THINK YOU FOR JOINING US THAT
WE'RE GONNA GET STARTED WITH THE
JOINT LEGISLATIVE COMMITTEE ON
CLIMATE CHANGE POLICIES.
YOU PROBABLY KNOW MY NAME'S
EDUARDO GARCIA.
I THINK WE'LL HAVE A COUPLE OF
OF OUR COLLEAGUES COMING OUT
THROUGHOUT THE HEARING. BUT
AGAIN JUST WELCOME EVERYONE. AT
THANK YOU FOR JOINING US.
.
CALIFORNIA'S CONTINUE CLIMATE
LEADERSHIP
IS MORE IMPORTANT THAN EVER WE
ARE NOW. NOT ONLY THE LEADERS IN
OUR NATION BUT HAVE A
RESPONSIBILITY TO THE REST OF
THE WORLD TO ENSURE. OUR URGENT
CLIMATE COMMITMENTS ARE MET.
AB ONE NINETY SEVEN AB THREE ANY
DIRECT THE COMMITTEE TO OVERSEE
IMPLEMENTATION OF THIS AND OTHER
RELATED CLIMATE POLICIES. FOR
SURE LEGISLATIVE INTENT AS
HONORED AND AT THE LARGER.
STATE GOALS.
THAT THEY MET.
PASSAGE OF AB THREE NINETY EIGHT
LAST SUMMER CREATED MARKET
CERTAINTY BANKS AND THE CAP
TRADE PROGRAM UNTIL TWENTY
THIRTY.
BUT IT ALSO MADE SEVERAL
SIGNIFICANT CHANGES TO THE
PROGRAM.
SEVERAL MONTHS INTO THE
IMPLEMENTATION OF THIS BILL.
THE QUESTIONS HAVE BEEN RAISED
ABOUT ALLOWANCE OVERSUPPLY AND
DIRECT ENVIRONMENTAL BENEFITS.
IT IS THOSE TWO ISSUES THAT THIS
HEARING WILL FOCUS ON TODAY.
IMPORTANT THAT WE TALK EARLY AND
OFTEN TO ENSURE THE PROGRAM IS
DESIGNED IN A WAY THAT WILL
ACHIEVE THE TARGET WHILE ALSO
CONTINUING A DIALOGUE. ABOUT
WHAT OTHER MEASURES THE STATE
CAN TAKE TO ENSURE EMISSION
REDUCTIONS HAPPEN IN A WAY THAT
LEADS TO PRESSURE ON THE MARKET.
WITH THAT I'D LIKE TO ASK OUR
PANELISTS.
FROM MAYOR BE AT TO JOIN US AT
THE TABLE INVITA. ANY OF OUR.
THE OTHER FOLKS THAT WILL BE
SPEAKING AS WELL.
GOOD MORNING.
MORNING.
SO THANK YOU FOR HAVING ME HERE
TODAY MY NAME IS EACH CHIANG MAI
DEPUTY EXECUTIVE OFFICER AT THE
CALIFORNIA AIR RESOURCES BOARD.
STUCK OUT A HAND OUT TODAY IT
LOOKS LIKE IT YOU'VE JUST
RECEIVED THAT.
SOME OF THE SLIDES ARE
BACKGROUND AND INFORMATION AND
I'M GONNA REFER. TO SOME OF THE
OTHER SLIDES AS I GO THROUGH THE
TESTIMONY TODAY. SO AS YOU
MENTIONED IN YOUR OPENING
STATEMENT LAST SUMMER THE
LEGISLATURE PASSED IN THE
GOVERNOR SIGNED. EIGHTY THREE
NINETY EIGHT OFFERED ON AUTHORED
BY THE CHAIR OF THIS COMMITTEE
ASSEMBLY MEMBER GARCIA. SINCE
OCTOBER TWENTY SEVENTEEN WE'VE
BEEN HOLDING INFORMAL PUBLIC
WORKSHOPS
TO HELP INFORM OUR DEVELOPMENT
OF THE CAP AND TRADE AMENDMENTS
TO IT CONFORM THEM TO AB THREE
NINETY EIGHT. THIS FOLLOWS THE
BOARD'S DECEMBER TWENTY
SEVENTEEN UNANIMOUS APPROVAL OF
A SCOPING PLANNED TO MEET THE
TWENTY THIRTY TARGET.
WHICH INCLUDES A CAP AND TRADE
PROGRAM AS DIRECTED BY THE
LEGISLATION.
WE'VE HAD THREE PUBLIC WORKSHOPS
SO FAR TO DISCUSS POTENTIAL
CHANGES TO THE CAP AND TRADE
REGULATION BUT WE HAVE NOT YET
MADE ANY FINAL DECISIONS.
WE GOT SEVERAL MORE MONTHS TO
WORK WITH STAKEHOLDERS BEFORE A
PROPOSAL IS RELEASED FOR
CONSIDERATION BY THE BOARD. AND
I WANT TO THANK THE COMMITTEE
FOR THE OPPORTUNITY TO COME HERE
TODAY I'M TO SHARE INFORMATION
ABOUT OUR WORKSHOPS AND HEAR
YOUR THOUGHTS AS WE DEVELOP
THESE REGULATORY AMENDMENTS.
I'M I'M GONNA GO OVER SOME OF
THE POINTS IN AND A. B. THREE
NINETY A AND WHAT WE'VE HEARD
FROM STAKEHOLDERS.
AND AS YOU LISTEN TO THE THING
THAT WE'RE HEARING IT MIGHT HELP
YOU SORT OF ORGANIZE IT IN YOUR
HEAD. TO KNOW THAT THE COMMENTS
THAT WE RECEIVE SORT OF FALL
INTO TWO GENERAL CAMPS.
AND HE'S CANCER GENERALLY
SUPPORT OF HIGHER PRICES IN THE
PROGRAM.
AND LOWER PRICES IN THE PROGRAM.
SO FOR THIS RULEMAKING AS WITH
OUR ORIGINAL PROGRAM DESIGN.
WE'RE CHARTING A PATH TO MEET
OUR CLIMATE CHANGE GOALS WHILE
TRYING TO MINIMIZE IMPACTS TO
CALIFORNIANS.
I'M WE AIM TO DO THAT BY
PRODUCING A STEADY PREDICTABLE
AND INCREASING FOR PRICE.
WITH DELINING EMISSION PERHAPS
TO PROMPT INVESTMENTS AND
ACTIONS TO ACHIEVE MID AND LONG
TERM GREENHOUSE GAS REDUCTIONS.
ALL OF THE DESIGN FEATURES IN
THE PROGRAM THE FLOOR PRICE THE
CAP BANKING PROVISIONS HOLDING
LIMITS THE AUCTION DESIGN.
LEAKAGE PROTECTION OFFSET RULES
AND NOW THE PRICE CEILING AND
THE PRICE CONTAINMENT POINTS ALL
OF THOSE WORK TOGETHER TO TRY TO
ACHIEVE THIS GOAL.
I'M OUR OTHER GOALS ARE ALSO
LISTED ON FLIGHT TO IN YOUR
HANDOUT. AS MANDATED BY AB
THIRTY TWO WE WANT TO ENCOURAGE
EARLY AND VOLUNTARY EMISSION
REDUCTIONS.
WE SEEK TO MAINTAIN AND CONTINUE
TO ATTRACT LINKAGE PARTNERS.
AND TO MAINTAIN THE MULTITUDE OF
BENEFITS OF THE PROGRAM'S MARKET
FEATURES COST EFFECTIVENESS
FLEXIBILITY. AND MINIMIZING
LEAKAGE.
SO ONE OF THE AREAS THAT THE
COMMITTEE SPECIFICALLY ASKED
ABOUT. WITH THE AB THREE NINETY
EIGHT MANDATED ANALYSIS OF QUOTE
OVER ALLOCATION IN THE STATE
BOARDS DETERMINATION OF THE
NUMBER OF AVAILABLE ALLOWANCES
FOR YEARS TWENTY TWENTY ONE TO
TWENTY THIRTY.
SO WHAT'S THIS REALLY ABOUT.
IN CALIFORNIA WHERE IN THE
ENVIABLE POSITION
I BEING AHEAD OF SCOTT.
SO WE'VE PROJECTS THAT WE'RE
GONNA MEET OUR TWENTY TWENTY
TARGET EARLY. AND SO THIS MEANS
THAT EMISSIONS ARE LOWER THAN WE
THOUGHT THEY WERE GOING TO BE.
AND WHAT THAT MEANS IS THAT
COVERED ENTITIES DON'T HAVE TO
TURN IN AND MANY ALLOWANCES. AS
WE THOUGHT THEY WERE GOING TO
HAVE TO.
SO THERE'S A CONCERN BY IF YOU
THAT THESE UNUSED ALLOWANCES THE
ONES YOU DON'T NEED IN THE PRE
TWENTY TWENTY. MAY HINDER OUR
ABILITY TO MEET THE TWENTY
THIRTY TARGET.
I'M SOME BELIEVE THAT WERE AHEAD
ENTITIES HAVE TAKEN EARLY
ACTIONS TO REDUCE EMISSIONS. AND
THEY SHOULDN'T BE PENALIZED.
A FEW PEOPLE BELIEVE THAT
REGARDLESS OF WHY EMISSIONS ARE
LOWER UNUSED ALLOWANCES SHOULD
BE REMOVED FROM THE SYSTEM EVEN
THAT'S IT IF THIS INCREASES
COSTS THE ECONOMY. AND FUEL AND
ENERGY COSTS FOR CONSUMERS.
WE CAN ALL AGREE I THINK THAT
IT'S A GOOD THING THAT WERE
AHEAD OF SCHEDULE THAT'S A GOOD
PLACE FOR US TO BE. AND IT'S A
GOOD THING THAT WERE ON TRACK TO
ACHIEVE THE TWENTY TWENTY TARGET
EARLY. ESPECIALLY BECAUSE AS WE
LOOK POST TWENTY TWENTY WE'RE
LOOKING AT HAVING TO DOUBLE THE
RATE OF EMISSION REDUCTIONS SO
WE'RE LOOKING AT A STEEPENING OF
THE CURVE.
I WON A NOTE THAT DROPPING POST
TWENTY TWENTY CAPS I HAVE
BECAUSE WERE AHEAD OF SCHEDULE
MAY ENCOURAGE ENTITIES TO DO THE
MINIMUM. IT COULD DISCOURAGE
EARLY COMPLIANCE BY SENDING THE
MESSAGE THAT WE COULD MAKE THE
PROGRAM MORE STRINGENT IF THE
EMISSIONS ARE LOWER. AND THIS
APPROACH COULD LEAD TO A HIGHER
COST PROGRAM.
IN RESPONSE THE DIRECTION IN AB
THREE NINETY EIGHT US STAFF
COMPLETED AND MADE PUBLIC. AN
INITIAL ANALYSIS LAST MONTH
WHICH WE RECEIVE WHICH WE
RELEASED FOR STAKEHOLDER COMMENT
AND MORE INTERESTED I'M YOU KNOW
WE'VE GOT SOME COMMENTS AND WERE
INTERESTED IN FEEDBACK FROM THIS
COMMITTEE AS WELL.
I AM I WANT TO POINT OUT THAT
THE ANALYSIS OF ANYTHING THAT
YOU'RE ANALYZING TWELVE YEARS
OUT INTO THE FUTURE IS GOING TO
HAVE SOME UNCERTAINTIES AND I
THINK THAT'S IMPORTANT TO KEEP
IN MIND. WE'VE LISTED SOME OF
THOSE UNCERTAINTIES ON THE SLIDE
ON SLIDE FOR.
I AM I WANT TO START WITH THE
GRAPH THAT'S ON SLIDE FIVE. AND
IT SHOWS PROJECTED EMISSIONS.
AND PARKS.
AND SO THE SLIDE IS A LITTLE BIT
COMPLICATED SOME TO TRY TO TALK
THROUGH IT AND EXPLAIN WHAT'S
HERE. SO THE BARS ON THIS SHOW
EMISSIONS.
AND THE LINES SHOW CAPS.
SO THE GREEN BARS REPRESENT THE
GREENHOUSE GAS EMISSIONS IN THE
CAP AND TRADE COVERED SECTORS.
OF TRANSPORTATION INDUSTRY AND
ENERGY AND INCLUDES THE IMPACT
OF COMPLEMENTARY POLICIES LIKE
THE RENEWABLE PORTFOLIO STANDARD
THE LOW CARBON FUEL STANDARD
ADVANCE CLEAN CARS.
AND WHAT YOU SEE ON THE GREEN
LINE THOSE ARE THE POST TWENTY
TWENTY CAPS.
IN THE CAP AND TRADE PROGRAM.
AND YOU CAN SEE THAT THE GREEN
LINE IS LOWER THAT THE GREEN
BARS.
THAT THE CAPS IN THE CAP AND
TRADE PROGRAM CONSTRAIN
EMISSIONS SAID WE WERE EXPECTING
MORE MISSIONS THAN WHAT YOU
WOULD THEN WHERE THE CAPS ARE.
YEAH WE SHOW SIMILAR INFORMATION
FOR TO PORTAL GREENHOUSE GAS
EMISSIONS SO IF YOU ADD ON THOSE
BLUE ANDS THOSE ARE THE
UNCOVERED SECTORS SUCH THINGS
LIKE AGRICULTURE. QUITE GLOBAL
WARMING POTENTIAL GASES AND THEN
THE DOTTED LINE ABOVE IS SORT OF
THE OCCULT THE GLIDE PATH OF THE
SCOPING PLAN.
YOU CAN SEE THE BLUE DOT AT THE
END THAT'S THE TWENTY THIRTY
TARGET.
A TWO HUNDRED AND SIXTY MILLION
METRIC TONS AND AGAIN YOU CAN
SEE THAT THE SCOPING PLANT THERE
I'M SCRUBBING PLANNED TARGET IS
LOWER THAN. THE ON A MISSIONS
THAT ARE EXPECTED SO AGAIN YOU
KNOW WE NEED TO REDUCE EMISSIONS
TO HIT OUR TARGETS.
NOW WITHOUT GETTING INTO TOO
MANY OF THE DETAILS BASICALLY
WHAT OUR ANALYSIS DID IT LOOK AT
WHETHER THE POTENTIAL UNUSED
ALLOWANCES. FROM PRE TWENTY
TWENTY SO ALL OF THESE
ALLOWANCES ARE GETTING USE NOW
WILL ERASE ALL OF THE BENEFIT
BETWEEN THE CAP THE GREEN LINE.
AND THE PROJECT THAT EMISSIONS
THOSE TOP OF THE GREEN BARS.
SO TO DO THIS WE LOOK AT HOW
MANY ALLOWANCES MIGHT BE
AVAILABLE FOR PROPOSED TWENTY
TWENTY.
SO THAT INCLUDES THE POST TWENTY
TWENTY ALLOWANCES SO WHAT YOU
KNOW WHAT DOES THE PROGRAM
PRODUCE.
OFFSETS
AND IT ALSO INCLUDES THE
ALLOWANCES THAT MIGHT BE CARRIED
OVER. FROM PRE TWENTY TWENTY AND
THEN WE COMPARED THAT AGAINST
THE EMISSIONS THAT ARE EXPECTED
POST TWENTY TWENTY.
SO WE DID TWO SCENARIOS WE DID
ONE SCENARIO WHERE WE CARRIED
OVER THE PRE TWENTY TWENTY
EMISSIONS.
AND WE DID ONE SCENARIO THAT WE
DID NOT CARRY OVER THE PRE
TWENTY TWENTY EMISSIONS.
OUR ANALYSIS INDICATES THAT IN
BOTH SCENARIOS OPPOSE TWENTY
TWENTY CAPS.
WILL CONSTRAIN GREENHOUSE GAS
EMISSIONS AND CONTINUE TO
SUPPORT A STEADILY INCREASING
CARBON PRICE SIGNAL. AS
ALLOWANCES BECOME PROGRESSIVELY
MORE SCARCE.
NOW THE LEVEL OF THE CAP IS KEY
TO OUR PROGRAM.
AND I WANNA POINT OUT THAT THE
CAPS IN OUR PROGRAMMER SAT USING
REPORTED DATA. AND THE
REFRACTIVE REFLECTS LESSONS
LEARNED AND OTHER TRADING
PROGRAMS SUCH AS THE EU ETS AND
REGGIE.
THESE PROGRAMS DIFFER FROM MARS
AND THREE IMPORTANT WAYS.
FIRST OF ALL.
THEY DIDN'T RELY ON REPORTED
DATA WHEN THEY SET THEIR CAPS.
THEY EITHER HAVE NO PRICE FLOOR
WHERE THEY HAVE A PRICE FLOOR
THAT'S TOO LOW TO SORT OF
ENCOURAGE REDUCTIONS.
AND THEY ALSO DIDN'T ANTICIPATE
HAVING TO HAVE SORT OF AN
AUTOMATIC WAY TO REMOVE UNSOLD
ALLOWANCES.
SO BECAUSE OF THAT BOTH OF THOSE
PROGRAMS HAVE HAD TO HAVE
SIGNIFICANT CORRECTIONS OR
ADJUSTMENTS.
I'M TO CORRECT FOR OVER
ALLOCATION SO THAT THEY HAD A
HIGH ENOUGH PRICE
TO PROMPT EMISSION REDUCTIONS.
SO WHAT HAPPENS
TO US WHAT WE'D DO IF EMISSIONS
ARE LOW AND WE HAVE A LOT OF
ALLOWANCES. WILL THE CALIFORNIA
PROGRAM ALREADY INCLUDES A
FEATURE FOR TRANSFERRING UNSOLD
AUCTION ALLOWANCES INTO THE HIGH
PRICE RESERVE AFTER EIGHT
AUCTIONS.
SO WITH ALLOWANCES DOWN DON'T
SELL AFTER TWO YEARS THEY GET
MOVED INTO THE HIGH PRICE
RESERVE. AND THIS IS A PROVISION
THAT'S NOW CODIFIED AS PART OF
AB THREE NINETY EIGHT.
NO WE ALREADY KNOW THAT THIS
MECHANISM IS GONNA TRANSFER AT
LEAST FORTY MILLION UNSOLD
ALLOWANCES INTO THE RESERVE.
DEPENDING ON HOW OPTIONS GO THIS
YEAR THERE MAY BE MORE
ALLOWANCES TRANSFERRED INTO THAT
RESERVE.
I AM I WANT TO KNOW THAT THE
COMMITTEE REPORTS LIKE THE PAPER
THAT CLAIMS THERE'S AN ERROR IN
OUR STAFF ANALYSIS.
REVIEW REVIEWED THE PAPER AND
EVALUATED THAT CLAIM OUR
CONCLUSION IS THAT THERE IS NO
ERROR IN OUR ANALYSIS.
SIMPLY PUT THE PAPER DOESN'T
REALIZE THAT WE MADE AN
ADJUSTMENT AND IT MAKES THAT
ADJUSTMENT AGAIN.
