WE'RE. GONNA BE DISCUSSING A
VERY IMPORTANT TOPIC, WHICH IS,
OF COURSE, CAP AND TRADE RULE
MAKING. UH, AS YOU ALL KNOW, UH,
I THINK IT WAS 18 YEARS AGO NOW,
UH, THE LEGISLATURE PASSED A B
32. WHICH SET IN MOTION A REALLY
SIGNIFICANT EFFORT, UH, TO
DECARBONISE OUR STATE'S ECONOMY
IN RESPONSE TO THE GROWING
THREAT OF CLIMATE CHANGE, AND SO
SINCE THEN CALIFORNIA, OF
COURSE. UH, WE'VE CONTINUED TO
PUSH THE ENVELOPE IN TERMS OF
OUR CLIMATE GOALS. THOSE GOALS
HAVE GOTTEN MORE AND MORE
AMBITIOUS. UH AT THE SAME TIME
WE'VE BEEN CONTINUING TO FEEL,
UM MORE AND MORE DRAMATIC
EFFECTS OF CLIMATE CHANGE. UM WE
JUST HAD A HEARING LAST YEAR.
UH, CAR, UH, WAS WAS DID YOU
KNOW? DID A REVIEW OF THE 2022
SCOPING PLAN UPDATE THAT
SUGGESTED THAT WE NEED TO
INCREASE OUR TARGET EMISSIONS
REDUCTIONS TO 48% BELOW 1990
LEVELS BY 20. TO BE ON TRACK TO
BE CARBON NEUTRAL BY 2045 AS IS
REQUIRED. UNDER RECENT
LEGISLATION. UH, WE KNOW THAT.
WE UP UNTIL NOW, CAP AND TRADE
HAS CERTAINLY BEEN A REALLY
IMPORTANT PART OF CALIFORNIA'S
CLIMATE PLAN, AND IT'S AN
IMPORTANT THAT'S BEEN USED AS AN
IMPORTANT TOOL TO DRIVE
EMISSIONS REDUCTIONS. I KNOW
THAT CARPS HAD ITS WORK OUT. FOR
IT, UH, DESIGNING, RUNNING AND
IMPROVING THE CAP AND TRADE
PROGRAM FOR MANY YEARS NOW AND,
UM YOU KNOW, OBVIOUSLY, THERE'S
UH UH, YOU KNOW, BEEN A LOT OF
CONCERNS RAISED ABOUT VARIOUS
ASPECTS OF THE PROGRAM. I DO
THINK THAT FOR THE FOR THE MOST
PART, UH, THE PROGRAM HAS, UM
HAS SUCCEEDED AND THE TWEAKS AND
CHANGES THAT HAVE BEEN MADE HAVE
MADE IT MORE SUCCESSFUL. SO LET
ME JUST START BY SAYING THANK
YOU TO CARB. FOR THE REALLY
TREMENDOUS EFFORT, UH, THAT
YOU'VE ALL UNDERGONE TO GET OUR
CAP AND TRADE PROGRAM INTO THE
STATE THAT IT IS TODAY. UH, I
ALSO WANT TO THANK ALL OF OUR
PANELISTS WHO HAVE REMAINED
REALLY ENGAGED IN HELPING THE
PROGRAM BE THE BEST. IT CAN BE
RAISED CRITICISMS OFTENTIMES,
VERY UNCOMFORTABLE. UH YOU KNOW,
WE'RE NOW AT A REALLY
INTERESTING MOMENT IN THE IN THE
PROGRAM. UM, IT'S NOT BEEN
FORMALLY AMENDED SINCE 2018. BUT
OVER THE LAST YEAR CARB HAS HELD
A NUMBER OF WORKSHOPS TO
CONTEMPLATE POTENTIAL CHANGES TO
THE REGULATIONS. UH AND NOW
WE'VE GOT AN OPPORTUNITY TO TALK
ABOUT WHAT INSIGHTS HAVE BEEN
GLEANED FROM THESE WORKSHOPS.
WHAT LESSONS MIGHT YOU KNOW,
COULD BE INTEGRATED INTO THE
PROGRAM GOING FORWARD, AND WE
ALSO HAVE A CHANCE TO HEAR FROM
SOME INDEPENDENT EXPERTS
HIGHLIGHTING BOTH THE SUCCESSES
OF THE CAP AND TRADE PROGRAM SO
FAR, AND THE OPPORTUNITIES THAT
WE MAY HAVE, UH, GOING FORWARD
TO MAKE THE PROGRAM BETTER. UM
AND I'M ALSO HOPEFUL THAT YOU
KNOW WE'LL HAVE THE OPPORTUNITY
TO VÀ SOME REALLY DEEP AND KIND
OF EXISTENTIAL QUESTIONS ABOUT
THE PROGRAM. IS IT DOING WHAT IT
UH WHAT? WHAT WE NEEDED TO DO?
UH, YOU KNOW, DOES IT REALLY
HAVE THE FOUNDATIONAL BASIS TO
GET US TO OUR OUR BROADER GOALS.
HOW DO WE COMPARE OUR PROGRAMS?
UH, BOTH ON THE, UH, YOU KNOW,
REVENUE GENERATION SIDE AND ON
THE SPENDING SIDE TO PLACES LIKE
WASHINGTON AND ELSEWHERE THAT
HAVE BEEN HIGHLIGHTED AS A AS A
SUCCESSFUL PROGRAM. AND YOU
KNOW, WE WE'VE WE'VE BEEN. WE'RE
BEING ASKED TO REAUTHORIZE THE
PROGRAM AND, UM BY BY ALL SORTS
OF DIFFERENT FOLKS, AND I THINK
ONE OF THE THINGS WE WANNA DO IS
REALLY DO A DEEP DIVE REALLY
START A AAA BIG DISCUSSION
ABOUT, UM ABOUT WHAT THAT
REAUTHORIZATION OUGHT TO LOOK
LIKE, AND ON WHAT TERMS AND, UM
LET ME JUST SAY THIS EFFORT HERE
IS GONNA BE PART OF A STRING OF
HEARINGS. I KNOW THE JOINT
COMMITTEE ON CLIMATE CHANGE THAT
THIS CHAIRED BY SENATOR STERN IS
LOOKING TO DO SEVERAL DEEP DIVES
INTO ASPECTS OF THE PROGRAM OVER
THE COURSE OF, UH UH, THE EARLY
PART OF THE YEAR AND, UM, AND
WHILE SENATOR STERN IS IN HERE
PERSONALLY, UH, HE HE ASKED, YOU
KNOW, HE'S HE'S LISTENING IN
RIGHT NOW. I KNOW AND IS VERY
ENGAGED IN THIS EFFORT, TOO. SO
I WANNA TO PUT THAT OUT THERE.
SO ANYWAY, UH, KICKING US OFF
TODAY. WE'RE GONNA BE, UH,
HAVING, UM LEÓN RANDOLPH, WHO'S
CHAIR OF CARB TO PROVIDE SOME
VITAL CONTEXT AND UPDATES ON THE
RULEMAKING PROCESS. WE'RE ALSO
JOINED BY, UH, SARAH. CORNET UH,
WHO'S REALLY FANTASTIC ANALYST
AT L A Ó. UH, CAITLIN RODNER
SUTTER, WHO'S THE ASSEMBLY
APPOINTEE TO THE INDEPENDENT
ADMISSIONS MARKET ADVISORY
COMMITTEE. IE, A UM KATHERINE
GRUPA, WHO'S FROM, UH, CARBS,
ENVIRONMENTAL JUSTICE ADVISORY
COMMITTEE, EJ. AND OF COURSE,
DANNY DANNY CON WORD VICE CHAIR
AND SENATE APPOINTEE TO THE IAC
AND THEN MATT BOIL AS WELL.
WHO'S THE CHIEF OF THE OF
INDUSTRIAL STRATEGIES DIVISION
AT CARB? SO WE REALLY DO
APPRECIATE ALL THE PANELISTS
COMING IN TODAY, BRINGING IN A
UNIQUE AND VALUABLE PERSPECTIVE
ON THE DESIGN OF THE PROGRAM AND
FOR THE TIME AND EFFORT. UM YOU
KNOW, I MEAN, ULTIMATELY, THIS
IS REALLY ABOUT MAKING SURE THAT
WE LEARN MORE ABOUT CARBS
RULEMAKING PROCESS. HOW
DECISIONS THAT CHANGE THE CAP
AND TRADE PROGRAM ARE BEING
CONSIDERED. AND UM AND THEN AND
THEN REALLY, YOU KNOW,
ULTIMATELY WE ALL HAVE TO MAKE
DECISIONS AS A LEGISLATURE, UH,
TO FIGURE OUT HOW WE WANNA BOTH
PRODUCTIVELY CONTRIBUTE TO THESE
ONGOING CONVERSATIONS. UH, BUT
BUT ALSO, UM. IF YOU FIGURE OUT
YOU KNOW WHAT? WHAT THE PATH
MOVING FORWARD IS SO WE'RE GONNA
START WITH JERRY RANDOLPH. SHE'S
GONNA PROVIDE AN OPPORTUNITY FOR
MEMBERS OF THE COMMITTEE TO ASK
HER QUESTIONS. AND THEN WE'RE
GONNA HAVE A SECOND PANEL WHERE,
UM, EVERYONE WILL DELIVER A
SCENE SETTING REMARKS. UH, WE'RE
GOING TO ASK THAT MEMBERS OF THE
COMMITTEE HOLD THEIR QUESTIONS.
FOR THE SECOND PANEL UNTIL ALL
THE PANELISTS HAVE GOT GIVEN
THEIR REMARKS. AND THEN UM, UH,
YOU KNOW, AND THEN WE'LL HAVE A
DISCUSSION FROM THERE SO UM,
THAT'S THE PLAN FOR TODAY, AND
IT'S GONNA BE AN INTERESTING
HEARING AND LET ME PASS IT OVER
TO MY CO CHAIR. UH, SENATOR
BECKER. THANK YOU. THANK YOU FOR
SENATOR ALLEN. LOOK FORWARD TO
THIS. YEAH EXACTLY, UH, FOR YOUR
JOINT HERE FOR THE JOINT HEARING
TODAY, UM AND, UH PLEASE OPEN
SOME, UH, GREAT OFFICE, SOME
OPENING COMMENTS AS WELL. FIRST
OF ALL, I WANT TO THANK ALL THE
PANELISTS. UM THAT CENTER I
MENTIONED FOR BEING HERE TODAY.
PARTICULARLY CHAIR RANDOLPH.
THANK YOU FOR YOUR TIME TODAY.
UH, YOU'VE BEEN A FOUNDATIONAL
PARTNER ON CLIMATE ISSUES AND
CAP AND TRADE IS A CRITICAL
COMPONENT OF OUR EFFORTS TO GET
TO NET ZERO AND I LOOK FORWARD
TO THE ONGOING DISCUSSIONS AND
COLLABORATIONS ON THIS ISSUE IN
THE 2022 SCOPING PLAN. CARB
ESTIMATES THAT IN THE REFERENCE
THE CAP AND TRADE PROGRAM WILL
HELP FILL THE GAP. UH BETWEEN 79
TO 98 MILLION METRIC TONS OF CO.
TWO. IN THE NEXT SIX YEARS TO BE
ON TRACK FOR CARBON NEUTRALITY
BY 2045. AND IN LAST YEAR'S
SCOPING PLAN. THE TARGET, UH,
WAS UPDATED TO 48% REDUCTION IN
THE SENATE. ALLEN MENTIONED BY
2030 RELATIVE TO 40% LAST YEAR,
WHICH IS A SIGNIFICANT AND
IMPORTANT, UM EXPANSION OF OUR
OF OUR AMBITIONS. AND, NEEDLESS
TO SAY, IT'S EVIDENT THAT BOTH
CARBON ALL THE VARIOUS CLIMATE
MODELS AGREE THAT BOTH MORE
STRINGENCY AND ADDITIONAL
CLIMATE SOLUTIONS ARE GOING TO
BE NEEDED TO ENSURE THAT WE KEEP
ON TRACK FOR 85% EMISSIONS
REDUCTIONS BY 2045. AND CARPS
ARE PRO SCENARIOS IN THE
RULEMAKING STEP INTO THAT, UH,
WITH AMBITIOUS OUTCOMES BY, FOR
EXAMPLE, REMOVING ALLOWANCES
FROM THE MARKET AND WE'LL HEAR
ABOUT THAT, UH, TO TODAY, UM.
AND AGAIN. I WANNA GET, UH AGAIN
REITERATE THE AGENCY AND THE
CHAIR'S LEADERSHIP ON THIS
ISSUE. UM WELL, WE PRESENT
CONCERNS AND POTENTIAL
OPPORTUNITIES AT THIS HEARING
TODAY, I. I WANT TO, UM, CAN
RECOGNIZE THE RULE OF THE ROLE
IN THE IMPORTANCE OF CARBS,
AMBITIOUS MODELING TO ENSURE
THAT WE CAN GET TO NET ZERO. AND
AT THE SAME TIME WE DO MAKE
ASSUMPTIONS OF SCOPING PLAN
ABOUT WHAT WE CAN DO THAT ARE
UNLIKELY TO HAPPEN WITHOUT
FURTHER POLICY ACTION. I THINK
WE NEED TO RECOGNIZE THAT AS
WELL, UH, FOR EXAMPLE, UH, WE'RE
NOT PUTTING SUFFICIENT STATE
FUNDING FOR LIVESTOCK EMISSIONS
THAT CARB ESTIMATES ARE NEEDED
TO GET TO THE 1383 EMISSIONS
REDUCTION GOALS AS ANOTHER
EXAMPLE. WE'RE NOT FUNDING
CARBON DIOXIDE REMOVAL
TECHNOLOGIES PER THE SCOPING
PLAN ESTIMATES BESIDES A VERY
SMALL POOL OF R AND Dð FUNDING
EVERY YEAR. WHILE THE PROGRAM
CANNOT AND WILL NOT BE THE
PRIMARY DRIVER IN GETTING THE
STATE TO NET ZERO. IT DOES
PROVIDE A BACKSTOP TO FILL THAT
GAP OF UNCERTAINTY. ON TOP OF
THIS, THE MOST DISADVANTAGED
COMMUNITIES DON'T FEEL TANGIBLE,
UH, FAST ENOUGH IMPROVEMENTS TO
AIR QUALITY AND PUBLIC HEALTH
FROM THE STATIONARY SOURCES OF
AIR POLLUTION. AND WHILE THE
COVERAGE SOURCES ARE NOT THE
ONLY SOURCE OF AIR POLLUTION,
THE SMOKE STACKS ARE CAUSING
BOTH POLLUTION AND A GSG
EMISSIONS. WHILE THE LEGISLATURE
PASSED PREVIOUS LEGISLATION TO
TRY TO CLOSE THE GAP OF
IMPROVEMENT, IT IS CLEAR THERE
ARE SIGNIFICANT LIMITATIONS TO
THOSE PROGRAMS, AND WE'LL HEAR
ABOUT THAT TODAY. AND FINALLY
JUST WAY OF KIND OF SETTING THE
STAGE AND THE MAIN FUNDING FROM
CAP AND TRADE, WHICH IS MEANT TO
TRANSITION. THE SECTOR IS NOT
REGULATED. UM OR WHICH WILL NEED
MORE SUPPORT OR FOR SUPPORTING
THE TRANSITION IN LOW INCOME
COMMUNITIES ARE NOT CURRENTLY
BEING TARGETED WELL TOWARDS
THOSE USES IN A COST EFFECTIVE
WAY, AT LEAST ACCORDING TO L, A
Ó AS WE'LL HEAR THE INVESTMENTS
FROM OUR GREENHOUSE GAS
REDUCTION FUND HAVE BEEN GOING
TO PROGRAMS THAT ARE VERY
IMPORTANT, BUT OUR, UH, FOR THE
MOST PART, ARE NOT EFFECTIVE OR
NOT POINTED AT HIGH PRIORITY
CLIMATE EXPENDITURES IN THE
SECTORS OR TECHNOLOGIES THAT ARE
NECESSARY FOR MEETING OUR
CLIMATE GOALS. A RECENT ANALYSIS
BY UH èC S¼ G ESTIMATE THE COST
EFFECTIVENESS OF COST
EFFECTIVENESS OF OUR OVERALL
SPENDING IS ABOUT $1003 A TON.
SO THIS PROGRAM IS AN IMPORTANT
PART OF OUR STATE'S PORTFOLIO
POLICIES. UM AND IT IS CRITICAL
FOR CARBON LEGISLATURE TO MAKE
IMPROVEMENTS TO ENSURE ITS
SERVING BOTH OUR CLIMATE AND OUR
AIR QUALITY GOALS. I LOOK
FORWARD TO BEING A PARTNER WITH
OUR COLLEAGUES, AND WE KNOW
THERE'S ALSO A VERY IMPORTANT
UH, ENERGY OVERSIGHT HEARING
TODAY, TOO, SO WE'LL PROBABLY
HAVE SOME MEMBERS IN AND OUT,
BUT I APPRECIATE THE MEMBERS WHO
ARE HERE. UM THE GOVERNOR'S
OFFICE LOOKING FOR OPPORTUNITIES
TO STRENGTHEN OUR AMBITION WHILE
MAKING SURE WE, UM, STAY
AMBITIOUS. AND ACHIEVING ALL OF
OUR CLIMATE TARGETS. THANK YOU.
OK, LET'S GO AHEAD AND GET
STARTED WITH THE CHAIR,
RANDOLPH. GOOD MORNING. THANK
YOU FOR HAVING ME. UH, IT'S GOOD
SEEING YOU ALL THIS MORNING. UM
NOTES HERE. UM. OK SO, UH, MY
REMARKS ARE GONNA GET FAIRLY
WONKY. UM SO I HOPE, UH, I HOPE
ALL THE INFORMATION IS USEFUL AS
WE ENGAGE IN THIS DISCUSSION. UM
AS THE SENATORS HAVE MENTIONED,
THE CAP AND TRADE PROGRAM IS AN
ECONOMY WIDE CAP ON GREENHOUSE
GAS EMISSIONS. IT COVERS
APPROXIMATELY 400 FACILITIES AND
80% OF THE STATE'S G HÌ Dð
EMISSIONS. THE CAP IS A IS
ACHIEVED VIA CREATING A BUDGET
OF ALLOWANCES EQUAL TO THE CAP,
THEN REDUCING THE NUMBER OF
ALLOWANCES IN THE SYSTEM EACH
YEAR TO ACHIEVE OUR REDUCTION
GOALS. EACH ALLOWANCE
CORRESPONDS TO ONE METRIC TON OF
GREENHOUSE GAS EMISSIONS. EACH
ENTITY REGULATED BY THE PROGRAM
IS REQUIRED TO SURRENDER ONE
COMPLIANCE INSTRUMENT FOR EACH
TON OF GREENHOUSE GASSES THEY
EMIT THROUGH EITHER AN ALLOWANCE
OR AN OFFSET WHICH I'LL DISCUSS
SHORTLY, SO WE'LL START WITH
ALLOWANCES. THE CAP AND TRADE
PROGRAM. ALLOWANCES ARE
DISTRIBUTED IN A MANNER TO HELP
ACHIEVE THE REQUIREMENTS OF A B
32 AND THE OVERALL GOALS OF THE
PROGRAM. MOST ALLOWANCES ARE
SOLD AT QUARTERLY AUCTIONS, THE
PROCEEDS OF WHICH WILL FUND
CALIFORNIA CLIMATE INVESTMENTS,
UM, WHICH I'LL DISCUSS LATER. UM
A NUMBER OF THE ALLOWANCES ARE
ALLOCATED TOWARDS ELECTRICAL AND
GAS UTILITIES, THE MAJORITY OF
WHICH ARE CONSIGNED AT QUARTERLY
AUCTIONS AND THE PROCEEDS
DISTRIBUTED IN THE FORM OF A
CREDIT ON CUSTOMER BILLS TWICE A
YEAR. SLIGHTLY OVER 15% OF THE
ALLOWANCES ARE ALLOCATED
DIRECTLY TO INDUSTRY TO PREVENT
G HÌ Dð EMISSIONS LEAKAGE, WHICH
IS THE RELOCATION OF CALIFORNIA
BUSINESSES OUT OF STATE. A FINAL
5% OF THE ALLOWANCES ARE PLACED
IN THE ALLOWANCE PRICE
CONTAINMENT RESERVE, WHICH
PROTECTS BUSINESSES AND
CONSUMERS FROM SPIKES IN
ALLOWANCE PRICES. AS THE NUMBER
OF THE AVAILABLE ALLOWANCES
DECLINE IN THIS SENDS THAT LONG
TERM SIGNAL TO REGULATED
ENTITIES, ENCOURAGING THEM TO
DECARBONIZE THEIR OPERATIONS IN
THE WAY THAT'S MOST EFFECTIVE
AND COST EFFECTIVE FOR THEM. IN
ADDITION TO ALLOWANCES REGULATED
ENTITIES CAN ALSO USE CARB
EVALUATED AND APPROVED
COMPLIANCE OFFSETS TO COVER A
LIMITED PORTION OF THEIR CARBON
EMISSIONS. THE REGULATION SETS
LIMITS ON THE USAGE OF OFFSETS
TO ENSURE THAT AS THE EMISSIONS
CAP DECLINES, THE COVERED
ENTITIES ARE STILL INCENTIVIZED
TO DECARBONIZE RIGHT NOW,
STATUTE LIMITS THESE OFFSETS TO
4% OF AN ENTITY'S GREENHOUSE GAS
EMISSIONS, AND HALF OF THOSE
OFFSETS MUST PROVIDE DIRECT
ENVIRONMENTAL BENEFITS TO
CALIFORNIA. OFFSETS REPRESENT
VERIFIED GHD EMISSIONS
REDUCTIONS BY PROJECTS THAT
FOLLOW STRICT REQUIREMENTS IN
SECTORS AND SOURCES NOT COVERED
BY THE CAP AND TRADE PROGRAM.
