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Voluntary Initiatives and Early Reductions under AB 32 Jonathan Evans Staff Attorney, Center for Biological Diversity Global Warming Impacts and Need for Rapid Reductions AB 32 Voluntary Early Reductions AB 32 Discrete Early Actions and Expanded Early Actions California Environmental Quality Act – Requirement for GHG analysis – Framework for Climate Change Analysis Climate Change and Wildlife Species committed to extinction by 2050 due to business as usual climate projections: Minimum warming scenario: 18% Mid-range warming scenario: 24% Maximum warming scenario: 35% Thomas et al. 2004. Extinction risk from climate change. Nature 427:145-148. During warm “greenhouse” phases global biodiversity been relatively low while extinction rates have been relatively high. Mayhew et al. 2007. A long term association between global temperature and biodiversity, origination and extinction in the fossil record. Proc. R. Soc. B (doi:10.1098/rspb.2007.1302) NASA/Goddard Space Flight Center Scientific Visualization Studio Future reduction of sea ice in the Arctic could result in a loss of 2/3 of the world's polar bear population within 50 years. U.S. Fish and Wildlife Service photo © Michael Mengak, University of Georgia Desert tortoise American Pika © Richard A. Arnold Bay checkerspot Butterfly © Shaye Wolf Cassin’s auklet California Climate Change Center. Luers et al. 2006. % CHANGE IN EXPECTED MINIMUM NUMBER OF LARGE FIRES PER YEAR Increase in Wildfires 60 LOWER WARMING RANGE MEDIUM WARMING RANGE 30 0 2035-2064 2070-2099 Source of data : Westerling and Bryant, “Climate change and wildfire in and around California: Fire modeling and loss modeling” (2006), www.climatechange.ca.gov AB 32 Voluntary Early Reductions ARB is to ensure that entities that have voluntarily reduced their GHG emissions prior to 2012 receive appropriate credit for early voluntary reductions – H&S Code §38562(b)(3) ARB is to adopt methodologies for the quantification of voluntary greenhouse gas emission reductions – H&S Code §38571 ARB avenues for addressing voluntary early actions Policy statement on treatment of early voluntary reductions Solicitation of voluntary reduction protocols and projects Voluntary Early Reductions Policy Work with the California Climate Action Registry to develop a process for recording voluntary emission reductions Review proposed quantification methodologies for voluntary GHG emission reductions Work with the South Coast Air Quality Management District and other local air districts to promote development of quantification methodologies and protocols Encouraging voluntary early action AB 32 directs ARB to design regulations in a manner that encourages early action to reduce GHG emissions – H&S Code §38562(b)(1) AB32 Voluntary Early Reductions -A Closer Look Jocelyn Thompson April 14, 2008 Weston Benshoof Rochefort Rubalcava MacCuish LLP Voluntary Early Reductions Why do they matter? – CO2 is cumulative in the atmosphere – Lag time before mandatory reduction measures in place Early action reduction regulations to be adopted by Jan 1, 2010 Emission limits and reduction measures regulations to be adopted by Jan. 1, 2011 Regulations to become operative by Jan. 1, 2012 – Want to encourage investments in reductions The Policy Statement To the extent feasible, Scoping Plan and implementing regulations will: – Encourage and reward VER. – Ensure recognition of actions undertaken post-enactment of AB32. – Ensure that any credits provided for VER are based on reductions that are real, permanent, additional, quantifiable, verifiable, enforceable. The Policy Statement To promote the policy, ARB will: – Work with California Climate Action Registry to establish a process to document reductions ARB to determine later the “appropriate” credit ARB to determine later the conditions under which voluntary reductions may be used – Review quantification methodologies for proposed reduction projects – Work with air districts to promote expedited quantification methodologies & protocols Limitations of the Policy Statement No guarantees. Reassures re: CARB intent and direction. Applies prospectively only. – Pre-AB32 reductions to be considered in development of Scoping Plan & trading program. – Same for reductions post-AB32 adoption but prior to adoption of Policy Statement. No new insights into statutory criteria to qualify reductions. Sets up case-by-case review of reductions Qualifying Criteria Emission reductions must be: – Real – Permanent – Additional – Quantifiable – Verifiable – Enforceable Terms adapted from criteria pollutant ERC regime . . . . What do they mean here? Qualifying Criteria As applied to criteria pollutant ERCs, these criteria result in restrictive accounting, e.g.: – – – – – Use of recent historical average emissions (not peak). Rarely granted credit for mobile source reductions. No credit if emissions overlooked in SIP inventory. Reductions discounted to reflect BACT. No credit if reductions achieved as result of project undertaken for other regulatory purpose. What will these terms will mean under AB32? – ARB will tell you in 2011. Sources of GHG Emissions Case-By-Case Approval Process for Obtaining Approval – Propose project to ARB with quantification methodology. – ARB will prioritize proposals; review. – If ARB agrees with quantification methodology, will adopt Executive Order. Executive Order only confirms quantification – does not approve credit. Uncertain Prospects For Credit “You could have a credit. It just might not be worth anything. You could have