THE OTHER SPECIFIC ISSUE IS THAT
THE PAPER CLAIMS THAT OUR
ANALYSIS DOESN'T ADJUST.
I CAPS TO ACCOUNT FOR THE
PORTIONS OF COVERED SECTORS THAT
ARE NOT COVERED FOR EXAMPLE
FUGITIVE EMISSIONS FROM THE
INDUSTRIAL SECTOR.
SO THIS ISN'T TRUE.
OUR CAPS IN THE POST TWENTY
TWENTY PROGRAM ARE SET BASED
ONLY ON THE PORTION OF THE
INVENTORY THAT'S COVERED BY THE
PROGRAM.
JUST LIKE THE CAPS IN THE PRE
TWENTY TWENTY PROGRAM.
IN ADDITION FOR THE POST TWENTY
TWENTY PROGRAM.
BECAUSE WE ANTICIPATED WHEN WE
DID OUR PROJECTIONS THAT
EMISSIONS WERE GOING TO BE LOWER
THAN WE PREDICTED.
WE ACTUALLY LOWERED THE NUMBER
OF ALLOWANCES THAT WE WOULD
PROVIDE SO WE ACTUALLY REDUCE
THE NUMBER OF ALLOWANCES BY
NINETY FOUR MILLION METRIC TONS.
AND THOSE EXTRA ALLOWANCES ARE
GOING TO GO INTO THE HIGH PRICE
RESERVE. SO WE TAKE OUT THOSE
ALLOWANCES BECAUSE WE KNOW
EMISSIONS ARE GONNA BE LOWER.
SO TURNING NOW TO ANOTHER AREA
THAT THE COMMITTEE ASKED ABOUT
OFFSETS.
SO UPSETS ARE AN IMPORTANT COST
CONTAINMENT FEATURE IN OUR
PROGRAM IT ALLOWS COVERED
ENTITIES TO PURCHASE PURCHASE
REDUCTIONS FROM SECTORS THAT ARE
NOT COVERED BY THE PROGRAM.
AB THREE NINETY IT REDUCES THE
OFFSET USAGE LIMIT FROM EIGHT
PERCENT. TO FOUR PERCENT BETWEEN
TWENTY TWENTY ONE AND TWENTY
TWENTY TWENTY FIVE. AND THEN
INCREASES IT TO SIX PERCENT FROM
TWENTY TWENTY SIX TO TWENTY
THIRTY.
AB THREE NINETY EIGHT SPECIFIES
AT NO MORE THAN HALF OF THAT
AMOUNT MAYBE SOURCE FROM
PROJECTS THAT DID NOT PROVIDE
QUOTE DIRECT ENVIRONMENTAL
BENEFITS. IN THE STATE.
IN THE WORKSHOP MATERIAL THAT
WE'VE PROVIDED WE NOTED THAT OUR
GOAL IS TO LOOK BEYOND JUST
GREENHOUSE GAS BENEFITS AND WE
USE THE EXACT DEFINITION IN THE
LEGISLATION IN OUR RULE MAKING.
I'M WE HEARD AND UNDERSTAND THE
LEGISLATURE'S DESIRE TO INCREASE
THE NUMBER OF OFFSET PROJECTS IN
STATE. AND TO LOOK FOR
ADDITIONAL CO BENEFITS IN STATE
SUCH AS THOSE CITED IN AB THREE
NINETY EIGHT PRODUCTION AND
OTHER AIR QUALITY POLLUTANTS AND
AVOIDANCE OF POLLUTANTS THT
COULD IMPACT THE STATE'S WATERS.
I WANT TO EMPHASIZE THAT NOT
FALL OFF THAT PROJECTS
WE'LL BE ABLE TO MEET THE
CRITERIA OF DIRECT ENVIRONMENTAL
BENEFITS AS DEFINED IN THE
LEGISLATION.
I'M IN A THIS IS VERY CLEAR TO
US WE'VE HEARD THE LEGISLATURE
LOUD AND CLEAR ON THIS.
AND TO ENSURE THAT ALL OF OUR
STAKEHOLDERS ALSO UNDERSTAND THE
LEGISLATIVE DISCUSSIONS THAT
HAVE TAKEN PLACE AND THE INTENT
WE'VE PROVIDED LINKS TO THE
LEGISLATIVE HEARINGS ON THESE
MATTERS. I'M IN OUR WORKSHOP
MATERIALS OF FOLKS ARE AWARE OF
THAT.
AFTER EACH OF OUR WORKSHOPS WE
ALLOW FOR AN INFORMAL WRITTEN
COMMENT PERIOD TO ALLOW
STAKEHOLDERS A CHANCE TO PROVIDE
WRITTEN MATERIALS FOR STAFF
EVALUATION AND CONSIDERATION.
AND.
IF THEIR SPECIFIC INFORMATION
THAT THIS COMMITTEE WOULD LIKE
US TO CONSIDER WOULD WELCOME
RECEIVING THAT IN WRITING AS
WELL.
I AM AS I MENTIONED AT THE START
OF MY TESTIMONY WE SEE A FEW
PATTERNS EMERGING IN THE WRITTEN
COMMENTS.
I'M WE CAN PROBABLY CLASSIFY
THEM AS BEING EITHER SUPPORTIVE
OF HIGHER PRICES. OR SUPPORTIVE
OF LOWER PRICES IN THE PROGRAM.
ONE GROUP IS STAKEHOLDERS WOULD
LIKE TO SEE THE SUPPLY OF
ALLOWANCES AND OFFSETS REDUCED.
ALONG WITH HIGHER PRICES FOR THE
PRICE CEILING AND THOSE TWO
PRICE CONTAINMENT POINTS.
ALL RESULTING IN HIGHER
COMPLIANCE COSTS IN THE PROGRAM.
AND ANOTHER GROUP STAKEHOLDERS
WOULD LIKE TO SEE A LARGER
SUPPLY OF ALLOWANCES AT LOWER
PRICE POINTS
THEY WANT TO MAXIMIZE OFFSETS
HAVE LOWER PRICES FOR THE PRICE
CEILING AND HAVE AND THAT'S
THOSE TO COST CONTAINMENT POINTS.
AND AS I MENTIONED EARLIER OUR
GOAL IS TO TRY TO DESIGN A
PROGRAM THAT MEETS THE
LEGISLATIVE MANDATES.
TO BE COST EFFECTIVE AND
MINIMIZE LEAKAGE WHILE MEETING
THAT TWENTY THIRTY GOAL.
SO BEFORE AND I WANTED TO TALK A
LITTLE BIT ABOUT HOW WE ENSURE
THAT WE REMAIN ON TRACK TO THE
TWENTY THIRTY GOAL.
ON HOW WE GET TO TWENTY THIRTY
IS JUST AS IMPORTANT AS ACTUALLY
HITTING THE TARGET.
WE NEED TO BALANCE THE MANY
OBJECTIVES THAT'S BEEN THAT HAVE
BEEN LAID OUT FOR US AND
LEGISLATION COST EFFECTIVENESS.
MINIMIZING LEAKAGE ENSURING
PROGRAMS ARE TECHNOLOGICALLY
FEASIBLE NOT IMPEDING PROGRESS
TOWARD AIR QUALITY STANDARDS AND
ACHIEVING GREENHOUSE BURKE GAS
REDUCTIONS AMONG OTHERS.
OUR GOAL IS TO TRANSITIONOUR
ECONOMY AS SMOOTHLY AS POSSIBLE.
A CLEAN FUELS AND CLEAN
TECHNOLOGY WHILE CONTINUING TO
GROW THE ECONOMY.
THERE IS UNCERTAINTY AND WHETHER
WE'RE GONNA MEET THE TWENTY
THIRTY TARGET THIS IS SOMETHING
THAT'S IT'S TWELVE YEARS AWAY.
AND IN THAT TWELVE YEARS YOU
KNOW WE NEEDS THERE'S
UNCERTAINTY AND HOW MANY
REDUCTIONS ARE REGULATIONS ARE
GOING TO GET. HOW QUICKLY
TECHNOLOGY PRESS PROGRESSES
I'M POWER ECONOMY IS GOING TO BE
PERFORMING TWELVE YEARS FROM NOW?
SO IN THE FACE OF THAT
UNCERTAINTY HOW DO WE TRACK OUR
PROGRESS HOW DO WE ENSURE THAT
WE'RE GONNA STAY ON THE PATH
THAT WE NEED TO STAY.
SU EACH YEAR UP CARP POSTS ON
OUR WEBSITE A GREENHOUSE GAS
INVENTORY.
THIS IS A RETROSPECTIVE LOOK AT
WHAT EMISSIONS ACTUALLY WERE.
WE ALSO TO UNDERSTAND THE
UNDERLYING CAUSES OF THOSE
EMISSIONS WE TRACK FACTORS LIKE
ECONOMIC ACTIVITY. FEEL USE
WEATHER CONDITIONS GROWTH IN
RENEWABLES DEPLOYMENT OF CLEANER
VEHICLES AND A WHOLE HOST OF
OTHER METRICS.
ALL OF THESE METRICS INCLUDING
THE GREENHOUSE GAS INVENTORY ARE
PUBLICLY AVAILABLE.
AND IN ADITION AND JUST AS
IMPORTANTLY WE ALSO TRACK THE
IMPLEMENTATION OF ALL OF OUR OUR
PROGRAMS THAT ARE MOVING US
TOWARDS. THESE GOALS SO WE TRACK
IMPLEMENTATION OF THE LOW CARBON
FUEL STANDARD OF THE RENEWABLE
PORTFOLIO STANDARD. OF THE
ADVANCE CLEAN CAR PROGRAM AND OF
THE CAP AND TRADE PROGRAM
TO ENSURE THAT THOSE REGULATIONS
ARE MEETING THEIR METRICS AND
THAT THE NEEDED REDUCTIONS ARE
OCCURRING.
IF IT APPEARS THAT EMISSIONS ARE
NOT DECLINING IS EXPECTED WE
NEED TO UNDERSTAND WHY. IS IT
BECAUSE WE HAD A OF A REALLY DRY
YEAR AND SO WE HAD TO HAVE MORE
ELECT NEO FOSSIL FUEL
ELECTRICITY GENERATION BECAUSE
WE DIDN'T HAVE AS MUCH HYDRO.
WHAT'S HAPPENING WITH GLOBAL
FUEL PRICES WHAT'S HAPPENING TO
THE ECONOMY.
OUR SECTORS RESPONDING AS WE
ANTICIPATED. AND IF THEY'RE NOT
WHAT PROGRAMS AFFECT THOSE
SECTORS AND WHAT CAN WE DO TO
GET BACK ON TRACK.
SO THIS IS ALSO THAT WE CAN
ASSESS WHAT THOSE TRENDS ARE WE
REPORT UP PROGRESS TO OUR BOARD
EVERY YEAR.
ARE CHAIR PROVIDES AN ANNUAL
REPORT TO THIS COMMITTEE. AND
ONCE EVERY FIVE YEARS WE GET A
CHANCE A SORT OF READ YOU THE
WHOLE CLIMATE STRATEGY ONE RE
READ TO THE SCOPING PLAN. AND
THE THINGS THAT WE'RE LOOKING AT
REALLY ARE. ARE WE ON THE PATH
THAT WE THINK WE NEED TO BE TO
GET TO THAT TWENTY THIRTY GOAL.
SLIDE SEVEN AND EIGHT IN YOUR
TAX SHOW ON THE CHECK IN POINTS
THAT I TALKED ABOUT AS WELL AS
MANY OTHER REPORTING AND
OVERSIGHT OPPORTUNITIES THAT THE
PUBLIC THE BOARD AND THE
LEGISLATURE HAVE.
SO IN CLOSING I WANT TO THANK
THE COMMITTEE FOR YOUR INTEREST
IN THIS RULEMAKING AND FOR
TAKING THE TIME THIS MORNING TO
SHARE YOUR THOUGHTS WITH US.
I'M OUR SCHEDULE HAS US
RELEASING A STAFF PROPOSAL FOR
FORMAL FORTY FIVE DAY COMMENT
PERIOD IN THE SUMMER. AND THE
FIRST BOARD HEARING ON THIS WILL
BE IN THE FALL AND THEN WE WOULD
FOLLOW THAT WITH THE FINAL BOARD
MEETING ON THE REGULATION IN
DECEMBER. SO WITH THAT I'D BE
HAPPY TO TAKE ANY QUESTIONS
THANK YOU.
CAN YOU.
GO BACK TO THE COMMENT ABOUT THE
GUY CHALLENGES WITH THE.
IN STATE OFFSETS THAT THE
CHALLENGES THAT YOU FORESEE A.
HEARING YOU CANNOT ELABORATE LOW.
SO WHEN YOU SAY CHALLENGES YOU
MENTIONED THAT IT'S GOING TO BE
DIFFICULT RIGHT TO HAVE DIRECT
BENEFIT.
ó YEAH I DO NOT AND I DID NOT
MEAN TO IMPLY THAT IT WOULD BE
DIFFICULT TO HAVE DIRECT
ENVIRONMENTAL BENEFITS I THINK.
WHAT AND WHAT I MEANT TO CONVEY
IF IT WAS NOT CLEAR IS THAT WE
UNDERSTAND THAT THERE IS A
LEGISLATIVE INTEREST IN INTENSE
AS PART OF THREE NINETY EIGHT TO
INCREASE THE NUMBER OF? IN STATE
OFFSETS
I'M AND WE ARE AT THAT IS
SOMETHING THAT WE ARE AWARE OF
HIS WERE GOING THROUGH THE RULE
MAKING PROCESS. AS YOU KNOW AB
THREE NINETY EIGHT ALSO SET UP A
COMPLAINTS OFFSET COMMITTEE OR
TASK FORCE I CAN'T REMEMBER
EXACTLY WHAT IT'S CALLED. AND TO
LOOK AT HOW WE CAN INCREASE THE
NUMBER OF IN STATE ASSETS POST
TWENTY TWENTY.
SO AND THAT'S A COMMITTEE THAT
WE ARE IN THE PROCESS THAT.
WE'RE THINKING ABOUT WHAT ARE
THE APPROPRIATE I'M INTO GROUPS
OF PEOPLE THAT NEED TO BE
REPRESENTED AS WE CONSIDER THAT
BUT IT'S DEFINITELY SOMETHING
THAT WOULD YOU KNOW I ACTUALLY
TELL YOU THAT WE ARE ALSO.
INTERESTED IN SEEING MORE IN
STATE OFFSETS AS WE MOVE FORWARD
ALSO ANTICIPATE A. MAJOR HURDLES
AND MOVING IN THAT DIRECTION.
WELL. IT'S
I THINK IT'S IT'S HARD TO SAY
THINK THE CHALLENGES THAT WE
HAVE OVERALL OFFSETS OR. THAT IN.
AT AS PART OF OUR PROGRAM WE
LOOK FOR OPPORTUNITIES TERROR TO
REGULATE. TO HAVE.
REQUIRED EMISSION REDUCTIONS
INSTEAD OF VOLUNTARY EMISSION
REDUCTIONS AND IN SOME CASES IN
THE PAST WHAT'S HAPPENED IS THAT
YOU DON'T SEE AS MANY
OPPORTUNITIES. TO HAVE THESE
VOLUNTARY PROGRAMS BECAUSE WE'VE
REGULATED THEM INSTEAD AND SO I
THINK THAT THE AND THE
REGULATORY ENVIRONMENT THAT WE
HAVE MAKES IT SOMETIMES IT'S
SORT OF NARROWS THE.
OF WHAT'S AVAILABLE FOR OFFSETS
ON BUT IT IS SOMETHING THAT WE
THINK THAT WE CAN CONTINUE TO
WORK THROUGH IN THERE MAY BE
SOME SECTORS WHERE WE MAY BE
ABLE TO MAKE SOME PROGRESS.
SO WE'VE HAD A QUESTION.
I REYES TO OUR OFFICE QUITE
OFTEN AS IT RELATES TO.
HOW YOU DETERMINED?
THE IMPACTS OF THE RECESSION.
AT TWO THOUSAND TEN TWO THOUSAND
FOURTEEN WHERE AREAS WERE WHAT
THEY WERE POINTED OUT.
THE CHAIR NOW.
CAN'T CREDIT SOME OF THE.
IMPACTS RIGHT OF BY THE
RECESSION TO LOWER EMISSION
ABSOLUTELY RIGHT AND SO THEN THE
QUESTION IS WHAT YOU KNOW. WHAT
WE JUST?
MOVING FORWARD.
.
THE CAT TO ACCOUNT FOR THAT
RECESSION.
AT THIS POINT SO I HAVE A I HAVE
A DOG EXHILARATING SLIDE FOR YOU.
AND SO THIS IS SOMETHING THAT.
THE WHEN YOU LOOK AT.
TRENDS YOU CAN DEFINITELY SEE
THIS IS A GRAPH THAT SHOWS.
GRACE DOMESTIC PRODUCT AND ALSO
GHG PER PER GROSS DOMESTIC
PRODUCT SEE YOU CAN SEE IN TWO
THOUSAND AND EIGHT THERE'S A BIG
DIP IN THE GROSS DOMESTIC
PRODUCT AND WHEN YOU LOOK AT
EMISSIONS YOU SEE A BIG DIP IN
TWO THOUSAND AND EIGHT ALSO.
I'M FROM HARPER'S AND WHAT
YOU'VE SEEN SINCE THEN IN THE
LAST TEN YEARS IS THE LARGEST
SUSTAINED PERIOD OF ECONOMIC
GROWTH THAT CALIFORNIA HAS EVER
SEEN.
THE THING THAT WE FIND VERY
HEARTENING THE THING THAT WE SEE.
IS THAT.
.
THE EFFICIENCY OF OUR STATE IS
INCREASING SO EVEN THOUGH THE
ECONOMIC OUTPUT IS INCREASING WE
ARE NOT SEEING. INCREASE WE ARE
NOT SEEN COMMENSURATE INCREASES
IN GREENHOUSE GAS EMISSIONS SO
IF YOU LOOK AT GREENHOUSE GAS
EMISSION TRENDS OVER THIS TIME
WHAT YOU SEE IS THE ECONOMY IS
GETTING BETTER. AND THE WE ARE
GETTING MORE EFFICIENT AT THE
SAME TIME SO WE HAVE ACCOUNTED
FOR THAT. BUT WE'VE ALSO SEEN AS
WE LOOK AT SOME OF THESE OTHER
METRICS
THAT.
OUR INDUSTRIES ARE ACTUALLY
GETTING MORE EFFICIENT AND I
THINK THAT THIS IS A BIG SUCCESS
THIS IS ONE OF THE THINGS THAT
CALIFORNIA CAN SAY TO THE WORLD
IN THAT WE HAVE SAID TO THE
WORLD.
YOU DON'T HAVE TO.