IT'S IMPORTANT TO NOTE THAT THE
COMPLIANCE OFFSETS USED IN THE
CAP AND TRADE PROGRAM UNDERGO A
HIGHER LEVEL OF SCRUTINY AND
REVIEW THAN THE VOLUNTARY
OFFSETS THAT ARE IN THE MARKET,
AND THAT INCLUDES STATUTORY
REQUIREMENTS FOR REAL, PERMANENT
, VERIFIABLE, QUANTIFIABLE AND
ENFORCEABLE EMISSIONS
REDUCTIONS. CALIFORNIA STANDARDS
FOR ASSETS HAVE WITHSTOOD
LITIGATION AND ARE REGARDED AS
THE GOLD STANDARD FOR CARBON
OFFSETS, WHICH IS REFLECTED IN
THEIR SIGNIFICANTLY HIGHER VALUE
ON THE OFFSET MARKET. THE FUNG
BILITY OF OFFSETS AND ALLOWANCES
, ALONG WITH OTHER ELEMENTS OF
THE PROGRAM ARE DESIGNED TO
INCREASE COMPLIANCE, FLEXIBILITY
AND COST EFFECTIVE EMISSIONS
REDUCTIONS AMONGST THE REGULATED
ENTITIES. THAT INCLUDES A THREE
YEAR COMPLIANCE PERIOD THAT
GIVES ENTITIES TIME TO DEVELOP
COMPLIANCE RESPONSES WHEN ANNUAL
EMISSIONS DUE TO DROUGHT OR
ECONOMIC CONDITIONS OR OTHER
CIRCUMSTANCES. THE PROGRAM
FACILITATES INTEGRATION WITH
OTHER G HÌ Tð REDUCTION PROGRAMS
, INCLUDING PROGRAMS IN
CALIFORNIA, AS WELL AS PROGRAMS
IN LINKED JURISDICTIONS. IN 2014
, THE CAP AND TRADE PROGRAM
LINKED WITH THE QUEBEC CAP AND
TRADE SYSTEM. AND THAT ALLOWS
MUTUAL ACCEPTANCE OF ALLOWANCES
ISSUED BY BOTH JURISDICTIONS
WHICH INCREASES THE FLEXIBILITY
OF THE PROGRAM. FINALLY UH,
LET'S TALK ABOUT THE CALIFORNIA
CLIMATE INVESTMENT. UM. CAP AND
TRADE AUCTION. PROCEEDS ARE, OF
COURSE, APPROPRIATED BY THE
STATE LEGISLATURE TO A VARIETY
OF PROGRAMS OVER $26 BILLION HAS
BEEN RAISED BY CAP AND TRADE,
AND MORE THAN HALF OF THAT
REVENUE HAS BEEN DIRECTED TO
PRIORITY COMMUNITIES, EXCEEDING
THE 50% REQUIRED BY STATUTE.
THESE FUNDS REALLY REPRESENT THE
ONLY SUSTAINED SOURCE OF
INVESTMENT FOR CRITICAL PROGRAMS
BENEFITING PRIORITY COMMUNITIES.
THESE FUNDS HAVE HELPED PROVIDE
REBATES FOR ELECTRIC VEHICLE
DEPLOYMENT. WEATHERIZE LOW
INCOME HOMES. EXPAND CLEAN
PUBLIC TRANSPORTATION AND
PRESERVE AND RESTORE PUBLIC
LANDS. OVER 567,000 PROJECTS
HAVE BEEN FUNDED SO FAR AND HAVE
REDUCED AN ESTIMATED 78.6
MILLION METRIC TONS OF GHG
EMISSIONS. AS MENTIONED EARLIER,
THE PROGRAM WAS ADOPTED BY THE
BOARD IN 2011 AND HAS BEEN
AMENDED EIGHT TIMES OVER THE
PAST 13 YEARS. THESE UPDATES
REFLECT LEGISLATIVE DIRECTION,
THE LATEST DATA AND
IMPLEMENTATION EXPERIENCE AND
THE CURRENT PROGRAM REFLECTS THE
LEGISLATIVE DIRECTION THAT WAS
GIVEN BY A B THREE 98 IN 2017.
THREE 98 ADDED A PRICE CEILING
TO MANAGE COST. REDUCE THE
COMPLIANCE OFFSET USAGE LIMIT AS
I MENTIONED EARLIER TO 4. UM.
AND ADDRESS G HÌ Tð EMISSIONS
LEAKAGE CONCERNS BY DIRECTING
CARB TO TREAT ALL COVERED
INDUSTRY AS A HIGH RISK FOR
LEAKAGE WHEN DISTRIBUTING FREE
ALLOWANCES. SO THAT'S THE CAP
AND TRADE PROGRAM ITSELF. NOW AS
THE SENATORS MENTIONED, WE ARE
EMBARKING ON A CAP AND TRADE
RULE MAKING TO UPDATE THE
PROGRAM. UM SO I WANNA TALK A
LITTLE BIT ABOUT WHAT WE'VE
LEARNED THROUGH THAT PROCESS. I
WILL, UM GIVE YOU A CAVEAT THAT
THERE IS AN CAP AND TRADE
AUCTION SCHEDULED FOR TOMORROW.
UM SO I WANT TO BE, UM, BRIEF TO
AVOID ANY SENSITIVITIES THAT
MIGHT INFLUENCE AUCTION
BEHAVIOR. SO WE'RE CURRENTLY
ENGAGED IN THAT PUBLIC DECISION
MAKING PROCESS TO ALIGN THE
PROGRAM WITH THE 2022 SCOPING
PLAN THAT WAS APPROVED BY MY
BOARD IN DECEMBER OF 2022. THE
MOST IMPORTANT CHANGE TO THE
REGULATION WE ARE CONSIDERING IS
REMOVING ALLOWANCES THROUGH
2030. ONE SCENARIO IS TO ALIGN
WITH THE LATEST INVENTORY UPDATE
FOR THE S¼ B 32. 40% TARGET FOR
2030. BUT WE'RE ALSO EVALUATING
THE REMOVAL OF ADDITIONAL
ALLOWANCES TO ALIGN WITH A 48%
REDUCTION, AS CALLED FOR IN THE
2022 SCOPING PLAN TO ACHIEVE
THAT 2045 CARBON NEUTRALITY
GOAL. AND WE ALSO ANALYZED AN
ADDITIONAL SCENARIO WHICH WOULD
BE A 55% REDUCTION TARGET BY
2030 TO EVALUATE IN MORE
INCREASED AMBITION IN THE NEAR
TERM. QUESTIONS HAVE ALSO BEEN
RAISED ABOUT THE APPROXIMATELY
5% BANKED OR UNUSED ALLOWANCES
IN THE PROGRAM CURRENTLY HELD BY
PRIVATE COMPANIES. EVALUATING
THIS IS PART OF THE RULE MAKING
AND IS BEING CONSIDERED AS PART
OF THE FORTHCOMING TECHNICAL
WORK IN PUBLIC WORKSHOPS. AS IT
RELATES TO COMPLIANCE OFFSETS.
CURRENTLY NÓ CHANGES ARE BEING
CONSIDERED AT THIS TIME. WE ARE
CONTINUING TO IMPLEMENT THE
REQUIREMENTS PURSUANT TO A B 398
AS RELATED TO OFFSETS. AS NOTED
GHD EMISSIONS FROM COMPLIANCE.
OFFSETS MUST MEET THOSE
STATUTORY ESTABLISHED CRITERIA
OF REAL PERMANENT, QUANTIFIABLE,
VERIFIABLE, ENFORCEABLE IN
ADDITIONAL. GIVEN THE
POSSIBILITY OF REVERSAL, FOR
EXAMPLE, THE LAST OF, UH, FOREST
IN WILDFIRE HAS GENERATED.
CONCERNS REGARDING COMPLIANCE
OFFSETS CARB ENSURES THAT THE
STATUTORY REQUIREMENTS CONTINUE
TO BE MET THROUGH THE CREATION
OF A BUFFER POOL. EACH PROJECT
MUST CALCULATE ITS RISK OF
REVERSAL AND THEN CONTRIBUTE
ADDITIONAL GHG REDUCTIONS TO
THAT BUFFER POOL THAT IS USED TO
MAINTAIN THE ENVIRONMENTALLY,
UH, THE ENVIRONMENTAL INTEGRITY
OF THE CAP AND TRADE PROGRAM.
AND OF COURSE, ANY CHANGES TO
THE COMPLIANCE OFFSET USAGE
REQUIREMENT WOULD NEED TO BE
EVALUATED IN THE CONTEXT OF COST
CONTAINMENT. COMPLIANCE OFFSETS
ARE ONE OF THE KEY LEVERS CARB
HAS AVAILABLE TO HELP MANAGE THE
OVERALL COST OF THE PROGRAM
WHILE ALSO DIRECTING PRIVATE
FUNDS TO ACTIONS SUCH AS
SUSTAINABLE FOREST MANAGEMENT
AND DESTRUCTION OF HIGH GLOBAL
WARMING POTENTIAL GASSES. THE
COMPLIANCE OFFSET PROGRAM,
PARTICULARLY THE FOREST OFFSETS
PROTOCOL IS ALSO A PATHWAY FOR
TRIBES TO VOLUNTARILY
PARTICIPATE IN THE PROGRAM AND
GENERATE CRITICAL REVENUE FOR
THEIR MEMBERS. AND OF COURSE, WE
NEED TO CONSIDER MANAGING ANY
CHANGES TO AVOID STRANDED
INVESTMENTS IN THESE COMPLIANCE
OFFSET PROJECTS. AS PART OF THE
PUBLIC WORKSHOPS. THIS YEAR,
WE'VE PARTNERED WITH OUR LINKED
PARTNER, QUEBEC TO MODEL HOW
CHANGES TO THE PROGRAM WOULD
POTENTIALLY IMPACT BOTH LINKED
PROGRAMS. THE TWO MODELS USED BY
CARB AND QUEBEC ARE STRUCTURALLY
DIFFERENT, RELYING ON DIFFERENT
ASSUMPTIONS AND PROVIDE
DIFFERENT RESULTS. HOWEVER THE
USE OF THOSE MODELS ALLOWS US TO
CROSS CHECK RESULTS AND FOCUS ON
THE DIRECTIONAL IMPACTS OF
PROGRAM CHANGES. THE TWO DRAFT
MODELING RESULTS HIGHLIGHT A FEW
COMMON THEMES THAT WE HAVE
SHARED PUBLICLY IN OUR WORKSHOP
DISCUSSIONS. REDUCING ALLOWANCE
SUPPLY INCREASES, SCARCITY FOR
ALLOWANCES AND INCREASES
ALLOWANCE PRICES. THE 5% BANKED
ALLOWANCES ARE EXHAUSTED IN THE
EARLY PART OF THE NEXT DECADE.
REMOVAL OF ALLOWANCES BETWEEN
NOW AND 2030 ACCELERATES THE USE
OF BANKED ALLOWANCES AND
INCREASES ALLOWANCE PRICES
SOONER IN THIS DECADE AND POST
2030. COST CONTAINMENT AND
LEAKAGE BECOME IMPORTANT AREAS
OF FURTHER EVALUATION. AND WORK
AS SUPPLIANT AS ALLOWANCE SUPPLY
DECREASES AND PRICES INCREASE.
AND THE EXISTENCE OF A POST 2030
PROGRAM PROGRAM CAN HELP
MODERATE THOSE PRICES MOVING
FORWARD. ANOTHER AREA WHERE WE
HAVE SOLICITED IMPACT, UH, INPUT
IS ON MARKET RULES. WE CURRENTLY
HAVE POSITION LIMITS. MONITORING
OF ACCOUNT HOLDER RELATIONSHIPS.
AN EXTENSIVE DISCLOSURES TO HELP
ON MARKET MONITORING FOR
COLLUSION OR MARKET MANIPULATION
BY PER PARTICIPATING ENTITIES.
WE ALSO HAVE A THIRD PARTY
MONITOR THAT ASSISTS IN DAY TO
DAY MARKET MONITORING. AND
MONITORING OF AUCTION BEHAVIOR
BY PARTICIPATING ENTITIES. WHILE
WE HAVE EXERCISED SOME
ENFORCEMENT ACTION, WE HAVE NOT
OBSERVED ANY INSTANCES TO DATE
WHERE THE MARKET HAS EXPERIENCED
PRICE MANIPULATION OR COLLUSION.
A KEY FEATURE OF PROTECTING THE
MARKET IS TIMELY DISCLOSURE OF
MARKET INFORMATION FROM CARB AND
QUEBEC AS MARKET ADMINISTRATORS.
WE HAVE A NEW MARKET DASHBOARD
ON OUR WEBSITE, WHICH CONTAINS
QUARTERLY AND ANNUAL STATISTICS
AND REPORTS ON PRICES. FREE
ALLOCATED ALLOWANCES TO SECTORS.
VOLUMES OF COMPLIANCE
INSTRUMENTS TRADED REGISTERED
MARKET PARTICIPANTS. AND VOLUMES
OF COMPLIANCE INSTRUMENTS HELD
IN PRIVATE AND STATE ACCOUNTS,
AMONG OTHER DATA. WHAT WE WILL
CONTINUE TO DISCUSS WITH THE
CONTRACTED MARKET MONITOR AND
OUR LINKED PARTNER ANY
ADDITIONAL DATA THAT WOULD BE
HELPFUL TO ADD TO THAT, UH,
DATABASE. UM, TO SUMMARIZE AND
DISCLOSE. WE'RE CONTINUING TO
EVALUATE IF ANY CHANGES ARE
NEEDED TO MODIFY OR ADD NEW
RULES TO PROTECT THE MARKET AS
ALLOWANCE SUPPLY DECREASES
MOVING FORWARD. A KEY
CONSIDERATION IN MAKING DATA
PUBLIC IS THE POTENTIAL FOR THE
DATA TO BE USED TO DISADVANTAGE
ANY SECTOR OR INDIVIDUAL COVERED
COMPANY. SO WE HAVE TO BALANCE
WHAT WE'RE DISCLOSING VERY
CAREFULLY. I WILL SHARE SOME OF
THE FEEDBACK WE'VE RECEIVED TO
DATE FROM THE PUBLIC WORKSHOPS.
UM AND I'M SURE THE PANEL WILL,
UM, BE ABLE TO PROVIDE A LOT
MORE DETAIL AND CONTEXT AROUND.
UH, A LOT OF THESE OBSERVATIONS.
MARKET OBSERVERS, ENVIRONMENTAL
GROUPS AND FINANCIAL ENTITIES
GENERALLY SUPPORT INCREASING CAP
AND TRADE PROGRAM STRINGENCY
CONSISTENT WITH AT LEAST A 48%
GHG EMISSIONS REDUCTION TARGET
BY 2030. INDUSTRIAL ENTITIES ARE
ENCOURAGING RECOGNITION OF GHG
EMISSIONS REDUCTIONS ACHIEVED BY
CARBON CAPTURE AND
SEQUESTRATION. AND HAVE RAISED
CONCERNS ABOUT ALLOWANCE REMOVAL
, RESULTING IN HIGHER ALLOWANCE
COSTS AND POTENTIALLY LEAKAGE.
UTILITIES HAVE EXPRESSED CONCERN
FOR ANY DECREASE IN ALLOWANCE
ALLOCATION IF ALLOWANCES ARE
REMOVED. CONCERNS HAVE BEEN
EXPRESSED FROM A VARIETY OF
STAKEHOLDERS ABOUT THE IMPACTS
OF CHANGES TO UTILITY RATEPAYERS
, PARTICULARLY LOW INCOME
CUSTOMERS. UM. BUT SO FAR HAVE
NOT INCLUDED RECOMMENDED
PROVISIONS TO ADDRESS THOSE
CONCERNS. WE'VE ALSO HEARD FROM
REGULATED ENTITIES AND VOLUNTARY
PARTICIPANTS, CONCERNS AND
POTENTIAL RESISTANCE TO ENHANCED
OVERSIGHT OF RELATED COMPANY
RELATIONSHIP DISCLOSURES. MOST
REGULATED ENTITIES FEEL THAT THE
HOLDING LIMIT IS APPROPRIATELY
SET TO DECLINE WITH THE CAP. THE
A B 32 ENVIRONMENTAL JUSTICE
ADVISORY COMMITTEE HAS PROVIDED
SIGNIFICANT INPUT. INCLUDING
ADVOCATING FOR THE ELIMINATION
OF FREE ALLOWANCES, ELIMINATION
OF OFFSETS AND THE
IMPLEMENTATION OF NÓ TRADING
ZONES. FOR FACILITIES IN
PRIORITY COMMUNITIES. THE STAFF
WILL CONTINUE TO EVALUATE THESE
AND OTHER TOPICS OVER THE NEXT
FEW MONTHS. SO AS I WRAP UP, I
JUST WANTED TO SHARE A FEW
OBSERVATIONS. FOR THIS PROGRAM.
I THINK IT'S IMPORTANT TO
RECOGNIZE THAT IT IS A CLOSED
SYSTEM. IT HAS BEEN AN EFFECTIVE
PROGRAM. UM BECAUSE IT HAS BEEN
STRUCTURED VERY CAREFULLY TO YOU
KNOW, BALANCE ALL THESE
COMPETING INTERESTS. SO NÓ
DESIGN FEATURE CAN BE CONSIDERED
IN ISOLATION. CHANGES TO ONE
FEATURE WILL RIPPLE ACROSS THE
SYSTEM AND IMPACT THE OVERALL
PROGRAM. SO MOVING FORWARD. WE
HAVE TO BE CAREFULLY ANALYZING
POTENTIAL CHANGES AND CONSIDER
THOSE CHANGES IN THE CONTEXT OF
HAVING A MORE STRINGENT PROGRAM.
WHEN THE PROGRAM WAS BEING
DEVELOPED. AS YOU ALL KNOW,
THERE WERE LOTS OF PREDICTIONS
THAT IT WOULD HAVE SEVERE
NEGATIVE ECONOMIC IMPACTS ON THE
STATE. THOSE PREDICTIONS HAVE
NOT COME TO PASS. WE HAVE
ACHIEVED OUR 2020 GHG EMISSIONS
REDUCTION GOAL IS SIX YEARS
EARLY AND WITHOUT THE
CATASTROPHIC ECONOMIC
CONSEQUENCES THAT SOME
PREDICTED. NOR HAS THERE BEEN A
COLLAPSE IN PROGRAM PRICES.
GOING FORWARD. WE ALL KNOW DOING
THIS WORK THAT WE HAVE RUN OUT
OF THE LOW HANGING FRUIT
SOLUTIONS, UM AND ACHIEVING OUR
LONG TERM CLIMATE GOALS WILL
REQUIRE AN UNPRECEDENTED
TRANSFORMATION IN OUR BUILT
ENVIRONMENT AND OUR
TRANSPORTATION SYSTEMS. OUR
EFFORTS TO AVOID THE WORST
IMPACTS OF CLIMATE CHANGE ARE
GOING TO BECOME MORE
CHALLENGING. AND WE MUST
CONSIDER THE HEALTH AND ECONOMIC
IMPACTS TO THE MOST VULNERABLE
COMMUNITIES IN CALIFORNIA. BUT
I'M OPTIMISTIC. I'M VERY PROUD
TO WORK WITH THIS ADMINISTRATION
AND WITH THIS LEGISLATURE WHO
HAS SHOWN INCREDIBLE LEADERSHIP
ON TACKLING CLIMATE CHANGE AND
CONTINUE TO LEVERAGE
CALIFORNIA'S INNOVATIVE SPIRIT,
OUR TENACITY. AND OUR STRONG CAN
DO ATTITUDE TO DRIVE US TOWARD
THAT CARBON NEUTRAL FUTURE. SO
THANK YOU. I APPRECIATE HAVING
THE OPPORTUNITY TO SPEAK WITH
YOU. THANK YOU, MADAM CHAIR.
LET'S GO TO SENATOR DALI. THANK
YOU, MR CHAIR. I'M SORRY. UM I
HAVE I'M ON SUB TWO. I'M ON EQ
AND I'M ON ENERGY WHICH ARE ALL
HAPPENING AT THE SAME TIME. SO
UM, JUST BEAR WITH ME FOR A FEW
YEARS. I HAVE A QUESTION. AND
THEN I HAVE A COMMENT AS WELL.
MY QUESTION IS YOU MENTIONED IN
YOUR, UM, REMARKS THAT YOU KNOW,
WE HAVE NOT SEEN THE ECONOMIC
IMPACT TO CALIFORNIANS THROUGH
THIS GGRF PROGRAM SINCE ITS
INCEPTION. AND I TAKE EXCEPTION
TO THAT. I THINK MAYBE THAT WE
HAVE SEEN OUR ELECTRICITY PRICES
AND OUR FUEL PRICES IN
CALIFORNIA. GO UP AND WE ALSO I
WANTED TO ASK YOU ARE YOU DO YOU
HAVE THE ABILITY TO BE ABLE TO
TRACK UM AND I DON'T KNOW IF
THIS IS IN THE PART OF YOUR I
KNOW YOU'RE JUST IN THE
REGULATORY PART OF IT. YOU'RE
NOT IN THE JOB CREATING OR BUT
WE HEAR A LOT ABOUT YOU KNOW,
WE'VE CREATED ALL THESE JOBS,
BUT MOST OF THOSE JOBS HAVE BEEN
IN YOU KNOW, PUBLIC SECTOR OR
DIRECTLY TO SOLAR OR
TRANSMISSION. OR NOW THE NEW
JOBS IS GOING TO BE AND YOU
KNOW, OFFSHORE WIND. BUT THE
PRIVATE INDUSTRY THAT HAS LEFT
CALIFORNIA WE KNOW THERE'S AN
EXODUS OF CALIFORNIA THERE'S NÓ.
