San Diego California's air board next week will emphasize the need to set a greenhouse gas reduction target for 2030, a potential guidepost as the state eyes an ambitious 2050 emissions goal, a top executive said here.
The California Air Resources Board (ARB) intends to release a revised draft of its Climate Change Scoping Plan, said Richard Corey, executive officer at the agency. That blueprint, which has been in the works for several months, is the "road map" for how the state will meet its objective of shrinking emissions to 1990 levels by 2020, he said. It also will look toward 2050.
"What it's doing is it's underscoring the importance of a midterm target," Corey said. "We would expect others to pay attention to the update and possibly take followups, be it legislation or otherwise."
"A midterm target is critical to help frame the suite of policies we'll need to put us on the path to a midcentury goal of 80 percent below 1990 levels," Corey added. Former Gov. Arnold Schwarzenegger (R) in an executive order required California to reduce climate pollution to that point.
Corey spoke about the scoping plan and other state actions on climate change at an event looking at the first year of California's capandtrade program. That economywide policy requires many businesses to cut their greenhouse gas pollution and submit carbon emissions permits. About 100 people from San Diego regional businesses, local governments, state agencies, and environmental and nonprofit groups attended the session, sponsored by CleanTECH San Diego, the San Diego Foundation, Procopio, Climate Resolve and Climate Action Reserve.
California's climate law, A.B. 32, requires that every five years, the state update the scoping plan. ARB's new draft scoping plan will incorporate several hundred comments that have been received since October, when the agency first released an update, Corey said. That earlier draft already pointed to 2030 as a midpoint to focus on between now and 2050 (ClimateWire, Oct. 2, 2013).
Corey said the revised update will make "a stronger case for the need for a midterm target."
"You underscore the science, you underscore the importance of planning, the importance of certainty that investors need," Corey said. "A midterm target is a complement to a longterm target for all those reasons."
The blueprint will not establish a midterm target, he said, because "it's a plan, so it's not a regulation." He would not say whether the state Legislature should enact a 2030 goal but said that ARB's draft plan would be "keying up the discussion."
Looking at sector-specific targets
The draft scoping plan also will look at how the state is progressing toward the 2020 goal and how to make reductions beyond that point. It also will look at the need for "the collaborative effort that needs to go forward" and the number of state agencies that are involved.
It will look at where there are opportunities to cut emissions, he said, including oil production, landfills and the hydrofluorocarbons emitted by refrigerators.
"It also lays out new strategies for sectors that we know must increasingly play a role in coming years," Corey said. The update "also recognizes each sector will need to play a role in cutting emissions that contribute to both midterm and longterm targets," he said.
There will be discussion of each sector meeting specific targets, he said, with the acknowledgement that sectors will move on targets "in different ways and in different time frames."
ARB at its meeting this month will look at the revised draft proposal. A final document could be ready in May, Corey said.
Corey at the meeting also talked about cap and trade and its first year. He said that a sign of its success is "the degree to which companies are considering the cost of carbon in strategic planning and budget. It's become a cost of doing business, like transportation, raw materials, labor."
California has yet to link its cap-and-trade auctions to Quebec, though the state last year linked its market to the Canadian province. Quebec has about one-sixth the emissions footprint of California, so its participation is expected to slightly affect trading prices. But a link is seen by some as crucial to creating momentum that could pull in other states.
Corey said it won't happen until "we have a practiced joint auction and got all the I's dotted and T's crossed in terms of completely testing out those systems." That should happen this year, and with a successful outcome, the market linkage would move forward, he said.
Gas prices could rise
At the event, others representing businesses and interest groups talked about the impact of cap and trade. Craig Anderson, director of environmental affairs at Solar Turbines, said the experience for his company has been "like being in a plane that's on a test flight."
"We're really about ready to head out over open water in this program, especially in 2015," he said, referring to the year when the transportation sector will be brought into the cap-and-trade program.
The company, a subsidiary of Caterpillar Inc., does not make solar, despite its name. Its greenhouse gas emissions come from the testing of its turbines and test cells. Caterpillar, based in Peoria, Ill. "has always looked at us as being the canary in coal mine for these type of regulations."
He said Solar Turbines is worried about leakage, where the company would lose business to competitors that are outside of California and not covered by the capandtrade regulation.
During the session on cap and trade's effects, Jonathan Parfrey, executive director at Climate Resolve, asked F. Noel Perry, founder of San Francisco nonprofit Next 10, whether gasoline prices could rise when the transportation sector falls under the program next year.
"It's hard to know," Perry said. "Gas prices may increase; I don't know how much they might increase. There's certainly the possibility that they could increase."
Mary Leslie, president of Los Angeles Business Council, said businesses have not really felt the impact of cap and trade in electricity rates because the Los Angeles Department of Water and Power (LADWP) gets free allowances from the state.
"In general, businesses in L.A. are not complaining about cap and trade, because it hasn't effectively been realized for them because they are buffered by this allowance that the Department of Water and Power has," she said.
Parfrey asked whether, "when the fuels kick in" in 2015, "do you think that there will be a little whining going on?"
"Yes, there will be whining when the fuels kick," Leslie said. "Definitely whining."
Leslie also talked about a feed-in tariff program in Los Angeles. It allows contracts for purchases of energy by LADWP from property owners that add renewable power to buildings and allows participation by any technology accepted under California's green power mandate.
The pilot program has rolled out in two phases, totaling 150 megawatts. It was 40 percent oversubscribed in the first part, and the second was also "fully oversubscribed." There are 250 projects, she said. There is a third phase due this year.