IT YOU DON'T HAVE TO GIVE UP
ECONOMIC GROWTH TO SEE BENEFITS
FROM YOUR CLIMATE PROGRAM THAT
YOU CAN HAVE YOU CAN HAVE IT ALL.
AS IT WERE.
WE HAVE SEEN RIGHT ECONOMY GROW.
DURING AND THAT WE'VE
IMPLEMENTED.
SOME OF THESE POLICIES ARE NOT
BROKEN.
EXCEPT THERE'S AND SO I THINK.
TO THAT LAST POINT YOU MADE
THERE'S CERTAINLY SOME
CREDIBILITY BEHIND THAT
STATEMENT.
.
I DON'T KNOW FOR AYE IF THIS IS
POSSIBLE AND YOU KNOW THE LACK
OF.
OF COLLEAGUES HERE TO ASK
ADDITIONAL QUESTIONS BUT.
YES I DO CHAIR OF THE COMMITTEE
I MAY BE ABLE TO DO THIS RIGHT.
THERE ARE SOME FOLKS IN IN THE
AUDIENCE THAT THAT PERHAPS.
.
HAVE SOME QUESTIONS THAT THEY'D
LIKE TO POSE.
AND IF OKAY WITHOUT.
WELL WITH ME I GUESS RIGHT.
I WOULD I WOULD DO IF YOU DON'T
MIND.
JUST FOR NO MORE THAN ABOUT
FIVE MINUTES.
OPEN UP THE THE MIKE AND HAVE
SOME FOLKS UP POSE SOME
QUESTIONS BASED ON THIS SIR.
PRESENTATION THAT YOU'VE GIVEN
SO.
.
I'D LIKE TO WELCOME ANYONE.
TO WHO WOULD LIKE TO.
MAKE COMMENT OR A QUESTION
RELEVANT TO THE PRESENTATION
THAT WAS JUST MADE.
I WELCOME YOUR PARTICIPATION.
THE STATE YOUR NAME AND.
ORGANIZATION YOU YOUR WITH GOOD
MORNING CHAIR GARCIA DANNY COHEN
WORD WITH NEAR ZERO ALSO A
MEMBER OF THE INDEPENDENT
EMISSIONS MARKET ADVISORY
COMMITTEE.
I WANTED TO RESPOND ARE ON A
COUPLE OF ISSUES AND PERHAPS
ENGAGEMENTS CHIANG AND IN OUR
DISCUSSION WE CAN DO THIS DURING
THE FORMAL TESTIMONY IF YOU
PREFER.
BUT I WANTED TO POINT OUT MISS
CHANG TESTIFIED THAT THERE ARE
THREE DIFFERENCES BETWEEN THE
STATE'S CAPITATE PROGRAM AND THE
CAPITA RATE PROGRAMS IN THE
NORTHEASTERN UNITED STATES AND
IN EUROPE. AND SPECIFICALLY SHE
CITED THE FACT THAT WE HAVE A
PRICE FLOOR WHICH IS INDEED
DIFFERENT.
AND SHE SUGGESTED THAT HARM THE
STATE OF CALIFORNIA RELIES ON
ACTUAL COVERED SECTOR COVERED
FACILITY MISSION STATED TO SET
THE CAP UNLIKE WAS WHAT WAS DONE
FOR EXAMPLE. IN THE EUROPEAN
UNION. AND SHE SAID THAT WE HAVE
A SELF CORRECTING AUCTION
MECHANISM AND I JUST WANNA POINT
OUT. OF MISS CHENEY TESTIFIED
THAT THERE WERE ABOUT FORTY
MILLION TONS THAT WILL BE
REMOVED FROM THE ALLOWANCES THAT
CAME FROM THE AUCTION COLLAPSE
OF TWENTY SIXTEEN TO TWENTY
SEVENTEEN.
I'M NINETEEN YEARS ARE DISPARATE
REPORT WE AGREE. THAT'S THE
MINIMUM NUMBER THE MAXIMUM
NUMBER WE CALCULATED AROUND
SIXTY SIX MILLION.
SO THERE'S A RELATIVELY MODEST
BALLPARK TWENTY FIVE MILLION
POSSIBLE INCREMENT.
IN OVER ALLOCATION REDUCTIONS.
IF MULTIPLE OPTIONS THIS YEAR
DON'T SELL OUT.
NOW THAT'S A SMALL FRACTION OF
THE TWO HUNDRED SEVENTY MILLION
THAT FOR EXAMPLE CHRIS BUSH
ESTIMATES
JUST ROUGHLY IN LINE WITH WHAT
OTHER INDEPENDENT ANALYSTS HAVE
POINTED OUT. TO JUST ONE RESPOND
AS TO THIS PARTICULAR
DISTINCTION THERE'S NOT A LOT
THERE.
I THINK THE KEY ISSUE AND I
WOULD LOVE TO ENGAGE IN HIS
CHIANG ON THIS QUESTION IS
WHETHER NOT YOU'VE ACTUALLY USED
THE FIT A FACILITY LEVEL DATA
PROJECT TO PROJECT THE CAPS.
SO AS YOU TESTIFIED WHEN AIR BE
SET THE ORIGINAL CAPS IN TWENTY
TEN.
EVERY VERY CAREFULLY SAID WE
CANNOT LOOK AT BROAD SECTOR DATA
TO SET THE CAPS WE MUST USE
FACILITY LEVEL DATA INSTEAD.
AND THE ORIGINAL CAPS WERE SET
USING FACILITY LEVEL DATA AS YOU
SUGGEST.
HOWEVER THE CALCULATIONS THAT
YOUR AGENCY RELEASED
AT LAST MONTH DO NOT DO THAT.
AND YOU TESTIFIED THAT IN FACT
THEY DO.
AND THIS SEEMS TO BE INCREDIBLY
IMPORTANT POINT OF DIFFERENCE
BECAUSE THE ERROR THAT MY TEAM
HAS IDENTIFIED. IS QUITE
SIGNIFICANT.
AND WE CHECKED THE PRIMARY
SOURCES YOU USED
SO I'D BETTER APPRECIATE YOUR
CLARIFICATION. I WHEN YOU SAY
THERE'S NO AARON CALCULATIONS
AS TO WHERE THAT COMES FROM.
S. CHURCH SO WITH THE WAY THAT
WE SAT THAT WAY THAT WE SET THE
CAPS ALL TALK THIS WAY IT'S
EASIER. THAT WAY THAT WE THOUGHT
THE CAPS POSTS TWENTY TWENTY
BASICALLY RATCHETS DOWN THE CAPS
THAT WE SET UP.
TWENTY TWENTY.
AND THIS IS DESCRIBED IN THE
RULE MAKING THAT WE DID IN
TWENTY SIXTEEN TO SAT THE POST
TWENTY TWENTY CAPS
SO THEY'RE BASICALLY IT'S THE
EXACT SAME METHODOLOGY AND WE
JUST RATCHETED DOWN SO IT'S
USING THE EXACT SAME METHODOLOGY
THAT WE DID IN TWENTY TEN. FOR
TO SET THAT THE. THAT PRE TWENTY
TWENTY CAPS IS WHAT WE USE FOR
THE POST TWENTY TWENTY CAPS.
OKAY URGING PATTY WITH THE
AMERICAN CARBON REGISTRY.
IDINA AND THINKING ABOUT THE
END DIAZ SAID PROJECT TYPES THAT
REDUCE SHORT LIVED CLIMATE
POLLUTANTS.
AND THE FACT THAT WE USE A ONE
HUNDRED YEAR TWP FOR OFFSETS
ACCOUNTING PURPOSES FOR.
JG COUNTY PERSON THE CAP AND
TRADE PROGRAM FOR THOSE.
AND YET THERE.
THE WARMING POTENTIAL OF THOSE
IS ROUTE IS REALLY REALIZED
WITHIN MUCH SHORTER.
TIME FRAMES.
AND SO YOU KNOW UNDERSTANDING
THAT WE NEED TO BE ABLE TO KICK
TO COMPARE APPLES TO APPLES CO
TWO REDUCTIONS ON HUNDRED YOUR
TIME SCALE.
WITH METHANE ORDER PRODUCTIONS
AN HONOR TIMESCALE.
BUT EARNED IF WE LOOK AT A
MEANINGFUL TIME FRAME FRESNO
CP'S IT'S IN OVERLOOKING A
TWENTY YEARS WHERE WHERE WE HAVE
A. MUCH HIGHER GWP FOR THOSE.
SO I MEAN WHAT IT WOULD BE FAIR
TO SAY THAT WE.
EFFECTIVELY HAVE A NET.
CLIMATE BENEFIT.
.
BECAUSE WHERE.
YOU KNOW COUNTING THE REDUCTIONS
UNDER YOUR TIME SCALE BUT
REALIZING THE BENEFIT. ON A
TWENTY YEAR TIME SKILL SO
RELEASED REALIZING MORE KIND OF
BENEFITS AND WE'RE COUNTING FOR.
THE.
.
WITH THOSE REDUCTIONS IN A AND
WENT AND LEADING CLEAR I I THINK
I UNDERSTAND WHAT YOU'RE SAYING
I. I THINK THAT THAT MIGHT BE ON
A THAT MIGHT BE ONE WAY TO LOOK
AT IT I ALSO THINK THAT. I'M AS
WERE THINKING THROUGH.
MAKING SURE THAT WITHIN THE CAP
AND TRADE PROGRAM WE HAVE AN
APPLES TO APPLES COMPARISON IT'S
IMPORTANT THAT WE LOOK AT ALL OF
THE REDUCTIONS IN WITHIN THAT
PROGRAM FROM.
BUT SINGLE.
AT A SINGLE A GLOBAL WARMING
POTENTIAL PERIOD. AND SO YOU
KNOW I DID FOR THE COMMITTEES.
INFORMATION WHEN WE'D TO FOR
EXAMPLE THE SHORTLY CLIMATE
PUTTING PLAN WHEN DO WE DO
REGULATIONS THAT FOCUS ON. A
METHANE LIKE OUR OIL AND GAS
REGULATION THAT WE RECENTLY DID
WE ALWAYS SHOW ON THE SHORT
LIVED CLIMATE BENEFITS ON THE
TWENTY YEAR GLOBAL WARMING
POTENTIAL BECAUSE THAT IS ONE OF
THE BIG BENEFITS AS OF UP THOSE
REGULATIONS. IS THAT WE GET MORE
BANG FOR OUR BUCK AS IT WERE SO
AND THE ABILITY TO TAKE SOME OF
THE SHORT LIVED CLIMATE
POLLUTANTS OUT OF THE AIR
THEY'RE NOT. AND BECAUSE THEY
FALL OUT OF THAT IF YOU REDUCE
FEWER OF THEM THEY FALL OUT OF
FEAR MORE QUICKLY SO YOU SEE A
BIGGER BENEFIT. ONTO THE
ATMOSPHERE MORE QUICKLY SO I'M
ETHIC THAT MIGHT BE WHAT ONE WAY
TO LOOK AT IT BUT I DON'T THINK
IT WOULD REALLY AFFECT HOW WE ON.
CREDIT THINGS.
I GOOD MORNING I'M WILL BEAR
WITH THE AMERICAN LUNG
ASSOCIATION AND I WANT TO JUST
KIND OF REACTING AND POSE A
QUESTION RELATED TO YOUR. NOTE
THAT YOU KNOW LOOKING FOR TWELVE
YEARS TWENTY THIRTY THERE'S A
LOT OF UNCERTAINTY AS FAR AS HOW
WE MEET THE TARGET. AND GETTING
THEIR BEING AS IMPORTANT AS HOW
WE GET THERE.
.
AS WE LOOK AT IT AND SAY YOU
KNOW THERE IS UNCERTAINTY BUT.
HOW DO YOU ENVISION? OUT THROUGH
THIS PROCESS AND OTHER PROCESS
REALLY MAKING SURE THAT THERE IS
CERTAINTY THAT TO THOSE ARE
QUALITY BENEFITS IN THE PUBLIC
HEALTH BENEFITS AS WE GO FORWARD.
AYE WE LOOK AT AB SIX ONE SEVEN
ELSE IF ASSN THE THINGS YOU
MENTION.
IT'S CRITICALLY IMPORTANT BUT
JUST WONDER IF YOU HAVE ANY
FURTHER THOUGHTS WITHIN THE
CONTEXT OF.
THE COVENTRY DISCUSSION IN THAT
UNCERTAINTY HOW WE GET TO THOSE.
CLEANER BENEFITS.
THANK YOU WELL. I THINK THAT AS
WE LOOK AT ANYTHING THAT WERE
PROJECTING OUT TWELVE YEARS INTO
THE FUTURE THERE'S A LOT THAT WE
DON'T KNOW THAT'S GONNA HAPPEN
TWELVE YEARS OUT AND I THINK
THAT THAT'S WHY THE TRACKING
PIECE OF IT IS SO CRITICAL. WE
HAVE THIS PROCESS TO HAVE ANNUAL
UPDATES TO A ANNUALLY BE ABLE TO
LOOK AT OUR GREENHOUSE GAS
INVENTORY TO ANNUALLY REPORT TO
THIS COMMITTEE TO ANNUALLY
REPORT TO OUR BOARD. AND ONE OF
THE THINGS THAT.
YOU KNOW IT I TALKED IN MY
TESTIMONY ABOUT HOW POSTS TWENTY
TWENTY WHERE WE SEE WE NEED TO
DOUBLE THE RATE OF EMISSION
REDUCTIONS.
SO RIGHT NOW WE MIGHT BE
REDUCING EMISSIONS YOU KNOW THE
THE. PATH THAT WERE ON WE MIGHT
REDUCING EMISSIONS FIVE TO SIX
MILLION METRIC TONS.
A YEAR. POSTS TWENTY TWENTY WERE
LOOKING AT SOMETHING LIKE A
THIRTEEN MILLION METRIC TONS OF
EMISSIONS REDUCTIONS A YEAR. AND
IT'S HARD TO SORT OF AND PUT
THAT INTO CONTEXT BUT YOU KNOW
ONE WAY TO THINK ABOUT THAT IS.
THE TOTAL EMISSIONS FROM ALL
FOOD PROCESSORS IN THE STATE OF
CALIFORNIA IS TWO MILLION METRIC
TONS A YEAR. SO IT'S A PRETTY
BIG REDUCTION OR ASKING FOR
EVERY YEAR. AND AS WE START
LOOKING AT.
AS WE START GETTING INTO POST
WHEN TWENTY IN OUR PROGRAMS
REALLY NEED TO START BITING AND.
I THINK EARLY ON IN THE EARLY
TWENTY TWENTIES IN TWENTY TWENTY
THREE TWENTY TWENTY FOUR IF
WE'RE NOT SEEING A SUBSTANTIAL
INCREASE IN THE RATE OF EMISSION
REDUCTIONS.
WE KNOW THAT WE'RE NOT GOING TO
BE ON TRACK THIS IS NOT
SOMETHING YOU KNOW TWENTY TWENTY
NINE BURRITO OWN KNOW THERE'S A
PROBLEM. YOU'RE GONNA SEE ARE
FOR NAUGHT IF THE LINE ISN'T
LIKE THIS AND IT'S MORE LIKE
THIS OR LIKE THIS OR EVEN WORSE
LIKE THIS.
WE'RE GOING TO KNOWING GOING TO
BE NEED TO BE ABLE TO ADJUST
FOR THAT.
BECAUSE THIS ONE AND MAYBE HAVE
A FINAL QUESTION AFTER THAT THAT
ANYONE ELSE ONCE LINED UP.
THANK YOU TERRACE SIERRA.
THINKING IS TRYING.
.
I'D LIKE TO GO BACK TO THE THE
ASSERTION YOU MADE A COUPLE OF
TIMES THAT.
THE COMMENTS TEND TO GROUP INTO.
TWO CAMPS THOSE IN FAVOR OF
HIGHER PRICES AND LOWER PRICES
AND WHEN YOU ADDRESS THAT.
DISTINCTION.
.
I FOUND THAT AND.
SURPRISING.
BECAUSE.
.
YOU KNOW A ADDRESS THE THAT THE
BULK OF THE CONTENT OF MANY OF
THE COMMENTS THAT SAY THAT.
.
THERE IS A CONCERN THAT THE WAY
THE MARKET RULES MAY NOT
SUFFICIENTLY.
THE EXCUSE ME THE WAY THE
MARKET RULES ARE WRITTEN.
.
RISKS CREATING A MARKET THAT
MIGHT NOT.
INCENTIVIZE SUFFICIENT
REDUCTION SMITH MEET THE TARGETS.
I DID NOT SEE A TON OF COMMENTS
THAT SAID WE IS SPECIFICALLY
WANT HIGH PRICES I THINK MOST
PEOPLE WANT LOW PRICES.
THE QUESTION IS
WHETHER WE'RE CREATING A MARKET
THAT CAN ACTUALLY DRIVE THOSE
EMISSION REDUCTION.
AND THAT HAS ROOM IN THE MARKET
FOR THE PRICE DISCOVERY TO OCCUR
SO THAT INVESTMENTS OCCUR THAT
ACTUALLY CREATE THOSE REDUCTIONS.
RATHER THAN PURSUING LOW MARKET
PRICES POTENTIALLY AT THE
EXPENSE OF OTHER GOALS.
AND SO IT'S THE QUESTION IS IS
THERE ARM.
THERE'S IMPLIED IN YOUR SLIDES I
THINK THAT.
THE QUESTION OF WHETHER THE
MARKET PRODUCES LOW PRICES
ALWAYS LOW PRICES AS POSSIBLE.
OR HAS ROOM FOR PRICES TO.
.
TO RANGE ACROSS A WIDER RANGE.
.
THERE'S AN IMPLICATION THAT
THERE IS NO ENVIRONMENTAL
DIFFERENCE BETWEEN HOW THAT SET
UP THAT THERE'S NO DISTINCTION
BETWEEN WHETHER WE HAVE THE
CLIMATOLOGISTS ARE NOT.
AND I'M WONDERING IF THEY ARE BE
HAS ANALYZE THE DIFFERENT SETS
OF MARKET RULES TO SEE WHAT THE
EFFECTS ON THE ENVIRONMENTAL
OUTCOMES WILL BE BECAUSE I THINK
THAT'S REALLY. THE MAIN THING
THAT A LOT OF FOLKS ARE ASKING
FOR PLEASE PROVIDE US WITH
EVIDENCE.
THAT THE ROUTE COMBINATION OF
RULES THAT YOU'RE LOOKING AT
ACTUALLY PRODUCES RESULTS THAT
ARE CONSISTENT WITH THE SCOPING
PLAN.
SO THAT YOU KNOW I AM.
SIMPLIFYING THE KINDS OF
COMMENTS THAT WERE RECEIVING IN
THE PROCESS AND I WOULD SAY THAT.
THERE ARE.
IT.
YOU WANT TO MAKE SURE AND I I
THINK THAT WE HAVE MANY OF THE
SAME GOALS THAT WE WANT TO SEE.