A DEBATE ABOUT THAT. IT'S
HAPPENING, AND WE'VE SEEN, UM IN
OUR BUDGETS. UH, A DECLINE. IN A
HUGE BUDGET DEFICIT THIS YEAR,
AND THE STOCK MARKET IS DOING
GREAT AND THE ECONOMY IS DOING
GREAT THROUGHOUT THE COUNTRY,
BUT IT'S NOT DOING GREAT IN
CALIFORNIA. SO I'M CONCERNED
ABOUT WHAT THE FUTURE LOOKS
LIKE. UH UH, YOU KNOW, IN THE
NEXT BETWEEN NOW AND 2030. HOW
ARE WE GOING TO NUMBER ONE. MAKE
SURE WE MEET OUR CLIMATE GOALS
AT THE SAME TIME, MAKING SURE
CALIFORNIA STAYS ECONOMICALLY
VIABLE THROUGH, UH, YOU KNOW,
GOOD PAYING JOBS AND ACTUALLY
BUSINESSES STAYING IN CALIFORNIA
. SO THAT'S UH DO YOU DO YOU
LOOK AT THAT PART OF IT AS WELL
OR NÓ? UM I GUESS I WOULD SAY A
FEW THINGS. UM, FIRST OF ALL, I
HEAR YOU ON, UM UTILITY RATES.
UM YOU KNOW, BEING A FORMER PUC
COMMISSIONER, UM I WILL NOTE
THAT THAT A LOT OF AS YOU LOOK
AT UTILITY RATES. THERE'S A LOT
OF FACTORS THAT ARE GOING INTO
IT. BUT ONE OF THE KEY FACTORS
IS THAT WE ARE BOTH TRYING TO
ADAPT TO CLIMATE CHANGE AND
MITIGATE CLIMATE CHANGE AT THE
SAME TIME, RIGHT, SO THERE ARE
SIGNIFICANT STEPS WE NEED TO
TAKE TO HARDEN OUR SYSTEM. UM
OUR TRANSMISSION DISTRIBUTION
SYSTEM FOR WILDFIRE AND TAKE
OTHER STEPS TO PREPARE US FOR
THE IMPACTS OF CLIMATE CHANGE.
UM AND CERTAINLY, UH, THE AS WE
DECARBONIZE THE ELECTRICITY
SECTOR. UM. THAT WE HAVE COME UP
WITH VERY EFFECTIVE WAYS TO
RECOGNIZE THE FACT THAT
RENEWABLE ENERGY UM IS ON A VERY
CLEAR DOWNWARD COST TRAJECTORY.
UM. AND UH, SO I. I DON'T THINK
THAT THE. RATE I THINK THE RATES
ISSUE IS MUCH MORE COMPLICATED
THAN SIMPLY SAYING OUR CLIMATE
PROGRAMS ARE ARE BURDENING RATES
BECAUSE THERE ARE SO MANY OTHER
FACTORS AND AS I MENTIONED
ADAPTING TO CLIMATE CHANGE IS A
CRITICAL PIECE ON THE JOBS PART.
UM I THINK, UH, FIRST OF ALL WE
WORK VERY CLOSELY WITH, UM A
WORKFORCE AGENCY, WHICH HAS THE
WORKFORCE AND LABOR AGENCY,
WHICH, UM UH, DOES HAVE, UM UH,
AN INDIVIDUAL WHO IS, YOU KNOW,
REALLY, YOU KNOW, WORKING
CLOSELY ON THIS ISSUE OF CLIMATE
AND JOBS AND THE RELATIONSHIP.
UM WE CONTINUE TO BE VERY, UM
UH, SUPPORTIVE OF, YOU KNOW,
GOOD PAYING JOBS, UH, ENSURING
THAT OUR CLIMATE TRANSITION DOES
CREATE GOOD PAYING JOBS. UM AND
THERE'S LOTS OF OPPORTUNITIES
THAT WE SEE IF YOU IF YOU LOOK
AT THE SCOPING PLAN SOME OF THE
OPPORTUNITIES TO GROW, UH,
EMPLOYMENT IN IMPLEMENTING MANY
OF THESE CLIMATE PROGRAMS AND
STRATEGIES. UM IT'S A KEY PART
OF THE SCENARIO DEVELOPMENT
SHOWS THAT OUR SELECT SCENARIO
IN THE 2022 SCOPING PLAN DOES
INCLUDE JOB GROWTH. UM SO I
THINK WE CAN CONTINUE TO BUILD A
STRONG ECONOMY IN CALIFORNIA
EVEN AS WE ARE BOTH MITIGATING
AND ADAPTING TO CLIMATE CHANGE.
THANK YOU. I JUST, UH ONE MORE
COMMENT. YOU MAY YOU MAY WANT TO
COMMENT ON THAT. SO I KNOW IT'S
$1000 A TON, I THINK WAS THE
AVERAGE 103. I THINK IT WAS 1000
AND $3. I THINK SENATOR ALLEN
MAYBE MENTIONED THAT AS AS THE
BASELINE, BUT THERE ARE SOME
PROGRAMS THAT WE KNOW. OR
HUNDREDS OF THOUSANDS OF DOLLARS
. FOR EXAMPLE, THE BULLET TRAIN
IS SOMETHING THAT COSTS A TON OF
MONEY, AND THE RETURN TO
CALIFORNIANS IS. WE DON'T EVEN
KNOW WHAT IT'S GONNA BE, IF
THERE EVER IF THERE AND DEPENDS
ON WHAT IT ENDS UP BEING BECAUSE
THERE IS STILL IN FLUX, AND I
KNOW THAT THAT WAS OUT OF YOUR
HANDS THAT THERE'S BEEN A BALLOT
INITIATIVE. I'M I'M NOT THROWING
THAT OUT. BUT I THINK WE NEED TO
BE HONEST TO THE WITH
CALIFORNIANS, AND THAT NEEDS TO
BE PART OF THIS EQUATION TO SAY,
WHERE ARE EVEN THOUGH MAYBE WE
SHOULD CHANGE OUR MIND ON THE
TRAIN. I'VE I'VE SAID THAT FOR
THE 12 YEARS I'VE BEEN HERE. I
THINK IT'S A WASTE OF MONEY. I
THINK WE CAN DO I KNOW IN
FORESTRY WE CAN DO UNDER $15 A
TON. WE CAN SEQUESTER CARBON
THAT'S A HECK OF A LOT BETTER
DEAL THAN 1000 OR 100,000. I
KNOW THERE'S SOME AREAS IN THAT
SO I WANT I WANTED TO JUST THROW
THAT OUT. I THINK MAINLY NOT SO
MUCH FOR YOU, BUT FOR THE
LEGISLATORS TO KNOW THAT THAT
THAT'S SOMETHING I'M GOING TO BE
WATCHING, AND I THINK
CALIFORNIANS ARE WATCHING AS
WELL. MY LAST COMMENT WOULD BE
ON FORESTRY PART OF IT BECAUSE I
KNOW THAT THERE'S BEEN A LOT OF
TALK AND I REPRESENT A VERY
FORESTED AREA OF CALIFORNIA. UM
AND A FOREST THAT IS PROPERLY
MANAGED. UM WILL EMIT CARBON,
BUT NOT AT THE LEVEL ONE. THAT'S
THAT HASN'T BEEN MANAGED. SO IF
WE THIN THAT FOREST AND THEN
FIRE COMES THROUGH. THE FOREST
IS STILL ALIVE AFTER THE FIRE
GOES THROUGH. IT HAPPENED FOR
MILLENNIA BEFORE WE MESSED WITH
IT AND STOPPED FIRE FROM BEING
PART OF THAT EQUATION. SO WHEN
WE HAVE THESE EMISSION PROBLEMS
WHERE WE'VE HAD BANKING IN
FORESTRY, AND THEN WE HAVE THESE
CATASTROPHIC EVENTS, IT'S
BECAUSE THE FOREST WASN'T PUT
INTO A UH UH STATE WHERE IT CAN
SUSTAIN FIRE AND STILL SEQUESTER
CARBON AFTER A FIRE. SO I THINK
THAT'S SOMEWHERE. WE SHOULD
FOCUS ON MAKING SURE THAT WE
THIN THAT FOREST AND ALLOW IT TO
DO WHAT IT NORMALLY WAS. WAS
DOING BEFORE WE MANIPULATED AND
STOPPED FIRE. SO I JUST WANNA
THROW THAT OUT. I THINK THAT'S A
GREAT AREA. UM WHERE WE CAN DO
GREAT THINGS FOR THE
ENVIRONMENT. WE CAN SEQUESTER
CARBON AND NOT EMIT AS MUCH
CARBON FOR MILLENNIA. ON TO AS
WELL. SO I JUST WANT TO THROW
THAT OUT BECAUSE IT'S SOMETHING
I KNOW THAT MANY OF THE MEMBERS
HAVE BEEN ON THE FORESTRY TOURS
AND I'VE ADVOCATED FOR THAT,
BECAUSE I THINK IT'S A GREAT
CARBON SINK. FOR US. THAT'S A
GREAT PLACE FOR WILDLIFE. WATER
ALL COMES FROM THOSE, UH,
MANAGED GOOD MANAGED FOR SO I
WANNA THANK YOU FOR YOUR TIME.
GOOD TO SEE YOU AGAIN AND SORRY
I HAVE TO RUN TO ANOTHER
MEETING. SURE UM, AND JUST ON
THE FORESTRY POINT, I'VE I'VE
ALSO BEEN ON THOSE TOURS, SEEING
A MANAGED FOREST IN AN OFFSET
PROJECT AND AN UNMANAGED FOREST.
AND THE DIFFERENCE IS STRIKING.
UM SO I COM I COMPLETELY AGREE
WITH YOU AND THE SCOPING PLAN.
UH, DOES CALL FOR MORE
INVESTMENTS IN FOREST
MANAGEMENT. THANK YOU. JUST A
QUICK FOLLOW UP TO THAT. UM
MAYBE YOU COULD TALK ABOUT SOME
OF THE MECHANISMS IN THE PROGRAM
THAT SOFTEN PRICE SPIKES OR, UM,
YOU KNOW, ARE THERE TO PREVENT
PRICE CRASHES IN THE FUTURE.
RIGHT. I MEAN, THE. BANK
ALLOWANCES ARE A CLASSIC EXAMPLE
OF THAT, UM, BECAUSE THE, UM.
ALLOWING ENTITIES TO BANK THOSE
ALLOWANCES. KIND OF HELPS THEM,
UM ADDRESS. OR MITIGATE FOR
POTENTIAL PRICE SPIKES. UM AND,
UH AND THEY HAVE ALLOWANCES THAT
THEY CAN USE RATHER THAN UM, UH,
PURCHASING ALLOWANCES, UM, WITH,
YOU KNOW, EXTREME HIGH PRICES.
SO THAT HELPS KIND OF MODERATE,
UM THE PRICE SPIKES. UM AND SO I
THINK THAT'S THAT SORT OF GOES
TO MY POINT ABOUT. YOU KNOW, YOU
GOTTA SORT OF LOOK AT THIS AS A
CLOSED SYSTEM. UM AND, UH AND
THE SORT OF THE CAREFUL, UM,
REDUCTION IN THE CAP. YOU KNOW,
BEING VERY JUDICIOUS ABOUT THAT,
UM, ALL OF THOSE MECHANISMS HELP
KEEP THE PROGRAM ON A FAIRLY
PREDIC PREDICTABLE TRAJECTORY SO
THAT THE COVERED ENTITIES CAN
UNDERSTAND HOW TO PLAN FIGURE
OUT WHAT THEY NEED TO DO, UM, TO
MEET THEIR COMPLIANCE
OBLIGATIONS. UM WELL, LET ME I
JUST WANT TO CLARIFY ONE THING
THAT WAS SAID BY UM, SENATOR
DOLLY II. I THINK HE SAID
SOMETHING ABOUT THE COST OF THE
BULLET TRAIN BEING ESTIMATED
HUNDREDS OF THOUSANDS PER TON.
THAT'S JUST NOT MY UNDERSTANDING
THAT NOW. OF COURSE, THE BULLET
TRADE HASN'T BEEN COMPLETED AND
SO ONE COULD SAY IT'S AN
INFINITE COST BECAUSE THERE IS
NÓ MITIGATION THAT'S HAPPENED
YET. SO THAT'S ONE ARGUMENT. THE
FLIP SIDE IS I KNOW THERE. THERE
ARE RESEARCHERS THAT ESTIMATE
THAT THE FUTURE COST OF
ABATEMENT FROM THE PROJECT WOULD
BE ABOUT 1800. UM PRETEND WHICH,
BY THE WAY IS WAY HIGHER THAN
EVERYTHING ELSE. SO THE CENTRAL
POINT, I THINK IS CORRECT. UM
YOU KNOW, THE GENERAL
EXPENDITURE IS THE ESTIMATES
AROUND 1000. I KNOW THE CAP AND
INVEST PROGRAM IN WASHINGTON.
UH, A LOT OF THE PROGRAMS SEEM
TO BE, YOU KNOW, LESS EXPENSIVE
PER TON. AND THAT'S I THINK ONE
OF THE THINGS I WOULD LIKE TO
TALK ABOUT. I MEAN, I DON'T DO.
DO YOU WANNA GIVE US SOME
THOUGHTS ON THE WASHINGTON
PROGRAM AND HOW IT UH AND THE
EXTENT TO WHICH WE SHOULD BE?
DRAWING INSPIRATION OR OR OR
INFORMATION FROM THEIR PROGRAM.
UM I GUESS I WOULD SAY A COUPLE
THINGS. THE, UM. YOU KNOW, WE
STAY IN CLOSE COMMUNICATION WITH
WASHINGTON. UM AS WE DO WITH
OTHER JURISDICTIONS THAT HAVE
PROGRAMS. UM ONE OF OUR GOALS
IS, UM TO BE ABLE TO LINK WITH
OTHER JURISDICTIONS AS MUCH AS
POSSIBLE. RIGHT SO WE KEEP THOSE
LINES OF COMMUNICATION OPEN? UM
SOME, YOU KNOW. SOME STATES ARE
SETTING UP PROGRAMS AND ARE
INTERESTED IN TALKING TO US
ABOUT, UM, ABOUT LINKAGE. UM I
DO KNOW THAT THE WASHINGTON
PROGRAM IS, UM, SOMEWHAT. UH,
UH, I DON'T WANNA SAY IN FLUX,
BUT I MEAN THERE'S CONVERSATIONS
ABOUT POTENTIAL CHANGES TO THAT
PROGRAM. THERE'S A OBVIOUSLY A
BALLOT MEASURE. UM UH, AIMED AT
THE PROGRAM, WHICH IS, UM UH,
WHICH IS UNFORTUNATE, UM SO. I
GUESS I WOULD SAY I DON'T
NECESSARILY KIND OF WANT TO, UH,
GO INTO THE SPECIFICS OF THE
PROGRAM, NECESSARILY OTHER THAN,
UM, I THINK, UH, WE WILL
CONTINUE TO STAY. IN CONTACT
WITH THEM CONTINUE TO SUPPORT
KIND OF THE TECHNICAL, UH, WORK
THAT THEY'RE DOING AND, UM, THE
POTENTIAL CONSIDERED THE
POTENTIAL CHANGES THAT THEY ARE
CONSIDERING, BUT I DON'T THINK
THAT THE PROGRAM IS
FUNDAMENTALLY BETTER OR WORSE
THAN CALIFORNIA. IT'S JUST
SLIGHTLY DIFFERENT. ONE OF THE
ONE OF THE ARGUMENTS IS MADE.
AND MAYBE THIS IS A BETTER
CONVERSATION FOR US TO HAVE WITH
THE, UM THE PANEL, BUT I'LL I'LL
THROW IT OUT THERE FOR PEOPLE TO
START THINKING ABOUT, I SUPPOSE,
IS THAT THERE'S A I I'VE SEEN
ARGUMENTS MADE THAT THE
WASHINGTON AND MAYBE THIS IS
MORE ON THE EXPENDITURE SIDE, SO
IT'S LESS IN CENTRAL TO YOUR
BELLY WICK ON THIS, BUT THAT THE
THAT THE PRO THAT THE THINGS
THAT ARE FUNDED ON THE
WASHINGTON PROGRAM ARE THINGS
THAT THE GENERAL PUB THAT ARE
MORE POPULAR WITH THE GENERAL
PUBLIC THAT THEY CAN SEE AND
TOUCH AND FEEL THAT THAT THAT'S
THAT'S EXPANDED TO EVERYBODY.
WEATHERING PROGRAMS. UH, TRANSIT
. UH, AND THEY'VE DONE A REALLY
GOOD JOB OF DIRECTLY TYING THE
PROGRAM TO UM TO THE LEGISLATION
AND THE KINDS OF PROJECTS THAT
THEY THEY'RE GETTING FUNDED THAT
THAT IMPACT PEOPLE DIRECTLY NOW,
OF COURSE, MAYBE THEIR
POPULARITY WILL BE TESTED WITH
THIS BALLOT MEASURE. UH BUT SO,
UM. SO I WOULD SAY A COUPLE OF
THINGS. FIRST OF ALL, UM IN OUR
CLIMATE INVESTMENT PROGRAMS.
HAVE. TOUCHED HUNDREDS OF
THOUSANDS OF PEOPLE IN THE STATE
OF CALIFORNIA. UM AND YOU KNOW,
WE HAVE DONE MANY OF THE SAME
THINGS THAT WASHINGTON TALKS
ABOUT, RIGHT? YOU KNOW, WE'VE
DONE THE WEATHERIZATION. WE HAVE
FUNDED, UM. ONE OF THE KEY
PROGRAMS THAT I SPEND A LOT OF
TIME PROMOTING IS, UM INCENTIVES
FOR HEAVY DUTY TRUCKING. UM YOU
KNOW, I HAVE GONE DOWN TO SEE
THESE ZERO EMISSION CLASS EIGHT
TRUCKS WITH THE CALIFORNIA
CLIMATE INVESTMENTS DECAL RIGHT
ON THE SIDE OF IT, UM, AND THOSE
TRUCKS ARE BENEFITING
COMMUNITIES TODAY ON THOSE
HEAVILY TRAVELED CORRIDORS. UM,
WE HAVE. THEN YOU KNOW, I. ONE
OF MY OTHER FAVORITE EXAMPLE, IS
THE CLEAN MOBILITY OPTIONS
PROGRAM, WHICH FUNDS PLANNING
FOR COMMUNITY, UM. ZERO EMISSION
OR LOW CARBON MOBILITY PROJECTS
AND HELPS DEPLOY THOSE PROJECTS
IT FUNDS WORK WITH COMMUNITY
GROUPS TO ACTUALLY HAVE THE
GROUPS DECIDE WHAT THE BEST
PROGRAM IS. IS IT AN E BIKE
PROGRAM? IS IT A, UM, A CAR
SHARING PROGRAM? AND SO NOT ONLY
DOES IT FUND THE PLANNING IT
FUNDS THE DEPLOYMENT. UM SO
THOSE ARE JUST A COUPLE OF
EXAMPLES. I THINK, UM THE FUNDS
ARE USED TO HELP SUPPORT OUR A B
617 COMMUNITY AIR PROTECTION
PROGRAM WHERE COMMUNITY STEERING
COMMITTEES CAN WORK WITH LOCAL
AIR DISTRICTS, CARB STAFF AND
INDUSTRY TO COME UP WITH UH,
AGAIN, COMMUNITY SOLUTIONS THAT
ARE SPECIFIC TO THAT AREA. UM.
SO I GUESS I DON'T. I WOULD
DISAGREE WITH THE PREMISE THAT,
UM THAT OUR INVESTMENTS DO NOT
BENEFIT COMMUNITIES AND
INDIVIDUALS. UM, I THINK THEY DO
. AND I THINK THE LEGISLATURE UM
YOU KNOW, HAS DONE. A GOOD JOB
OF ENSURING THAT AT LEAST 50% AS
REQUIRED BY STATUTE OF THOSE
FUNDS GO TOWARDS, UM, THE MOST
IMPACTED COMMUNITIES. LET ME LET
ME UM. DELVE IN A LITTLE BIT
MORE ON ON MOST IMPACTED
COMMUNITIES. COMMENT, UM BECAUSE
I KNOW AS HAS BEEN DISCUSSED.
THERE HAS BEEN DEBATE ABOUT UM,
FACILITY LEVEL EMISSIONS CAPS.
AND I'D LOVE TO GET YOUR TO THE
EXTENT THAT YOU FEEL YOU'RE ABLE
TO TALK, YOU KNOW TO JUST TALK
TO US ABOUT WHERE THAT PROPOSAL
IS FITTING INTO THE CONVERSATION
AT CARB RIGHT NOW. UH IT'S
DEFINITELY PART OF THE
CONVERSATION AT THE WORKSHOP
LEVEL. UM IT IS SOMETHING WE
WILL CONSIDER AGAIN. THE
PROGRAMS A CLOSED SYSTEM. SO IF
YOU YOU KNOW, IT'S A MARKET
BASED PROGRAM. SO IF YOU SORT OF
SAY, WELL, THIS THIS ASPECT OF
THE PROGRAM IS NOT SUBJECT TO
THE SAME MARKET CONDITIONS AS
THE PROGRAM AS A WHOLE, THEN
THAT HAS IMPACTS. UM SO I THINK
IT'S SOMETHING THAT UH, WE NEED
TO CONSIDER BECAUSE IT IS
CLEARLY BEEN, UM BEEN ADVOCATED
FOR, UM. BUT WE'LL ALSO HAVE TO
SORT OF THINK ABOUT WHAT WHAT
THE WHAT THE PROS AND CONS OF
THAT WOULD BE AND HOW IT WOULD
AFFECT THE OVERALL MARKET SYSTEM
. UM SO WE OBVIOUSLY HAVEN'T
MADE ANY DETERMINATIONS YET, UM.
