AB197 directs the California Air Resources Board to prioritize disadvantaged communities in its climate-change regulations, and to evaluate the cost-effectiveness of the measures it considers. The bill also allows the Legislature to appoint two lawmakers as nonvoting members of the board, a move supporters said will provide more transparency and oversight on the agency.

Lawmakers have criticized the lack of diversity on the board, and Assembly Speaker Anthony Rendon, D-Paramount (Los Angeles County) said the board has a credibility problem.

“Any exercise of authority has to be reviewed,” Brown said when asked about the criticism of the board that is largely appointed by him. “Any time you have the power to say no or reduce your high-carbon fuel, reduce your pollutants, change the way a carbonized society works, it will be felt with some sting. That’s the reality, but we want to make sure we are doing it in a way that advances our goals of equity and inclusion.”

Brown unsuccessfully lobbied to have the cap-and-trade program included in SB32, but lawmakers balked because the bill already faced an uncertain future in the Assembly. On Tuesday, the Assembly narrowly passed the bill with one vote to spare, although several Democratic lawmakers changed their votes to approve of the legislation after it passed.

The Senate passed SB32 on Wednesday in a 25-13 vote.

The future of cap-and-trade remains uncertain due to a legal challenge from the California Chamber of Commerce. That uncertainty, along with some fearing SB32 would not be signed into law, contributed to poor auction results this year.

EDITORIAL On Senate Bill 32

Step ahead on climate

California is doubling down in the fight against climate change. After teetering on defeat, a state bill that expands efforts to curb heat-trapping emissions is in the final stages of approval.

The measure, SB32, builds on the state’s plan in 2006 to cut greenhouse gases by 30 percent by 2020, a goal that’s already within reach. With both the Senate and now the Assembly in support, the bill pushes the state to trim climate-altering emissions by 40 percent by 2030.

An accompanying bill would give the state Air Resources Board more power to regulate industrial and refinery emissions in a bow to lawmakers from low-income areas who want more out of climate change ideas. That bill, AB197, is hanging, a target for business lobbyists who want to sink the overall effort. Passing this second measure is essential to complete a comprehensive effort.

Still, the success so far is worth notice. California isn’t budging from its course. White House aides and Gov. Jerry Brown called wavering moderate Democrats for their votes, which the same lawmakers had withheld last year. With the nation stalled on climate change steps, California has a chance to move forward and demonstrate the effects, costs and benefits of its aggressive steps. The ability to add pollution controls to a roaring economy is making the state a globally watched experiment.

The rules need attention. One key mechanism is the cap and trade exchange that obliges polluting industries to purchase credits from cleaner operations. The sales aren’t netting the expected amounts with less than $10 million spent in the latest auction. The money is due to go to pollution-limiting programs such as transit and the struggling high speed rail project.

Defenders of the cap and trade plan say that uncertainty over the legislative outcome is to blame for the weak revenue. Now that the state’s direction is emphatically decided, the value of pollution credits should stabilize, they argue. That’s a claim that needs testing.

On balance, Brown has been a good advocate for climate action, though he does have one notable blind spot: his continued silence on a plan to ship major quantities of coal through a new Oakland port facility for overseas combustion. That project just happens to belong to Phil Tagami, a buddy and political donor to the governor. May we remind the governor of his own words from last year: “It doesn’t make sense to be shutting down coal plants (in the U.S.) and then export it for somebody else to burn in a more dirty way,” he said.

Let the record be clear: Brown’s climate commitment is incomplete until he takes a stand, one way or another, on that Oakland coal train.

 

Air pollution, California Air Resources Board (CARB), California Regulation, Cap-and-trade, Pollution credits

Demand sags for California credits aimed at greenhouse gases

Repost from Associated Press

Demand sags for California credits aimed at greenhouse gases

By Ellen Knickmeyer, Aug. 23, 2016 6:46 PM EDT

SAN FRANCISCO (AP) — California’s latest carbon auction brought disappointing results Tuesday as litigation and lagging support by lawmakers weigh down the state’s landmark programs combating climate change.

State officials said only 34 percent of the available carbon pollution credits were sold in the latest auction under the program, which requires companies that emit climate-changing gases to buy the pollution permits.

It was a slight rebound from this spring, when investors bought just 10 percent of the pollution credits offered, signaling a rocky period for the state’s overall campaign against climate-changing pollution from fossil fuels.