A STEADY AND PREDICTABLE MARKET
PRICE
IF THE PRICE IS TOO LOW AS WE
SAW IN THE YEAR AND AS WE SAW
AND REGGIE. AND YOU ARE NOT
GOING TO SEE ENTITIES ACTUALLY
TAKING ACTION TO REDUCE
GREENHOUSE GAS EMISSIONS I THINK
THAT'S WHAT WE ALL WANT.
ON THE OTHER HAND WE DON'T WANT
TO HAVE PRICES BE HIGHER THAN
THEY NEED TO BE TO GET THE
EMISSION REDUCTIONS AND I THINK
THAT THAT'S REALLY ONE OF. THE
CHALLENGES THAT WE HAVE AS WE GO
THROUGH THIS PROCESS THAT'S
PARTLY WHY WE'RE GOING THROUGH
THIS RULE MAKING PROCESS AND
INTERESTED IN HEARING FROM A
BROAD VARIETY OF FOLKS
STAKEHOLDERS AS WELL AS THE
LARGEST LEGISLATURE ON THIS.
SEEING NO ONE ELSE LINED UP FOR
ASKING QUESTIONS THAT.
YOU THINK YOU FOR THINKING A
TROOPER.
AND THIS ONE KIND OF
UNCONVENTIONAL BUT YET I THINK
IMPORTANT TO HAVE A LITTLE MORE.
OPEN DIALOGUE WITH SOME OF OUR
STAKEHOLDERS WERE HERE. THANK
YOU FOR BEING HERE THIS MORNING
WE CERTAINLY.
I ANTICIPATE THAT THERE WILL BE
IS LIST OF QUESTIONS WILL COME
FROM SOME OF OUR COLLEAGUES WERE
NOT HERE.
WHO ANTICIPATED DAM TO BE HERE
AND BE ABLE TO ASK QUESTIONS OF
LOOK LOOK FOR THOSE FROM THE
COMMITTEE AS WELL THANK YOU AND
THANKS A LOT FOR THE NETFINITY
INCLUDE COST IN EXCESS SAID OF?
THE PRESENTERS THAT DANNY AND
UNCLE MART WITH THE INDEPENDENCE
IN MARKET. AND COSTS IN THE
INDEPENDENT MISSION MARC
ADVISORY COMMITTEE. AND ROSS
BROWN.
THAT WITH THE LA ELSE OFFICE
.
BUT YOU MAY BE YOU MAY BE A.
THANK YOU.
GOOD MORNING MR GARCIA THANK FOR
THE OPPORTUNITY TO BE HERE MY
NAME IS STANLEY COHEN WORD.
I'M A MEMBER OF THE TEAM AT
THAT RESEARCH NONPROFIT NEAR
ZERO AND A MEMBER OF THE
INDEPENDENT EMISSIONS MARKET
ADVISORY COMMITTEE.
I HAVE THREE ISSUES I'D LIKE TO
TALK ABOUT TODAY. ARE AND I'LL
SPEND MOST MY TIME ACTUALLY
RESPONDING I THINK TO SOME OF
THE ISSUES THAT MISS CHANG
BROUGHT UP THE IN HER RECENT
TESTIMONY TO YOU.
IT'S THE FIRST TWO ISSUES I'D
LIKE TO REFER TO OUR IN THE
HANDOUT I PROVIDED TO THE
COMMITTEE. AND THEY RELATE TO
THE ISSUE OF CARBON OFFSETS AYE
WHICH YOU DISCUSSED A LITTLE IN
YOUR OPENING REMARKS.
THE FIRST ISSUE I JUST WANNA
RAISES A AS YOU KNOW MISTER
GARCIA THREE NINETY EIGHT
SPECIFICALLY SETS NEW LIMITS ON
THE USE OF CARBON OFFSETS IN THE
POST TWENTY TWENTY MARKET PERIOD.
SUCH THAT NO MORE THAN FOUR
PERCENT OF EMISSIONS IN THE
PROGRAM CAN BE SATISFIED BY
OFFSETS IN THE YEARS TWENTY
TWENTY ONE THROUGH TWENTY TWENTY
FIVE. AND THAT SIX PERCENT IN
THE YEARS TWENTY TWENTY SIX TO
TWENTY THIRTY. THINK IT'S
IMPORTANT FOR THE COMMITTEE TO
BE AWARE THAT THE PROPOSAL THAT
THEY ARE BE HAS PUT FORWARD
INFORMALLY AT THE STAGE.
WOULD IN FACT APPLY THAT HIGHER
SIX PERCENT LIMIT TO THE BULK OF
THE MISSIONS OCCURRING IN THE
YEARS TWENTY TWENTY FOUR AND
TWENTY TWENTY FIVE.
WE CALCULATE THAT THAT'S ABOUT
EIGHT POINT FIVE MILLION
ADDITIONAL OFFSET CREDITS IF
THAT LIMIT IS FULLY EXPLOITED. A
YOU SHOULD JUST BE AWARE OF THAT
IF THAT'S CONSISTENT WITH YOUR
VIEWS ON THE INTENTION OF THE
BILL.
THAT'S AN IMPORTANT ASPECT AS
TO THE TOTAL OFFSET LIMITS.
ARE THE SECOND OFFSETS ISSUE YOU
MENTIONED IS IS WITH ESPECT TO
DEFINING DIRECT ENVIRONMENTAL
BENEFITS AND I APPRECIATE. OF
BOTH THE BOARD'S DISCUSSION AS
WELL AS YOUR OWN INTEREST IN
THIS.
DEFINING THIS TERM AND DOING SO
IN A WAY THAT'S VERY CAREFUL AND
RESPECTS ALL THE LEGITIMATE
INTERESTS IN THE PROCESS WILL
TAKE TIME ON SHORE AND EFFORT.
BUT OWN EMPHASIZE FOR THE
COMMITTEE THAT THUS FAR THE
BOARD HAS BEEN UNWILLING TO RULE
OUT THE ARGUMENT THAT PROJECTS
CAN QUALIFY FOR DIRECT
ENVIRONMENTAL BENEFIT ON THE
BASIS OF THE GREENHOUSE GAS
EMISSIONS.
IF THEY ARE ABLE TO SO QUALIFY
EVERY PROJECT WILL QUALIFY AND
THERE WILL BE NO LIMIT ON DIRECT
ENVIRONMENTAL BENEFITS IN THE
PROGRAM. I HEARD MS CHEN TESTIFY
TO YOU THAT THE BOARD WILL NOT
DELIVER A DEFINITION. THAT
RESULTS IN ALL PROJECTS
QUALIFYING. THAT'S CLOSE TO
SAYING THAT THAT THAT ARGUMENT
ABOUT GREENHOUSE GASES WON'T BE
ACCEPTED BUT IT'S STILL NOT
STATED. AND YOU SHOULD JUST BE
AWARE OF THAT BECAUSE AGAIN IF
GREENHOUSE GAS EMISSIONS ARE A
BASIS FOR PROVING THAT THE
PROVISION GOES AWAY AND THE
IMPLEMENTATION OF THE LAW.
SO THE FINAL ISSUE I WANT TO
TALK ABOUT AND THIS IS WELL
SPEND THE BULK OF MY TIME IS
THIS QUESTION OF. OVER
ALLOCATION AS IT'S PUT AN A. B.
THREE NINETY EIGHT ALSO CALLED
SOMETIMES OVERSUPPLY IN THE
DISCUSSIONS.
NICK THE FIRST THING TO SAY
HERE IS IS THAT. UP CALIFORNIA
IS NOT UNIQUE IN EXPERIENCING
THIS PROBLEM AFFECT EVERY MAJOR
CARBON MARKET IN THE WORLD HAS
EXPERIENCED THIS EXACT SAME
PHENOMENON. POSSIBLY BECAUSE
MOST OF THESE CARBON MARKETS
ROAD THROUGH THE RECESSION YOU
DISCUSSED EARLIER WHICH
EXOGENOUSLY CAUSED EMISSIONS TO
FALL LOWER THAN WHEREVER THE
PROGRAM CAPS WERE SET. PRIOR TO
THE MISSIONS UP PRIOR TO THAT TO
THE RECESSION.
AND THE INTERESTING THING ABOUT
CALIFORNIA'S THAT BOTH OF THE
OTHER MAJOR MARKETS IN THE WORLD
BOTH THE NORTHEASTERN STATES
REGGIE CARBON MARKET AS WELL AS
THE EUROPEAN UNION CARBON MARKET.
HAVE BOTH IDENTIFIED THIS ISSUE
STUDIED IT AND IMPLEMENTED
PROGRAMMATIC REFORMS TO DEAL
WITH THE PROBLEM OF CLOUDS OVER
ALLOCATION. EITHER BY REMOVING
ALLOWANCES UP FRONT OR IN THE
CASE OF BOTH MARKETS ALSO
REMOVING ALLOWANCES ON THE BASIS
OF TRACK INFORMATION.
AS THE BANK OF ALLOWANCES IN
PRIVATE HANDS GROWS THE SUPPLY
OF ALLOWANCES GOES UP OR DOWN
DEPENDING ON THE AMOUNT OF THAT
BANK.
SO BOTH OF OUR OUR MOST
IMPORTANT APPEAR SYSTEMS IN THE
WORLD HAVE DEALT WITH THIS
PROBLEM QUITE SUCCESSFULLY AND
THERE'S NO TECHNICAL BARRIER TO
DOING THAT HERE.
I THINK THE MAIN BARRIER
RELEASED TO HAVE AN HONEST
CONVERSATION ABOUT THE NATURE OF
THIS PROBLEM.
AND WITH THAT I I I PROVIDED IN
THE COMMITTEE.
BACKGROUND DOCUMENT REFUSE TO
REPORT THAT MY TEAM PUT OUT ON
THIS ISSUE. AND MISS CHIANG
TESTIFIED THIS MORNING THAT OUR
REPORT IS INCORRECT.
I WANT TO CLARIFY HOW THE THE
EXCHANGE I JUST HAD WITH MISS
CHIANG INFORMED WHAT I'M ABOUT
TO TELL YOU.
I THINK WHAT SHE'S TELLING YOU
IS NOT ENTIRELY TRUE NICK IT'S
TECHNICALLY TRUE.
BUT IT DOESN'T ACTUALLY ADDRESS
THE SUBSTANCE OF THE CONCERNS WE
RAISED AND IF I COULD REFER YOU
MISTER GARCIA TO THE BACKGROUND
DOCUMENT OF THAT YOU HAVE THAT
THE YOUR COMMITTEE PREPARED.
IN TABLE ONE ON PAGE THREE.
WALKS THROUGH SOME OF THE
CALCULATIONS SIMILAR TO THE
CALCULATIONS MY TEAMMATE NEAR
ZERO PRESENTED.
AND WHAT I HEARD MISS CHANG
TESTIFY IS THAT THE PROGRAM CAPS
IN THE CAP AND TRADE SYSTEM ARE
SET USING FACILITY LEVEL DATA.
AND THAT REFERS TO. A WHAT WOULD
BE THE FOURTH LINE WHERE IT SAYS
POST TWENTY TWENTY ALLOWANCES
WITHOUT RESERVE. AND IN BOTH OF
THE CASES IN THAT TABLE THE
NUMBER TWO FIVE THREE TWO WAS
IDENTIFIED THAT'S THE NUMBER OF
ALLOWANCES THE BOARD PROJECTS IN
THE POST TWENTY TWENTY PERIOD IN
THE CURRENT MARKET RULES.
MS CHANG TESTIFIED THAT THE
NUMBER OF ALLOWANCES IS SET
USING FACILITY LEVEL EMISSIONS
DATA. THAT IS TRUE.
THE ERROR WE IDENTIFIED HAS TO
DO WITH THE FIRST LINE IN THAT
TABLE.
WHERE THE PROJECTED EMISSIONS IN
THE POST TWENTY TWENTY PERIOD
ARE BASED NOT ON FACILITY LEVEL
EMISSIONS
BUT ON THE EMISSIONS FROM THE
ENTIRE SECTORS THAT ARE COVERED
BY CAP AND TRADE WHICH INCLUDES
A SIGNIFICANT NUMBER OF
EMISSIONS THAT ARE NOT SUBJECT
TO CAP AND TRADE?
THIS ERROR REMAINS AN ERROR AND
RESULTS IN THE PROBLEM WE
IDENTIFIED IN OUR WORK THAT
SHOWS THAT THE BOARDS ANALYSIS
ABOUT OVER ALLOCATION DOESN'T
HOLD ANY WATER.
THAT CONTINUES TO BE TRUE.
AND I CANNOT EMPHASIZE HOW MUCH
OF THE BASIC SCIENTIFIC
INTEGRITY QUESTION THIS'S WE
WENT STRAIGHT TO THE MODEL
OUTPUTS THAT THE BOARD SITES IN
THE SCOPING PLAN. WE TRIPLE
CHECKED THE NUMBERS THE NUMBERS
MATCH WHAT ARE BE PUBLISHED AND
THEY ARE NOT FACILITY LEVEL
EMISSIONS DATA SO THE
CALCULATIONS THE BOARD PRESENTS.
ARE IN FACT BASED ON SECTOR WIDE
EMISSIONS.
THIS IS A PROBLEM BECAUSE THE
CALCULATED REDUCTIONS IN THE
BOARD'S REPORT ATTRIBUTED TO THE
CAPITA RATE PROGRAM ARE INFLATED
AS A RESULT OF THIS AIR.
AGAIN THIS IS JUST BASIC
ACCOUNTING.
I WANNA EMPHASIZE FURTHER THAT
THE QUESTION OF HOW TO DEAL WITH
OVER ALLOCATION IS A QUESTION OF
WHAT HAPPENS IN THE YEAR TWENTY
THIRTY THE YEAR OF S. B. THIRTY
TWOS BINDING STATEWIDE EMISSIONS
LIMITS.
AS LEN WHEN OTHERS HAVE
TESTIFIED
THE QUESTIONABLE REALLOCATION IS
A QUESTION OF WHETHER OR NOT
THESE EXTRA ALLOWANCES WILL
CAUSE THE STATE TO MISSION MISS
ITS EMISSIONS TARGETING TWENTY
THIRTY.
THE BOARD HAS NOT ANALYZE THE
QUESTION OF WHAT OVER ALLOCATION
MY TO TO EMISSIONS IN THE YEAR
TWENTY THIRTY. THAT IS THE
SINGLE AND PRIMARY QUESTION THAT
IS STILL LEFT UNADDRESSED.
THIS DISCUSSION IS CHIANG AND I
HAD I'D BE DELIGHTED TO CONTINUE
THAT DISCUSSION WITH YOUR
PERMISSION.
IS A QUESTION OF WHETHER OR NOT
THE INFORMATION THE BOARD PUT
FORWARD TO SATISFY AB THREE
NINETY EIGHTS INSTRUCTION TO
STUDY THIS ISSUE PASSES A BASIC
SCIENTIFIC INTEGRITY TEST.
IT DOES NOT IN MY OPINION.
THANK YOU FOR YOUR TIME.
NEXT.
PRESENT.
THANK YOU CHAIRMAN GARCIA I'M MY
NAME IS ANN CARLSON I AM A
PROFESSOR OF LAW AT UCLA SCHOOL
OF LAW WHERE I DIRECT THE M.
INSTITUTE ON CLIMATE CHANGE IN
THE ENVIRONMENT AND I'M ALSO ON
THE INDEPENDENT. COMMISSIONS
MARKET ADVISORY COMMITTEE.
I SHOULD SAY HAS ALSO CALIFORNIA
ASSEMBLY FELLOW IN NINETEEN
EIGHTY TWO I SPENT FOUR YEARS
WORKING IN SACRAMENTO SO IT'S.
DEJA VU IN SOME RESPECTS
ALTHOUGH I NEVER BEEN ON THE
SIDE OF THE. OF THE MICROPHONE
AS OF YOU FOR GIVING ME AN
OPPORTUNITY TO.
SHARE SOME THOUGHTS HERE I WANT
TO START BY EMPHASIZING
SOMETHING IMPORTANT ABOUT MYSELF
AND THAT'S THAT I'M NOT
ECONOMIST.
AND I'M NOT A POSITION TO ANSWER
THE KINDS OF QUESTIONS THAT I'M.
PARTICLE WORD IS IS RAISING
ABOUT FOR EXAMPLE THE ACCOUNTING
PROCEDURES.
A BUT I DO WANNA OTHER TAKE THIS
OPPORTUNITY TO THINK ABOUT THE
ROLE THAT YOUR COMMITTEE. CAN
PLAY AND PROVIDING OVERSIGHT OF
THE CAR PROCESS
I'M I SHOULD SAY THAT AS A
SCHOLAR OF.
I'M ADMINISTRATIVE AGENCIES EPA
CAR BUT CETERA.
THIS IS A GREAT OPPORTUNITY FOR
ME TO THINK ABOUT THE
APPROPRIATE ROLE THAT THE
LEGISLATURE AUTOPLAY VIS A VIS
AND ADMINISTRATIVE AGENCY. THAT
IS DELEGATED THAT EXTRAORDINARY
AMOUNT OF POWER AND AUTHORITY.
.
BY THE LEGISLATURE WHICH I THINK
IS PLACE A LOT OF TRUST IN CARP
AT AND AT THE SAME TIME
CONTINUING TO PLAY AN ONGOING
ROLE THAT I THINK IT'S AN
IMPORTANT ONE AND SO.
PART OF WHAT I WANNA DO IS JUST
COME AND THAT THE.
LEGISLATURE FOR ACTUALLY
THINKING HARD ABOUT THAT
APPROPRIATE BALANCE BETWEEN THE
TWO AGENCIES AND THEN. SAY
SOMETHING ABOUT THE WAY IN WHICH
THIS COMMITTEE MIGHT THINK ABOUT
THE OVER ALLOCATION PROBLEM FROM
AN OVERSIGHT PERSPECTIVE AS
OPPOSED TO REALLY TECHNICAL KIND
OF ECONOMIC PERSPECTIVE.
SO I'M SO THIS IS REALLY FOR FOR
ME AND SINCE SOME RESPECT TO ADD
EXERCISE AND FRAMING HOW TO
THINK ABOUT THE ISSUE. BECAUSE
AS.
.
MS CHANG SAID I THINK
APPROPRIATELY THIS IS A LONG
TERM ISSUE WITH A LONG TAIL
WHERE WE DON'T HAVE COMPLETE
INFORMATION. AND MORE
INFORMATION WILL COME GOING
FORWARD AND ONE THING THE
COMMITTEE MIGHT THINK ABOUT IS
HAVE STRUCTURE SOME OF THE
QUESTIONS ABOUT WHAT KIND OF
INFORMATION IS NECESSARY. AND I
THINK THAT THINK ABOUT THAT IT
IT MIGHT BE GOOD TO STEP BACK
AND THINK ABOUT SOME FIRST
PRINCIPLES.
