Earlier this month, the California Air Resources Board (CARB) kicked off its every-five-years Scoping Plan process with a series of virtual workshops. CARB spent several days presenting these workshops on several topics, including separate workshops on natural and working lands, environmental justice and equity, and the transportation and electricity sectors.
CARB is evaluating progress toward the statewide goal of 40% emissions reductions below 1990 levels by 2030 as well as determining a path toward Governor Brown’s Executive Order B-55-18 which requires the state to achieve Carbon Neutrality by 2045. Complicating that process, Governor Newsom just days ago asked CARB and the California Public Utilities Commission to evaluate a 2035 Carbon Neutrality goal.
At the conclusion of each workshop the Environmental Justice Advisory Committee, formed pursuant to AB 32 (Nunez, 2006) was provided with a platform to make opening public comments, followed by general comments from the public. Opening comments from the public on July 9 provided a glimpse into the various parties’ opinions on how California should meet its AB 32 goals, and additional opportunities to comment will be available as more specific workshops are conducted.
The next Scoping Plan Workshop is scheduled for July 20, which will go into detail on the state’s natural and working lands sector.
As we evaluate how to meet our post-2030 goals, it is important that we continue to strive for an appropriate economic and environmental balance. CalChamber supported the bipartisan effort to reauthorize cap-and-trade to meet our 2030 goals for this reason. As set forth in AB 32, which guides the Scoping Plan process, the state must evaluate technological feasibility and cost-effective sources to reach our goals. A few overarching suggestions are below.
California Must Remove Barriers to Innovation
The Scoping Plan process should include a robust discussion around the barriers companies currently face in investing in innovative emissions reductions techniques in California. Other than in cap-and-trade, California has tended to “choose” a technology that it deems worthy of support. For example, many zero emission resources such as nuclear and large hydro are left out of the state’s limited statutory definition of “renewable.” So, of course, companies have been reluctant to invest in other technology that also reduces emissions but will not be acceptable to California.
Building anything in California is very time consuming. CARB should be collaborating with other state and local agencies to identify other barriers to entry, such as where land use and entitlements can be streamlined or tax credits can be altered to uncap research and development limits. If California is going to take a statewide approach to climate change, it must also evaluate statewide barriers to technological development.
CARB Should Avoid Sector-By-Sector Limits
The Scoping Plan process should address pathways for meeting our statewide emissions reductions goals and avoid imposing restrictions on any one sector of the economy, as this could have significant ripple effects.
Focusing on a statewide approach to carbon neutrality is important for several reasons. First, California’s economy is largely intertwined, and impacts to one sector carry through to others. For example, imposing significant burdens on the agricultural sector that may substantially risk an increase in the price of food, which would in turn affect in-state grocery retailers, farmers’ markets, as well as revenue from state exports from one of the largest American markets for food. Likewise, impacts to the transportation sector have ripple effects throughout the entire economy, which, if not done with intention in solving externalities, also risk increasing costs to all goods and services that are transported around and out of our state.
A sector-by-sector approach may run the risk of increasing leakage and sending carbon emissions (and revenue generating new low and zero emission technology) out of state when increased compliance costs deter multiple sectors of the economy from expanding or investing in California. In identifying scenarios to meet our 2045 goals, CARB must continue to focus on statewide emissions and the interaction between emissions reductions and the entire statewide economy in evaluating cost effectiveness.
California Must Identify Incentives for Emission Reductions
CARB should avoid an all-or-nothing approach, as balance between source reduction and technology will be necessary to meet our climate goals. California has a substantial opportunity to be a leader not only in emissions reductions at the source, but in innovations to capture, store, or otherwise address existing greenhouse gas (GHG) emissions. Companies are making investments in achieving voluntary carbon reduction goals, investing in zero and low emission transportation options or helping them come to market, and are supporting companies that can provide those benefits as quickly and cost-effectively as possible to address the climate crisis. Companies are looking toward technology like carbon capture and sequestration to address hard-to-decarbonize sectors of the economy and a burgeoning carbontech market is emerging , wherein companies are researching innovative ways to utilize and sequester carbon-rich materials, or CO2 itself, in new or replacement products. According to a recent report by President Biden’s Council on Environmental Quality:
To reach the President’s ambitious domestic climate goal of net-zero emissions economy-wide by 2050, the United States will likely have to capture, transport, and permanently sequester significant quantities of carbon dioxide (CO2). In addition, there is growing scientific consensus that carbon capture, utilization, and sequestration (CCUS) and carbon dioxide removal (CDR) will likely play an important role in decarbonization efforts globally; action in the United States can drive down technology costs, accelerating CCUS deployment around the world.
Companies are scrambling to address the climate crisis in any way possible, but barriers to entry for some sectors—like a lack of a reliable market in some sectors or carbon credits or regulatory certainty in others for this technology—remain. California should be seeking opportunities to create a robust market in our state, where our technology and historic industrial sectors, our world class universities, and research and development capacity can create a market for innovative emissions reductions technology to complement direct emissions reductions.