The cap-and-trade program is a keystone of Gov. Jerry Brown’s efforts to reduce climate-changing pollution in California and is being watched closely around the world as other governments put together efforts to fight climate change.

Dave Clegern, spokesman for the state air board that runs the effort, said the program is adapting as it should to shifts in the market.

“The California cap-and-trade program is first and foremost a greenhouse gas reduction program, and it is working” to bring down carbon pollution from fossil fuels, Clegern said in an email.

Pollution credits consistently sold out after the cap-and-trade program began in 2012, bringing in hundreds of millions of dollars quarterly for initiatives that reduce greenhouse gases. The proceeds are used to fund a high-speed rail project pushed by Brown, along with other transit construction and energy conservation efforts.

This year, demand plummeted amid uncertainty about the program’s viability. The result was the steep decline in revenue at a spring auction, prompting concerns that funding won’t be available long-term to continue the programs.

Brown, backed by environmental groups and some Democratic lawmakers, is struggling to win support for extending the state’s landmark global warming law amid opposition from oil companies, Republicans and moderate Democrats in the Legislature.

Republican lawmakers called the latest middling auction results a failure and a flop, and called again for the state to abandon the cap-and-trade program.

However, the state Assembly took a critical step Tuesday when it advanced the latest global warming legislation to the state Senate, where it is also expected to pass before next week. Both chambers are dominated by Democrats.

The California Chamber of Commerce is fighting cap-and-trade in court, claiming it is an illegal tax that did not go through the proper legislative approval process.

The lawsuit in particular is scaring away some potential investors, said Dan McGraw, a Houston-based carbon analyst with the ICIS trade publication.

“Potentially there’s a lot to lose if the California Chamber of Commerce wins that case,” McGraw said.

The growing backlog of unsold carbon credits also is weighing on the cap-and-trade program, he said.

“They’re going through something every carbon market has gone through,” the analyst said. “The question is: What do you do now?”

The latest auction results show that the market needs certainty about the state’s long-term cap and trade program, through either the Legislature or state voters vouching for its future in a ballot initiative, Nancy McFadden, Brown’s chief of staff, said in a statement.

Biofuels, California Air Resources Board (CARB), California Energy Commission, California Regulation, Cap-and-trade, Clean fuel standard, Climate Change, Ethanol, Global warming, Low carbon fuel standard, Oil Industry, Oil industry lobby

Sacramento: Oil firms challenge state over clean fuel

Repost from SFGate

Clean fuels shaping up as fight of the year in Sacramento

New battle lines drawn in fight over low-carbon policy
By Laurel Rosenhall, CALmatters, Mar 5, 2016 Updated: 3/6/16 3:33pm
A pending fight over low-carbon fuel standards could hinge on how they affect the state’s cap-and-trade system for carbon emissions. Photo: Ted S. Warren, AP
A pending fight over low-carbon fuel standards could hinge on how they affect the state’s cap-and-trade system for carbon emissions. Photo: Ted S. Warren, AP

A Harvard economist known globally for his work on climate change policy sat in the Sacramento office of the oil industry’s lobbying firm recently, making the case that California is fighting global warming the wrong way.

The state has a good cap and trade system, Robert Stavins said, but some of its other environmental policies are weakening it. He pointed to a rule known as the low carbon fuel standard, which is supposed to increase production of clean fuels.

Environmental advocates consider it a complement to the cap and trade program that makes industry pay for emitting carbon; Stavins had other words.

“It’s contradictory. It’s counter-productive. It’s perverse,” he said. “I would recommend eliminating it.”

California’s low carbon fuel policy is shaping up as a major fight this year for the state’s oil industry, an influential behemoth that spent more than $10.9 million lobbying Sacramento last year, more than any other interest group.

“There’s a storm coming,” biofuels lobbyist Chris Hessler told a roomful of clean energy advocates at a recent conference on low carbon fuels. “If we don’t meet this attack vigorously, we’re all going to be in a lot of trouble.”

NEW BATTLE LINES

The oil industry was front and center in the biggest fight to hit the state Capitol last year: a proposal to cut California’s petroleum consumption in half over the next 15 years to slow the pace of climate change. The industry won its battle when lawmakers stripped the oil provision from Senate Bill 350.

But California’s larger oil war is far from over, and the newest battle lines are beginning to emerge.