AND AT BY THAT WHAT I MEAN IS I
THINK IT'S IMPORTANT THINK ABOUT
THE GOALS THAT.
AB THIRTY TWO AND SB THIRTY TWO
AND AND SO FORTH HAVE SET IN
TRYING TO ACCOMPLISH. DEEP
GREENHOUSE GAS EMISSIONS
REDUCTIONS AND THINK ABOUT
WHETHER SOLUTIONS TO THE OVER
ALLOCATION PROBLEM ARE
CONSISTENT WITH THOSE SCHOOLS
AND ALSO TO RECOGNIZE THAT THOSE
SCHOOLS CAN BE ATTENTION WITH
ONE ANOTHER. AND SO GETTING
INFORMATION ABOUT WHETHER THOSE
SCHOOLS ARE ACTUALLY GOING TO BE
ACCOMPLISHED SEEMS TO ME TO BE
AN IMPORTANT ROLE FOR YOUR
COMMITTEE TO PLAY.
SO LET ME JUST EXPLICATE SOME OF
THOSE SCHOOLS PEOPLE MAY THINK
THERE ARE OTHERS BUT ALL PUT A
FEW IN FRONT OF YOU. AND THE
TALK ABOUT THE WAYS IN WHICH
THOSE SCHOOLS MIGHT ACTUALLY BE
IN TOUCH WITH EACH OTHER AND THE
KINDS OF QUESTIONS THAT YOU
MIGHT ASK TO GET MORE
INFORMATION. SO THAT YOU CAN
PROVIDE APPROPRIATE GUIDANCE TO
CARVE ABOUT WHICH SCHOOLS ARE
MORE IMPORTANT HOW TO BALANCE
THE COMPETING INTERESTS AND SO
FORTH.
SO IN MY VIEW M. AND THAT THE IT.
A DECENT AMOUNT OF THIS FROM THE
LEGISLATION LEGISLATIVE HISTORY.
OF THE GOALS OF ANY SOLUTION TO
THE OVER ALLOCATION PROBLEM
THAT'S ASSUMING THERE ISN'T OVER
ALLOCATION PROBLEM ASSUMING IT'S
A SERIOUS ONE.
SEEM TO ME TO BE M. MAYBE IN
THIS ORDER ALTHOUGH YOU COULD
QUIBBLE WITH MY ORDER FIRST TO
ACHIEVE THE ENVIRONMENTAL
OUTCOME AND THAT IS THE BINDING
GOAL SET.
FOR BY ON.
LEGISLATION TO CUT GREENHOUSE
GAS EMISSIONS BY TWENTY THIRTY
UP BY FORTY PERCENT OR NINETEEN
NINETY LEVELS AND IMPORTANTLY
ALSO TO THINK ABOUT WHETHER. AS
MISS CHANG SUGGESTED THAT ALSO
GETS US ON THE TRAJECTORY A
TRAJECTORY THAT DOESN'T END IN
TWENTY THIRTY BUT THAT ENDS MID
CENTURY OR MAYBE NEVER ENDS. AND
THAT IS uDEEPLY
THE CALIFORNIA ECONOMY AND SO I
THINK WE SHOULD KEEP.
THAT LONGER TERM GOAL IN MIND AS
WELL BECAUSE IT MAY BE THAT THE
ANSWER TO THE QUESTION OF THE
OVER ALLOCATION PROBLEM SHOULD
TAKE INTO ACCOUNT THE FACT THAT
WERE LIKELY TO CONTINUE TO
REGULATE POST TWENTY THIRTY.
I'M SO ACHIEVING ENVIRONMENTAL
OUTCOMES HE'S TO ME TO BE A.
PRIMARY PRINCIPLE MAYBE THE MOST
IMPORTANT GOAL BUT SIMILARLY
IT'S VERY IMPORTANT DO SO COST
EFFECTIVELY THAT'S. THAT'S OF
REPLETE THROUGHOUT THE
LEGISLATION IT'S ALSO SOMETHING
I THINK KNOWN WOULD QUIBBLE WITH
THAT WE WANT TO TRY TO FIGURE
OUT HOW TO DO THIS IN A WAY THAT.
HELPS GROW THE ECONOMY THAT
MAINTAINS PRICES FOR THINGS LIKE
FUEL AND ELECTRICITY AT AND AT A
RATE THAT CONSUMERS CAN AFFORD.
WE WANT TO BE PARTICULARLY
CONCERNED ABOUT DISTRIBUTIONAL
CONSEQUENCES FROM LOW INCOME
CONSUMERS WE SOMETIMES TALK
ABOUT ENVIRONMENTAL JUSTICE ON
THE ENVIRONMENTAL SIDE I THINK
IT'S ALSO IMPORTANT TO KEEP IN
MIND THAT. THE ECONOMIC
CONSEQUENCES THAT HIGHER LEVELS
PRICES FOR EXAMPLE COULD HAVE ON
THINGS LIKE GASOLINE. I'M I
THINK WE ALSO WANT.
AND THIS IS PROBABLY A A LESSER
GOAL BUT ONE THAT MIGHT BE WORTH
KEEPING IN MIND. A PREDICTABLE
RELIABLE REVENUE STREAM FROM THE.
AUCTION OF ALLOWANCES I'M I
KNOW THAT RAISING REVENUE IS NOT
THE PRINCIPAL FOCUS OF THE.
OF THE PROGRAM BUT IT IS
HELPFUL TO HAVE STEADY OF BURKE
PREDICTABLE REVENUE THAT HELPS
BUDGET AND SO FORTH AND OF
COURSE THAT REVENUE HAS PAID FOR
SOME REALLY IMPORTANT. PROGRAMS
AND WILL CONTINUE TO DO SO.
SO WHY FORWARD MY PERSONAL
FAVORITE IS CLEANING UP THE
TRANSPORTATION FLEET WHICH I
THINK ISTHE SINGLE BIGGEST
PROBLEM FOR.
FOR.
DISADVANTAGED COMMUNITIES AND
FOR AIR POLLUTION PROBLEMS THAT
WE CONTINUE TO FACE.
I THINK ANOTHER GOAL IS TO TRY
TO MAKE TRANSITIONS FOR EXAMPLE
INTO THE TWENTY TWENTY. PERIOD.
STABLE AND TO LIMIT VOLATILITY
AND AND PRICES THAT SUPPORT FOR
CONSUMERS IT'S ALSO IMPORTANT
FOR THE REGULATED PARTIES AND
THAT FINALLY THIS MIGHT SEEM
LIKE A WEIRD GOAL BUT I THINK
IT'S IMPORTANT TO KEEP IN MIND
IS. THAT IT'S IMPORTANT TO
MAINTAIN POLITICAL STABILITY FOR
THE PROGRAM AND ONE OF THE GREAT
HALLMARKS TO ME. OF CALIFORNIA'S
CLIMATE POLICIES IS THAT WE HAVE
MAINTAINED VERY STRONG PUBLIC
SUPPORT FOR THE PROGRAM WE'VE
MAINTAINED. A FAIR AMOUNT OF
SUPPORT BY A LOT OF REGULATED
PARTIES AND I THINK THAT'S IN
PART BECAUSE WE'VE DONE A VERY
GOOD JOB OF REDUCING EMISSIONS
ARE COST EFFECTIVE PRICES. AND
SO KEEPING THAT GOAL IN MIND
WHEN WE THINK ABOUT.
TRY TO SOLVE THE OVER
ALLOCATION PROBLEM SEEMS TO ME
TO BE IMPORTANT IT'S I JUST
WANTED TO HIGHLIGHT THAT.
THAT DIFFERENT SOLUTIONS THAT
HAVE BEEN PROPOSED I DON'T I
DON'T I THINK WE'RE PROBABLY NOT
OF THE STAGE AT TO ACTUALLY
FIGURE OUT WHAT THE RIGHT
SOLUTION IS A BIG WE NEED MORE
INFORMATION. BUT THE DIFFERENT
SOLUTIONS COMPOSED REAL TENSIONS
BETWEEN THOSE SCHOOLS
SO FOR EXAMPLE IF WE WERE TO SAY
LET'S DO NOTHING ABOUT THE OVER
ALLOCATION PROBLEM ASSUMING THAT.
IT EXISTS AND IT'S PRETTY
SERIOUS WE COULD MISS THE TWENTY
THIRTY GOAL BY TEN OR TWENTY OR
EVEN THIRTY PERCENT TO SOME
PROJECTIONS
CHEST.
BUT THE COSTS WOULD BE LOW. BY
WAY OF HAVE MUCH LOWER COST
BY THE SAME TOKEN IF WE SIMPLY
CUT OFF A HUGE NUMBER OF. A PRE
TWENTY TWENTY ALLOWANCES THAT
BEEN BANKED AND SO FORTH WE
MIGHT MEET THE ENVIRONMENTAL
GOAL THAT WE MIGHT SEE PRICE
SPIKES.
AND AGAIN TO TRY TO FIGURE OUT.
BY HOW MUCH IT CETERA SEEMS TO
ME TO BE AN IMPORTANT GOAL FOR
THIS COMMITTEE AND. A AND WOULD
BE A GOOD WAY TO THINK ABOUT THE
INTERACTIONS WITH CARBON SEEKING
INFORMATION FROM CARP ABOUT. THE
TRADE OFFS.
BETWEEN THOSE TWO GOALS AND OF
COURSE SOME OTHER ONES HOW
VOLATILE PRICES BE IF WE AND
ADOPT A PARTICULAR SOLUTION.
ARE WE LIKELY TO USE LIVES
POLITICAL SUPPORT ARE WE LIKELY
TO SEE BIG PRICE SPIKES IN FUEL
PRICES ARE ELECTRICITY AND SO
FORTH. AND SO I'M SO FOR ME AND
TRY TO EVALUATE THESE PROPOSALS
I THINK OF BE HELPFUL TO GET
MORE INFORMATION FRAMED AROUND
THESE SCHOOLS AND AGAIN I THINK
THAT MIGHT BE. A WAY FOR
LEGISLATIVE OVERSIGHT TO PROCEED
GOING FORWARD AS.
CARD COMES OUT WITH A PROPOSAL
IN IS VERY STAKEHOLDERS RESPOND
TO THAT PROPOSAL.
I'M.
LET ME NOW JUST MOVE ON TO THE
QUESTION OF DIRECT ENVIRONMENTAL
BENEFITS I I AGREE WITH.
OF DR COHN WORD THAT TIME.
WE CANNOT MEASURE DIRECTIVE ARE
NOT A BENEFIT SIMPLY BY SAYING
THE REDUCE GREENHOUSE GASES I
THINK THAT DEFEATS THE PURPOSE
OF THE LEGISLATION. AND SO IT
WOULD BE HELPFUL I THINK TO
CLARIFY THAT PARTICULAR POINT.
THE ONLY OTHER THING I'LL SAY IS
I I THINK I'D BE REMISS AS A.
LAW PROFESSOR IF I DIDN'T RAISE
THE QUESTION OF WHETHER THEY'RE
CONSTITUTIONAL PROBLEMS WITH.
THE WAY THAT THE LEGISLATION
READS RIGHT NOW I THINK THERE
IT'S AT LEAST WORTH A DEEPER
ANALYSIS OF WHETHER THEY'RE
COMMERCE CAUSE PROBLEMS WITH
SINGLING OUT CALIFORNIA TO HAVE
DIRECT ENVIRONMENTAL BENEFITS
THINK IT'S ACTUALLY COMPLICATED
QUESTION. I THINK THE.
NINTH CIRCUIT'S RULING ON THE
LOW CARBON FUEL STANDARD GIVES.
SOME HOPE THAT THE LEGISLATION
WOULD ACTUALLY BE OF HELP BUT I
THINK PROBABLY DESERVES MORE
ANALYSIS AND. HONEST IS WORTH
SAVING.
THANK YOU THANK YOU.
THANK YOU MISTER CHAIRMAN RICH
ROSS BROWN WITH THE LA THOUGH.
I THINK I'D LIKE TO JUST BEGAN
MY COMMENTS JUST.
FIRST SORT OF STATING I THINK
THAT GENERALLY OUR OFFICE HAS
BEEN SUPPORTIVE OF CARBON
PRICING AND CAP AND TRADE IN
PARTICULAR AS A. TOOL TO ACHIEVE
THE STATE'S AGGRESSIVE
GREENHOUSE GAS TARGETS AND
RECOMMENDED THE LEGISLATURE
EXTENDED PROGRAM.
LAST YEAR BECAUSE WE DO THINK
IT'S THE ONE OF THE MOST COST
EFFECTIVE TOOLS TO ACHIEVE THOSE
GOALS IN THIS PARTICULAR
IMPORTANT GIVEN THE AMBITION OF
THE. OF THIS LEGISLATURE'S GOALS.
HOWEVER IT IS AN EXTREMELY
COMPLICATED PROGRAM AND IT'S
IMPORTANT TO GETS.
THE DESIGN FEATURES RIGHT AND
BALANCE ALL THE DIFFERENT TRADE
OFFS IN THOSE DESIGN FEATURES
AND SO. WHAT WE THINK OVERSIGHT
AND HEARINGS LIKE THIS ARE ARE
IMPORTANT?
FOR FROM THE LEGISLATURE'S
PERSPECTIVE.
ALSO JUST WENT OUT WE RELEASED
GONNA A REPORT LAST DECEMBER
HIGHLIGHTING SOME OVERSIGHT
ISSUES AND.
SOME OF THOSE ARE DISCUSSED AND
AND THE HEARING STAY ON THE
TOPIC OF OF THE HEARING TODAY WE
ALSO PRODUCED A HAND OUT FOR
TODAY'S HEARING WHICH YOU SHOULD
HAVE. IN YOUR POCKET IF YOU
DON'T THE SERGEANTS SERGEANTS
CAN ARE. PRESENT THAT.
I'LL JUST DISCUSS SOME OF THE
ISSUES THAT WE HIGHLIGHT IN THE
LAST FEW PAGES OF THOSE HAND OUT.
THE FIRST TO THE ISSUE OF OVER
ALLOCATION AND JUST MORE BROADLY
SETTING CAPS AND OTHER SUPPLY OF
ALLOWANCES.
THE POST TWENTY TWENTY PROGRAM
ARE OBVIOUSLY VERY A VERY
IMPORTANT ISSUE FROM AN
ENVIRONMENTAL PERSPECTIVE.
AND.
YOU JUST ASK THE QUESTION ARE
CAPS THAT IN A WAY THAT'S
CONSISTENT WITH THE
LEGISLATURE'S TWENTY THIRTY GOAL
IS THE PROGRAM GENERALLY SET UP
IN A WAY. THAT'S LIKELY TO
ACHIEVE THE LEGISLATURE'S
GREENHOUSE GAS GOALS.
IT'S PARTICULARLY IMPORTANT
GIVEN THAT AND THE SCOPING PLAN
CAP AND TRADE IS IDENTIFIED AS
SORT OF THE TOOL THAT WILL
ENSURE THE STATE MEETS THOSE
GOALS.
WHAT OTHER POLICIES ARE ABLE TO
ACHIEVE CAP AND TRADE WILL MAKE
UP THE DIFFERENCE SO IT'S PRETTY
GOOD IMPORTANT TO DEMONSTRATE
THAT IT'S ACTUALLY SET UP IN A
WAY TO ACHIEVE THAT GOAL?
AND ARE DECEMBER REPORT THAT I
MENTIONED WE LAID OUT.
ONE PLAUSIBLE SCENARIO WHERE
JUST GIVEN THE STRUCTURE OF THE
PROGRAM WITH BANKING AND
POTENTIALLY WITH SOME UNUSED
ALLOWANCES CARRIED OVER IN THE
TWENTY TWENTY PROGRAM. YOU GET
THE STATE DEFINED ITSELF IN A
SITUATION WHERE IT MEETS THE
SORT OF CUMULATIVE EMISSION
REDUCTION OUR MISSION GOALS BUT
DOESN'T NEED ITS ANNUAL TWENTY
THIRTY TARGET THAT'S THE THAT'S
LAID OUT IN STATUTE AND SO. I
THINK THAT'S KIND OF IMPORTANT
ISSUE TO EXAMINE US KIND OF IS
THE IS THE PROGRAM GONNA GONNA
PUT THE STATE ON TRACK TO
ACHIEVE ITS ANNUAL TWENTY THIRTY
GOAL.
DESPITE THIS POSSIBILITY OUR
CARBON ITS INITIAL WORKSHOPS
HAS NOT IN OUR VIEW DEMONSTRATED
OR EXPLAINS.
HOW THE PROGRAM IS LIKELY TO
ACHIEVE THAT TWENTY THIRTY GOAL
AND PUT THE STATE ON TRACK TO
ACHIEVE THAT TWENTY THIRTY
TARGET?
THEY HAVE DONE SOME ADDITIONAL
ANALYSIS AT THE AS YOU'VE HEARD
LOOKING AT.
I ESTIMATED CUMULATIVE EMISSIONS
AND KIM WOULD HAVE REDUCTIONS
AND THERE'S SOME DISCUSSION THAT
DR ARTICLE IN WORD MENTIONED.
WE DO SHARE SORT OF SOME OF THE
CONCERNS AROUND.
THE ANALYSIS OF KEY MODE OF THE
NATION'S INCOME HOW THAT THAT
PROGRAM WOULD WOULD REDUCE THOSE.
.
BUT DATE I THINK THE MORE
IMPORTANT POINT IS THAT THERE IS
STILL HAS NOT REALLY BEEN AN
EXPLANATION OF EXACTLY. HOW THE
BOARD ENVISIONS THE PROGRAM?
AS GONNA PUT IN THE STATE ON
TRACK TO ACHIEVE ITS TWENTY
THIRTY GOALS.
.
SO THEY THAT THE LEGISLATURE
MIGHT WANT TO.
DIRECTS A CARP TO REPORT ON HOW
THE PROGRAM IS LIKELY TO DO THIS.
EVALUATE AND THEN EVALUATE
DIFFERENT BE A SIGNIFICANT ISSUE. AT THE
VERY LEAST.
I THINK SO ONE OF THE POINTS
THAT WAS MADE EARLIER.
BY MISS CARLSON.
ESTABLISH SOME CRITERIA.
AND AND SERVE DATA COLLECTION
TO SORT OF OUTLINE IF NO
ADJUSTMENTS ARE MADE NOW AT
LEAST IN THE FUTURE WHAT ARE THE
CRITERIA THEY'RE GOING TO BE
USED TO EVALUATE. WHEN THIS IS A
PROBLEM IF AND IF IT IS A
PROBLEM WHAT ARE THE LIKELY
STEPS THAT THE STATE'S GONNA
TAKE TO TO ADDRESS IT.
THEIR VARIETY OF OPTIONS THAT
THE LEGISLATURE HAS IN THE STATE
HOUSE IN FRONT OF IT RIGHT NOW
TO.