AND IT'S PART OF THE SUITE OF
POTENTIAL TWEAKS THAT WILL BE
DISCUSSING. UM BUT AS WITH ANY
OF THESE CHANGES WE HAVE TO
FIGURE OUT YOU KNOW HOW IT FITS
IN TO THE LARGER PROGRAM. YEAH,
OK, BUT SO IT'S NOT YOUR SENSE.
IT'S SOMETHING YOU COULD ADOPT
WITHOUT ADDITIONAL LEGISLATIVE
DIRECTION. AND IT WOULD IT
WOULD, IT WOULD BE IT'S WITHIN
YOUR AUTHORITY UNDER CURRENT
LAW. YEAH, I THINK THAT'S
CORRECT. COULD YOU ALSO, UM ONE
OTHER THING I WANTED TO ASK
ABOUT, UM THE PRICE CEILING. UM
THE MECHANISM BY WHICH, UM. YOU
KNOW, WE SET THE PRICE CEILING
WHERE IT IS AND, UM AND, UM AND
ALSO IF WE WERE TO HIT THE
CEILING, WHAT WHAT WOULD BE THE
RAMIFICATIONS? UM TERMS OF
ALLOWANCE AVAILABILITY
EMISSIONS. REVENUES, ET CETERA.
UM, YOU KNOW, I THINK THAT MIGHT
BE A BETTER QUESTION FOR MATT ON
THE NEXT PANEL. UM BECAUSE WE
HAVE NOT. YOU KNOW, WE HAVE NOT
BEEN IN THAT PLACE. UM SO I
HAVEN'T HAD TO DEAL WITH THAT.
OK AND INCLUDING, INCLUDING
WHERE WE'VE, UM AND HOW WE'VE
SET THE PRICE CEILING. WE SHOULD
ASK HIM TO ABSOLUTELY OK, THAT'S
GOOD. YES, UH SENATOR BECKER.
YEAH. JUST KOO. UM LAST FOLLOW
UPS, UM YOU TALKED ABOUT BANK
ALLOWANCES FROM THE IN THE SORT
OF COST CONTAINMENT PIECE, BUT,
UH, ALSO, UM, BEEN DISCUSSION
ABOUT UM, HOW CARB IS GONNA MOVE
FORWARD TO PREVENT FUTURE
EXCESSIVE ALLOWANCE BANKING, SO
I DON'T KNOW IF YOU WANTED TO
ANYTHING. YOU CAN COMMENT ON
THAT NUMBER ONE, THEN NUMBER TWO
JUST ON THE PRICE CONTAINMENT
PIECE, JUST TO, UH, FINISH THAT
CONVERSATION. I KNOW AS PART OF
A THREE 98. THERE WERE, UM
INCLUSION OF TWO PRICE STEPS TO
MITIGATE PRICE IMPACT TO THE
PROGRAM AND, UM MAYBE YOU COULD
COMMENT. HOW OFTEN HAVE THOSE
BEEN USED SINCE 2017 AND HAS
CARB SEEN A SUCCESSFUL POSITIVE
IMPACT ON CONTAINING. YEAH I
THINK THAT'S ANOTHER MAT.
QUESTION ALL RIGHT. WE'LL GO
BACK TO HIM ON THAT ONE ON THE
FUTURE, EXCESSIVE BANKING THAT
THAT COMMENT ON HERE. UM I CAN
HAVE MAD COMMENT ON THAT TOO.
AGAIN. THAT'S ANOTHER SORT OF,
UM. PROGRAM PROGRAMMATIC CHANGES
THAT'S BEEN SORT OF WORKSHOPPED,
BUT I HAVEN'T DEALT INTO THE
DETAILS YET ON THAT. RIGHT? OK
FOR IDENTIFICATION. CAN YOU JUST
GIVE US A AAA? BIT OF A, YOU
KNOW, TIMELINE IN TERMS OF THE
NEXT STEPS ON THE RULE MAKING
PROCESS, UM, DO SOME MORE
WORKSHOPS PLANNED. UM YEAH. SO,
UM WE REALLY WANT TO GET THIS,
UM, ACCOMPLISHED BECAUSE, YOU
KNOW, WE WANNA MAKE SURE THAT WE
HAVE, UM, OUR OPPORTUNITY TO
RECEIVE THE BENEFITS OF THE
INCREASED AMBITION AND ALSO, YOU
KNOW, REALLY ENCOURAGE COVERED
ENTITIES TO TAKE ADVANTAGE OF
THE FEDERAL OPPORTUNITIES THAT
ARE OUT THERE TO REDUCE
EMISSIONS, AND, UM SO WE HAVE
THE TYPICAL REGULATORY PROCESS
AS WE DO. WE RELEASE AN, UH, A,
WHICH IS AN ECONOMIC ANALYSIS OF
THE POTENTIAL CHANGES. UM, THEN,
UM, WE DO, UH, RELEASE PROPOSED
REGULATORY LANGUAGE. UM. OUT PUT
IT OUT FOR PUBLIC COMMENT. UM
AND THEN THE BOARD HAS AN
OPPORTUNITY TO TAKE A LOOK AND
WEIGH IN, UM WE WOULD LIKE TO
GET THIS DONE BY THE END OF THE
YEAR. UM I THINK THEY'RE LIKELY
WILL BE, UM MORE PUBLIC
ENGAGEMENT. UM. POTENTIALLY MORE
WORKSHOPS. UM ENGAGEMENT WITH
OUR ENVIRONMENTAL JUSTICE
ADVISORY COMMITTEE. UM BUT OUR
GOAL IS TO IS TO GET THIS DONE
BEFORE THE END OF THE YEAR. OK,
UM OK. AND NOT JUST ON A
PREVIOUS COMMENT YOU MADE ABOUT,
UM YOU KNOW, I. I DON'T DISAGREE
WITH YOU THAT THERE'S A LOT OF
BENEFITS THAT REGULAR PEOPLE, UM
ASSOCIATED WITH OUR EXPENDITURES
. WHAT WHAT ROLE DOES CARB èC
IT? PLAYING IN? GETTING THE WORD
OUT ABOUT THE BENEFITS? IS THAT
IS THAT YOUR JOB? IS IT? NOT
YOUR JOB? UM WHOSE JOB IS IT?
MAYBE IT'S NOBODY'S JOB. I MEAN,
WHAT IS THAT AN IMPORTANT PART
OF THE STORY. OH I THINK IT IS
OUR JOB. UM AND I THINK WE TRY
TO DO THE BEST WE CAN. AND WE
HAVE, UM UH UH, YOU KNOW, A VERY
EXTENSIVE WEBSITE THAT TALKS
ABOUT ALL THE DIFFERENT PROGRAMS
. UM AND THE DIFFERENT
CATEGORIES WE GO. WE DO GO
THROUGH A PUBLIC PROCESS TO MAKE
RECOMMENDATIONS. UM EVERY FEW
YEARS TO, UM UH, WORK WITH
STAKEHOLDERS TO RECOMMEND
PROGRAMS AND THINGS THAT WE
THINK THE UM FUND SHOULD BE USED
FOR. EVEN THOUGH WE AREN'T THE
ULTIMATE DECISION MAKERS, WE DO
GET FEEDBACK, AND THROUGH THAT
PROCESS WE'RE ABLE TO KIND OF
TALK ABOUT OK, HERE'S WHAT WE'VE
DONE IN THE PAST. HERE'S SOME
IDEAS FOR THE FUTURE. SO WE DO
DO WORKSHOPS, PUBLIC ENGAGEMENT
AROUND THAT, AND THAT'S ACTUALLY
GETTING STARTED RIGHT NOW. UM WE
TRY TO DO AS MUCH MARKETING AS
WE CAN. UM UH, AS I MENTIONED,
YOU WILL SEE, YOU KNOW, THE
LITTLE CALIFORNIA CLIMATE.
INVESTMENTS LOGO ON VARIOUS
PROJECTS, UM THROUGHOUT THE
STATE. UH, OBVIOUSLY, YOU KNOW,
WE CAN CERTAINLY, UM DO MORE,
UH, TO HIGHLIGHT THE PROGRAMS. I
THINK THE CHALLENGE IS PEOPLE
FOCUS ON THE PROGRAM. THEY DON'T
NECESSARILY FOCUS ON THE COLOR
OF MONEY THAT'S SUPPORTING THE
PROGRAM RIGHT SO THEY'LL KNOW
THAT A PROGRAM EXISTS. THEY'LL
KNOW THAT IT'S PART OF THE
STATE'S OVERALL SUPPORT FOR
CLEAN TRANSPORTATION FOR, UM, UH
, CLEAN ENERGY INFRASTRUCTURE,
OTHER THINGS, UH, BUT THEY DON'T
NECESSARILY UNDERSTAND THAT THAT
COMES FROM, UH, THE GREENHOUSE
GAS REDUCTION FUND. UM AND SO WE
TRY TO TELL THAT STORY AS BEST
WE CAN OK? YOU'VE ANSWERED
QUESTIONS. ALL RIGHT. THANK YOU.
I APPRECIATE IT AND I. I KNOW
YOU'RE GONNA BE LISTENING TO THE
REST OF THE CONVERSATIONS. UM,
BUT BUT WE YEAH, WE'RE WE'RE
WE'RE EXCITED TO HAVE A ALL THIS
WORK? YEAH I'M GONNA BE
LISTENING REMOTELY BECAUSE I
HAVE TO. YEAH, I WILL DEFINITELY
BE LISTENING, AND I REALLY
APPRECIATE THE ENGAGEMENT AND
THOUGHTFUL CONVERSATION AND
LOOKING FORWARD TO HEARING THE
PANEL. ALL RIGHT. THANK YOU. ALL
RIGHT. UM NEXT, WE'VE GOT, UM, A
PANEL THAT WILL BE DISCUSSING
YOU KNOW WHAT'S AT STAKE FOR OUR
OUR OUR CURRENT CAP AND TRADE
RULE MAKING AND SO WE'VE GOT,
UM, SARAH, CAITLIN, CATHERINE,
DANNY AND MATT, WHO I INTRODUCED
DURING MY OPENING COMMENTS, SO
LET'S HAVE YOU ALL COME UP, AND
I THINK WE'LL START WITH SARAH
CORNET FROM Dð L A Ó. WE HAVE.
OH YEAH, THERE'S AN OH, DEAR.
OK, YEAH. LET ME PULL ONE OVER
THERE AND THEN YEAH. THIS IS
FUN. WE GOT TO HAVE EVERYBODY.
YEAH. THERE WE GO. ONE BIG HAPPY
FAMILY. UM. AND YOU KNOW, JUST
TO LET FOLKS KNOW. UM YOU KNOW
THE PANEL WAS DESIGNED TO DRAW
UPON UM, THE VARIOUS KIND OF
ADVISORY BOARDS. THAT EXISTS IN
THIS SPACE. SO OBVIOUSLY THE L A
Ó IE A, UM, YOU KNOW E, JACK,
AND THEN, UM AND THEN, UH,
OBVIOUSLY, WE'VE GOT MATT HERE.
WHO'S GONNA YOU KNOW, DEAL WITH,
UH, OVER HERE? YEAH YEAH, WHO'S
UH, WHO'S BEEN REFERRED TO MANY
TIMES TO HANDLE ALL THE TOUGH
QUESTIONS. SO UM, ANYHOW, UH,
LET'S GET STARTED, UM, WITH, UH,
WITH SARAH CORNET. GREAT. UM
WELL, THANK YOU. AND WE HAVE
PREPARED A HANDOUT THAT YOU
SHOULD HAVE IN FRONT OF YOU.
I'LL JUST LEAVE SOME OF THESE.
IF YOU OTHER PANELISTS WANT SOME
, THIS IS, UM, IS ALSO AVAILABLE
ON THE L A Ó WEBSITE, UM, JUST
FOR THE SAKE OF TIME AND GIVEN A
CHAIR RANDOLPH'S COMMENTS. I'M
GONNA SKIP AHEAD TO PAGE NINE OF
THE HANDOUT, UM, KEY LEGISLATIVE
CONSIDERATIONS. SO. YEAH JUST TO
KIND OF SET SET THE STAGE FOR
THIS MOMENT. UM WE JUST WANNA
BEGIN WITH KIND OF ACKNOWLEDGING
. YOU KNOW, THIS IS THIS IS A
REALLY KEY TIME FOR THE
LEGISLATURE TO THINK ABOUT ITS
PREFERRED ROLE IN THE DIRECTION
OF THE PROGRAM. SO WHILE CARB
ULTIMATELY HAS AUTHORITY OVER,
YOU KNOW THE RULE MAKING PROCESS
AND THE PROGRAM DESIGN THE
LEGISLATURE COULD WEIGH IN AND
DIRECT CARB TO MAKE CERTAIN
PROGRAM CHANGES OR CONSIDERS
CERTAIN ISSUES IF THERE ARE
PRIORITIES THERE. UM SECOND, UH,
THE ISSUE OF KIND OF ANNUAL
VERSUS CUMULATIVE EMISSIONS
FORECAST. SO THIS IS A LITTLE
BIT A LITTLE BIT OF A WONKY
ISSUE, BUT IN SOME OF THE
WORKSHOPS THAT, UM THAT CARB HAS
PRESENTED THE MODELING IS
FOCUSED ON CUMULATIVE EMISSIONS
RATHER THAN AN ANNUAL LOOK AT
EMISSIONS. WE THINK THAT THE
LEGISLATURE MAY WANT TO DIRECT
CARB TO KIND OF FOCUS ON AN
ANNUAL LOOK JUST TO BETTER
ALIGN. UM, THE. THE, UM THE KIND
OF THE MODELING WITH OUR OUR
STATEWIDE STATUTORY TARGETS,
WHICH DO FOCUS ON ANNUAL
EMISSIONS. AND THEN, UM, THIRD.
HOW SHOULD THE STATE BALANCE
PURSUING EMISSIONS REDUCTIONS
WITH POTENTIAL COST IMPACTS? SO
THIS IS SOMETHING THAT I THINK
WE THINK IS, YOU KNOW REALLY
IMPORTANT TO CONSIDER. AS TO
RANDOLPH IDENTIFIED, YOU KNOW,
THE CHANGES THAT CARVE IS
CONSIDERING ADJUSTING THE CAP
AND REMOVING ALLOWANCES WILL
LIKELY INCREASE ALLOWANCE PRICES
. WE HAVE A TABLE HERE THAT JUST
SHOWS SOME OF THE POTENTIAL
IMPACTS IN TERMS OF DIFFERENT
ALLOWANCE PRICES ON THE COST OF,
UH, RETAIL. VASELINE AND DIESEL.
UM SO THIS IS JUST YOU KNOW
SOMETHING SOMETHING TO KEEP IN
MIND. AND EVEN DESPITE THIS
POTENTIAL IMPACT, THIS OPTION IS
STILL LIKELY TO BE LESS COSTLY
THAN SOME OTHER PROGRAMS OR
POLICIES THE STATE MIGHT HAVE TO
EMPLOY TO HELP US MEET OUR
STATUTORY GOALS. AND THEN MOVING
TO THE NEXT PAGE. SO UM, HOW
SHOULD THE STATE ALLOCATE
ALLOWANCES TO BALANCE DIFFERENT
PROGRAM GOALS AND IMPACTS? SO AS
UM, CHAIR RANDOLPH MENTIONED,
YOU KNOW THAT SOME ALLOWANCES
ARE SOLD AT THE STATE RUN
AUCTIONS AND THE REVENUE IS USED
IN DR G RAFF, WHILE OTHERS ARE
GIVEN A WAY TO COVERED ENTITIES,
UM, INCLUDING UTILITIES. UH, SO
THE WAY THAT THAT ALLOCATION
WORKS CAN CAN HAVE AN IMPACT ON
COST TO CONSUMERS. SO, FOR
EXAMPLE, UTILITIES USE THE
REVENUE. THAT THEY GENERATE FROM
SELLING THEIR FREE ALLOWANCES TO
APPLY A BILL CREDIT THE
CALIFORNIA CLIMATE CREDIT ON UM
I Ó U CUSTOMER BILLS. SO IN
TERMS OF HOW CARB MAKES ITS
DECISIONS AROUND ALLOCATION.
THIS IS ALSO SOMETHING THAT WE
THINK THE LEGISLATURE SHOULD
CONSIDER AND IS, IS WORTH KIND
OF KEEPING A CLOSE LOOK AT AND
THEN, UM, IN TERMS OF TAKING
OTHER STEPS TO MITIGATE
POTENTIAL COST IMPACT, SO WE
HAVE THREE KIND OF, YOU KNOW,
TOOLS THAT ARE AVAILABLE HERE.
UM THE ALLOWANCE PRICE CEILING
CAME UP. IT SOUNDS LIKE WE'LL
TALK MORE ABOUT THAT. THAT'S
SOMETHING THAT EXISTS, UM, THE
LEGISLATURE COULD CONSIDER
DIRECTING CARB, UM, TO MAKE
CERTAIN CHANGES. CARB CURRENTLY
HAS THE AUTHORITY TO SET THE
PRICE CEILING. SO IF THE
LEGISLATURE HAS SOMETHING IN
MIND, THAT'S THAT'S AN OPTION
THERE AGAIN THE ALLOWANCE
ALLOCATION ISSUE THAT I
MENTIONED AND THEN THE USE OF
GGF REVEN. SO THE STATE COULD
CONSIDER USING ANY ADDITIONAL Tð
GF REVENUES THAT MATERIALIZE
FROM INCREASE FROM AN INCREASE
IN, UM ALLOWANCE PRICES TO
SUPPORT REBATES TO LOW OR MIDDLE
INCOME CONSUMERS FOR ENERGY COST
GROWTH THAT MIGHT RESULT FROM
PROGRAM CHANGES. THIS IS
SOMETHING THAT HAS BEEN
IDENTIFIED IN SOME STUDIES OF
CARBON MARKETS AS A PRETTY
EFFECTIVE AND EFFICIENT WAY TO
TARGET BENEFITS AND TRY TO, UM,
REDUCE SOME OF THOSE INEQUITABLE
IMPACTS OF COST GROWTH AND
LEAVE. AND THEN, FINALLY ON THE
LAST PAGE. SO DOES THE
LEGISLATURE WANT TO TAKE ACTION
TO EXTEND THE PROGRAM BEYOND
2030? IF UM, THE LEGISLATURE
DOES WANNA CONTINUE WITH THE
PROGRAM, MAKING AN EXTENSION
DECISION SOONER RATHER THAN
LATER COULD PROVIDE SOME, UM
SOME ASSURANCE TO THE MARKET AND
MITIGATE, UM, AGAINST POTENTIAL
LIKE PRICE VOLATILITY WITH
ALLOWANCES AND THEN FINALLY,
WHAT ARE THE LEGISLATURE'S
EXPENDITURE PRIORITIES FOR GGF
REVENUES SO WE COULD POTENTIALLY
BE SEEING, UM, SOME SOME BIG
CHANGES IN JUJ F REVENUES.
DEPENDING ON UM HOW. CARB UM,
MAKES ITS CHANGES, THOUGH, SO
THE LEGISLATURE MAY WANT TO
START THINKING NOW ABOUT ITS ITS
PRIORITIES FOR THESE REVENUES.
UM AND THEN, JUST JUST FOR YOUR
REFERENCE, UM, THE FIRST FEW
PAGES OF THE HANDOUT JUST
DISCOVER. UH, SOME BACKGROUND ON
THE PROGRAM. UM THE USE OF GGF
AND, UM, SOME COMMENTS, UH, THAT
WE'VE MADE BEFORE TO YOU ABOUT
HOW THE WAY THE PROGRAM IS NOT
CURRENTLY WELL STRUCTURED TO
HELP US MEET OUR 2030 2045
EMISSIONS REDUCTION GOAL. OK,
WE'RE GONNA I WANNA FOLLOW UP
WITH YOU ON THAT PARTICULAR
TOPIC. UH, BUT WE'RE GONNA, UM
LISTEN TO THE WHOLE PANEL FIRST,
SO LET'S UM LET'S NEXT. GO TO,
UH, CAITLIN RUNNERS SETTER FROM,
UH, IAC. THANK YOU VERY MUCH. I
APPRECIATE THE OPPORTUNITY TO BE
HERE TODAY. UM I AM CAITLIN
RONER SETTER ASSEMBLY APPOINTEE
TO THE INDEPENDENT EMISSIONS
MARKET ADVISORY COMMITTEE,
THOUGH I SHOULD SAY THAT
EVERYTHING I'M GONNA SAY TODAY
DOESN'T NECESSARILY REPRESENT
EVERY MEMBER OF IMAC. UM, I'M
SURE IT WON'T. UM SUCH IS THE
NATURE OF THESE ADVISORY
COMMITTEES. UM AND I SHOULD ALSO
SAY I'M THE CALIFORNIA DIRECTOR
FOR ENVIRONMENTAL DEFENSE FUND
AS WELL. UM SO FIRST, I REALLY
WANNA EMPHASIZE TO YOU THE
ESSENTIAL ROLE THAT THE CAP AND
TRADE PROGRAM PLAYS IN ACHIEVING
OUR GREENHOUSE GAS REDUCTION
GOALS. BOTH 2030 WHAT WE WILL
NEED TO DO TO ACHIEVE OUR 2045
GOAL. UM THIS PROGRAM IS A KEY
PIECE OF OUR SUITE OF CLIMATE
POLICIES AND SPECIFICALLY THE
EMISSIONS CAP, WHICH WHEN IT IS
DESIGNED WITH SUFFICIENT
AMBITION AND HIGH ENVIRONMENTAL
INTEGRITY, PLAYS A REALLY UNIQUE
ROLE IN ACTING AS THE BACKSTOP
TO PROVIDE THE GREATEST POSSIBLE
CERTAINTY THAT WE WILL MEET
THESE 2030 2045 GOALS. SO WHAT
THAT MEANS IS IF OTHER PROGRAMS
OVER PERFORM AN EMISSIONS
ABATEMENT. THERE COULD BE LESS
DEMAND FOR ALLOWANCES AND LESS
PRESSURE ON THAT EMISSIONS CAP.