quantified it. You could have registered it. You could be meeting all these tests. But the question is, what are you going to do with it at the end of the day? . . . That’s what we really don’t know at this point.” Mary Nichols 2-28-08 Jocelyn’s Suggestions Take actions that make sense for other reasons, without banking on VER credit. Stationary source reductions preferred over mobile or area source reductions. Reductions inside facility/plant boundaries preferred over external or 3rd party reductions. Avoid trading in credits before California system established. If interested, make proposal to ARB quickly. AB 32: Early Actions AB 32 Discrete Early Actions: Transportation & Shipping Sector Low Carbon Fuel Standard Green Ports Smartway Truck Efficiency Tire Inflation AB 32 Discrete Early Actions: Commercial & Industry Sector Reduction in high Global Warming Potential (GWP) Greenhouse Gases (GHGs) in consumer products Perfluorocarbon (PFC) reduction in semiconductor industry Restrictions on High GWP refrigerants Sulfur hexafluoride (SF6) reductions in the nonelectricity sector AB 32 Discrete Early Action: Land Use Landfill methane capture AB 32 Early Actions: Land Use Local Government GHG reduction guidance and protocols Business GHG reduction guidance and protocols AB 32 Scoping Plan Land Use Subgroup of the Climate Action Team (LUSCAT) – Working to include GHG considerations in State and Local decision making – Defining goals and measuring reductions AB 32 Follow-On Legislation AB 2093 – Would require general plan elements to consider policies that reduce effects of land use on GHG emissions. – Deadline: next general plan update, or next housing element update after July 2009 AB 2596 – Would require ARB to prepare GHG inventories for cities and counties. – Cities & counties would be allowed to trade emission reductions achieved through planning process. California Environmental Quality Act Inform government and public about potential significant environmental impacts of proposed activities Identify ways to avoid or reduce environmental impacts Prevent significant environmental damage by requiring changes in the project (alternatives and mitigation) Environmental review must consider: – All phases of the project – Direct & reasonably foreseeable indirect effects – Short term and long term effects. Types of Environmental Review Documents Negative Declaration Mitigated Negative Declaration Environmental Impact Report Which one depends on whether impacts are potentially significant. What Is A “Significant” Impact? A potentially substantial, adverse change in any physical condition within the area affected by the project Significance may vary with the setting Agencies encouraged to publish thresholds Substantial evidence must support determination Cumulative Impacts A succession of minor projects may cause cumulatively significant impacts Is the project’s contribution “cumulatively considerable”? CEQA Project Approval Lead Agency may approve a project with residual significant environmental impacts if: – Statement of Overriding Considerations states that project benefits outweigh harm to the environment – Record includes evidence supporting conclusions about project benefits Legislative Actions SB 97 CEQA Amendment – CA Public Resources Code § 21083.05 Acknowledges that climate change analysis should be addressed in the CEQA process. Jan 1, 2010: the CA Resources agency must adopt CEQA Guidelines for addressing GHGs developed by the Office of Planning and Research. Legislative Actions SB 97 CEQA Amendment – CA Public Resources Code § 21097 Allows projects financed by transportation bonds to move forward with limitations on CEQA challenges. Does not protect all public agencies from CEQA challenges. SB 97 Legislative Analysis Senate Floor Analysis– “The analysis of GHG impacts under laws like CEQA, and its federal counterpart NEPA, is not new, nor did it commence with the passage of the California Global Warming Solutions Act of 2006.” – “confirming that GHG emissions are a significant adverse effect under the [CEQA]” SB 97 -- Limitations Leaves most projects vulnerable to challenge when standards uncertain. Guidelines required only address mitigation. – Why mitigation? – Why not the significance threshold? Don’t get carried away with excerpt from Senate Floor Analysis. – Generic statements. – Doesn’t mean every project is significant. Settled Cases San Bernardino County General Plan cases – People of the State of California ex rel. Attorney General Edmund G. Brown v. County of San Bernardino, Case No. CUVSS 700329 (San Bernardino Superior Court) (filed April 12, 2007); – Center for Biological Diversity v. County of San Bernardino, Case No. CIVSS 0700293 (San Bernardino County Superior Court) (filed April 11, 2007). Administrative appeal of Conoco Phillips Clean Fuels Expansion Project to the Contra Costa Board of Supervisors by the People of the State of California ex rel. Attorney General Edmund G. Brown (filed May 18, 2007). Global Warming Analysis Required People of the State of California v. County of San Bernardino General Plan Amendment to adopt a goal of reducing greenhouse gases Greenhouse Gas Emissions Reduction Plan – Inventory of greenhouse gas emissions: inventory sources, past emissions for 1990 levels, a current baseline, and projected emissions for 2020 levels – Target for reductions – “Feasible” mitigation to reduce greenhouse gas emissions – Greenhouse Gas Reduction Plan will undergo CEQA review Appeal of ConocoPhillips Clean Fuels Expansion by the People of the State of California Greenhouse Gas Emissions Audits – Auditing all ConocoPhillips California refineries to identify greenhouse gas emission sources and reduction opportunities. Offsetting Emissions – 70,000 tons of greenhouse gas emissions would be eliminated from a ConocoPhillips facility in Santa Maria (Santa Barbara County), – $7 million offset program for the Bay Area Air Quality Management District, – $2.8 million for reforestation efforts in California, to sequester of 1.5 million metric tons of greenhouse gases. – $200,000 for restoration of the San Pablo wetlands. Climate Change Analysis 1. 