DEAL WITH THE POTENTIAL OVER
SUPPLY PROBLEM INCLUDING MOVING
SOME ALLOWANCES EITHER TO THE
PRICE CEILING OR MAYBE A MORE
MODEST APPROACHES.
MOVING SOME TO SOME OF THE.
SPEED BUMPS AT SOME OF THE
LOWER PRICES.
THERE I THINK THE MAIN PUSHED
BACK TO SOME OF THESE CHANGES.
WHICH IS FAIR IS THAT IT IT NOW
IT HAS.
PUTS UPWARD PRESSURE PRESSURE
ON PRICES AND COSTS.
AND SO THERE IS DEFINITELY A
VERY CLEAR TRADE OFTEN AND
MAKING SOME OF THOSE ACTIONS AND
MAKING SOME OF THOSE CHANGES.
ARE BUT JUST A COUPLE POINTS ON
THAT ONE.
EVEN UNDER THE CURRENT PROGRAM
UNDER KIND OF THE CURRENT CAPS
MORE THAT'S OF SUPPLIED
ALLOWANCES IT IS. THERE'S STILL
A.
SIGNIFICANT REST THE PRICES
COULD INCREASE SIGNIFICANTLY
EVEN CUT NOW IT SO THERE'S JUST
A LOT OF UNCERTAINTY AROUND
PRICES REGARDLESS OF WHAT
ADJUSTMENTS MIGHT BE MADE.
IN RESPONSE TO WHATEVER OVER
SUPPLY ISSUE MIGHT BE OUT THERE.
.
I THINK MAYBE THE MORE IMPORTANT
POINT FROM OUR PERSPECTIVE IS
THAT IT'S THE QUESTIONS AROUND
STE
SUPPLY OF ALLOWANCE IS AN
OVERSUPPLY AND WHERE TO SET THE
CAPS.
ARE REALLY IN OUR VIEW SHOULD BE
DRIVEN PRIMARILY BY THE IN THE
STATE'S ENVIRONMENTAL GOALS AND
WHETHER OR NOT IT'S CONSISTENT
WITH THE STATE'S ENVIRONMENTAL
GOALS. THEIR FAIR CONCERNS
AROUND.
COSTS AND TRADE OFFS RELATED TO
COSTS
HOWEVER THAT THE PROGRAM DOES
HAVE OTHER FEATURES THAT ARE
SPECIFICALLY DESIGNED TO TRY TO
MITIGATE AGAINST SOME OF THOSE
RISKS FOR EXAMPLE AB THREE
NINETY EIGHT.
DIRECTOR CARP TO ESTABLISH A
PRICE CEILING AND THE GOLD THAT
PRICE CEILING HAS TO DEAL WITH
THAT THE THE SPECIFIC RISK OR
CONCERNED ABOUT PRICES AND COST
GETTING TOO HIGH AND SO. TO THE
EXTENT THE LEGISLATURE IS
CONCERNED ABOUT THAT AND YOU
KNOW IT WENT TO I THINK LOOK
VERY CLOSELY AT. OUR ENSURING
CAR BESETTING THE LEVEL THAT
PRICE HILL IN THE WAY THAT'S
CONSISTENT WITH HOW THE
LEGISLATURE BALANCES ITS GOALS
ARE BETWEEN VARMINT GOALS AND
ALSO.
MAINTAINING COSTS AT A
REASONABLE LEVEL.
.
FINALLY JUST VERY QUICKLY ON THE
OFFSETS ISSUE I DON'T KNOW THAT
I HAVE MUCH TO ADD BEYOND WHAT
HAS ALREADY BEEN SAID. OTHER
THAN I THINK JUST ALSO THE
HIGHLIGHTS.
YOU KNOW THAT IT APPEARS BASED
ON SOME STAFF COMMENTS IN
WORKSHOPS THAT THERE WERE SOME
CONSIDERATION OF ALLOWING A
GREENHOUSE GAS REDUCTION. AS
COUNTY NOW HAS A DIRECT
ENVIRONMENTAL BENEFIT AYE I
THINK YOU KNOW THAT THAT CLEARLY
WOULD SORT OF FLATTENED MAKE
OFFSET PROJECTS POTENTIALLY
QUALIFY. AND THAT DOES SEEM TO
BE INCONSISTENT IF IT WERE TO BE
IMPLEMENTED THAT WAY THAT DOES
SEEM TO BE INCOME
AND WITH THE INTENT OF OF THE
THE STATUTE ITSELF.
I WANT MY COMMENTS THERE AND.
HAPPY TO ANSWER ANY QUESTIONS
ABOUT.
THANK YOU.
MY COLLEAGUE GUY CAN QUESTIONS.
SURE THANK YOU MISTER CHAIR.
.
CURIOUS ABOUT.
SO LITTLE NO MORE DETAIL ON THE
STATE OF THE MARKET ITSELF AND
THE CARBON MARKET.
.
I DON'T KNOW TO WHICH OF YOU
THIS IS BEST DIRECTED BUT.
LIQUIDITY BROUGH LIKE VOLUME A
BILATERAL TRADING WHEN WE
ACTUALLY SEEING IN THE CAR
MARKET IS THIS IT. IS A ROBUST
MARKETPLACE RIGHT NOW OUR DOES
IT FEEL LIKE.
.
STRICTLY A COMPLIANCE MARKET
SORT OF WITHOUT I KNOW THERE'S A
LOT OF FOLKS LOOKING
CALIFORNIA'S WOULDN'T MAKE SOME
INVESTMENT DETERMINATIONS AND.
AND LOOK AT IT FROM A TRUE
MARKET INVESTMENT PERSPECTIVE
NOT NOT LIKE A REGULATE IT AND
HE WOULD LOOK AT IT. WHAT ARE WE
SEEING IN THAT LANDSCAPE HOW
MANY NEW PLAYERS ARE ARE GETTING
ENGAGED IN THAT CALIFORNIA
CARBON MARKET IN?
AND AND YOU KNOW SORT OF WHAT IS
THE STATE OF.
OF THAT SORT A SECONDARY MARKET
LOOK LIKE RIGHT NOW YOU KNOW WE
DON'T WE DIDN'T GET NEW
INFORMATION TODAY ABOUT THE
AUCTION I'M ASSUMING THAT CAN
YESTERDAY SENATOR RIGHT SO SO
DID WE DO WE HAVE. ANY AND I
KNOW THAT'S THE THOSE OF THE
COMPLIANCE ALLOWANCES BUT SURELY
SECONDARILY MORE ACTIVITY. THREE
IF YOU TAKE ON THAT.
SO SO I THINK THE FIRST THING TO
SAY SENATOR IS THAT THERE'S NO
PUBLIC DATA ON SECONDARY MARKET
BEHAVIOR AND THAT'S ALL THROUGH
PRIVATE DATA SERVICES I DON'T
HAVE DIRECT ACCESS TO ANY OF
THAT RIGHT NOW. WHEN YOU READ
SUMMARY REPORTS FROM THOSE
INDIVIDUALS TRAINING SECTION AND
QUITE THIN RECENTLY. I THINK TO
YOUR QUESTION ABOUT WHO'S
ENGAGING IN THE MARKET ONE OF
THE MOST IMPORTANT.
DATA POINTS TO GIVE YOU IS THAT
A TYPICAL AUCTION INCLUDING THE
MAY AUCTION THE RESULTS CAME OUT
YESTERDAY. FEATURES AROUND
NINETY FIVE PERCENT OF THE
ALLOWANCES BEEN PURCHASED BY
COMPLIANCE ENTITY WAS SO MOST OF
THE PEOPLE BUYING MOSTLY LANCE'S
ARE BEING BOUGHT BY ENTITIES
THAT ARE SUBJECT TO THE PROGRAM.
AND THERE'S A VERY SMALL AMOUNT
THAT'S BEEN BOUGHT BY PEOPLE WHO
ARE THIRD PARTIES THAT MIGHT BE
PROVIDING LIQUIDITY OR OTHER
SORTS OF FINANCIAL TRANSACTIONS
THAT YOU SEE IN TYPICAL MARKET
PLACES SO IT'S. IT'S PRETTY WELL
DOMINATED BY THE THE PURCHASING
AND TRADING BEHAVIOR OF THE
REGULATED ENTITIES RATHER THAN
THIRD PARTY PARTICIPANTS.
BUT THERE ARE OTHER BENEFITS TO
MORE LIQUIDITY IN OUR MARKET
AMEND KNOWING IN TYPICAL MARKETS
YOU WANT. EASY ENTRY EXIT AND
SORT OF LIKE.
QUICK YOU KNOW A LOT BUT BROAD.
AND
DISTRIBUTION A RISK AMONG MORE
PLAYERS BUT DO YOU THINK THERE'S
A REASON THIS MARKET SHOULD BE
DIFFERENT FOR.
I THINK TO BE HONEST SENATOR
MIGHT MY MY OWN PERSONAL VIEW IS
THAT THERE'S A GREAT DEAL OF
UNCERTAINTY RIGHT NOW BECAUSE
THE AB THREE NINETY EIGHT
PROCESS IS JUST BEGINNING WE'RE
TALKING ABOUT FUNDAMENTAL
QUESTIONS AS TO PROGRAM
STRINGENCY. WHERE THINGS HAVE
GONE VERY DIFFERENT DIRECTIONS
AND IT'S A DIFFICULT TIME FOR
THIRD PARTY INVESTORS TO ENGAGE
WITH LONG TERM STRATEGIES?
FROM THE PERSPECTIVE OF ENTITIES
THAT ARE SUBJECT TO THE CAP AND
TRADE PROGRAM MY TEAM AND I
BELIEVE WE CONTINUE TO SEE ALL
THE ALLOWANCES BEEN PURCHASED
AND THE SIZE OF THE PRIVATE BANK
GROWING OVER TIME. WHICH
SUGGESTS THAT AT LEAST IN THE
NEAR TERM COMPLIANCE ENTITIES
ARE SAYING WILL TAKE MORE
ALLOWANCES NOW EVEN THOUGH WE
DON'T NEED THEM RIGHT NOW.
IS AGAIN EMISSIONS UNDER THE
PROGRAM ARE SIGNIFICANTLY LOWER
THAN CURRENT CAP LEVELS GET ALL
OF THE ALLOWANCES ARE BEING
PURCHASED AND AGAIN THAT'S
CONSISTENT WITH THIS NOTION THAT.
PEOPLE ARE BANKING AND SAVING AT
LEAST SOME.
THERE'S A QUESTION OF HOW MANY
THEY'LL SAVE OVER THE NEXT
SEVERAL YEARS AND AS TO THE
DISCUSSION EVERYONE'S BEEN
HAVING WHAT THAT MEANS TO THE
LONG TERM HEALTH OF THE PROGRAM.
BUT IN THIS ENVIRONMENT WHERE
THERE IS AT LEAST A SHORT TERM
ACCESS THE THE ROLE FOR EXTRA
LIQUIDITY IS IT DOESN'T STRIKE
ME AS A FUNDAMENTAL CONSTRAINT
BUT A HEALTHY MARKET WILL HAVE A
VERY LIQUID MARKET ITS SO IT'S
IRONIC THOUGH. THAT IN THE NEAR
TERM WE HAVE ALL THE THERE'S
DISCUSSION EXCESS AND AND AND
NOT ALLOWED OUTSIDE ENTRANCE BUT
THEN NO LONGER MEDIUM TERM.
CONSERVE OUR PRICE SPIKES WERE
YOU ACTUALLY COULD GET SOME
BENEFITS THAT ENHANCE THE
QUALITY SO HARD. WITH THAT
BRIDGE LOOK LIKE AND.
MEAN WHAT IT.
SHOULD WE BE ENDEAVORING FOR
THAT KIND OF MARKET IN
CALIFORNIA IN YOUR VIEW DO WE
WANT MORE THAN JUST COMPLIANCE
ENTITIES IN OUR MARKETPLACE OR
IS THERE ARE THERE OTHER UPSIDES
TO THAT.
IT FROM FROM A RECENT ALLEGATION
PERSPECTIVE WARS THAT CHARTER
RELEVANCE TO.
.
IF THE SUN THE THE PRICE RISK
SIDE IS THAT.
NOT REALLY A FACTOR
WE JUST THOUGHT ABOUT THAT.
I MEAN I I'M NOT SURE I I GUESS
THAT I HAVEN'T THOUGHT ABOUT
THAT SPECIFIC QUESTION EXACTLY
AND I GUESS THE WAY WE WOULD
PROBABLY THINK ABOUT IT IS.
I THOUGHT WHAT'S NECESSARY FOR
KIND OF PRICES TO REFLECT THE
KIND OF INCENTIVES THAT ARE
NEEDED TO ENCOURAGE THE STATE TO
MEET ITS GOALS SO IT YOU KNOW
ARE. BASICALLY I I AND I DON'T
KNOW WHAT FORM OF MARKET THAT
TAKES NECESSARILY I MEAN I THINK
THAT'S.
I OFTENTIMES SORT OF SCENE OF
ONE OF THE BENEFITS OF HAVING
SORT OF THE ADDITIONAL PLAYERS
IN THE MARKET IS THAT MAYBE IT
COULD SORT OF HELP FACILITATE.
SOME THE PRICE DISCOVERY IN THE
PRICES MADE WHAT JUST BETTER
REFLECT SORT OF THE THE VALUE
GOING FORWARD IN THAT PROVIDES
THE APPROPRIATE SENATE'S NEEDED
TO ACHIEVE THAT THE GOALS THAT
ARE SET OUT IN SO. WHY NOT THAT
INCLUDES YOU KNOW A LOT MORE
PLAYERS I I GUESS I DON'T REALLY
KNOW EXACTLY BUT THAT'S I THINK
OF HOW WE WOULD TEND TO THINK
ABOUT IT?
DID YOU GUYS GO THROUGH THE
RESULT TILL THE OPTION NO THERE
WAS NO CAN YOU GIVE US A LITTLE
FEEDBACK WHAT WHAT WHAT DO WE
SEE YESTERDAY WHAT WHAT WHAT
CAME OUT.
AND. YET.
AT SO I MEAN I THINK JUST AT A
HIGH LEVEL OF THE.
CURRENT VINTAGES SOLD.
THE STATE PORTION OF THAT IS
ABOUT FORTY TWO MILLION
ALLOWANCES YOU KNOW LITTLE LESS
THAN HALF I THINK OF THAT FUTURE
VINTAGES SOLD OUT TO TWENTY
TWENTY ONE.
IN THE CURRENT AUCTION INCLUDED
BOTH TWENTY EIGHTEEN ALLOWANCES
AS WELL AS SOME OF THE UNSOLD
ALLOWANCES FROM TWENTY SIXTEEN
THEY WERE BEING KINDA COMING
BACK ONTO THE MARKET AND BEING
RE OFFERED.
THE PRICE OF THOSE SO CALLED
DEAD CELL YEAH HOW. THE TWENTY
SIXTEEN BIT INTO THE HAT THAT IF
THE FUTURE VINTAGE WHICH IS WHAT
TWENTY TWENTY ONE TWENTY ONE AND
BEYOND ONLY HAVE SO IT'S JUST
TWENTY TWENTY ONE IN THIS
AUCTION VERY DAY I ABOUT. ALMOST
HOUSE SOLD
AND HOW DOES THAT COMPARE TO
LAST AUCTION.
EVERYWHERE FOLKS BUYING THOSE
LIGHT YOU'RE INTO SLIGHTLY LESS
THAN THE LAST I MEAN THE LAST
AUCTION WAS AT THAT THINK SORT
OF YOU KNOW A LITTLE BIT MORE
THAN HALF WITH MINORS THAT
SEVENTY PERCENT AROUND THE
NEIGHBORHOOD.
SO SOME DROUGHT YET AND SO YOU
KNOW PRICES CLEARED SO.
TWELVE CENTS ABOVE THE FLOOR
AND THE CURRENT AUCTION WE WHERE
WHERE DID IT END WE'RE WEALTHY
FOURTEEN SIXTY FIVE.
FORCE FOURTEEN FIFTY THREE.
NOT CURRENT AUCTION WAS WHAT'S
OUT THE FLOOR.
OTHERS ARE THE EVENTS ARE HAVING
A BAD LUCK AND THANK YOU.
I JUST HAD JUST VERY BRIEFLY ON
THAT SENATOR THIS AGAIN THIS
DISCUSSION THERE'S AT SOME
DISCUSSION THAT THE AUCTION IS A
SELF CORRECTING VEHICLE THAT
REDUCES OVER ALLOCATION. AND
AGAIN THAT THE NUMBERS JUST
AREN'T THERE SO WAS DOCTOR BROWN
TESTIFIED THE UNSOLD ALLOWANCES
FROM THE TWENTY SIXTEEN AND
TWENTY SEVENTEEN PRICE COLLAPSE
ARE BEING REINTRODUCED. AND
THEY'RE ALL BEING PURCHASED.
THERE'LL BE A MODEST NUMBER
THAT WON'T BE PURCHASED
AND IT'S JUST NOT THAT BIG OF A
DEAL IN TERMS OF THE OVER
ALLOCATION CALCULATIONS PEOPLE
TALKING ABOUT SORT WE SAW. IN
THE RESULTS YESTERDAY WAS A
RELATIVELY HEALTHY DEMAND PEOPLE
BOUGHT ALL OF THE CURRENT YEAR
ALLOWANCES THOSE ADVANCED
ANNOUNCES THAT THEY DIDN'T
PURCHASE DON'T GO AWAY THE BE
MADE AVAILABLE IN THREE YEARS.
SO DEMAND WEAKENED SLIGHTLY
THERE BUT WE SAW THE MARKET
BASICALLY ABSORB ALL OF THE
SUPPLY.
ACTUALLY.
INCLUDING AGAIN THE PREVIOUSLY
UNSOLD ALLOWANCES
SO AGAIN THIS THIS BANK IS
GROWING.
NO LACK OF DEMAND.
NO ACADEMIA I MEAN I CONFIDENCE
AT LEAST IN THE MARKET IN THAT
REGARD IT I MEAN.
AND EH AT LEAST FROM THE
COMPLIANCE ENTITIES A HEALTHY.
.
THE MOTIVATION TO PARTICIPATE
BUT YOU'RE SAYING YEAH WE JUST
DON'T KNOW ENOUGH ABOUT.
THE FUTURE TO KNOW BEYOND THIS
IS KIND OF PERIOD WHAT'S GONNA
HAPPEN TO PRICES IN THE FUTURE I
THINK THE WAY TO THINK ABOUT
THIS IS THAT IF YOU HAVE THE
OPTION TO BUY A TODAY'S LOW
PRICES.
AND TAKE A LITTLE BIT MORE THAN
YOU NEED RIGHT NOW THAT LOOKS
LIKE A BAT.
ARE THAT YOU CAN PLACE IF THE
MARKET TIGHTENS AGAIN MOST
ANALYSTS THINK EVENTUALLY WILL
TIGHTEN.