IF HOWEVER, OTHER PROGRAMS DO
NOT DELIVER THE DESIRED OR
EXPECTED ABATEMENT. THE
EMISSIONS GAP CLOSES THAT THE
EMISSIONS CAP CLOSES THAT GAP,
UM, BECAUSE THERE WOULD BE
GREATER DEMAND FOR ALLOWANCES
AND POTENTIALLY HIGHER ALLOWANCE
PRICES. UM BUT WHEN THAT CAP IS
WELL DESIGNED, MEANING IT IS,
YOU KNOW, SUFFICIENTLY STRINGENT
, UM, CALIFORNIA IS COVERED
EMISSIONS CANNOT EXCEED WHAT IS
REQUIRED TO MEET OUR TARGETS,
AND WE DO NOT HAVE ANOTHER
PROGRAM THAT FILLS THIS ROLE
WITH ITS FOCUS. STRICTLY ON TONS
OF EMISSIONS. SO I WANT TO JUST
EMPHASIZE THIS IS A UNIQUE AND
IMPORTANT PROGRAM. UM HOWEVER,
THE KEY, OF COURSE, IS THE
STRINGENCY OF THE EMISSIONS CAP
TO MAKE ALL OF THAT TRUE, UM AND
AS AS CHAIR, RANDOLPH SAID. THAT
IS REALLY THE NUMBER OF
ALLOWANCES THAT ARE IN THE
PROGRAM, UM AND E Dð F HAS BEEN
RECOMMENDING TO CARB SINCE THE
2018 RULE, MAKING THAT THERE BE
FEWER ALLOWANCES AVAILABLE IN
THE ANNUAL BUDGETS TO INCREASE
THE LEVEL OF CLIMATE AMBITION.
MÀ HAS MADE SIMILAR
RECOMMENDATIONS. UM BUT I AM
PLEASED TO SAY THAT IN THE
CURRENT RULEMAKING CARB IS
TAKING THAT VERY STEP AND
CONSIDERING DIFFERENT SCENARIOS
FOR HOW TO REDUCE THE ALLOWANCE
BUDGETS IN THE NEAR TERM, UM AND
I THINK THAT'S A REALLY POSITIVE
STEP TO, UM INCREASE THE
STRINGENCY OF THE PROGRAM AND I
JUST APPRECIATE CARBS FOCUS ON
ON NEAR TERM AMBITION. UM
HOWEVER, THERE ARE A FEW
ADDITIONAL ITEMS THAT WE WOULD
LIKE CARB TO CONSIDER IN IN THIS
RULE MAKING PROCESS AND ONE IS
PRESERVING THE ABILITY TO BANK
ALLOWANCES, UH, WHICH HAS
IMPORTANT CLIMATE BENEFITS. THAT
IS, IF YOU PURCHASE AN ALLOWANCE
TODAY, AND IT DOES NOT GET
TURNED IN FOR COMPLIANCE TODAY.
THAT REPRESENTS A TON OF
EMISSIONS THAT IS NOT EMITTED
TODAY. AND SO BANKING ALLOWANCES
ESSENTIALLY BRINGS REDUCTIONS
FORWARD IN TIME, UM, WHICH MEANS
LESS CUMULATIVE CLIMATE IMPACT.
UM AS NEAR TERM REDUCTIONS ARE
MORE IMPORTANT FOR THE OVERALL
BENEFITS OF THE CLIMATE THAN
REDUCTIONS WE PLAN FOR, UM OUT
IN THE FUTURE. UM ADDITIONALLY,
AS CARB CONSIDERS REMOVING
ALLOWANCES FROM THE PROGRAM, UM
THEY MAY WANT TO CONSIDER
INCREASING THESE PRICE
CONTAINMENT TIERS OR THE PRICE
CEILING. UM ONE OF THE FACTORS
THAT GOES INTO THE DETERMINATION
OF WHAT THOSE PRICE CONTAINMENT
POINTS AND PRICE CEILING ARE, UM
, IS THE SOCIAL COST OF CARBON,
WHICH IS SIGNIFICANTLY HIGHER
TODAY. UM EPA PUT IT AT ABOUT
100 AND $90 A TON THAN IT WAS
BACK WHEN A B THREE 98 PASSED IN
2017. SO I THINK THAT IS
SOMETHING THAT THAT WE WOULD ASK
CARB TO LOOK AT AS WELL. UM AND
THEN, ADDITIONAL PROGRAM
FEATURES INCLUDE AN EMISSIONS
CONTAINMENT RESERVE, WHICH WOULD
REDUCE ALLOWANCE SUPPLY WHEN
PRICES ARE LOW. COUNTING OFFSETS
UNDERNEATH THE CAP INSTEAD OF IN
ADDITION TO THE CAP, THIS WOULD
MAINTAIN THAT VITAL FLOW OF
RESOURCES TO NATURAL AND WORKING
LANDS, AND OUR TRIBES WILL ALSO
ACCOUNTING FOR SOME OF THE
UNCERTAINTY AROUND CERTAIN TYPES
OF OFFSETS, UM AND THEN FACILITY
LEVEL EMISSION CAPS OR WHAT E
JACK REFERS TO AS AS NÓ TRADING
ZONES, UM, TO ENSURE THAT
FACILITIES AND OVERBURDENED
COMMUNITIES OR SPECIFIC SECTORS
SUCH AS REFINERIES ARE REDUCING
THEIR GREENHOUSE GAS POLLUTION
AND CO POLLUTANTS AT LEAST AS
FAST AS THE STATE OR THE STATE'S
ECONOMY WIDE CAP. UM AND THEN I
GUESS. LASTLY I WOULD ECHO WHAT
WHAT THE L Ó HAS SAID ABOUT THE
FUTURE OF THE PROGRAM. UM IF WE
WANT COVERED ENTITIES TO INVEST
IN EMISSIONS ABATEMENT
TECHNOLOGY, THERE NEEDS TO BE A
CLEAR PATH FORWARD FOR THE
PROGRAM AFTER 2030. THAT SIGNAL
NEEDS TO BE SENT NOW, UM,
DECISIONS ARE BEING MADE TODAY,
WHICH WILL IMPACT OUR EMISSIONS
FOR YEARS TO COME. UM AND SO, AS
YOU THINK ABOUT THIS POST 2030
I, I WOULD SECOND THE
RECOMMENDATION OF LOOKING AT
LEAKAGE ASSUMPTIONS THAT WERE
MADE IN A B 398 DIRECT
ALLOCATION IS REALLY IMPORTANT
TO PREVENTING EMISSIONS AND
ECONOMIC LEAKAGE, BUT ONLY IF
THE UNDERLYING ASSUMPTIONS GOING
INTO THAT ARE SOUND. UM AND I
THINK YOU KNOW, AS AS L A Ó WAS
SAYING, WE REALLY SHOULD
CONSIDER HOW THE REVENUE FROM
THIS PROGRAM IS TARGETED,
ESPECIALLY TOWARD THE MOST
VULNERABLE HOUSEHOLDS AND
COMMUNITIES. UM AND THEN THE
VERY LAST THING I'LL SAY IS
CALIFORNIA ALSO HAS AN
OPPORTUNITY BEFORE IT AS CAR
MAKES THESE PROGRAM UPDATES, AND
YOU ALL CONSIDER WHAT A POST
2030 PROGRAM LOOKS LIKE, UM, TO
EXPAND OUR CLIMATE DIPLOMACY BY
PURSUING LINKAGE WITH WASHINGTON
AND POTENTIALLY NEW YORK IN THE
FUTURE. UM CALIFORNIA CANNOT
SOLVE CLIMATE CHANGE ON OUR OWN
AND EXPORTING, AMBITIOUS AND
WELL DESIGNED POLICY. UM SO
OTHERS CAN JOIN OUR EFFORTS. YOU
KNOW, WE'LL YIELD FAR GREATER
BENEFITS THAN WHAT WHAT WE
ALONE. CAN DO. UM SO THERE'S A
LOT IN HERE AND I LOOK FORWARD
TO DISCUSSING IT ALL WITH YOU.
BUT THANK YOU VERY MUCH FOR YOUR
FOR YOUR TIME AND YOUR INTEREST.
GREAT. THANK YOU. ALL RIGHT,
LET'S NEXT GO TO KATHERINE.
GRUPA FROM, UM FROM CARB Z,
JACK. GOOD MORNING, KATHERINE
GRUPA, EXECUTIVE DIRECTOR OF THE
CENTRAL VALLEY AIR QUALITY
COALITION, OR èC, EJ COCHA HAS
BEEN MENTIONED AND ALSO THE
CONVENOR OF OUR CARBON MARKETS
WORK GROUP. I WANT TO THANK
COMMITTEE STAFF AND THE SENATORS
FOR GIVING US THE OPPORTUNITY TO
SPEAK TODAY AND TO THANK KATIE
VALENZUELA ON MY TEAM FOR
HELPING PUT TOGETHER A HANDOUT,
WHICH SHOULD HAVE BEEN
DISTRIBUTED TO THE SENATORS AND
THE PANELISTS. IT IS ALSO
AVAILABLE ONLINE AND THE
REMAINING HARD COPIES I HAVE.
I'M HAPPY TO PUT OUT FOR FOLKS
IN THE AUDIENCE. IT'S IMPORTANT
TO FRAME MY COMMENTS BY SAYING
THAT THE EJ MOVEMENT IS
ABSOLUTELY NOT A MONOLITH, AND I
CAN REALLY ONLY SPEAK TO THE SAN
JOAQUIN VALLEY PERSPECTIVE AND
THE PERSPECTIVE OF CVAS MEMBERS.
FUNDAMENTALLY MARKET BASED
MECHANISMS ARE NOT DESIGNED TO
PRODUCE EQUITABLE OUTCOMES AND,
IN FACT, THE ABILITY TO TRADE OR
PURCHASE EMISSIONS CREDITS THAT
ARE A FRACTION OF THE COST OF
ACTUAL EMISSIONS REDUCTIONS
NATURALLY FAILS TO CREATE
SUFFICIENT COST INCENTIVE. WHAT
WE SEE IN PRIORITY ENVIRONMENTAL
JUSTICE COMMUNITIES IN THE SAN
JOAQUIN VALLEY IS THAT EMISSIONS
ARE NOT GOING DOWN, AND THERE'S
AN EXAMPLE IN THE HANDOUT, WHICH
I'LL TOUCH ON IN A MINUTE OF
SOUTH STOCKTON, WHERE OUR OFFICE
IS LOCATED, AND WHERE I HAVE
WORKED AT THIS. èC S¼ U
STANDARDS LOST STOCKTON CENTER
SINCE 2016 SO VERY FAMILIAR WITH
THAT COMMUNITY. RECOGNIZING THAT
CLAPHAM CAP AND TRADE IS A
CLIMATE PROGRAM, BUT IT'S
LARGELY THE SAME SOURCES THAT
ARE PRODUCING CRITERIA AIR
POLLUTANTS. IT SHOULD BE
BASELINE THAT THE CAP AND TRADE
PROGRAM FUNDAMENTALLY SHOULD NOT
MAKE OUR AIR POLLUTION PROBLEMS
WORSE, ESPECIALLY IN A REGION
LIKE THE SAN JOAQUIN VALLEY,
WHICH IS THE MOST POLLUTED IN
THE UNITED STATES FOR FINE
PARTICLES, CAUSING A PUBLIC
HEALTH CRISIS. RATHER WE SHOULD
BE FRAMING OUR APPROACH AS
MANDATORY EMISSIONS REDUCTIONS
THAT START IN FRONT LINE
COMMUNITIES IF WE'RE SERIOUS
ABOUT A PHASE OUT OF FOSSIL
FUELS IN CALIFORNIA. THAT BEING
SAID. WE RECOGNIZE THAT THE CAP
AND TRADE PROGRAM IS HERE TO
STAY, WHETHER WE SUPPORT IT OR
NOT, AND REFORMS ARE ABSOLUTELY
NEEDED. THE ENVIRONMENTAL
JUSTICE ADVISORY COMMITTEE WORK
GROUP HAS BEEN ENGAGED IN THE
PUBLIC PROCESS AND HAS SUBMITTED
SEVERAL COMMENT LETTERS. THAT
SHOULD ALSO BE A PART OF YOUR
BACKGROUND. UM, DOCUMENTS THAT
CHAIR. RANDOLPH ALSO TOUCHED ON
THAT INCLUDE RECOMMENDATIONS
LIKE PRIORITIZING DIRECT
EMISSIONS REDUCTIONS,
ELIMINATING FREE ALLOWANCES,
ELIMINATING OFFSETS,
PARTICULARLY THOSE FROM THE
INTERNATIONAL MARKET, UM AND
LOCALIZING THEM TO ENSURE THAT
IT'S CALIFORNIA COMMUNITIES THAT
ARE, UM EXPERIENCING THE
BENEFITS AND IMPLEMENTING
FACILITY LEVEL CAPS OR NÓ TRADE
ZONES, WHICH I APPRECIATE A
ROBUST DIALOGUE WITH THE
INDEPENDENT EMISSIONS MARKET
ADVISORY COMMITTEE ABOUT THE
IMPLICATIONS OF SUCH A
RECOMMENDATION. I. I COULDN'T
HELP BUT NOTICE THAT CHAIR.
RANDOLPH SAID THAT SHE BELIEVES
THAT IT'S WITHIN CARBS AUTHORITY
TO IMPLEMENT NÓ TRADE ZONES
BECAUSE WHEN I EXPLICITLY ASKED
CARB STAFF AT OUR NOVEMBER EJ
MEETING WHETHER THAT WAS TRUE,
THEY SAID NÓ THAT THEY CAN
IMPLEMENT NÓ TRADE ZONES WITHOUT
LEGISLATIVE DIRECTION, SO IT
WOULD BE IMPORTANT TO GET
CLARITY ON THAT POINT. UM I ALSO
WANNA MAKE A QUICK AND EXPLICIT
PIVOT TO TALKING ABOUT G GR F
FUNDING PROJECTS AND
SPECIFICALLY ASSEMBLY BILL 617
THAT CREATED THE COMMUNITY AIR
PROTECTION PROGRAM. WHEN THE
PROGRAM WAS EXTENDED IN 2017.
THIS COMPANION BILL WAS PASSED
TO ENSURE THAT AIR QUALITY AND
ENVIRONMENTAL JUSTICE
COMMUNITIES IMPROVED AND AT THAT
TIME WAS CHARACTERIZED AS A DOWN
PAYMENT IN ADDRESSING THOSE
ISSUES. WHAT WE'VE SEEN OVER THE
LAST SEVEN YEARS OF THE
IMPLEMENTATION OF THIS PROGRAM
IS THAT IN THE SAN JOAQUIN
VALLEY MONEY IS GOING TO
POLLUTERS, NOT HOUSEHOLDS AND
MONEY IS GOING TO AIR DISTRICTS
AND NOT COMMUNITY BASED
ORGANIZATIONS. SO AGAIN IN SOUTH
STOCKTON, WHERE I'VE BEEN ON THE
COMMUNITY, UM STEERING COMMITTEE
, WHICH IS IN THE 99TH
PERCENTILE FOR DIESEL PM 99
PERCENTILE FOR ASTHMA AND KROC
SCREEN, HISTORICALLY AN AN
INCREDIBLY ETHNICALLY DIVERSE
COMMUNITY, UM, WITH FILIPINO AND
LATINO ETHNIC ENCLAVES THAT WERE
DESTROYED BY THE CONSTRUCTION OF
WHAT'S CALLED THE CROSSTOWN
FREEWAY HIGHWAY FOUR. YOU KNOW,
THE PORT OF STOCKTON IS ONE OF
THE LARGEST POLLUTERS IN THE
AREA AND AS A RESULT THIS YEAR,
THIS COMMUNITY STEERING
COMMITTEE FOR 617 DISAGREED WITH
THE AIR DISTRICT'S
RECOMMENDATION TO GIVE $5
MILLION IN INCENTIVES TO THE
PORT FOR A VARIETY OF REASONS,
WHICH ARE MORE DETAILED IN THE
HANDOUT. UM BUT FUNDAMENTALLY
INCREASING CONCERNS WITH
INCENTIVIZING INCREASED
EXPANSION AT THE PORT AND THAT
SOME OF THE TECHNOLOGY THAT WAS
BEING PROPOSED CARB STAFF
EXPLICIT SAID, WAS NOT A FIT FOR
THE TYPE OF SHIPS THAT ACTUALLY
COME INTO THE PORT OF STOCKTON.
SO INSTEAD OF ALLOWING THE
COMMUNITY STEERING COMMITTEE TO
REALLOCATE THAT $5 MILLION TO
THINGS LIKE HOME WEATHERIZATION,
ELECTRIFICATION, INFRASTRUCTURE
THINGS THAT WERE PRIORITY FOR
COMMUNITY MEMBERS. THE AIR
DISTRICT TOOK THE $5 MILLION
BACK AND CARB SAID THAT THEY
COULDN'T DO ANYTHING ABOUT IT.
WE RECENTLY CONVENED A REGIONAL
SUMMIT OF OUR MEMBERS WORKING
ACROSS THE SAN JOAQUIN VALLEY.
AND SO I JUST WANNA HIGHLIGHT A
FEW OF THE GAPS THAT REMAIN IN
THIS PROGRAM. THERE IS A LACK OF
ENFORCEABILITY TO THE COMMUNITY
AIR PROTECTION PLANS THAT ARE
CREATED, UM THERE'S NÓ TEETH TO
PROVISIONS LIKE BEST AVAILABLE
CONTROL TECHNOLOGY, WHICH IS
MEANT TO MAKE SURE THAT THE
DIRTIEST AND OLDEST FACILITIES
ARE BEING CLEANED UP. INSTEAD
WHAT WE'VE GOTTEN IS AN UPDATED
LIST OF BACKED AND BARED BUT NÓ
ACTUAL IMPLEMENTATION ON THE
GROUND. A B 617 WAS ALSO
SUPPOSED TO ENSURE ENHANCED
ENFORCEMENT AND INSTEAD WHAT
WE'VE SEEN IS OUR AIR DISTRICT
BRING US LISTS OF PEOPLE WHO GOT
VIOLATIONS, UM, FOR BURNING IN
THEIR FIREPLACES, NOT ATTENTION
TO THE LARGEST SOURCES, NOT SITE
INSPECTIONS, NOT SOURCE TESTING
TO ENSURE THAT WE HAVE THE BEST
AVAILABLE CONTROL TECHNOLOGY AT
THE LARGEST POLLUTING FACILITIES
IN THE MOST OVERBURDENED
COMMUNITIES. WE ALSO
UNFORTUNATELY SEE CONTINUED
PERMITTING OF NEW SOURCES. SO AS
CREATING A PLAN TO TRY TO BRING
EMISSIONS DOWN JUST IN SOUTH
STOCKTON, ALONG WITH THE PORT
EXPANDING. THERE ARE SEVERAL
PROPOSALS FOR WAREHOUSES.
THERE'S A PROPOSED CARBON
CAPTURE PROJECT AT THE BIOMASS
FACILITY AND SEVERAL OTHER
THINGS THAT ARE DETAILED IN THE
HANDOUT. UM, FUNDAMENTALLY, CARB
IS NÓ LONGER, SELECTING NEW
COMMUNITIES. SO HOW ARE WE
BUILDING OFF OF THE LESSONS THAT
HAVE BEEN LEARNED OVER THE LAST
SEVEN YEARS OF THIS PROGRAM? UM
AND AGAIN, HOW ARE WE ENSURING
THAT WE GO ABOVE AND BEYOND BOTH
IN CAP AND TRADE A 601? AND
WHATEVER ELSE WE NEED TO DO TO
REALLY FUNDAMENTALLY REDUCE THE
BURDENS IN ENVIRONMENTAL JUSTICE
COMMUNITIES AND INCREASE THE
BENEFITS. SO IN CLOSING, THERE
ARE A LOT OF SOLUTIONS AND WE
WOULD URGE A FOCUS ON REAL
REDUCTIONS, PROTECTIONS AND
BENEFITS DIRECTLY TO THE MOST
IMPACTED HOUSEHOLDS. THANK YOU.
THANK YOU VERY MUCH. THANK YOU.
ALL RIGHT, UM, LET'S NEXT GO
OVER TO DANNY. DANNY COLLIN
WORD. ALSO FROM I EAC. GOOD
MORNING SENATORS. UH, DANNY
COLLINWOOD ON THE SENATE'S
APPOINTEE TO THE IMF WHERE I'VE
BEEN SERVING SINCE 2017. I WANT
TO START OFF WITH A COUPLE OF
NOTES OF APPRECIATION, FIRST TO
DR CATHERINE WITH THE
ENVIRONMENTAL JUSTICE ADVISORY
COMMITTEE, WHICH HAS BEEN
COLLABORATING WITH THE IMAC AND
JUST BEEN DOING SOME SOME VERY
IMPORTANT WORK TO CONSTRUCTIVELY
DIALOGUE AROUND SOME OF THESE
CHALLENGES, AND I WANT TO ECHO.