2. 3. 4. 5. Reference the Scientific and Regulatory Background on Climate Change Assess the Project’s Greenhouse Gas Emissions Assess the Impact of Climate Change on the Project and the Project’s Impacts Make a Significance Determination Analyze and Adopt Alternatives and Mitigation Measures to Reduce Impacts 1. Scientific and Regulatory Background on Climate Change Summary of recognized impacts to CA such as impacts to: – – – – Wildlife and habitat Water supply Sea level Wildfire Mandatory reductions required under AB 32 Governor’s Executive Order S-3-05 – 80% below 1990 levels by 2050 2. Assess the Project’s Greenhouse Gas Emissions Conduct an Inventory Electricity and natural gas usage in buildings; Vehicle trips generated by the project; Water supply and transportation to the project; Operation of construction vehicles and machinery; Manufacture and transport of building materials; Waste disposal, including transport of solid waste and methane emissions from organics decomposition; Process emissions, such as from the production of cement or the refining of gasoline; “End use” emissions, such as the burning of the fossil fuels extracted by a production project. 2. Assess the Project’s GHG Emissions -- Counterpoint Avoid methodologies that result in doublecounting – Water supply & transportation – Manufacture of building materials – “End use” emissions Some projects reallocate or move emissions rather than produce new emissions – Retail closer to residential reduces VMT GHG Emissions Analysis is NOT SPECULATIVE California Attorney General – Global Warming & CEQA: Chart of Modeling Tools http://ag.ca.gov/globalwarming/ceqa/modeling_tools.php California Air Pollution Control Officer’s Association (CAPCOA) – CEQA & Climate Change: Evaluating and Addressing Greenhouse Gas Emissions from Projects Subject to CEQA, (Jan. 2008) http://www.capcoa.org/ California Climate Action Registry – General Reporting Protocols http://www.climateregistry.org/tools/protocols/general-reportingprotocol.html Center for Biological Diversity – CEQA: On the Front Lines of California’s Fight Against Global Warming (Sept 2007) http://www.biologicaldiversity.org/campaigns/ceqa/index.html Is It Speculative? Counterpoint CEQA § 15145: Where the impact is too speculative for evaluation, note conclusion and terminate discussion. Per AB 32, global climate change is not speculative. Impacts of a particular project may nonetheless be speculative. 3. Assess the Impact of Climate Change on the Project “[A]nalyze any significant environmental effects the project might cause by bringing development and people into the area affected.” – CEQA Guidelines 15126.2(a) Increased threat of wildfire, flooding, or water scarcity 4. Make a Significance Determination Direct Impact? • GHGs must be considered a cumulatively significant impact Greenhouse Gases are Cumulatively Significant “[t]he impact of greenhouse gases on climate change is precisely the kind of cumulative impacts analysis that NEPA requires agencies to conduct.” – Center for Biological Diversity v. National Highway Traffic Safety Administration, 508 F.3d 508 (9th Cir. 2007) “[T]he greater the existing environmental problems are, the lower the threshold should be for treating a project's contribution to cumulative impacts as significant” – Communities for a Better Environment [2002] 103 Cal.App.4th 120. Significance Thresholds Needed Administrative overload if every project considered significant. No other issue area uses “zero increase”. Threshold should be consistent statewide. – Impacts are not tied to specific locale. – Poor policy to encourage development to gravitate to area with most liberal thresholds Threshold should be set by state agency with expertise, not cities & counties. Potential Significance Thresholds Flat amount of CO2e tons per year Comparison to facility’s 1990 emissions Comparison to AB32 reductions – % reduction required overall – % reduction by sector Performance standards – Benchmark emissions per unit output – Green building standards Hybrid 5. Analyze and Adopt Alternatives and Mitigation Measures Local or regional plan – General Plan, Regional Transportation Plan Individual project Mitigation framework Reducing emissions from the project – Reducing energy required by the project including alternatives to the project Generate energy from renewable sources Measures to offset emissions – Local offsets must be analyzed and incorporated Feasible Mitigation: “Win-Win” Greenhouse Gas reductions LEED certification – Costs and marketability Solar retrofitting – Southern California Edison – SunEdison Density Bonuses for Transportation Oriented Design Mitigation Measures – Further Thoughts Compare cost effectiveness – “Popular” measures not necessarily produce the greatest reductions. Local measures may provide attractive cobenefits. Purchase of credits likely to result in offsetting twice as AB32 is implemented. Will CEQA mitigations be creditable “voluntary early reductions under AB 32?