Landmark California Law Links Emissions Reductions and Environmental Justice Goals

by Alice Kaswan

September 19, 2016

California's recent climate legislation is noteworthy not only for its toughest-in-the-nation carbon reduction goals – 40 percent below 1990 emissions by 2030 – but also for continuing the state's tradition of linking climate and environmental justice goals. AB 197, which accompanied a carbon reduction bill known as SB 32, prioritizes direct emission reductions likely to improve air quality; increases public access to information about carbon, conventional, and toxic emissions; and establishes a new cross-cutting legislative oversight committee to systematically monitor California's multi-faceted climate programs.

The environmental justice movement has long recognized the connection between climate policies and environmental justice. Advocates have supported stringent carbon reduction targets because poor and marginalized communities are the most vulnerable to climate change impacts like heat waves, drought, and economic disruptions to agriculture and tourism.

Climate policies also have important implications for the traditional pollutants that pose the most immediate threats to public health. Most sources of carbon, including mobile sources, power plants, and industry, simultaneously generate harmful co-pollutants like nitrogen oxides, sulfur oxides, particulates, mercury, and other toxic contaminants. Many communities, particularly poor and of-color communities, continue to experience unhealthy air quality. Given the close correlation between carbon and co-pollutant emissions, climate policies have the potential to significantly reduce conventional pollution and benefit these communities.

California's climate policies have consistently promoted an integrated approach to reducing carbon and improving air quality, but the degree to which the state has fulfilled this objective has been hotly contested over the years. AB 32, California's 2006 Global Warming Solutions Act, called for climate measures that simultaneously improve air quality. Many of the state's climate policies are likely to have significant co-pollutant benefits and benefit disadvantaged communities: the state's renewable portfolio standard and energy efficiency programs will reduce power plant emissions, and other programs are designed to reduce vehicle emissions and direct resources to disadvantaged communities. 

But environmental justice advocates contend that cap-and-trade, a key feature of the state's program, does not maximize co-pollutant benefits. The cap-and-trade program provides a cap on a large proportion of the state's emissions, but individual sources do not have to limit their emissions. Instead, they remain free to purchase allowances if they choose to maintain or increase emissions.

Moreover, the cap-and-trade program allows facilities to "offset" their emissions. For example, a power plant could pay a timber company not to harvest timber. The preserved forest would sequester emissions, offsetting continued pollution from the power plant. Thus, sources purchasing these offsets could continue emitting at the same levels, foregoing co-pollutant benefits. 

Although California has many "complementary policies," like renewables requirements, that are likely to reduce power plant emissions, the cap-and-trade program is the state's primary mechanism for reducing industrial emissions. Environmental justice advocates fear that, by allowing large sources to purchase allowances or offsets, the state's cap-and-trade policy will fail to maximize co-pollutant reductions.

AB 197 appears designed to strengthen the connection between carbon and co-pollutant reductions and to facilitate legislative oversight of the agencies implementing California's climate programs. The most controversial provision states that carbon rules should "prioritize … [e]mission reduction rules and regulations that result in direct emission reductions at larger stationary sources … and direct emission reductions from mobile sources." (Sec. 5) This provision is clearly directed at the cap-and-trade program, but its reach is contested. 

Some commentators have observed that the language might be interpreted to prioritize direct facility controls and preclude or limit cap-and-trade, particularly when viewed in light of the Legislature's decision not to pass a bill authorizing the continued operation of the state's cap-and-trade program. The language of AB 197 does not, however, appear to go that far. A subsequent section of the law explicitly requires the Air Resources Board to provide certain information in connection with a range of possible measures, including a "market-based compliance mechanism." (Sec. 6) Moreover, the Legislature's decision not to pass a bill explicitly authorizing cap-and-trade does not mean that AB 197 implicitly rejects it.

The provision prioritizing direct reductions from sources does, however, appear likely to discourage the use of offsets. The cap-and-trade program generates actual reductions from regulated sources, even if it doesn't control which sources undertake the reductions. If sources rely on offsets, however, then the regulated source's emissions can continue. Reducing the use of offsets would increase the likelihood of carbon, and co-pollutant, reductions from polluting facilities and facilitate the objective of integrating climate and air quality goals.

AB 197 also includes provisions designed to increase transparency about facility emissions. Under cap-and-trade, facilities do not have permits authorizing a certain amount of pollution. Instead, they demonstrate compliance after-the-fact: they must show, at the end of a compliance period, that they have enough allowances and offsets to cover their earlier emissions. That makes it more difficult to track emissions in real time. AB 197 requires the Air Resources Board to post large sources' greenhouse gas and conventional pollutants, and by 2018, toxic air contaminants, on its website and includes additional provisions to improve the state's air quality assessments. (Sec. 4; Sec. 8) Citizens and the Legislature will therefore have regular and integrated information about the range of emissions from the state's pollution sources.

Lastly, the law establishes a "Joint Legislative Committee on Climate Change Policies" to improve legislative oversight. (Sec. 2) The Committee will receive information about the full range of pollutants from the state's sources, enabling it to assess the state agencies' success in integrating climate and air quality goals. Moreover, because climate policies are developed by a multiplicity of agencies and legislative oversight is similarly fragmented, the Committee will facilitate a more holistic approach to assessing implementation and considering the need for further legislative action.

AB 197 demonstrates the California Legislature's continued attention to the deeply connected goals of reducing carbon emissions and improving air quality. As states formulate their climate policies, whether pursuant to the federal Clean Power Plan or otherwise, California provides a model for a holistic approach to a clean energy transition.

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