UH, I DON'T SPEAK FOR
ENVIRONMENTAL JUSTICE
COMMUNITIES, BUT WHEN I SPEAK TO
OTHER MEMBERS OF ENVIRONMENTAL
JUSTICE, COMMUNITIES AND
ENVIRONMENTAL JUSTICE NGOS, I DO
THINK THERE'S A SIGNIFICANT
FRUSTRATION WITH PAST PROMISE.
AND THE ADEQUACY OF WHAT WE'RE
DOING TODAY AND I HOPE THAT YOU
WILL CONTINUE TO CENTER THAT AND
YOU'RE THINKING ABOUT CLIMATE
POLICY AND THESE CAP AND TRADE
PROGRAMS GOING FORWARD. UM THE
OTHER NOTE OF APPRECIATION I
WANT TO START WITH IS WITH
RESPECT TO CHAIR RANDOLPH AND
THE STAFF AT CARB SENATOR ALLEN
WILL WILL RECALL LAST YEAR AT AN
OVERSIGHT HEARING. HE CO CHAIRED
THAT CHAIR, RANDOLPH ANNOUNCED
HER INTENTION TO BEGIN
ADDRESSING SOME OF THE ISSUES
THAT ARE NOW PART OF THE
WORKSHOP PROCESS INVOLVING THE
ACCUMULATION OF UNUSED
ALLOWANCES IN THE BANK THAT LEO
AND OTHERS HAVE IDENTIFIED AS
SOME OF THE CONCERNS THAT KEEP
THIS PROGRAM FROM OPERATING AS
EFFECTIVELY AS IT COULD, AND I
WANT TO ACKNOWLEDGE BOTH THE
CHAIR'S LEADERSHIP AND THE WORK
OF THE STAFF IN THE WORKSHOP
PROCESS TO BEGIN BUS DIALOGUE
AROUND THOSE ISSUES, SO I VERY
MUCH APPRECIATE THAT EFFORT. UM
I'LL KEEP MY COMMENTS SHORT. I
JUST WANT TO TOUCH ON A COUPLE
OF ISSUES. I CAN COME BACK TO
THINGS LIKE OFFSETS AND PRICE
CEILINGS AND OTHER ISSUES. IF
YOU ALL WANT TO GET INTO THAT IN
CONVERSATION, BUT THE MAIN ISSUE
I WANT TO HIGHLIGHT IS ONE OF
AFFORDABILITY IN THE SENSE THAT
BOTH IN THIS PROGRAM AND ALSO IN
THE LOW CARBON FUEL STANDARD, A
RELATED EMISSIONS TRADING
PROGRAM THAT CARB RUNS. WE ARE
LOOKING AT A REGULATORY PROPOSAL
IN THAT PROGRAM AS WELL AS
DIRECTIONS FOR THIS PROGRAM THAT
WILL SUBSTANTIALLY INCREASE
CARBON PRICES AND AFFECT THE
FUEL PRICES THAT CONSUMERS FACE.
UM THE ECONOMIC ANALYSIS FOR THE
L èC F S¼ PROGRAM TALKS ABOUT
FUEL PRICE IMPACTS AS MUCH AS 40
, OR 50 CENTS A GALLON IN THE
NEXT COUPLE OF YEARS FROM THE
AMENDMENTS THAT ARE UNDER
CONSIDERATION AND YOU HAVE L'S
TABLE IN THE HANDOUT TODAY,
LOOKING AT WHAT POSSIBLE FUTURE
CARBON PRICES IN THE CAP AND
TRADE PROGRAM WOULD MEAN FOR
SOME OF THESE FUEL PRICE
IMPACTS. UM NOW THE I MA èC HAS
BEEN VERY CLEAR AND KAITLIN
SPOKE TO THIS EARLIER. THE MORE
WE RELY ON THE CAP AND TRADE
PROGRAM. WE CAN EXPECT THAT THE
EFFICIENCY OF THAT PROGRAM WILL
LOWER OUR OVERALL COSTS. IT WILL
ALSO INCREASE THE CARBON PRICE
AND THE VISIBLE IMPACTS TO
CONSUMERS AND I. I REALLY HOPE
LEGISLATORS WILL CENTER THAT
DISCUSSION. UM, I ALSO THINK
IT'S VERY IMPORTANT. AND I'M
HEARTENED BY THIS BEING A JOINT
HEARING BETWEEN A POLICY AND A
BUDGET COMMITTEE TO BRING
TOGETHER THE SPENDING AND MARKET
DESIGN FEATURES OF THE PROGRAM
WITH A SINGLE COHERENT THEORY
ABOUT HOW THOSE TWO SHOULD WORK
TOGETHER. MOST OF THE
DISCUSSIONS SO FAR IN THE
CARDBOARD SHOP PROCESS HAVE
FOCUSED ON MARKET DESIGN. UH,
APPROPRIATELY, SO BECAUSE THAT'S
WHAT CARB CONTROLS. UM BUT I
ENCOURAGE THE LEGISLATURE AS WE
THINK ABOUT HOW THE PROGRAM
SPENDING IS STRUCTURED. ABOUT
TWO THIRDS OF THE MONEY IS
CONTINUOUSLY APPROPRIATED UNDER
A VERY OLD DEAL WITH FORMER
LEGISLATIVE LEADERS AND FORMER
GOVERNORS THAT MAY OR MAY NOT
REFLECT CURRENT PRIORITIES. UM I
ALSO WANNA CALL OUT THAT THERE
IS A UNIQUE FEATURE OF THE CAP
AND TRADE PROGRAM AND THE GTR F
THAT IS NOT AVAILABLE IN THE LOW
CARBON FUEL STANDARD. THAT IS
THE OPTION TO SEND MONEY BACK TO
PEOPLE IN A VARIETY OF DIFFERENT
WAYS. WE CONSIDER IN THE FORM OF
REBATES YOU COULD IMAGINE
DIRECTING THOSE MONIES TO
UTILITY BILL RELIEF. THERE'S
LOTS OF DIFFERENT WAYS PEOPLE
COULD TALK ABOUT THINKING ABOUT
REBATES. AS THE PRICE OF CARBON
GOES UP. THOSE REBATES COULD GO
BACK TO SOME PEOPLE THAT COULD
GO TO TARGETED LOWER INCOME AND
MIDDLE INCOME HOUSEHOLDS. THAT
IS A POLICY TOOL THAT IS UNIQUE
TO THE CAP AND TRADE PROGRAM. IT
IS NOT IN THE LOW CARBON FUEL
STANDARD PROGRAM, AND TO THE
EXTENT WE WANT TO FOCUS ON THE
DIRECT IMPACTS THAT EVERYBODY
FEELS BECAUSE EVERYBODY WILL
FACE THE PRICE IMPACTS FROM BOTH
OF THESE PROGRAMS. REBATES ARE A
POTENTIAL TOOL TO CONSIDER WITH
EITHER CURRENT REVENUE OR FUTURE
INCREASES IN REVENUE FROM THIS
PROGRAM AND I. I JUST WANT TO
EMPHASIZE AGAIN THAT IT IS NOT A
TOOL THAT'S CURRENTLY AVAILABLE
IN THE LOW CARBON FUEL STANDARD
BECAUSE MONEY DOESN'T FLOW INTO
THE STATE, AND IT CAN'T BE
REDIRECTED OUT THROUGH
APPROPRIATIONS OR EXPENDITURES
IN A WAY THAT COULD TARGET
LOW-INCOME HOUSEHOLD IMPACTS SO
AGAIN TO CLOSE. I THINK IT'S
VERY IMPORTANT TO CONSIDER THE
BUDGET AND SPENDING SIDE OF THE
PROGRAM AS A COMPLIMENT AND
INTEGRATED WHOLE WITH DESIGN.
AND MAYBE THE LAST THING TO
MENTION WHICH THE IMAC HAS
TALKED ABOUT IN SEVERAL REPORTS,
INCLUDING A DETAILED CHAPTER IN
LAST YEAR'S REPORT. WE MAY NEED
LEGISLATIVE EXTENSION TO RESOLVE
UNCERTAINTY IN THE PROGRAM, AND
SO I THINK THIS IS AN IMPORTANT
OPPORTUNITY FOR THE LEGISLATURE
TO THINK ABOUT WHAT THOSE
PRIORITIES ARE. THANK YOU VERY
MUCH FOR YOUR TIME. OK? ALL
RIGHT. UM, I THINK DO EITHER OF
YOU GUYS WANT TO MAKE SOME YEAH.
YEAH OK, YOU'D LIKE TO MAKE SOME
MAIL WITH THE CALIFORNIA
RESOURCES BOARD, AND I DON'T
HAVE ANY PREPARED REMARKS TODAY,
BUT I THINK THERE WERE A COUPLE
OF QUESTIONS THAT SENATORS WERE
HOPING TO GET A LITTLE CLARITY
ON SO HAPPY TO ANSWER THOSE. AND
I'M ALSO HERE TO ANSWER ANY
OTHER QUESTIONS ON THE PROGRAM
THAT YOU MAY HAVE, UM SO ON
BROAD, BROAD COST EFFECTIVENESS
AND THE ALLOWANCE PRICE
CONTAINMENT RESERVE PRICES. I
JUST WANT TO REFLECT THE FACT
THAT THERE ARE A COUPLE OF
DIFFERENT METRICS THAT I HEARD
BEING DISCUSSED THE COST
EFFECTIVENESS OF THE VARIOUS GF
INVESTMENTS AS REPORTED VERSUS
WHAT THE PROGRAM IS PROVIDING SO
THE CURRENT ALLOWANCE PRICE
RIGHT NOW IN THE CAP AND TRADE
PROGRAMS AROUND $40 A TON. UM,
ONE OF THE MAIN FEATURES OF THE
PROGRAM IS ITS ABILITY TO COST
EFFECTIVELY REDUCE GREENHOUSE
GAS EMISSIONS. YOU CAN CONTRAST
THAT WITH SOME OF THE DECISIONS
MADE BY THE LEGISLATURE AND THE
ADMINISTRATION ON THE GREENHOUSE
GAS REDUCTION FUND, WHERE
THERE'S VARIOUS DIFFERENT
PRIORITIES AND HOW THAT MONEY IS
SPENT. THAT WILL ALTER THE COST
EFFECTIVENESS OF THOSE EMISSION
REDUCTIONS. MR CO ORD MENTIONED
THE IMPORTANCE OF FOCUSING ON
LOW INCOME HOUSEHOLDS AND, UM,
YOU KNOW, PROTECTING COSTS FOR
THOSE HOUSEHOLDS, PARTICULARLY
AS WE TRANSITION TO CARBON
NEUTRALITY THAT IS ONE
CONSIDERATION THAT IS PLACED ON
THE EXPENDITURE. TEACHER F MONEY
IS FOCUSING ON EQUITY AND
RELATED INVESTMENTS CAN
SOMETIMES BE LESS COST EFFECTIVE
ON A GREENHOUSE GAS BASIS AS
YOU'RE MOVING TECHNOLOGY AND
ADVANCED ROUS GAS STRATEGIES
INTO THOSE COMMUNITIES, UM, SO
ON THE QUESTIONS ABOUT THE PRICE
CEILING. THE CURRENT PRICE
CEILING TIERS RIGHT NOW ARE SET
AT AROUND $56 FOR THE FIRST TIER
IN AROUND $72 FOR THE SECOND
TIER. UM, WE AS I MENTIONED
EARLIER, RIGHT AROUND $40 IN THE
SECONDARY MARKET AT THE LAST
AUCTION CLEARED RIGHT AROUND
$38, SO WE HAVEN'T GOT INTO
THOSE PRICE TIERS YET AND IN THE
HISTORY OF THE PROGRAM. WE
HAVEN'T TRIGGERED PRICE
CONTAINMENT RESERVE SALE YET
EITHER, SO I JUST WANNA BE CLEAR
ON ON THAT POINT. UM AND THEN I
GUESS MAYBE THE, UH, THE ONLY
OTHER CLARIFICATION THAT I CAN
PROVIDE AT THIS TIME. I THINK
DOCTOR CATHERINE MENTIONED, UH,
THIS QUESTION ABOUT, UM, IT THE
ABILITY TO INSTITUTE NÓ TRADING
ZONES OR FOR INDIVIDUAL FACILITY
CAPS. UM SO WITH RESPECT TO THE
PROVISIONS IN A THREE 198, THERE
IS A DISTINCTION BETWEEN WHAT
CARB HAS THE AUTHORITY TO DO PRE
2030 POST 2030 THE DISTINCTION.
I THINK THAT'S BEING MADE. THERE
IS YOU KNOW WHAT COULD BE DONE
POST 2030 WITH THE PROGRAM? UM
WHEN THE A B THREE 98 PROVISIONS
SUNSET. SO HAPPY TO ANSWER ANY
OTHER QUESTIONS THAT THE
COMMITTEE HAS AND, UM AND THANKS
FOR HAVING ME GREAT, OK? UH, AND
A JUDGE HAS A LOT OF QUESTIONS.
WELL, I THINK, UM, LET ME JUST
START WITH SOME. I HAVE A LOT OF
REFORM RELATED QUESTIONS. BUT
LET ME START WITH SOME JUST TO
KIND OF TOP LINE LEVEL SET
QUESTIONS AND THEN TURN OVER TO
YOU, AND THEN WE CAN KIND OF
COME BACK AND JOINTLY DISCUSS
MAYBE SOME OF THE REFORM
QUESTIONS. I THINK WE HEARD VERY
CLEARLY. UM YOU KNOW SOME OF THE
CONCERNS, PARTICULARLY AROUND
THE, UH AND I WASN'T HERE WHEN
617 WAS NEGOTIATED, BUT CLEARLY
IT'S NOT HAVING WHATEVER
INTENDED EFFECT IT WAS IN IN
TERMS OF AIR POLLUTION BENEFITS
FOR COMMUNITIES NOT HAVING SO,
UM, WE'LL CERTAINLY WANT TO COME
BACK TO THAT, UM JUST TO KIND OF
LEVEL SET ON THE PROGRAM. MAYBE
MATT MAYBE YOU'RE THE PERSON BUT
FOR CARB JUST TO BE CLEAR. SO IN
THE SCOPING PLAN, UH WHAT IS THE
GAP BETWEEN THE PATHWAY? WE PLAN
TO GET TO 48% BELOW 1990 LEVELS
BY 2030 ADDITIONAL EMISSIONS
REDUCTIONS WILL NEED FROM OTHER
MECHANISMS SUCH AS A MORE
STRINGENT CAP AND TRADE PROGRAM.
YEAH, HAPPY TO TAKE THAT ONE.
AND, UM I THINK THAT YOU KNOW,
KIND OF REINFORCES SOME OF THE
TESTIMONY GAVE TO THIS COMMITTEE
JUST JUST LAST YEAR TO WITH
RESPECT TO THE WORK THAT WE DID
ON THE 2022 SCOPING PLAN WHERE
WE OUTLINED A PATH TO ACHIEVING
CARBON NEUTRALITY BY 2045
SUPPORTING THE A B 1279 TARGETS
OF AN 85% REDUCTION IN
ANTHROPOGENIC GREENHOUSE GAS
EMISSIONS BY 2045 AND LOOKING AT
WHAT TRAJECTORY DID WE NEED? DO
WE NEED TO BE ON? UM TO BE ABLE
TO ACHIEVE CARBON NEUTRALITY BY
2045 THE SCOPING PLAN IDENTIFIED
A 48% REDUCTION IN G HÌ G
EMISSIONS BY 2030 WOULD PUT US
ON THAT PATH TO CARBON
NEUTRALITY AND TO ACHIEVING THE
1279 TARGETS. UM WE DID WHAT'S
CALLED, UH, YOU KNOW, A
REFERENCE SCENARIO, SO YOU KNOW,
LOOKING AT EXISTING POLICIES.
WHAT'S THE WHAT'S THE TRAJECTORY
OF EMISSIONS THROUGH 2030 2045?
THAT DATA IS PUBLIC. IT'S IN THE
SCOPING PLAN, AND WHAT WE
IDENTIFIED WAS, YOU KNOW, UNDER
THE KIND OF EXISTING POLICIES AS
THEY IN 2022 THAT HAD BEEN
ADOPTED. WE WERE ON A PATH OF
AROUND THREE 100 MILLION METRIC
TONS, SO THERE WOULD BE A GAP OF
CLOSE TO 70 TO 80 MILLION METRIC
TONS TO GET TO THAT 48%
PRODUCTION LEVEL. LET ME DOUBLE
CHECK THE MATH. THAT ACTUALLY IS
THE 40% REDUCTION LEVEL. SORRY.
UM SO WE LOOKED AT THIS QUESTION
, UH OF GIVEN THE CURRENT
POLICIES. WHAT WAS THE
TRAJECTORY THAT WE WOULD BE ON
IN 2030? I DO WANT TO FLAG THAT
THAT WAS LOOKING AT EXISTING
REGULATIONS ABSENT THE CAP AND
TRADE PROGRAM. SO WHAT WE WERE
LOOKING AT WERE, UM, REGULATIONS
LIKE ADVANCED CLEAN CARS THAT
WERE ON THE BOOKS. UM, UH UH S¼
B 100, OTHERS THAT HAD ALREADY
BEEN ENACTED TO SEE WHERE WE
WOULD BE. EMISSIONS TRAJECTORY,
GIVEN THOSE EXISTING REGULATIONS
BECAUSE THOSE ARE A LITTLE BIT
MORE STRAIGHTFORWARD TO PREDICT
VEHICLE STOCKS AND RENEWABLE
ELECTRICITY, BUILD OUT,
ETCETERA. UM AND SO THERE'S
SIGNIFICANT UNCERTAINTY ON HOW
WE ARE GOING TO PROGRESS TOWARDS
THOSE 2030 TARGETS WITH RESPECT
TO THE PACE OF RENEWABLE
DEPLOYMENT, THE PACE OF MISSION
VEHICLE TECHNOLOGY ADOPTION
SINCE THE SCOPING PLAN WAS
ADOPTED, THE BOARD HAS ADOPTED
THE ADVANCED CLEAN FLEETS
REGULATION. WE NOW HAVE REALLY
ACCELERATED RATE AND AN
AMBITIOUS REGULATIONS IN THE
LIGHT DUTY SECTOR AND THE MEDIUM
HEAVY DUTY SECTOR TO DEPLOY ZERO
EMISSION VEHICLES TO DRIVE DOWN
EMISSIONS IN THE TRANSPORTATION
SECTOR. BUT YOU KNOW, CONSUMER
ADOPTION OF THOSE VEHICLES WILL
BE IMPORTANT OVER THE NEXT
DECADE TO SEE WHAT TRAJECTORY
WE'RE ON FOR 2030, JUST LIKE
BUILD OUT OF RENEWABLES WILL BE
IMPORTANT TO ACHIEVE THE SB 100
TARGETS AND BRING THOSE
REMISSIONS DOWN TO 2030. UM, SO
THERE ARE THERE ARE MORE THINGS
THAT NEED TO HAPPEN TO PUT US ON
THIS TRAJECTORY TO 48% AND THE
ABILITY FOR CAP AND TRADE TO
ALSO SUPPORT ACHIEVING THE 48%
REDUCTION IS SOMETHING THAT
WE'RE OBVIOUSLY LOOKING AT.
THAT'S BEEN THE SUBJECT OF OUR
WORKSHOPS THAT WE'VE HAD OVER
THE COURSE OF THE LAST YEAR. UM
WE ALSO LOOKED AT OTHER OPTIONS
AROUND. UH YOU KNOW, CONTINUING
THE 40% TARGET AS WELL AS A 55%
TRAJECTORY AND FOR CONTINUING TO
EVALUATE THOSE THOSE, UH, THOSE
OPTIONS. WITHOUT ANY. BASICALLY
SAYING WITHOUT ANY PROGRAMS SUCH
AS CAP AND TRADE, WE'D GET TO
ABOUT 68% OF OUR GOAL BY 2030 IS
THAT CORRECT. IS THAT MATH?
CORRECT SO LET'S SEE. WHAT DO I
GOT IN HERE? I'M GONNA TEXT TEST
ME ON THE NUMBERS HERE. UM UH,
WE DID SAY WE WOULD GET TO ABOUT
300 MILLION METRIC TONS. UM IN
IN 2030. WE ALSO FLAGGED THAT
THERE WAS UNCERTAINTY ASSOCIATED
WITH GETTING TO THOSE NUMBERS,
AND THERE'S A DISCUSSION IN THE
SCOPING PLAN ABOUT WHAT THAT
UNCERTAINTY YOU KNOW, IS REALLY
FOCUSED ON AND IT IS ON, UM,
YOUR VEHICLE ADOPTION AND
RENEWABLE DEPLOYMENT. UM AND I'D
HAVE TO DOUBLE CHECK THE
PERCENTAGES. AND I TRUST YOU CAN
DO THE MATH. UM AND WHAT ARE
SOME OF THE OTHER POLICIES
IDENTIFIED IN THE SCOPING PLAN
TO CLOSE THAT GAP, IN ADDITION
TO CAP AND TRADE, LIKE THE LIKE,
THE MORE STRINGENT èC F S¼ SO
THE SCOPING PLAN CALLS FOR
INCREASING THE PACE OF, UM
RENEWABLES DEPLOYMENT, AND IT
CALLS FOR INCREASING THE AMOUNT
OF HYDROGEN PRODUCTION THAT CAN
BE DEPLOYED TO SUPPORT
DECARBONIZATION OF THE
TRANSPORTATION FLEET AS WELL AS
OTHER SECTORS LIKE THE
INDUSTRIAL SECTOR. UM DISCOVER
PLAN CALLS FOR ACCELERATING VÆ M
Tð REDUCTIONS TO BE ABLE TO
REDUCE THE AMOUNT OF ENERGY WE
USE IN THE TRANSPORTATION SECTOR
. IT CALLS FOR INCREASING
ELECTRIFICATION IN VARIOUS
DIFFERENT SECTORS. BOTH
COMMERCIAL AND INDUSTRIAL
SECTORS TO SUPPORT FURTHER
DEEPER DECARBONIZATION. AND IT
ALSO CALLS FOR STRATEGIES FOR
èC, èC, S¼ AND CARBON REMOVAL
TO SUPPORT ACHIEVING A 48%
REDUCTION IN THE 1279 CARBON
NEUTRALITY TARGETS. UM SO
THERE'S A NUMBER OF STRATEGIES
THAT ARE IDENTIFIED IN THE
SCOPING PLAN THAT WILL ARE
COMPLEMENTARY TO THE CAP AND
TRADE PROGRAM IF THEY ARE PUT IN
PLACE, AND THEY REDUCE EMISSIONS
THAT OBVIOUSLY WILL GET US
CLOSER TO THAT 48. TARGET THAT
WE PUT ON THE ON THE 2037 PLAN.
