On September 27, 2006, California’s Governor Schwarzenegger signed AB 32—the California Global Warming Solutions Act of 2006—authored by Assembly Speaker Fabien Nunez (D-Los Angeles). California’s landmark bill establishes a comprehensive program of regulatory and market mechanisms to achieve reductions of greenhouse gases (GHG).
California is the 12th largest emitter of carbon in the world despite leading the nation in energy efficient standards and environmental protection.
AB 32 requires the California Air Resources Board (CARB) to develop regulations and market mechanisms that will ultimately reduce GHG emissions by 25 percent by 2020. Mandatory caps on emissions begin in 2012 for “significant” sources, as determined by CARB. The bill provides little indication regarding how GHG reductions will be achieved or how the associated costs will be allocated. Instead, AB 32 delegates these fundamental questions to the CARB along with the extensive questions of implementation and interpretation that are typically delegated to an administrative agency.
AB 32 specifically requires CARB to
- By January 2008 establish a statewide GHG cap to be achieved in 2020 based upon 1990 emissions levels;
- Adopt mandatory reporting rules for “significant” sources of GHG by January 1, 2009;
- Also by January 1, 2009, adopt a plan as to how “significant” GHG emission reductions will be achieved via regulation, market mechanisms or other actions;
- Adopt regulations by January 1, 2011 to achieve the maximum technologically feasible and cost-effective reductions in GHG, including provisions for using both market mechanisms and alternative compliance mechanisms;
- Convene an Environmental Justice Advisory Committee and an Economic and Technology Advancement Advisory Committee to advise CARB;
- All CARB actions must have public notice and opportunity for comment;
- Prior to imposing any mandates or authorizing market mechanisms, CARB must evaluate several factors, including but not limited to impacts on California’s economy, the environment and public health; equity between related entities; electricity reliability, conformance with other environmental laws and ensure that the rules do not disproportionately impact low-income communities.