WHETHER OR NOT IT GETS TIGHT
BECAUSE WE DEAL WITH THE OVER
ALLOCATION PROBLEM OR WE JUST
WAIT. AND WAIT WAIT WAIT
EVENTUALLY THE MARKET'S GONNA
TIGHT SO THERE'S A KIND OF THAT
ONE CAN PLACE.
AND WITH PRICES WHERE THE ARMY
ARE YOU SEEING ON THE OFFSET
SIDE WHAT WHERE WE'RE PRICES
THERE RIGHT NOW FOR. FOR
COMPLIANCE OFFSETS THOSE ARE
THOSE ARE NOT PUBLICLY TRACKED
IN ANYWAY SO THOSE ARE BASICALLY
PRIVATELY TRADED I DON'T HAVE
ANY OF THE ACTION MEAN DID
BILLION THOSE MARKET ANALYSTS
OUT THERE I MEAN TODAY HAVE SORT
OF ESTIMATED.
PRICES IN VARIOUS
INSTRUMENTS I MEAN DO WE ARE
LACKING THAT DATA SHOULD WE BE.
TAKING A CLOSER LOOK AT THAT AS
I THINK IT'S INTERESTING THAT IF
YOU COMPARE THIS TO FOR EXAMPLE
THE LOW CARBON FUEL STANDARD
WHICH IS ACTUALLY SET UP LIKE AN
EMISSIONS TRADING MARKET THERE'S
A LOT OF TRADING ACTIVITY THAT'S
PUBLICLY REPORTED BY THE BOARD.
THERE'S NO SECONDARY MARKET DATA
THAT'S REPORTED.
THROUGH GOVERNMENT ENTITIES AND
THAT'S NOT ON A FEDERAL LEVEL
THAT'S NOT REQUIRED LIKE THROUGH
THE CFTC OR SOME COME OUT IT YOU
KNOW. I MEAN WE'RE LOOKING AT
THIS FEDERALLY BUT THERE'S NO
FROM SEC OR.
CFTC PERSPECTIVE NO OBLIGATION
FOR PUBLICLY TRADED COMPANIES DO
THAT KIND OF COMMODITY FUTURES
TRADING DISCLOSURE AYE MINIMUM
AYE DEPTH HERE AGAIN I THOUGHT
PART OF THE PART OF THE GOAL OF
THIS PROGRAM WAS TO KEEP IT
OUTSIDE OF FEDERAL REGULATIONS
OR WHAT BUT I DON'T. YEAH SO MY
KNOWLEDGE THERE ARE NO REQUIRING
IF THERE'S ANY CHECK ON THAT AT
ALL.
.
OKAY.
.
LET'S REMIND MY MAIN QUESTIONS
AT THIS POINT. RIGHT THANK YOU
IDEA.
IT'S SOMETHING A LITTLE OUTSIDE
OF THE A BOXER YOUR.
.
THE INTERESTS OF HANK KEEPING A
CONSTRUCTIVE DISCUSSION GOING TO
ACTUALLY.
ASK ANYONE FROM THE AUDIENCE IF
THEY HAD ANY QUESTIONS FOR.
THE EARLIER PRESENTER AND SO I
WOULD.
.
IN THE INTERESTS OF.
NOW
FAIRNESS I WOULD ASK ANYONE
WANTING TO ASK ANY OF THESE.
PRISONERS ANY QUESTIONS TO
SPEND ABOUT FIVE MINUTES.
YEAH IF ANYONE WANTS TO US STEP
FORWARD.
AND DO SO.
ALRIGHT THAT'S CREATIVE.
YEAH NANO.
CENA SCENE THAT NO ONE HAS ANY
QUESTIONS FOR FOLKS APPEAR. AB
ANY CLOSING COMMENTS OF FROM THE
BALANCE HERE.
I YES THANK YOU MISTER GARCIA
ARE I THINK.
I JUST ONE ECHO I THINK BOTH
PROFESSOR CARLSON A DOCTOR BROWN
TALKED ABOUT TRADE OFFS IN THE
PROGRAM AND I WANNA CALL IT IS
AN ECONOMIST INSERTED REQUIRED
TO TELL YOU THERE ARE TRADE OFFS.
BUT ONE TRADE OFF I THINK WE
REALLY NEED TO TALK ABOUT MUCH
MORE CLEARLY AND THAT IS WE'RE
DOING THIS WHOLE PROCESS IN
REVERSE WE'RE DOING THIS IN
BACKWARDS ORDER.
SO THE SCOPING PLAN PACKET HAVE
AFTER ALL THAT THE BIG HEAVY
LIFT TO PASS AB THREE NINETY
EIGHT HAPPENS LAST YEAR IN JULY
THE SCOPING PLANK IT'S FINALIZED
NOVEMBER DECEMBER. THE SCOPING
PLAN SAYS FORTY SEVEN PERCENT.
A THE MISSION REDUCTIONS IN
TWENTY THIRTY ARE GONNA COME
FROM CAP AND TRADE.
NOW WE'RE DESIGNING A REGULATION
THERE IS NO ANALYSIS EITHER IN
THE SCOPING PLAN OR IN THE
INFORMAL PART THE REGULATORY
PROCESS THAT HAS THUS FAR
OCCURRED. THAT CONNECTS HOW THE
MARKET DESIGN SELECTED BY THE
BOARD WILL ACHIEVE ANYTHING
RESEMBLING THAT LEVEL OF
AMBITION. NOW MAYBE WE CAN HAVE
A GOOD FUND TECHNICAL DEBATE
ABOUT THIS BUT THERE'S LITERALLY
NO ANALYSIS OR INFORMATION.
AND THAT IS A STRIKING THING TO
SAY ABOUT THE MOST PROMINENT
CARBON MARKET IN THE WORLD.
AND THE LAST THING I THINK I
WANNA SAY ABOUT THIS IS IS AGAIN
TO ADMIT PROFESSOR KRAUSS
ANYTHING MADE A VERY GOOD POINT
WHICH IS. IT MAY BE THAT
RESOLVING OVER ALLOCATION WILL
INCREASE MARKET PRICES.
DOCTOR BROWN POINTS OUT THAT
AGAIN THERE ARE PRICE CONTROL
MECHANISMS THAT THE BOARD CAN
IMPLEMENT TO CONTROL THOSE
PRICES WERE THE BOARD DEEMS FIT
TO BALANCE ALL THOSE INTERESTS.
BUT THE BOARD DESIGNS A PROGRAM
THAT DOESN'T DELIVER ON THE
ENVIRONMENTAL GOALS THERE'S A
CONSISTENCY PROBLEM WITH RESPECT
TO THE BALANCE BETWEEN CAP AND
TRADE AND REGULATIONS IN THE
SCALP IMPLANT WAS APPROVED LAST
YEAR.
SO THANK YOU FOR YOUR TIME.
THANK YOU A I GUESS THE ONLY
THING I WOULD ADD IS THAT.
TO STATE THE OBVIOUS US IS
EXTRAORDINARILY COMPLEX
AND ONE OF THE THINGS THAT I DO
THINK IT'S WORTH POINTING OUT IS
THAT.
WE HAD A LOT OF SUCCESS TO DATE
AND.
OR IN AN ENVIABLE POSITION AND
A LOT OF RESPECTS AND THAT.
.
EMISSIONS HAVE DECLINED AT A
RATE FASTER THAN WHAT WE
EXPECTED PRICES HAVE STAYED LOW
AND THE AMOUNTS MARKETS WHICH
HAS.
BENEFITS AND THAT OUR COMMODITY
PRICES ARE NOT ROTH OF RAPIDLY
RISING OUR ECONOMY HAS GROWN.
AND SO YOU KNOW.
THAT WE SHOULD TAKE SOME COMFORT
IN THE FACT THAT IN THE FIRST.
SIX YEARS OF THE PROGRAM WE'VE
SEEN EXTRAORDINARY SUCCESSES AND
I THINK YOU KNOW THE JOB OF THIS
COMMITTEE AGAIN AS TO. TO MAKE
SURE THAT CARP CONTINUES ON PACE
TWO AND TO AND PROVIDE THE KIND
OF INFORMATION NECESSARY TO
ALLOW. THE KINDS OF ASSESSMENTS
THAT I THINK THEY'RE GOING ON BY
THIRD PARTIES RIGHT NOW IN A WAY
THAT I THINK IS HEALTHY AND
CONSTRUCTIVE AND SO. PART OF IT
AGAIN WHAT I WANT TO EMPHASIZE
IS JUST TO COMMAND THE PROCESS
WHICH I THINK IS AN IMPORTANT
ONE WE SOMETIMES THINK MORE
ABOUT THE SUBSYSTEM LEAD ABOUT
THE PROCESS.
BUT FOR ME AS SOMEBODY WHO
THINKS A LOT ABOUT PROCESS.
I THINK
THAT THIS IS AN EXTRAORDINARY
PROCESS TO HAVE VERY CLEAR
DIALOGUE BEFORE SOME OF THESE
PROBLEMS MIGHT ACTUALLY OCCUR.
AND TO BE AND TO HAVE YOU KNOW
I'D APPRECIATE FOR EXAMPLE
ALLOWING PEOPLE TO ASK QUESTIONS
OF THE WITNESSES. NOT JUST THOSE
SENATORS AND ASSEMBLY MEMBERS
HERE AND SO I WOULD JUST
ENCOURAGE YOU TO CONTINUE THIS
BACK AND FORTH PROCESS WHERE. WE
GET AS MUCH INFORMATION ON THE
TABLE AS WE CAN WE GET AS MUCH
ANALYSIS WE CAN NOT JUST FROM
CAR BUT FROM. OUTSIDE PARTIES
LEGISLATIVE ANALYST'S OFFICE AND
SO FORTH SO.
SO THANK YOU FOR THAT.
JUST WHAT IT WILL LOOK EXCUSE ME
WILL THAT CONTINUE TO MONITOR
IMPLEMENTATION OF THE PROGRAM
AND WERE ALWAYS HERE TO PROVIDE
ASSISTANCE TO THE COMMITTEE
WHENEVER NEEDED.
THANK YOU.
I DON'T HAVE ANY OTHER
QUESTIONS.
MY COLLEAGUE NO QUESTIONS I
WANNA THANK YOU UP WITH A R. B..
AND THREE PANELISTS WHO HAVE
PRESENTED WE'RE GOING TO
CONTINUE.
THE OVERSIGHT OF OF THESE
POLICIES TO ENSURE THAT THE
INTENT OF THE LEGISLATION THAT
HAVE BEEN PASSED ARE HONORED AND.
THAT THE OUTCOMES ARE BEING MET
THAT THAT WE'RE STRIVING FOR SO.
ANTICIPATE THAT I ANTICIPATE
ADDITIONAL CONVERSATIONS WHETHER
THEY BE FORMALLY.
SUCH AS A HEARING OR AS WELL AS
AN OF THE COMPETITIONS O.
CONTINUE TO HAPPEN.
IN OUR OFFICES AND WITH THEY
ARE BE.
WILL OPEN IT UP FOR PUBLIC
COMMENT AT THIS TIME ANYONE
WISHING TO ADDRESS THE COMMITTEE.
PLEASE COME FORWARD.
STATE YOUR NAME ORGANIZATION.
YOUR COMMENTS.
THANK YOU GET TO THE PALACE.
THAT SERGEANT PATTY WITH THE
AMERICAN GOVERNMENT SHOULD THANK
YOU SO MUCH FOR HOLDING THIS
HEARING ALSO CAN ALL DIVE INTO
THESE IMPORTANT ISSUES.
THERE'S BEEN SOME DISCUSSION
HERE ABOUT AND THE DIRECT MENTAL
BENEFITS IN STATE DADS AND AND
WHAT THE INTENT OF THAT ISN'T.
YOU KNOW WHEN WHEN ONE READS
THAT LEGISLATION. AND IN THEIR
IN THEIR SOME WHO BELIEVE THAT
THAT THAT MEANS IN STATE CAN GET.
YOU KNOW IT'S LEGISLATORS WHAT
SAID MET IN STATE.
YOU SAID THAT.
CAN WRITTEN IN THE LAW.
THAT SHOULD BE FOUR PERCENT IN
STATE.
THE FIRST FIVE YEARS THE NEXT I
COULDN'T AND SIX AND STATE PHONE
WITHIN FIVE YEARS.
BUT I DON'T THE DOES NOT TO HIS
SON'S TOUCH TALK ABOUT
RECOMMENDING BENEFIT SO WE HAD
TRIP TRUST.
THAT LANGUAGE WAS INTENTIONAL
THAT THEY ONLY WANTED.
CARD TO EXERCISE THEIR OVERSIGHT.
TO ENSURE THAT. THE ASA FOR
PROVIDING SOME ENVIRONMENTAL
BENEFIT TO CALIFORNIA. IN FACT
THEY WENT SO FAR AS TO SAY.
ANY AIR POLLUTANT THAT STRONG
LANGUAGE
I CLEARLY INCLUDES GHGS.
AS THE EPA.
HAS AFFIRMED THAT GHGS
OUR AIR POLLUTANTS AND.
SUPREME COURT HAS.
AFFIRMED THEIR AUTHORITY TO MAKE
THAT DETERMINATION.
BUT RESPECT WATER.
THERE'S BEEN NO QUALIFICATION
THAT THERE WERE THERE WERE EVEN
TALKING ABOUT WATER BALLOONS.
WE CAN TALK ABOUT AIR POLLUTANTS
AS WITH RESPECT THEIR THEIR
IMPACT ON WATER AS WELL SHEETS
CHEESE.
SO.
.
SO TRUSTING THAT.
THEM.
IF CARBON THEIR PROFESSIONAL
EXPERTISE TREMENS THAT.
ANY GHC REDUCTION ANYWHERE
PROVIDES A DIRECT ENVIRONMENTAL
BENEFIT.
TO CALIFORNIA.
THEN.
THE INTENT OF THE LAW.
HAS BEEN MET AND AND WE SHOULD
ALL BE SATISFIED THAT AND AND
LASTLY JUST TO TO TO ON RESPOND
TO US UNDERSTANDS QUESTION
REGARDING.
AT PRICES.
WE HAVE ENOUGH.
INSIGHT INTO THOSE PRICES FOR
ME TO BE ABLE TO RESPOND TO THAT.
THOSE THOSE GENERALLY.
.
THEY SENT ME THE PROGRAM THEY
HAVE ALWAYS TRACKED.
ALLOW ITS PRICES WITHIN A
CERTAIN BAND WE CAN SAY THERE
WITHIN.
SAY FIFTEEN PERCENT BELOW ON THE
ALLOWANCE PRICES SO CAN SAY
MAYBE. MAYBE TWO DOLLARS RIGHT
NOW BELOW ALLOWANCE PRICES AND
SO THAT'S A CLEAR INDICATION.
THAT.
.
THE MARKET CONTINUES TO BE.
CONSTRAINT RESPECT TO.
OFFSET SUPPLY.
IF THERE WERE ACCESS OUTSIDE
SOME OUTSIDE SUPPLY YOU WOULD
SEE A DIVERGENCE IN THOSE PRICES
WHERE OFFSETS PLACES WOULD
PRICES WOULD.
WOULD TAKE A DIFFERENT TRACK
DOWNWARDS.
AND WOULDN'T JUST TRACK RIGHT
BEHIND ON THE LEVELS PRICES SO
THERE'S CLEARLY A NEED. FOR FOR
OFFSETS IN THE MARKET THANKS
VERY MUCH.
I.
MCHALE'S WHO ARE LOW ON BEHALF
OF THE CALIFORNIA COUNCIL FOR BY
MY COUNT MOUNTS.
LIKE TO PICK A THANK COMMITTEE
FOR HOSTING ANOTHER ON THESE
OVERSIGHT HEARINGS. AND WE THINK
IT IS IMPORTANT TO NOTE THAT.
THE CAP AND TRADE IS NOT THE
SOLE COSTA CARBON AND
CALIFORNIA'S MARKET.
WE HAVE A NUMBER OF PROGRAMS
THAT THAT ALL COME AT ADDITIONAL
COSTS
A CAP AND TRADE IS DESIGNED TO
BE THE MOST COST EFFECTIVE AND.
ECONOMICALLY EFFICIENT WAY TO
ACHIEVE REDUCTIONS AS SUCH IT IT
DOES HAVE A MUCH LOWER COST A
CAR BUT IF YOU LOOK AT THE L.
CFS MARKET OR THE RENEWABLE
PORTFOLIO STANDARD. ALL THOSE
COMMENTED ADDITIONAL COSTS
MUCH HIGHER THAN THAN WHAT THE
CAP AND TRADE IS ON THE SCALE OF
OF TWO THREES SOMETIMES TEN
TIMES MORE.
AND AND WE NEED TO UNDERSTAND
THAT THAT THIS PROGRAM WAS BUILT
AS THE COST RELIEF VALVE FOR THE
ENTIRETY OF S. B. THIRTY TWO ONE
AB THIRTY TWO BEFORE.
.
AND AND TO THAT END AIR BE DID
DESIGNED THIS PROGRAM AND AND I
THINK IT WAS NEGOTIATED BY
STAKEHOLDERS TO KEEP THE COSTS
LOW.
AND SMOOTH THINGS OVER THE
COURSE OF OF THE COMPLIANCE
PERIODS WHICH IS WHY WE HAVE A
THREE YEAR COMPLIANCE TERMS AS
OPPOSED TO SINGLE YOUR CENTER
ENTERS. Y. WE LOOK AT THIS OVER
A PERIOD OF A DECADE AS OPPOSED
TO A PERIOD OF. OF YOU KNOW
IMMEDIATE.
NOW IN AND OUT YEARS.
.
TO THAT END THERE ARE MECHANISMS
DESIGNED TO DEAL WITH THINGS
SUCH AS YOU KNOW. MOVING
ALLOWANCES ARE OUT FROM FROM THE
MARKET SHOULD THEY GO ON AUCTION
AFTER A CERTAIN. PERIOD OF TIME.
AND I THINK THE YOU KNOW WE
CAN'T INTERCHANGEABLY SAY OVER
ALLOCATION WHEN YOU'RE TRYING TO
TALK ABOUT SUPPLY.
YOU KNOW OUR OUR ALLOCATIONS
WERE BASED ON.
FACILITY DATA UNLIKE. YOU KNOW
WE THIS IS NOT COMPARABLE TO
REGGIE OR THE UNITY ES WHERE
THERE.
BUT THEY'RE NOT A MISSION
ALLOCATIONS WERE BASED ON
CAPACITY.
SO IF I HAD A HUNDRED MEGAWATT
PLANT BUT AS ONLY RUNNING AT A
SEVENTY SEVENTY FIVE. YOU AYE I
WAS BEATEN GIVEN CREDIT FOR THE
HUNDRED.
IN CALIFORNIA YOU'RE ONLY GIVEN
CREDIT FOR FOR WHAT YOU'RE
PUTTING OUT.