OK, UM. AND CAITLIN. I KNOW
THERE'S A LOT OF SKEPTICS ABOUT
THE INCENTIVES THAT CREATED, UM
SAFE FOR INDUSTRY IN TERMS OF
REDUCTIONS AROUND THE PLAN. UM
MAYBE YOU CAN SPEAK TO, UH, HOW
DO WE KNOW THE PROGRAM IS
CREATING INCENTIVES TO REDUCE
EMISSIONS? AND MAYBE IN IN FROM
WHAT YOU'VE SEEN. WHAT ARE THE
ECONOMIC INCENTIVES CREATED? UM
BY THE PLAN TO GET TO NET ZERO.
YEAH I. I MEAN, A FEW THINGS I'D
SAY ON THIS. UM I GUESS THE
FIRST AND MAYBE THIS IS, YOU
KNOW, GONNA SOUND SUPER
OVERSIMPLIFIED. BUT BEFORE CAP
AND TRADE, THERE WAS NÓ PRICE ON
CLIMATE POLLUTION. YOU KNOW, YOU
COULD EMIT AS MUCH AS YOU WANT
OF GREENHOUSE GASSES WITH, YOU
KNOW, ZERO COST. UM IT THAT COST
WAS BORNE BY EVERYBODY WHO LIVES
AROUND THE FACILITIES BY ALL OF
US, UM, YOU KNOW, AS
CALIFORNIANS, UM AND SO THERE
WAS THERE WAS ECONOMIC INCENTIVE
TO BE REDUCING GREENHOUSE GAS
EMISSIONS. NOW AS WE'VE BEEN
HEARING, WE'RE AT 38 $40 A TON.
UM SO I MEAN, VERY CLEARLY. NOW
THERE IS A COST TO CLIMATE
POLLUTION, AND THAT COST IS
BORNE BY THE POLLUTERS. UM SO
AND YOU KNOW, WE'VE ALSO
ACKNOWLEDGED WE HAVE AN AUCTION
TOMORROW. WE'LL SEE WHAT THAT
PRICE IS AT, BUT BUT I THINK
THERE'S VERY CLEARLY AN ECONOMIC
INCENTIVE TO BE REDUCING
EMISSIONS PRECISELY BECAUSE
THERE IS A COST ASSOCIATED WITH
THAT NOW, UM, EVEN IF A FACILITY
IS RECEIVING REALLOCATION. THERE
IS AN OPPORTUNITY COST THERE
BECAUSE THEY CAN, YOU KNOW, SELL
THOSE ALLOWANCES AND IF THEY ARE
USING THEM FOR COMPLIANCE, THAT
IS, UM REVENUE THAT THEY ARE
FOREGOING SO SIMPLY PUTTING A
PRICE ON POLLUTION IS A
SIGNIFICANT ECONOMIC INCENTIVE.
UM AND I, I GUESS TO UNDERSCORE
THAT EVEN FURTHER. THE SECOND
THING I WOULD SAY IS THAT FOR
THE PAST SEVERAL YEARS THAT
PRICE HAS BEEN CONSISTENTLY
ABOVE THE PRICE FLOOR ABOVE THE
MINIMUM PRICE, WHICH TELLS US
THAT THERE IS A SCARCITY OF
ALLOWANCES TO SOME EXTENT,
BECAUSE THE DEMAND IS GREATER
THAN THE ALLOWANCES AVAILABLE.
UM SO I THINK THAT IS ANOTHER
INDICATION OF AN ECONOMIC
INCENTIVE TO BE REDUCING
EMISSIONS. AND YOU KNOW TO GO
BACK TO THE POINT EARLIER THAT
WE NEED TO REDUCE THE AVAILABLE
NUMBER OF ALLOWANCES GOING
FORWARD, WHICH IS SOMETHING THAT
I THINK IS INCREDIBLY IMPORTANT.
UM, WE WILL SEE GREATER ECONOMIC
INCENTIVE FOR FACILITIES TO
REDUCE THEIR EMISSIONS. AND THEN
, UM, I GUESS THE LAST THING I
WOULD SAY ON THIS AGAIN IS SORT
OF THE UNIQUE ROLE OF THE
EMISSIONS CAP AS A BACKSTOP. UM
THERE IS A LOT OF UNCERTAINTY IN
IN WHAT YOU KNOW THE SCOPING
PLAN INCLUDES A LOT OF
UNCERTAINTY ABOUT SORT OF WHERE
OUR EMISSIONS TRAJECTORY MIGHT
GO. AND I THINK THAT IS THAT IS
WHY THIS BACKSTOP FEATURE. UM,
IS JUST SO ESSENTIAL. UM GREAT
WONDERING YOU MENTIONED THE
PRICE IS NOW NOT AT THE FLOOR.
UH, I THINK MAYBE HAD BEEN
PASSED, BUT IT'S BUT II I IT'S
NOT. I DON'T KNOW IF YOU CAN
COMPARE THAT TO OTHER OUR PRICE
TO OTHER COUNTRIES OR OTHER
PROGRAMS, UM, NUMBER ONE, AND
THEN I GUESS THE SECOND FOLLOW
UP WOULD BE. DO YOU THINK THE
PROGRAM ITSELF IS SUFFICIENT TO
HAVE FACILITIES REDUCE EMISSIONS
, OR DO YOU BELIEVE IT IS, YOU
KNOW THAT THAT SUFFICIENT ITSELF
? UM I MEAN COMPARING TO OTHER,
YOU KNOW, WASHINGTON HAS, UM
WELL, NOW THEY PRICE IS PRETTY
MUCH ON PAR WITH CALIFORNIA AS
IT HAS BEEN HIGHER THAN THAN
CALIFORNIA'S, UM, FOR THEIR LAST
SEVERAL AUCTIONS, AND SOME OF
THAT IS JUST STRUCTURAL AND HOW
THEIR PROGRAM IS DESIGNED, UM
THE REGIONAL GREENHOUSE GAS
INITIATIVE HAS PRICES THAT ARE
SIGNIFICANTLY LOWER THAN
CALIFORNIA'S. BUT THAT IS ONLY
COVERING. UM THE POWER SECTOR.
UM SO THERE'S IT. IT'S A LITTLE
HARD TO MAKE THAT COMPARISON.
BUT, UM BUT YOU KNOW THOSE ARE
THOSE ARE BOTH PROGRAMS THAT WE
WOULD SORT OF LOOK TO, UM TO
BOTH LEARN FROM AND HOPEFULLY,
INFLUENCE AS WELL. UM AND THEN
I, UM SUFFICIENT. I WOULD SAY WE
NEED A SIGNIFICANT, UM, INCREASE
IN AMBITION IN THE PROGRAM. I
THINK THIS PROGRAM IS ESSENTIAL
TO MEET BOTH NEAR TERM AND LONG
TERM GOALS. UM BUT I DO NOT
THINK IT IS SUFFICIENTLY
RIGOROUS RIGHT NOW TO PROVIDE
THE CERTAINTY THAT WE NEED AND
THAT A PROGRAM LIKE THIS CAN DO.
AND WHAT DOES THAT LOOK LIKE TO
YOU? I THINK IT IT LOOKS LIKE
REMOVING ALLOWANCES IN THE NEAR
TERM. SO I THINK YOU KNOW MY
PERSPECTIVE IS I'M I'M PLEASED
TO SEE CARB LOOKING AT, UM, YOU
KNOW, 48% AS A TARGET FOR 2030
FOR PROGRAM REFORMS. I MEAN, IT
IS ONE OF THREE SCENARIOS. UM I
THINK IT IS ESSENTIAL THAT WE'RE
AT LEAST ALIGNED WITH THE
SCOPING PLAN. UM SO I THINK
REMOVING ENOUGH ALLOWANCES THAT
WE ARE IN LINE TO ACHIEVE WHAT
THE SCOPING PLAN SAYS WE NEED TO
DO AND WE NEED TO ACHIEVE THAT
48% BY 1990 TO BE ON TRACK TO
MEET OUR NET ZERO GOAL BY 2045.
AND SO THEN IF WE'RE LOOKING OUT
AFTER 2030, I THINK AGAIN. IT
MEANS SETTING YOUR ALLOWANCE
BUDGET. SO NOT ONLY ARE YOU ON
TRACK FOR THAT 85% REDUCTION NÓ
LATER THAN 2045, BUT YOU'RE ALSO
TAKING INTO CONSIDERATION SOME
OF THOSE, UM, EMISSIONS THAT ARE
OUTSIDE OF THE CAP. UM YOU ARE
TAKING INTO CONSIDERATION THE
NUMBER OF ALLOWANCES THAT ARE
HELD IN IN THE BANK AND YOU
HEARD IN MY REMARKS. I THINK
BANKING IS REALLY IMPORTANT. BUT
I ALSO THINK YOU KNOW, WE NEED
TO THINK ABOUT THE NUMBER OF
ALLOWANCES THAT ARE IN THE BANK
AS WE ISSUE FUTURE ALLOWANCES.
UM SO, YEAH, I. I MEAN,
FUNDAMENTALLY, IT GOES BACK TO
THE NUMBER OF ALLOWANCES AND
MAKING SURE THAT THAT NUMBER IS
SMALL ENOUGH AND CONTINUES TO
SHRINK OVER TIME. AND WHAT'S
YOUR SENSE OF. THE WAY THAT THE
AIR AIRPORT HAS BEEN GRAPPLING
WITH THAT THAT QUESTION RIGHT
NOW AND YEAH, I THINK, UM, I. I
MEAN, LIKE I'VE SAID, I'M I'M
PLEASED WITH WHAT CARB IS DOING
RIGHT NOW. I, I FRANKLY WOULD
HAVE LIKED IT SEVERAL YEARS AGO,
BUT, UM, I'M I'M PLEASED WITH
WHAT THEY ARE DOING RIGHT NOW,
AS WE LOOK AT 2025 TO 2030, WE
NEED TO START THINKING ABOUT
POST 2030, THOUGH. UM AND I, I
DON'T THINK WE'VE HAD THAT
CONVERSATION YET ABOUT THE LEVEL
OF AMBITION THAT ACQUIRED FROM
2030 TO 20. THEIR CONCERNS FROM
SEVERAL YEARS AGO WERE JUST THE
COST IMPACTS. I WELL, I DON'T. I
DON'T WANNA SPEAK FOR CAR. UM I
MEAN, I. I THINK THEY DID A RULE
MAKING IN 2018, AND THEY MADE
DECISIONS ABOUT WHAT WAS
INCLUDED IN THAT RULE MAKING AND
WHAT? WHAT WASN'T GOING TO BE
INCLUDED IN THAT RULEMAKING? UM
I DON'T KNOW THEIR DECISION
PROCESS THAT THAT WENT INTO
THAT. YEAH, HAPPY TO ADD A FEW
POINTS THERE. SO UM, FOR THE
PREVIOUS 2018 RULE MAKING, WE
WERE TEEING OFF OF WORK THAT HAD
BEEN DONE ON THE 2017 SCOPING
PLAN, AS WELL AS THE PASSAGE OF
MAYBE 398 TO INFORM THE PROGRAM
BETWEEN 2021 AND 2030. THERE ARE
PROVISIONS IN THE RULEMAKING NOW
THAT ALLOW FOR A CONTINUED
DECLINE ON THE CAPS, POST 2030.
BUT YOU KNOW, WITH THE UPDATE OF
THE 2022 SCOPING PLAN, THE CLEAR
SIGNALS ABOUT THE NEED FOR
INCREASED AMBITION AND THE
PASSAGE OF A 1279. WE ARE NOW IN
THIS PROCESS. OF LOOKING AGAIN
AT OUR TRAJECTORY TO 2030, AS
WELL AS POST 2030, THE WORKSHOPS
THAT WE'VE BEEN HOLDING, IN FACT
, OVER THE FALL IN LAST SUMMER,
WE'VE BEEN DISCUSSING THESE
VARIOUS DIFFERENT OPTIONS FOR
ALLOWANCE BUDGET ADJUSTMENTS
BETWEEN 20 BETWEEN NOW AND 2030,
AS WELL AS WHAT IT COULD LOOK
LIKE POST 2030, AS WELL AS
PRESENTING PRELIMINARY FINDINGS
FROM UC DAVIS AND OTHERS ON WHAT
THE ALLOWANCE SUPPLY AND DEMAND
COULD LOOK LIKE AND WHAT THAT
COULD MEAN FOR COSTS AND PRICING
UNDER THE PROGRAM AS WE GET MUCH
MORE STRINGENT POST 2030
SHOOTING FOR THAT 2045 TARGET,
THERE ARE CONCERNS ABOUT
AVAILABILITY OF ALLOWANCES AND,
YOU KNOW COST ASSOCIATED WITH
THE PROGRAM AS IT AS IT REALLY
RAMPS UP THE RATE OF REDUCTIONS
THAT ARE NECESSARY, AND I THINK,
YOU KNOW, UM, UH, THIS COMMITTEE
MAY KNOW. CERTAINLY THIS PANEL
KNOWS, TOO, THAT THE PROGRAM
JUST RECENTLY IN 2021 INCREASED
ITS AMBITION. YOU KNOW, IN TERMS
OF ITS RATE OF DECLINE OF
EMISSION REDUCTIONS, AND SO THAT
HAS ALREADY SPED UP AND POST
2030 THAT AGAIN CONTINUES TO
HAPPEN, WHICH MAKES THE PROGRAM
MUCH MORE STRINGENT AND RAISES
THE DEMAND FOR ALLOWANCES. UM
ONE OTHER COMMENT THAT I THAT I
FAILED TO MENTION. AND
UNFORTUNATELY, SENATOR BECKER
ISN'T HERE ABOUT THE PREVIOUS
QUESTION REGARDING, UM GETTING
TO 2030. I ALSO WANTED TO FLAG
THE IMPORTANCE OF YOU KNOW, KLIN
MENTIONED THIS, UM, REDUCTIONS
OUTSIDE THE CAP SECTORS FOR
GETTING TO OUR 2030 TARGET, AND
THOSE INCLUDE THINGS LIKE SHORT
LIVED CLIMATE POLLUTANTS THAT
ARE NOT PART OF THE CAP SECTORS
AS WELL AS OTHER EMISSIONS
COMING FROM NATURAL WORKING
LANDS, SO THAT'S ANOTHER
IMPORTANT CONSIDERATION. MHM.
YEAH, OK, UM. WANTED TO ASK.
THEY, UH. UH, TO JUST IF YOU
WOULDN'T MIND, UM EXPANDING A
LITTLE BIT ON ON SOME OF YOUR,
UM SOME OF YOUR THOUGHTS AND
CONCERNS ABOUT THE DISCRETIONARY
APPROPRIATIONS PROCESS AND THE
EXTENT TO WHICH IT'S BEEN TRULY
EFFICACIOUS. UH AND THEN I THINK
MAYBE, UM MAYBE WE'LL GET DANNY
INVOLVED IN THIS. DANNY AND
CATHERINE INVOLVED IN THIS
CONVERSATION, TOO. UM AND JUST
JUST TO CLARIFY, YOU MEAN FOR,
UM, TWO JRF APPROPRIATIONS?
YEAH. I MEAN, THE NEXUS AND, UM.
AND I MEAN, IT DOES SEEM IT'S
SEEMING AS THOUGH ESPECIALLY NOW
THAT WE'RE IN A YOU KNOW IT.
IT'S. IT IT YOU KNOW THE
TENDENCY ON THE PART OF THE
LEGISLATURE AND THE GOVERNOR TO
USE IT AS A. FLEX FUND FOR OTHER
, UM, FOR YOU KNOW, AS AS AS
OTHER BUDGET. CHALLENGES POP UP.
UM, WE'VE SEEN. YOU KNOW,
VARIOUS CLIMATE PRIORITIES GET
YOU THAT WE'RE GOING TO BE FULLY
FUNDED IN THE GENERAL FUND. NOW
GET SHIFTED OVER THERE. UM HOW
HOW ARE HOW ARE YOU GUYS IN THE
L A Ó THINKING ABOUT THE WAY
THAT IT'S BEEN, UM, THE WAY THAT
IT'S EVOLVED, UH, OVER THE LAST
FEW YEARS. AND THE WAY IT'S THE
WAY THAT THE GOVERNOR AND QUITE
FRANKLY, LEGISLATIVE BUDGET
LEADERSHIP HAVE TREATED THE
FUND. AS IT RELATES TO OUR
GENERAL FUND NEEDS AND
NECESSITIES. UM YEAH, WELL AS AS
PREVIOUSLY MENTIONED, I, I THINK
CAITLIN MAYBE MENTIONED THIS. UM
OR I THINK IT WAS DANNY,
ACTUALLY, UM 65% OR SO OF JUJ F.
REVENUES ARE CONTINUOUSLY
APPROPRIATED TO STATUTORY
PROGRAMS. SO WE HAVE ON PAGE TWO
OF, UM, THIS HAND OUT JUST KIND
OF A LIST OF THOSE AS WELL AS
SOME OF THE LARGER CATEGORIES
THAT HAVE RECEIVED THE
DISCRETIONARY SPENDING SO HIGH
SPEED RAIL IS, YOU KNOW, NUMBER
ONE AT 25% AFFORDABLE HOUSING,
UM, SINCE AND SUSTAIN.
COMMUNITIES AT 20. THERE'S A FEW
OTHERS HERE. UM SO WHILE UH,
TREASURE REVENUES HAVE, YOU
KNOW, HISTORICALLY BEEN KIND OF
FOCUSED ON CLIMATE, CLIMATE AND
ENVIRONMENTAL PROGRAMS, BUT THE,
UH, EMISSIONS REDUCTIONS
ASSOCIATED WITH THOSE PROGRAMS
REALLY, AND WE ALSO, UM HAVE
NOTED BEFORE THAT THE ESTIMATES
THAT CARB USES TO CALCULATE, UM
EMISSIONS REDUCTIONS FROM GR
FUNDED PROGRAMS. UM THERE IS
THERE. SOME CONCERNS RAISED BY
OUR OFFICE AS WELL AS OTHERS
ABOUT THE RELIABILITY OF THOSE
ESTIMATES. SO EVEN WITH THOSE,
YOU KNOW, HIGH NUMBERS OF, YOU
KNOW, $1000 PLUS FOR SOME OF
THOSE PROGRAMS, UM THERE, THERE
HAVE BEEN INSTANCES WHERE WE
BELIEVE THAT THOSE ESTIMATES ARE
EVEN OVERSTATED IN TERMS OF
EMISSIONS REDUCTION, SO I THINK
IN, PARTICULARLY IN THIS BUDGET
SITUATION THAT WE'RE IN NOW, UM
Dð JF YOU KNOW HAS WAS USED LAST
YEAR AND IS BEING PROPOSED BY
THE GOVERNOR TO BE USED THIS
YEAR AS A SOLUTION TO HELP
BACKFILL SOME GENERAL FUND
REDUCTIONS FOR PRIOR CLIMATE
COMMITMENTS. SO WE FIND THAT
THAT APPROACH YOU KNOW, CAN HAVE
MERIT IN TERMS OF RELIEVING SOME
GENERAL FUND PRESSURE. BUT AGAIN
, I THINK WE JUST WANNA SAY, SAY
AGAIN, UM, THE POINT EARLIER
THAT WE MADE JUST ABOUT THINKING
ABOUT AFFORDABILITY, AND
ESPECIALLY WE SEE YOU KNOW, WE?