Gov. Jerry Brown is plowing ahead with plans to cut vehicle oil use in half through executive orders and regulations like the low carbon fuel standard. The standard requires producers to cut the carbon intensity of their fuels 10 percent by 2020. To reach the standard, refineries will have to make a blend that uses more alternative fuels — like ethanol — and less oil.

The program was adopted in 2009 but was locked in a court battle for years. California regulators prevailed, and took action last year to resume the program. Now producers must start changing the way they formulate their fuel or buy credits if their product is over the limit.

That’s led to higher costs for fuel makers, which they are passing on to consumers at a rate of about 4 cents per gallon, according to the California Energy Commission. But the price is likely to keep increasing, the oil industry warns, as it gets tougher to meet the standard that increases over time.

Which is where Stavins’ argument comes in. It goes like this: the cleaner fuels required by the low carbon fuel standard will emit less greenhouse gas. That will reduce the need for fuel producers to buy permits in the cap and trade system (which makes industry pay for emitting climate-warming pollution) and create additional emissions by allowing other manufacturers to buy the pollution permits.

Less demand will also depress prices on the cap and trade market.

Stavins is the director of Harvard’s Environmental Economics Program and part of the Intergovernmental Panel on Climate Change, a prestigious group of experts who review research for the United Nations.

He’s also an advisor to the Western States Petroleum Association, which paid him to make the trip to Sacramento, where he talked with reporters before a day of meetings with lawmakers and business leaders.

Environmental advocates and California clean air regulators reject his view. They say the fuel standard works in harmony with other carbon-reducing programs and it’s an important piece of California’s effort to achieve its climate change goals.

“One of the major goals of the low carbon fuel standard… is to drive innovation of new and alternative low carbon fuels,” said Stanley Young, spokesman for the California Air Resources Board. “The cap and trade program on its own cannot do that.”

Alternative fuel producers gathered in a ballroom near the Capitol days after Stavins’ visit to Sacramento. During a presentation on the rising price of low carbon fuel credits, Hessler, the biofuels lobbyist, warned that the program is coming under “political attack.”

He defended the fuel standard by saying the regulation limits the price of the credits, and the cost to consumers will be kept down as some fuel producers make money by selling credits to others. He urged conference participants to share his information with California policymakers to counter opposition to the low carbon fuel standard.

“We’ve got to be ready for this,” Hessler said.

HOW THINGS COULD GO DOWN

A fight last year over a low carbon fuel standard in the state of Washington may provide some clues about how things could go down here.

There, Democratic Gov. Jay Inslee proposed a low carbon fuel standard but failed to earn enough support for it in the Legislature. The fuel standard became a bargaining chip for Republicans in negotiations about funding for transportation infrastructure.

Here in California, lawmakers and Gov. Brown are also negotiating a plan to pay for a backlog of repairs to state roads and highways. Brown has pitched spending $36 billion over the next decade with a mix of taxes and other revenue sources.

Republican votes are necessary to reach the two-thirds threshold for approving new taxes. So far, Republicans have balked at the plan, with some suggesting that the fuel standard should be included in the negotiations.

“As we’re having the discussions about transportation funding in general in California, and transportation taxes in particular, this ought to be part of the discussion,” said Assemblyman Jay Obernolte, R-Hesperia.

It’s a message echoed by the president of the Western States Petroleum Association, which advocated against the low carbon fuel standard in Washington.

Catherine Reheis-Boyd said she wants California lawmakers to “take a very hard look” at the low carbon fuel standard as they consider the future of climate change policies and the desire to repair the state’s roads.

“All those things interplay,” Reheis-Boyd said. “That’s a big conversation. I think people across the state are willing to have it, and I think we’re at a pivotal point to have it this year.”

CALmatters is a nonprofit journalism venture dedicated to explaining state policies and politics. For more news analysis by Laurel Rosenhall go to https://calmatters.org/newsanalysis/.
Air Quality, California Air Resources Board (CARB), California Regulation, Carbon emissions, Clean fuel standard, Climate Change, Emissions caps, Gasoline prices, Oil industry lobby

California regulators restore emissions-cutting fuel rule

Repost from the Associated Press

California regulators restore emissions-cutting fuel rule

By Judy Lin, Sep. 25, 2015 5:49 PM EDT
Mary NIchols, Barbara Riordan
Mary Nichols, left, chairwoman of the California Air Resources Board, applauds after the board restored ambitious rules to cut transportation fuel emissions 10 percent within 5 years, during a hearing in Sacramento, Calif., Friday, Sept. 25, 2015. By a 9-0 vote the board restored rules requiring a 10 percent cut in carbon emissions on fuels sold in the state by 2020, despite oil industry objections that it could drive up gas prices. At right is ARB board member Barbara Riordan. (AP Photo/Rich Pedroncelli)

SACRAMENTO, Calif. (AP) — California regulators on Friday restored ambitious rules to cut transportation fuel emissions 10 percent within 5 years, a decision that gives Gov. Jerry Brown a boost for his climate change agenda.

