The California Air Resources Board has released its first semi-annual report to the California Legislature on the agency’s AB 32 programs, designed to meet the state’s goal of reducing greenhouse gas emissions to 1990 levels by 2020.  The report details recent developments and anticipated milestones for three of CARB’s major AB 32 initiatives:  the cap and trade program, the low carbon fuel standard (LCFS), and the advanced clean cars program.  For our primer on the cap and trade program, see our earlier post.  Some highlights from these programs in 2012 and things to look for in 2013: 

  • The first auction of cap and trade greenhouse gas emission allowances was held in November 2012, raising $233 million for the state’s investor-owned utilities (for the benefit of ratepayers) and $55 million for the state Greenhouse Gas Reduction Fund.  The next auction will take place February 19, 2013 and the first allowance price containment reserve sale will be on March 8, 2013.
  • A trial court decision is expected in 1Q 2013 in the lawsuit challenging the offset protocols adopted for the cap and trade program, Citizens Climate Lobby and Our Children’s Earth Foundation v. CARB.
  • Sacramento Superior Court will hear arguments at the end of May 2013 in California Chamber of Commerce v. CARB, which challenges the cap and trade auction mechanism.
  • In early 2013, Governor Brown will consider the proposed linkage between California’s cap and trade program and Quebec’s program.  Public comments will be accepted on the package considered by the Governor.
  • Proposed amendments to the cap and trade regulation will be released summer 2013.
  • Development of new offset protocols is anticipated for spring 2013.
  • Further study has been initiated on several hot topics in cap and trade – leakage, industry benchmarks for efficiency, and affects of cap and trade on the agricultural sector, including food processors.
  • For the LCFS, hearings will be held in spring 2013 to add fuel pathways and crude oil carbon intensities.
  • Expect amendments to the LCFS in fall 2013, with rulemaking workshops to begin in the first half of 2013.  Workshops topics will include specifications for alternative diesel fuel blends, including biodiesel.
  • Related to the advanced clean cars program, CARB withdrew its Clean Fuels Outlet regulation in December 2012, which would have required fuel providers to build hydrogen stations once a certain number of fuel cell vehicles were in the California market.  Proposed legislation – AB 8 – would reauthorize various clean air fees to fund the hydrogen fueling network.  The Assembly Transportation Committee held its first hearing on AB 8 today.

CARB’s report also provides information on the agency’s regulation to reduce landfill methane emissions and details its activities to support AB 32, including:

  • a planned update to the AB 32 Scoping Plan in 2013,
  • CARB’s coordination with other entities, such as the Western Climate Initiative and Quebec, on cap and trade,
  • the development of sustainable community plans under SB 375 by metropolitan planning organizations like the Southern California Association of Governments and the Sacramento Area Council of Governments,
  • plans for the proceeds from cap and trade auctions,
  • CARB’s sustainable freight strategy.

The report also includes several other items required by the Legislature:  CARB’s latest estimates on the state’s trajectory for meeting emission reduction goals, a fiscal report on AB 32, a report on CARB’s resources to implement AB 32, and an update on the activities of Western Climate Initiative, Inc. that affect California government or entities.