AND THAT'S WHERE THE
BENCHMARKING TOOK PLACE BACK IN
BACK IN TWO THOUSAND EIGHT TWO
THOUSAND NINE ONE WE'RE
DEVELOPING THIS PROGRAM. SO IT
IS NOT AN APPLE STORE YOU KNOW
IT'S NOT APPLES TO APPLES
COMPARISON WE TALK ALLOCATIONS.
SO YEAH I DO THINK THE TERM OVER
ALLOCATION IS AN APPROPRIATE USE
WEEK WE CAN TALK ABOUT SUPPLY WE
CAN TALK ABOUT.
POTENTIAL OVERSUPPLY BUT TO TALK
ABOUT OVER ALLOCATION I THINK
THAT'S A COMPLETE MISNOMER IT
RELATES BACK TO THE TO THE
CRISIS THAT THAT TOOK PLACE IN
THE EU'S PROGRAM. AND IT INVOKES
THAT KIND OF FEAR WE SHOULD HAVE
THAT KIND OF FEAR AS WE MOVE
FORWARD WE WE WE DESIGNED FOR
THAT. THAT WHAT THAT WAS DEALT
WITH THAT THERE'S AND TO SAY
THAT THERE IS NO ANALYSIS PEACE
BETWEEN THE SCOPING PLAN AND THE
INTERACTION THE CAPTURE IS ALSO
FALSE WE HAVE TEN YEARS. OF OF
REGULATORY DEVELOPMENT
WE HAVE INPUT FROM FROM SO MANY
STAKEHOLDERS A IT IT'S JUST IT'S
THAT'S GOING TOO FAR IT'S A STEP
TOO FAR IN THE DESCRIPTION OF
HOW THIS WENT WEEK WE'VE ALL
BEEN. PARTICIPATING IN THIS
REGULATORY AND LEGISLATIVE
DEVELOPMENT FOR OVER A DECADE AT
THIS POINT.
IT'S THEIR THEIR IN THE RECORD
IS BUILT. IS GONNA CONTINUE TO
BE BUILT AS WE MOVE FORWARD I
THINK IS IMPORTANT AT THESE
DISCUSSIONS IN HERE FROM. FROM
FOLKS LIKE LIKE NEAR ZERO WHO
HAVE THESE CONCERNS THAT WE CAN
TALK ABOUT POTENTIAL CONCERNS
THERE BUT IT TO DESCRIBE IT IS
OVER ALLOCATION OR TALKING ABOUT
SUPPLY I THINK IS INCORRECT. AND
I THINK WE ALSO HAVE TO TAKE
TAKE THEIR RECOMMENDATIONS TO
THE END.
AND AND BASED ON KIND OF HOW
WE'RE LOOKING AT IT IF IF WE
REMOVE THIS MANY ALLOWANCES NOW
IS BEING SUGGESTED BY SOME.
WE END UP WAY BEYOND THE FORTY
PERCENT BELOW.
.
NINETEEN NINETY LEVELS IN TWENTY
THIRTY AND AND. WE DON'T HAVE
LEGISLATIVE MANDATE FOR THAT AND
I DON'T THINK THE LEGISLATURE
WANTS TO TO START LOOKING AT
THAT. UNTIL WE'VE WE'VE STARTED
MOVE INTO THAT POST TWENTY
TWENTY PERIOD AND WERE LOOKING
DOWN THE ROAD FURTHER WE SEE THE
ECONOMICS OF HOW THAT'S GOING TO
GO.
SO WE DID WHAT WILL FOLLOW UP
WITH SOME ADDITIONAL COMMENTS
WERE GONNA TAKE SOME TIME TO
DIGEST.
ALL THE COMMITTEES STUFF THAT
WAS PRESENTED HERE TODAY BUT WE
THINK IT'S IMPORTANT TO LOOK AT
THESE THINGS THROUGH THROUGH THE
EYES OF.
OF YOU KNOW PERHAPS IT AT SOME
POINT THE COMMITTEE WANTS TO
HEAR A LITTLE BIT MORE INPUT ON
PANEL SOME PEOPLE HAVE TO COMPLY
WITH THESE REGULATIONS. I THINK
WE HAVE AN IMPORTANT VOICE IN
THIS AS WELL SO THANK YOU.
GOOD MORNING CHAIRMAN GARCIA
VICE CHAIRMAN STERN THANK FOR
HOLDING THIS HEARING TODAY.
BILL MCGAVIN WITH COALITION FOR
CLEAN AIR WE WORK ON RESTORING
CLEAN AIR FOR CALIFORNIANS AND
ALSO ON PREVENTING CLIMATE
CHANGE.
WE REALLY APPRECIATE THAT OVER
THE LAST FEW YEARS THE
LEGISLATURE UNDER YOUR
LEADERSHIP CHAIRMAN GARCIA.
HAS BASICALLY TRIED TO MOVE
CALIFORNIA'S CLIMATE PROGRAMS
TO WHERE THEY WOULD ALSO.
PROVIDE BENEFITS PARTICLE
IMPROVING AIR QUALITY FOR
CALIFORNIANS.
MOST OF WHOM AS YOU KNOW ARE
STILL. SUFFERING FROM AIR THAT
IS NOT HEALTHY TO BREEZE.
AND SO I THINK WE NEED TO USE
THAT LANCE WHEN WE LOOK AT.
DIRECT ENVIRONMENTAL BENEFITS
AND ALSO DIRECT EMISSION
REDUCTIONS UNDER AB ONE NINETY
SEVEN SOMETHING I DON'T THINK
IT'S BEEN.
DISCUSSED YET THIS MORNING BUT
BUT SHALL I WANT TO ADDRESS.
SO WE THINK AT AND WE BELIEVE
THAT THE LEGISLATURE. ARE HAS
INTENDED.
THAT WHEN WE LOOK AT OFFSETS.
THAT THEY SHOULD BE PROVIDING
BENEFITS TO CALIFORNIA
COMMUNITIES.
DIRECT ENVIRONMENTAL BENEFITS.
AND THAT THOSE IF WE'RE GOING TO
HAVE OFFSETS IN THE PROGRAM THAT
THAT'S WHAT WE WANT TO PROVIDE
THAT THOSE SHOULD ACTUALLY BE
NOT ONLY REDUCING GREENHOUSE
GASES BUT PROVIDING THOSE OTHER
DIRECT ENVIRONMENTAL BENEFITS TO
OUR COMMUNITIES.
AND THEN WE LOOK AT AB ONE
NINETY SEVEN.
I WAS SUGGESTS THAT THE
LEGISLATURE SHOULD CLARIFY THAT
DIRECT EMISSION REDUCTIONS MEAN
THOSE EMISSION REDUCTIONS THAT
ARE ACHIEVED BY REGULATED
ENTITIES. ONSITE RATHER THAN
OUTSOURCED THROUGH ALLOWANCES
AND OFFSETS.
THANK YOU.
YOU.
I THINK MISTER CHAIRMAN AND
MEMBER OF THE COMMITTEE.
MICHAEL SOCK CALIFORNIA
MANUFACTURES TECHNOLOGY
ASSOCIATION I WANTED TO
ASSOCIATE MANY MY COMMENTS WITH
A MISTRESS CARLA FROM CIBER
EARLIER. AND SNOW THAT REMOVING
ALLOWANCES YOU KNOW FROM THE
MARKET AT THIS POINT WE KNOW
WILL INCREASE THE PRICE. OF
THOSE AMOUNTS IS WHICH DRIVES OF
THE COMPLIANCE COSTS WHICH HAS A
NEGATIVE IMPACT ON THE
MANUFACTURING ENVIRONMENT
CALIFORNIA. IN TERMS OF THOSE
COSTS SO WE DO KNOW THAT THEIR
SIGNIFICANT YOU KNOW ECONOMIC
CONSEQUENCES OF SOME OF THESE
ACTIONS WE ALSO KNOW THAT
LOOKING OUT.
THAT THERE ARE.
EXECUTE IF THERE'S A
SIGNIFICANT TIGHTENING.
OF THIS SITUATION WE GET TO THE
MID TWENTY TWENTIES ROUGHLY. A
WIN THOSE ALLOWANCES WILL BE
NECESSARY SO REMOVING THEM FROM
THE MARKET NOW ARTIFICIALLY
DRIVES UP PRICES TODAY.
PUTS US IN A NEGATIVE POSITION.
FOR THE FUTURE SO WE WOULD BE
VERY CONCERNED ABOUT THE
PROSPECT OF REMOVING AT ANY
ALLOWANCES THAT ARE CURRENTLY
UNUSED.
FROM THE MARKET NOT FOR THAT
PURPOSE OF FOR FOR THOSE REASONS
ADDITIONALLY.
WE AND WE THINK THAT THE MARKET
THE WAY IT IS WORKING TODAY AS
IS INDICATED BY THE A RESULTS
ARE RELEASED YESTERDAY. IS THAT
THE CORE OF THE CURRENT VINTAGE
AMOUNTS IS BEING COMPLETELY SOLD
OUT AND.
I THINK THE FUTURE VINTAGE
ALLOWANCES WERE NOT ENTIRELY
SOLD OUT THAT THEY'RE STILL
STRONG LEVEL OF INTEREST IN THAT.
BEING THOSE AT THE MANY OF THOSE
WERE.
ACQUIRED BY COMPLIANCE ENTITIES
YOU KNOW ISN'T THAT THE PURPOSE
OF THE SYSTEM ISN'T THE PURPOSE
THAT THESE ALLOWANCES ARE
AVAILABLE FOR ENTITIES THAT HAVE
A COMPLIANCE OVULATION.
THE FACT THAT THERE ARE
INVESTMENT ENTITIES AND OTHER
ENTITIES PARTICIPATING IN THE
MARKET.
CAN ASSIST WITH VOTE LIQUIDITY.
AND FACILITATING NOT HOWEVER
THE PURPOSES ON THE COMPLIANCE
SIDE FOR BT FACTORING INTO HE
OTHERS WHO HAVE THAT OBLIGATION
SO. ODD GIVEN THAT THAT'S THE
CASE GIVEN THAT ARE WHAT WE KNOW
WHAT HAPPENED REMOVED THOSE
ALLOWANCES WITH WE HAVE CONCERNS.
THAT TAKING SUCH ACTION OR
DIRECTING YOUR BE A STATE TO
TAKE SUCH ACTION.
YOU KNOW WOULD HAVE SIGNIFICANT
ECONOMIC CONSEQUENCES FOR THOSE
COMPANIES THAT FALL UNDER THAT
AND THEN FROM THAT WOULD BE.
CONCEPT FURTHER CONSEQUENCES TO
THE ECONOMY.
THROUGH THE PRODUCTS THAT WE
PURCHASE FUEL ELECTRICITY
ETCETERA. THANK YOU
IF YOU.
GOOD MORNING I'M CAITLIN REDNER
SUTTER FROM THE ENVIRONMENTAL
DEFENSE FUND AND THANK YOU FOR
THE OPPORTUNITY TO PROVIDE SOME
REALLY BRIEF COMMENTS AND.
ESPECIALLY FOR FACILITATING THIS
ONGOING CONVERSATION.
FROM ETFS PERSPECTIVE IT IS
GOOD NEWSTHAT CALIFORNIA IS
BELOW OUR EMISSIONS LIMIT AND
AHEAD OF SCHEDULE TO MEET OUR
TWENTY TWENTY TARGET.
THIS IS GOOD FOR THE
ENVIRONMENT IT DEMONSTRATES THE
SUCCESS OF CALIFORNIA'S SUITE OF
CLIMATE POLICIES INCLUDING THE
CAP AND TRADE PROGRAM.
.
AT THE SAME TIME BEING BELOW THE
CAP PRESENTS AN OPPORTUNITY TO
INCREASE THE STATE'S AMBITION
POSTS TWENTY TWENTY BY SETTING A
MORE STRINGENT CAP ON EMISSIONS.
AND SPECIFICALLY SETTING THAT
CAP BEAST ON EXPECTED EMISSIONS
AS WAS DONE BACK IN TWENTY TEN
RATHER THAN CONTINUING JUST A
STRAIGHT LINE CAP FROM TWENTY
TWENTY TO TWENTY THIRTY.
WE THINK INCREASING THIS
CLIMATE AMBITION IS REALLY
IMPORTANT NOT ONLY TO MEET OUR
TWENTY THIRTY TARGET BUT ALSO TO
CONTINUE CALIFORNIA'S ROLE AS AS
A REALLY IMPRESSIVE CLIMATE
LEADER.
AND I ALSO REALLY QUICKLY WANT
TO MAKE A POINT ABOUT AND ONE
BENEFIT OF LIMITED ALLOWANCE
BANKING. AND THAT IS THE ABILITY
TO DRIVE EARLY EMISSION
REDUCTIONS WHICH IS OF COURSE
GOOD FOR THE CLIMATE. EVERY
ALLOWANCE THAT THAT IS NOT USED
RIGHT NOW THAT IS HELD RIGHT NOW
IS REPRESENTS A TON OF EMISSIONS.
IS NOT LIMITED RIGHT NOW WHICH
HAS I MEAN GOOD CUMULATIVE
ENVIRONMENTAL BENEFITS.
SO I JUST WANTED SHARE THAT
POINT FROM FROM ETFS PERSPECTIVE
THAT THERE IS AN ENVIRONMENTAL.
ASPECT TO BANKING TO CONSIDER
AS WELL.
AND SO AGAIN THANK YOU FOR THIS
DISCUSSION M. FOR THE
OPPORTUNITY AND PUSH IT.
HELLO GOOD MORNING JOHN
CONSTANTINE ON BEHALF OF THE
VERIFIED EMISSION REDUCTIONS
ASSOCIATIONS A GROUP OF OFFSET
DEVELOPERS.
WANT TO JUST BRING UP A COUPLE
OF POINTS ON.
ARJUN WAS CORRECT THAT.
AIR POLLUTION.
INCLUDES GHGS BY DEFINITION
IMPLY A STATUTE SO I.
THE ARGUMENT THAT.
OFFSET CAN'T PRODUCE AND DIRECT
MY OWN BENEFIT HAS SOME SERIOUS
ISSUES BECAUSE AN OFFSET BY
DEFINITION IS A REAL REDUCTION
PERMANENT FORCIBLE QUANTIFIABLE.
AND.
.
THEY THE THE BENEFITS OF THE
OFFSET THEMSELVES.
CAN'T BE THE.
I'M SORRY.
WHEN YOU START OR.
YALE UNIVERSITY TO STUDY. AND
THEY LOOK AT WHAT AN ASSET IS
AND CAN YOU GET.
ALL THESE EXTRAS ONTO AN OFFSET
AND OFFSET IS A GHG REDUCTION
OUTSIDE THE CAP SECTOR AT A COST
IT'S BELOW. MARKET VALUE THERE'S
A LOT OF VALUE THERE FOR THE
PROGRAM FOR AND HE'S AND FOR THE.
THE.
GREATER NON REGULATORY ENTITY TO
GET.
GHG REDUCTIONS
AND THEY DETERMINED THAT IF YOU
IF YOU CHRISTMAS TREE OFFSETS IN
ADD ON DIRECT VIA A YET ON.
NOT LIKE SOCKS.
HEALTH BENEFITS YET ON ALL
THESE OTHER NON GHG PIECES TO
OFFSET IT NO LONGER BECOMES WHAT
IT WAS SUPPOSED TO BE IT BECOMES
A MORE EXPENSIVE. PRODUCTION
MEASURE AND SO NOT SAID IS WHAT
IT IS AND THE REQUIREMENTS OF
THREE NINETY EIGHT DESCRIBE.
BENEFITS THAT ARE VERY BROAD
AND.
.
THE GROUP HAS HAS.
COMMENTED ACCORDINGLY SO I JUST
WANT TO POINT OUT THAT OFFICE IT
IS WHAT IT IS WHICH IS A GHG
REDUCTION AND. ADDING ALL THESE
OTHER THINGS MAKE IT A MORE
EXPENSIVE OTHER KIND OF THING
AND THAT'S NOT WHAT THE WAY THE
PROGRAM WAS SET UP.
IF YOU.
THANK YOU ANYONE ELSE WISHING TO
ADDRESS THE COMMITTEE.
ALRIGHT BECAUSE COMETS.
ALRIGHT BUT LET ME JUST SAY
AGAIN THANK YOU FOR.
THIS CONVERSATION IT'S BEEN.
I THINK A GOOD PRODUCTIVE.
DESTRUCTIVE ONE AND I LOOK
FORWARD TO OUR NEXT YEAR AND
WHAT WE CAN HAVE.
SOME OF THOSE INDIVIDUALS WHO
HAVE TO IMPLEMENT YOU KNOW THESE
POLICIES AT TO HEAR DIRECTLY
FROM THEM BUT. I I DO WANT TO
JUST SAY THAT.
.
YOU KNOW WE RECOGNIZE THAT. THE
OFFSETS ARE.
IMPORTANT WHEN WE HAVE.
DEPLOY THESE A ACROSS THE BOARD.
OUT WHEN WE TALK ABOUT.
OFFSETS AND IN THE END
LEGISLATIVE INTENT HERE IN THE
DIRECT INVOLVEMENT OF BENEFITS.
YOU KNOW THE THOUGHT.
IT HAS BEEN HOW DO WE ENSURE
THAT YOU KNOW WHERE DRESSING.
I HAD THE LOCAL PROBLEMS CLEAN
AIR.
A CLEAN WATER.
AND DOUG IT CLEARLY AS ONE OF
THE AUTHORS OF THE BILL I I CAN
APPRECIATE YOU KNOW THE.
RE ITERATION OF WHAT THE INTENT
OF THE LEGISLATION WAS MY WAS
SPEAKERS BUT DOUBT YOU KNOW FOR
US.
IT WAS THAT DRAFTED IN CRAFTED
PACIFIC LEE THIS WAY.
TO MEET THE.
RESTRICTIONS OR LIMITATIONS OF.
OF THE LAW.
THAT THAT COULD ALLOW WAS TO
MEET THESE OVERALL OBJECTIVES
AND SO I JUST WANTED TO MAKE
SURE THAT I. AT RESTATED THAT
THAT THE BERMAN OF DRUG DIRECTLY
IN AT BENEFITS.
THAT WAS THE APPROPRIATE
APPROACH AND I AS THE AUTHOR THE
BILL I WANT TO LET YOU KNOW THAT
THAT'S WHAT WE MEANT.
I AND NOTHING BEYOND THAT SO.
THANK YOU AGAIN FOR
PARTICIPATING IN TODAY'S HEARING
I LOOK FORWARD TO CONTINUING THE
DIALOGUE THERE MANY DETAILS
STILL.
TO BE.
.
SCOTT'S
AND THAT MAKE SURE THAT THAT THE
OVERALL GOALS AND OBJECTIVES ARE
MET NESTLED THANK YOU AGAIN THAT
THIS MEANS OBJECT