The rules further strengthen California’s toughest-in-the-nation carbon emissions standards, but oil producers warn the changes could drive up costs for consumers at the gas pump.

The changes are expected to add a few cents a gallon to the cost of gasoline and diesel fuel in the state that already has some of the highest gas prices in the nation. The state estimates a typical commuter will pay an extra $20 to $24 in 2017, increasing to $52 to $56 in 2020.

“We are on a path to reduce our dependence on petroleum and this program is a key piece of that action,” Mary Nichols, chairwoman of the California Air Resources Board, said ahead of the vote.

Brown, a Democrat, has vowed to intensify his fight against climate change after the oil lobby helped kill a Democratic legislative proposal earlier this month to slash statewide petroleum use by half in 15 years. The board is the state’s top regulatory agency to enforce rules aimed at reducing air pollution.

Regulators voted 9-0 to re-adopt its low-carbon fuel standard, which requires producers to cut the carbon content of fuels 10 percent by 2020 to help the state meet its emission-reductions goals.

The program was initially adopted in 2009 but the reduction target has been frozen at 1 percent because of a court fight. Friday’s vote allows the state to resume its program; modifies rules in response to industry concerns about price spikes; and gives companies more credits for using renewable hydrogen and other investments to reduce pollutants.

Supporters say the program is worthwhile because it will encourage greater use of cleaner biofuels and electric vehicles, which can be cheaper to operate than those powered by gasoline or diesel.

“This puts it back on track,” Bill Magavern, policy director at Coalition for Clean Air, an environmental advocacy group, said after the vote. “We have other programs that address vehicle technologies and vehicle miles traveled, and this is the one that tells oil companies to reduce the carbon intensity of their fuels.”

Oil producers counter that the rules are unworkable and too costly. They said the standard will impact consumers as the companies try to comply with the mandate or face being shut out of the market.

Catherine Reheis-Boyd, president of the Western States Petroleum Association, which represents oil companies, said the low carbon fuel standard jeopardizes the state’s energy future and adds uncertainty.

“California motorists need to know what is coming and how these regulations will impact transportation fuels,” Reheis-Boyd said in a statement.

Unlike other rules the state has adopted requiring cleaner-burning fuel or more fuel-efficient vehicles, the standard, first proposed in a 2007 executive order from then-Gov. Arnold Schwarzenegger, calls for counting all the pollution required to deliver gasoline, diesel or alternative fuels to in-state consumers — from drilling a new oil well or planting corn to delivering it to gas stations.

In addition to tailpipe emissions, it includes factors such as whether an ethanol factory uses coal or natural gas to power production or an oil rig uses diesel fuel to drill.

Regulators are targeting transportation fuels because California’s roughly 30 million vehicles account for about 40 percent of the state’s emissions — the largest source. The rest comes from generating electricity and industrial manufacturing, as well as commercial, residential and agricultural uses.

All fuels are measured against a baseline pollution standard. If a fuel falls above or below the baseline, it generates a credit or deficit that other producers can buy and sell to meet the target.

It’s up to fuel producers to figure out how to meet the goal, whether by changing production methods, using ethanol or electric vehicles for transportation or buying credits on the market.

After the rule’s initial adoption, out-of-state refiners and ethanol companies were among those who sued, arguing that transporting the fuels into California alone made them less competitive against in-state producers. They argued the law unconstitutionally limits interstate commerce.

The U.S. Supreme Court let stand a 2013 appeals court decision upholding the fuel standard.

Opponents continue to challenge the state’s authority to regulate out-of-state production. Oil firms are also trying to block a similar standard enacted in Oregon, the only other state with a clean fuel standard.

Friday’s move to restore California’s program is not related to Volkswagen drawing international attention for violating separate federal and state rules that regulate emissions from vehicles.