Lofty Goals & Long Horizons: CARB’s 2022 Scoping Plan Targets Carbon Neutrality by 2045

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Greenberg Glusker LLP

[co-authors: Omar Corona]

This past summer, we have seen the risks of climate change manifest worldwide in the form of rising sea levels, severe droughts, massive wildfires, devastating floods, extreme heat, and other ecological disasters. Fifteen years ago, under the California Global Warming Solutions Act of 2006 (AB 32), California began efforts to sharply reduce emissions of greenhouse gases (GHGs). In June, the California Air Resources Board (“CARB”) kicked off the first of several public workshops to initiate development of the 2022 Scoping Plan.

Legislative Mandate

As the lead agency under AB 32, CARB is responsible for updating the state’s official Scoping Plan every five years, which identifies technologically feasible and economically viable methods for achieving GHG reductions. CARB works with other state agencies, the legislature, community members, industry representatives, and the public to design and implement policies, rules, regulations, incentives, and initiatives to achieve the law’s targets.

California’s first Scoping Plan was approved in 2008 with subsequent updates in 2013 and 2017. The state met its initial target of reducing GHG emissions to 1990 levels four years early, and it is currently on track to achieve a 40% reduction from 1990 levels by 2030. Pursuant to Executive Order (EO) B-55-18 issued by then-Gov. Jerry Brown in 2018, the next Scoping Plan must reflect California’s goal of achieving carbon neutrality by 2045.

Public Workshop Series

CARB opened its workshop series with an overview of the Scoping Plan process, featuring presentations by state officials and stakeholders as well as opportunities for public comment. Focus area discussions covered: Natural and Working Lands; Equity and Environmental Justice; the Transportation Sector; and the Electricity Sector. Greenberg Glusker attended several of the sessions (held via Zoom). Highlights and key takeaways are summarized below.

June 8 – Kickoff

  • Total GHG emissions and GHG emissions per capita decreased from 2000 to 2018 despite growth in gross domestic product (GDP) and population.
  • SB 100 requires 60% of California’s electricity to be renewable by 2030, and 100% of retail electricity to be renewable by 2045.
    • Although technically feasible, construction of solar and wind will need to increase 3x over 2020 levels, and battery storage build rates will need to increase 8x.
    • Natural gas may help minimize costs and ensure reliability during the transition to 100% clean energy.
  • CARB has partnered with outside consultants and researchers at the University of California (UC) to model emissions and health and economic impacts from multiple mitigation scenarios.
  • CARB is working to reduce emissions from short-lived climate pollutants (e.g., methane, HFCs), and to minimize sources and maximize sinks from natural and working lands (NWLs).

June 9 – Natural and Working Lands (NWLs)

  • California’s NWLs (e.g., forests, grasslands, agricultural lands, urban forests) can both contribute to and prevent climate change by acting as sources of carbon emissions as well as sinks that remove carbon from the atmosphere.
  • To achieve its goal of carbon neutrality, California will need to minimize carbon sources (e.g., combustion of fossil fuels) and expand carbon sinks (e.g., by developing carbon capture technologies and improving the carbon storage potential of NWLs).
  • A series of legislative directives require CARB to place a greater emphasis on NWLs in the next Scoping Plan
    • AB 1803 (2006) requires CARB to maintain a Statewide Greenhouse Gas Inventory.
    • SB 859 (2016) requires CARB to publish an inventory of the state’s NWLs and estimate the amount of carbon stored.
    • SB 901 (2018) directs CARB to assess GHGs emissions in relation to wildfires and forest management activities.
  • The impact of wildfires on California’s economy and ecosystems is a main area of focus.
    • Because of the increased frequency and severity of wildfires, California’s NWLs now represent a major source of carbon emissions in the state.
    • California’s NWLs cover approximately 90% of the state’s territory and provide many important benefits including biodiversity, water sources, economic development, food production, tourism, recreation, and climate adaptation.
    • Fires are impacting not only California’s forests but also its grasslands, urban forests, and, increasingly, its agricultural lands.
    • Fires impact and degrade air and water quality by releasing harmful gases and GHGs into the atmosphere, and by increasing soil erosion and sedimentation that impact water sources.
  • CARB has identified (1) conservation, (2) forestry, (3) restoration, and (4) agriculture as major “areas of opportunity and action” that can improve the sequestration potential of California’s lands.
  • CARB is also adopting an “Integrated Multi-Benefit Approach” for its next Scoping Plan, considering more than just carbon emissions – e.g., public health, the economy, biodiversity, agriculture, and other factors – to achieve sustained climate-related benefits.
  • The California Natural Resources Agency, Forest Resources Management is expanding its budget from $75 million to $1 billion to focus on building fire resilience and resistance inside communities, around communities, and across landscapes.
  • The Office of Environmental Farming and Innovation in the California Department of Food and Agriculture is focused on developing Farmer and Rancher-Led Climate Solutions, prompted by Gov. Gavin Newsom’s EO N-82-20 in October 2020.
  • The California Natural Resources Agency is working on several initiatives.
    • “CA Nature” will be an interactive geospatial information system that will allow the public to access climate data and track goals online.
    • The “30x30” goal aims to conserve 30% of California’s lands and coastal waters by 2030.
    • EO N-82-20 requires the agency to coordinate the state’s first “Climate Smart Land Strategy,” which identifies tangible ways California’s NWLs can be leveraged to achieve AB 32’s carbon neutrality goal.

June 9 – Environmental Justice

CARB appears to be making a concerted effort to incorporate environmental justice concerns into its planning process. AB 32 required CARB to establish an Environmental Justice Advisory Committee (EJAC), which is comprised of private, public, and governmental entities from communities with the most significant exposure to environmental inequities. CARB dedicated a standalone session on Day 2 of the workshop to discuss how environmental justice and equity concerns can inform the next Scoping Plan. Recommendations included:

  • Looking to impacted communities, rather than solely government studies and data, to understand environmental concerns
  • Consideration of non-economic factors: moving away from reliance on market-based initiatives and mechanisms that only consider environmental impacts through economic terms
  • Meaningful collaboration between community groups and government entities rather than arm’s length discussions
  • Supporting and sharing resources with environmental justice groups that are already active in impacted communities
  • Allowing communities to inform and shape the state’s carbon neutrality goal in advance rather than simply implementing after the fact
  • Intersectionality: important to address related environmental concerns in tandem rather than ad hoc
  • Environmental leadership should reflect the state’s demographics so that more black and brown voices have a “seat at the table”
  • Environmental justice and equity should be a priority for every government agency that has a role in implementing the Scoping Plan (not just CARB)

June 10 – Transportation

The Transportation session featured representatives from CARB, the California Public Utilities Commission (CPUC), the California Energy Commission (CEC), and the California Department of Transportation (CalTrans). The agencies shared data highlighting the critical role the transportation sector will play in achieving the state’s objectives:

  • Transportation is the largest contributor to the state’s GHG emissions. Mobile sources account for 40% of total CO2 emissions (50% if refining and oil production are included), and 76% of NOx emissions.
  • EO N-79-20 set a goal of 100% of new passenger vehicle sales (cars and trucks) to be zero emission by 2035. However, even with this shift, CARB estimates 30% of cars will still burn gas in 2045.
  • The EO is also targeting 100% of medium- and heavy-duty trucks and buses to be zero emission vehicles (ZEVs) by 2045. However, several presenters and commenters noted this may not be technically feasible.
  • A shift to greater electrification will trigger equitable concerns.
    • Wealthier households are typically better equipped to arbitrage distributed energy resources (DERs) and net energy metering (NEM) by investing in electric vehicles (EVs), solar photovoltaics (PVs), and battery storage systems.
    • As retail loads depart the main investor-owned utilities (IOUs), CPUC needs to ensure that IOUs can maintain reliability and revenue stability, while keeping rates affordable for low income residents in hotter areas.
    • Household energy costs have been outstripping inflation in recent years, a trend projected to continue over the next decade.
  • AB 118 established the Clean Transportation Program (CTP), which is investing $100 million annually in building out electric vehicle infrastructure.
    • 50% of funding is directed toward low income or disadvantaged communities.
    • The state is currently about 57,000 chargers short of meeting its goal of 250,000 EV chargers by 2025.
    • CEC estimates the state will need to build approximately 1 million additional chargers to support the 8 million ZEVs anticipated by 2030.

Next Steps

Workshop notices, presentations, comments, and recordings are available online. The Draft Scoping Plan is expected to be released in Spring 2022 and the Final Scoping Plan in Fall 2022.

Those interested in how the state plans to meet its 2045 carbon neutrality goals should continue monitoring this space for a preview of things of come. With lofty goals and long horizons, many of the policies, programs, regulations, and incentives developed as part of the 2022 Scoping Plan are likely to have widespread impacts on California companies, consumers, and citizens over the next 25 years.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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