WE'VE GOTTEN A LITTLE OVER 4
BILLION ABOUT, UM, $4.5 BILLION
LAST YEAR FROM GGRF. IF THAT
NUMBER GOES UP WITH AN INCREASED
ALLOWANCE PRICE, UM AND THAT
KIND OF COINCIDES WITH INCREASED
COST TO CONSUMERS. IN TERMS OF
GAS PRICES. YOU KNOW IT. IT
MIGHT BE WORTH CONSIDERING, UM,
USING THAT MONEY TO KIND OF, UH,
PROVIDE REBATES OR OTHER WAYS TO
MORE DIRECTLY BENEFIT LOW INCOME
FOLKS WHO WHO WOULD BE
STRUGGLING. WHO COULD BE
STRUGGLING FROM THAT? IT SEEMS
THAT AND YOU KNOW, AND LOOK, I'M
NÓ EXPERT IN THE WASHINGTON
PROGRAM. WE'VE TALKED ABOUT IT,
BUT IT DOES ONE OF THE THINGS I
HEAR I'VE READ ABOUT IT IS THAT
THEY THEY DO. PERHAPS A BETTER
JOB OF THIS IS EVERYTHING'S
ALWAYS THE GRASS IS ALWAYS
GREENER THAN THE SIDE OF THE
FENCE. BUT YOU KNOW THAT PERHAPS
THEY'VE DONE A GOOD JOB OF
DIRECTLY TYING SO IF PEOPLE ARE
SEEING ENERGY INCREASES ENERGY
COST INCREASES THAT ARE RELATED
TO YOU KNOW THE TIDING OF THE
ALLOWANCE MARKET. LET'S SAY FOR,
YOU KNOW, HOME HEATING OR AIR
CONDITIONING. THAT UM, THAT
THERE'S A YOU KNOW, THERE'S A
THERE'S A FUND THAT'S AVAILABLE
TO GO TO, YOU KNOW, HELP PEOPLE
WITH, YOU KNOW, WITH
WEATHERIZATION AND, YOU KNOW,
DOUBLE PAYING THEIR THEIR HOUSES
AND BETTER INSULATION. ALL THESE
THINGS THAT ARE GONNA HAVE A
CLIMATE BENEFIT AND A COST
BENEFIT. UH TO CONSUMERS. UM
ESPECIALLY AS YOU KNOW, THERE
MAY BE CONCOMITANT ENERGY PRICE
INCREASES ASSOCIATED WITH THE
PROGRAM. SO I, I, YOU KNOW. AND
MAY MAYBE PART OF THE YOU KNOW,
I. I KNOW THERE'S GOOD STUFF
HAPPENING ALL OVER THE PLACE
WITH THIS EXPENDITURES. BUT UM,
OBVIOUSLY, WITH SO MUCH OF IT
GOING TO HIGH SPEED RAIL AND NOT
BEING, YOU KNOW, OBVIOUSLY, THAT
HASN'T THAT'S NOT DIRECTLY
BENEFITING ANYONE, EXCEPT FOR
THE PEOPLE BUILDING IT YET,
RIGHT? UM YOU KNOW? I GUESS ONE
OF OUR CHALLENGES IS ENSURING
THAT THIS IS SOMETHING THAT
PEOPLE ARE FEELING AS A REAL
BENEFIT. AND, UM. I KNOW
SOMETHING THAT YOU'VE THOUGHT
QUITE A BIT ABOUT DANNY. UM.
YEAH I MAYBE JUST A COUPLE OF
POINTS TO TOUCH ON THE REPORTING
ABOUT HOW THE MONEY IS SPENT IS
I'M JUST GONNA BE A LITTLE BIT
BLUNT. IT'S VERY POORLY DONE.
THE NUMBERS ARE NOT THEY'RE
MISLEADING. THEY'RE NOT JUST OH,
THERE'S SOME UNCERTAINTY IN
DIFFERENT, YOU KNOW, WONKY
PEOPLE WHO LOOK AT IT COME TO
DIFFERENT ANSWERS. THEY'RE
FUNDAMENTALLY MISLEADING BY
ABOUT A FACTOR OF FIVE, AND
THAT'S BEFORE YOU GET TO THE
WONKY CONVERSATIONS ABOUT WHAT
HONEST ESTIMATES WOULD BE AS TO
AS TO THE COST EFFECTIVENESS
COST EFFECTIVENESS. SO THE
STATED HEADLINE NUMBER IS AND
THIS HAS BEEN CONSISTENT FOR
YEARS. THE TOTAL ESTIMATED
CLIMATE BENEFITS ARE COUNTED AND
ONLY THE PARTIAL COST OF
PROGRAMS FROM THE GR F ARE
COUNTED. EVEN THOUGH THE
PROGRAMS THAT WE FUND ARE
SUBSTANTIALLY FUNDED BY ABOUT
80% NON G GRF FUNDS ON AVERAGE
THAT EFFECTIVELY REDUCES THE
REPORTED COST EFFECTIVENESS BY A
FACTOR OF FIVE WHICH IS JUST
WRONG. SO IS THIS AN ACROSS THE
BOARD PROBLEM OR OR ARE THERE?
THAT'S JUST THAT'S JUST LIKE A
METRIC THAT WHEN YOU HEAR ABOUT
THE COST EFFECTIVENESS OF THE
PROGRAM, THE ANNUAL REPORTS FROM
THE CALIFORNIA CLIMATE
INVESTMENTS HAVE BEEN DOING
THAT. YEARS IN L, A AND OTHERS
HAVE OBSERVED THIS AND YOU KNOW,
THAT'S JUST AN EXAMPLE OF WHEN
YOU LOOK AT THE REPORTING DATA.
THE PICTURE THAT'S BEING PAINTED
IS JUST VERY DIFFERENT THAN
WHAT'S GOING ON. AND I MY
PERSONAL IMPRESSION IS THAT THE
PEOPLE WHO BENEFIT FROM THESE
PROGRAMS ARE VERY WELL
REPRESENTED IN TERMS OF THEIR
PRESENCE IN THE POLICY MAKING
PROCESS, BUT I DON'T THINK
THAT'S BROADLY REPRESENTATIVE OF
POPULAR OPINION. AND WHAT
WORRIES ME IS IF THERE ARE
POPULAR CONCERNS ABOUT ENERGY
PRICE IMPACTS THAT THE GOOD
THINGS WE DO FUND AND WE COULD
HAVE A DISCUSSION ABOUT WHICH
ONES WE LIKE RELATIVELY MORE OR
LESS. ARE NOT GOING TO BE AS
RESONANT AS THE CONCERNS AROUND
THE PRICE IMPACT. SO I WHAT DO
YOU WHAT DO YOU SEE AS SOME OF
THE MOST, UM YOU KNOW SOME SOME
OF THE MOST PROBLEMATIC
EXPENDITURES, UH, GIVEN ALL OF
THESE CONSIDERATIONS. I COULD
NAME NAMES TO ME, THAT'S SORT OF
LESS IMPORTANT THAN THIS HAS
BEEN A BLACK BOX THAT NOBODY
UNDERSTANDS EXCEPT THE PEOPLE
WHO DIRECTLY BENEFIT FROM IT.
IT'S AN OPAQUE PART OF THE
OVERALL PROCESS. AND I THINK
MAKING SURE THAT THE GRF
ALLOCATION PROCESS YEAH, I MEAN,
AGAIN, IT'S CONTINUOUSLY
APPROPRIATED MOST OF IT THE
ANNUAL PROCESS AS PEOPLE
FIGHTING OVER 30 35% OF THE
BUDGET, WE COULD DEBATE WHICH
STAKEHOLDERS AND PROGRAMS ARE
RELATIVELY MORE INTERESTING, BUT
THERE ISN'T A COHERENT THESIS
ABOUT WHAT THIS PROGRAM SUPPORTS
. THAT'S LIKE THE SIMPLE ANSWER
AS TO WHY CALIFORNIANS SHOULD
PAY MORE, WHICH I WOULD LIKE TO
BE ABLE TO MAKE THAT CASE. BUT
IT IS HARD FOR ME TO EVEN
DESCRIBE WHAT THE GF CURRENTLY
SUPPORTS. AND WITH ALL DUE
RESPECT TO THE L, WHICH IS
PERFECTLY CHARACTERIZED IT EVERY
TIME I'VE SEEN A REPORT, IT'S
HARD FOR PEOPLE TO GET THEIR
HEADS AROUND A FACTUAL
DESCRIPTION AT THAT LEVEL AND A
VERY ACCURATE LEVEL, AND THAT'S
THE GIST OF THE PROBLEM. I'M
TRYING TO COMMUNICATE TO YOU. IF
YOU SAY WHY IS IT IS IT GOOD?
WE'VE HEARD THE ECONOMIC
EFFICIENCY ARGUMENTS FOR WHY
CARBON PRICING IS A HELPFUL
THING TO RELY ON. I'M 100% ON
BOARD WITH THAT. WHY IS IT GOOD
THAT YOU'RE ASKING ME TO PAY
MORE FOR GASOLINE OR FOR
ELECTRICITY? I CAN'T EVEN BEGIN
TO ANSWER THAT QUESTION. NOT
THAT IT DOESN'T HAVE AN ANSWER
OR ISN'T A LEGITIMATE ASK, BUT
IT IS HARD TO TELL THAT STORY
BECAUSE OF THE COMPLEXITY AND
OPACITY OF HOW THE MONEY IS
SPENT TODAY, AND THAT'S MY
PRIMARY CONCERN. RATHER THAN
SAYING I LIKE THIS PROGRAM. CAN
I DRILL DOWN INTO THAT? A LITTLE
BIT MORE? I MEAN, WE HAVE A
WHOLE BUNCH OF EXPENDITURES THAT
ARE YOU CAN ARGUE FOR I MEAN YOU
TRANSIT FUNDING. UM YOU KNOW,
DRINKING WATER WEATHERIZATION
WILDFIRE PREVENTION. RAIL I MEAN
THERE. THERE'S A WE CAN. WE CAN
DEBATE THE RELATIVE MERITS OF
EACH OF THESE PROGRAMS. BUT
THERE'S A ENVIRONMENTAL BENEFIT
AND A POPULAR AND A PUBLIC
BENEFIT ASSOCIATED WITH EACH OF
THESE EXPENDITURES. ABSOLUTELY I
GUESS THE POINT I'M TRYING TO
MAKE IS THEY'RE THEY'RE
RELATIVELY CONCENTRATED BENEFITS
. SO IF YOU'RE INVOLVED IN THE
CONSTRUCTION OF HIGH SPEED RAIL
OR IF YOU LIVE IN AN AREA WHERE
THAT THAT TRANSIT OPTION IS
GOING TO IMPROVE YOUR LIFE,
THAT'S INTERESTING AND GOOD IF
YOU DON'T IT'S LESS INTERESTING
AND GOOD AND WE DON'T HAVE MANY
OF THE EXPENDITURE SIDE OF THIS
PROGRAM DOESN'T SUPPORT MANY
PROGRAMS THAT HAVE BROAD-BASED
BENEFITS THAT MOST PEOPLE WOULD
HAVE SOME KIND OF CONNECTION TO
WHAT ARE THOSE KINDS OF
PROGRAMS? YOU YOU'RE I. I THINK
THE EXAMPLE YOU SEE OF THIS IN
OTHER CARBON PRICING PROGRAMS
TEND TO BE REBATE ORIENTED. UM
AND I THINK THE WASHINGTON
EXAMPLE AND I'LL LOOK TO OTHERS
WHO MAY HAVE THOUGHTS ON THIS. I
MEAN, WASHINGTON PASSED ITS CAP
AND TRADE PROGRAM WHEN THERE WAS
A BUDGET SHORTFALL, AND THERE
WERE A SERIES OF TRANSIT
MEASURES THAT WERE UNFUNDED AND
WERE PROMINENT AND RELATIVELY
URGENT AND IN MANY PEOPLE'S
MINDS AND THE CAP AND TRADE
FUNDS HAVE BEEN LARGELY NOT
EXCLUSIVELY, BUT THAT'S ONE OF
THE MAIN THINGS THAT THEY'VE
DONE AND THE ANALOGY I WOULD
DRAW THERE IS OUR CONTIN.
APPROPRIATIONS WERE DECIDED MANY
MANY YEARS AGO EONS AGO IN
POLITICAL TERMS, AND I THINK
IT'S IMPORTANT TO ASK, HAVE HAVE
WE HIT THE RIGHT BALANCE IN
TERMS OF WHAT'S RESONANT. THE
WASHINGTON PROGRAM IS A MUCH
MORE CONTEMPORARY EFFORT TO
SPEND MONEY ON NEARER TERM
POLITICAL PRIORITIES. AND THEN
THE OTHER APPROACH THAT OTHER
SYSTEMS TAKE IS REBATING MONEY
WHERE THE FUNDS ACTUALLY GO INTO
SORT OF BROAD BASED ACTIVITIES
THAT MANY PEOPLE HAVE A
CONNECTION TO, RATHER THAN, FOR
EXAMPLE, I HAVE TREES PLANTED IN
MY NEIGHBORHOOD THAT WERE FUNDED
FROM THE F. THAT'S REALLY COOL.
MY NEIGHBORS DON'T KNOW ANYTHING
ABOUT THAT. AND THAT DOESN'T DO
ANYTHING FOR YOU OR YOUR
NEIGHBORS. AND THAT'S THE SORT
OF CONCERN. I'M TRYING TO
ARTICULATE. NOT THAT THE
PROGRAMS ARE BAD OR UNWORTHY.
BUT WHEN YOU ASK ABOUT THEIR
POLITICAL SALIENCE, THEY'RE
FAIRLY CONCENTRATED AND PRETTY
INVISIBLE. WHAT ARE SOME OF THE
RE WHAT ARE SOME SPECIFIC REBATE
PROGRAMS FROM WASHINGTON OR
ELSEWHERE THAT YOU THINK HAVE
BEEN REALLY EFFECTIVE? I DON'T
KNOW THAT REBATES HAVE BEEN
DETERMINED TO BE POLITICALLY
EFFECTIVE. AND I THINK THE SORT
OF THE WARNING SIDE WANT TO GIVE
YOU IS BUT IN CAÑADA, WHERE
THERE IS A NATIONAL CARBON
PRICING POLICY, THE PROVINCES
THAT GENERALLY DON'T LIKE IT
HAVE BEEN POLITICALLY REBELLING,
PARTICULARLY IN PLACES LIKE
ALBERTA, EVEN THOUGH THE POLICY
MODEL THEY'RE ASKED TO FOLLOW IS
ONE WHERE ALL OF THE MONEYS ARE
REBATED AND YOU SHOULD HAVE SORT
OF THE MAXIMUM ECONOMIC EQUITY
BENEFITS THAT YOU WOULD LOOK FOR
IN A PROGRAM DESIGN THAT'S NOT
PROVEN TO BE POLITICALLY SALIENT
IN PLACES LIKE ALBERTA, BUT
THAT'S THAT'S JUST BECAUSE
THEY'RE SO RELIANT ON FOSSIL
FUELS THAT THEY THAT THEY WOULD
KIND OF TEND TO OBJECT TO CARBON
PRICING OF ANY FORM NÓ. I
WOULDN'T SUGGEST THE EXPERIENCE
IN ALBERTA NECESSARILY
TRANSLATES HERE. HERE'S THE
PROBLEM WITH WITH REBATING
REBATING CAN CREATE GOOD
PROGRESSIVE ECONOMIC OUTCOMES
THAT ADDRESS THE ENERGY COST
IMPACTS AND THEIR IMPACTS ON LOW
INCOME HOUSEHOLDS. THE PROBLEM
IS WHETHER OR NOT PEOPLE NOTICE
OR PAY ANY ATTENTION TO IT, AND
I'LL GIVE YOU AN EXAMPLE
GROUNDED IN THIS PROGRAM. WE
HAVE THE ON BILL CALIFORNIA
CLIMATE CREDIT FOR CUSTOMERS OF
INVESTOR OWNED UTILITIES. I AM
LIKE A PROFESSIONAL ENERGY NERD,
AND I COULD BARELY MAKE SENSE OF
MY UTILITY BILL. IT'S A POLICY
THAT HAS GOOD EFFECTS THAT
ALMOST NOBODY UNDERSTANDS. AND
THAT'S ONE OF THE CHALLENGES
WITH REBATING IS HOW DO YOU MAKE
SURE THAT PEOPLE SEE THE REBATE
FEEL THE REBATE AND CONNECT THAT
TO SAYING I'M GOOD WITH THE
OTHER CONSEQUENCES? THAT REBATE
HELPS MITIGATE. THAT'S A
CHALLENGE EVERYWHERE, AND
THERE'S NÓ SORT OF SHINING
SUCCESS STORY. I CAN POINT YOU
TO. THAT'S ALL BEEN RESOLVED,
BUT I THINK GIVEN THE PRICE
TRAJECTORIES, IT'S THE SORT OF
THING WE NEED TO START TALKING
ABOUT. YEAH I MEAN, AND I DON'T
WANT TO PUT I MEAN, ON THE ONE
HAND I WANNA PUT A LOT OF
EMPHASIS ON THE PUBLIC
AWARENESS, BUT I ALSO DON'T WANT
TO PUT TOO MUCH BECAUSE IF THE
PROGRAMS TRULY ARE BENEFITING
THE PUBLIC AND PEOPLE DON'T
NECESSARILY UNDERSTAND EVERY
SINGLE MECHANISM BY WHICH
THEY'RE BEING BENEFITED. THAT
DOESN'T NECES AS LONG AS THEY
ACTUALLY ARE TRULY BEING BENT.
BENEFITING UH, MAY. MAYBE THAT'S
THAT'S ENOUGH, BUT, UM I KNOW.
OF COURSE YOU BROUGHT. YOU'RE
RAISING BROADER CONCERNS ABOUT
WHETHER THE WAY WE'RE DOING. OUR
EXPENDITURE REALLY IS IN LINE
WITH CURRENT NEEDS, AND, UM. AND
YOU KNOW, I MEAN, IT SOUNDS AS
THOUGH YOU'RE YOU'RE DOES HE
DOES? YAAK GET INTO, UM HèA HAVE
YOU BEEN DISCUSSING? A. OF A
PROPOSAL FOR A NEW APPROACH TO
EXPENDITURES OR IS THAT NOT
SOMETHING THAT YOU WE HAVEN'T
REALLY TOUCHED ON THAT IN A
FORMAL WAY YET, SO THIS IS ALL.
JUST BEEN ME RATHER THAN A
COMMITTEE? IS THAT A IS THAT A
IS THAT WITHIN YOUR PERCEIVED
SCOPE OR OR WE COULD ADDRESS
THAT? YEAH, AND I THINK IN THIS
IN THIS YEAR'S REPORT, THERE'S
SOME, UM, EFFORT TO ADDRESS
AFFORDABILITY CONCERNS. UM WHICH
IS I MEAN A LITTLE BIT
DIFFERENT, BUT CERTAINLY RELATED
TO THE EXPENDITURES. AND I THINK
WHAT YOU'VE HEARD COME UP HERE
IS, YOU KNOW A RECOGNITION THAT
AFFORDABILITY IS A REAL CONCERN.
AND TO DANNY'S POINT, LIKE,
MAYBE WE NEED TO RETHINK HOW
SOME OF THESE REVENUES ARE USED
TO BE ABLE TO, YOU KNOW, BETTER
ADDRESS SOME OF THE REAL NEEDS
AND AFFORDABILITY QUESTIONS. I
MEAN, I THINK THE WASHINGTON
EXAMPLE IS A IS A GOOD ONE WITH
RESPECT TO FUNDING TRANSIT
OPERATIONS, WHICH YOU KNOW
EASTERN WESTERN WASHINGTON.
SORRY I GREW UP ON THE EAST
COAST, EAST AND WEST IS ALL BACK
AND FORTH. UM, BUT, YOU KNOW,
YOU LOOK AT LIKE THE SEATTLE
TACOMA. AREA VERY TRANSIT. RICH
REALLY BENEFITS FROM THAT SORT
OF THING. YOU LOOK AT WESTERN,
THE OTHER SIDE OF WASHINGTON,
AND IT LOOKS A LOT MORE LIKE SAN
JOAQUIN VALLEY, AND IT'S VERY
RURAL. UM AND NOT A LOT OF
TRANSIT AND SO AND THAT'S WHERE
YOU KNOW. WE SEE SOME OF THE
FRUSTRATIONS. UM SO I GUESS MY
POINT IS, WE NEED TO THINK ABOUT
WHETHER IT'S GENERAL REBATES OR
OTHER WAYS TO GET, UM, BENEFITS
DIRECTLY TO PEOPLE THAT BENEFIT
PEOPLE IN ALL. PARTS OF THE
STATE AND THAT MIGHT BE
SUPPORTING TRANSIT. IT MIGHT BE
DIRECT REBATES. IT MIGHT BE
BETTER EXPLAINING, UM WHAT THOSE
REBATES ON YOUR ELECTRICITY
BILLS REALLY ARE. UM I WOULD
ALSO SAY, I THINK ANY OF THESE
PROGRAMS OUGHT TO BE TARGETED
TOWARD COMMUNITIES AND
HOUSEHOLDS THAT ARE MOST
VULNERABLE AND MOST OVERBURDENED
. UM THIS. THIS SHOULD NOT JUST
BE A BLANKET PROGRAM, UM, BUT
REALLY TARGETED TO THOSE MOST IN
NEED. CAN I JUST ASK YOU ABOUT
THE USE OF THE TERM REBATE? WHEN
I MEAN I'VE I'VE ARE WE BEING?
ARE WE BEING APPLES TO APPLES
HERE WHEN WE SAY THE WORD
REBATE? I MEAN, DID DID I HEAR
YOU CORRECTLY THAT YOU ALSO
CONSIDER REBATE? UM YOU KNOW,
SUBSIDY FOR PUBLIC TRANSIT
FUNDING THAT MIGHT LEAD TO YOU
KNOW, FREE TRANSIT PASSES AND
THAT KIND OF THING THAT THAT'S
ALSO A REBATE UNDER YOUR II. I
WAS USING IT MORE TO REFER TO
WHAT ARE ESSENTIALLY CASH
TRANSFERS THAT COULD COME
THROUGH UTILITY SYSTEMS. THIS IS
DIRECT TYPE, OK, THAT'S NOT TO
DENIGRATE THE VALUE OF
EXPENDITURE PROGRAMS THAT MIGHT
TARGET BROAD POPULATIONS. I JUST
THINK THE MECHANISM IS A LITTLE
BIT DIFFERENT. BUT THAT'S AN
EXPENDITURE PROGRAM TOO. RIGHT
WHEN YOU'RE WHEN YOU'RE SURE I.
I APOLOGIZE FOR THE CONFUSING
TERMINOLOGY. WHAT? WHAT I'M
TRYING TO GET AT HERE IS ARE WE
SENDING MONEY TO THINGS THAT
BASICALLY IMMEDIATELY TRANSFER
BACK TO PEOPLE LIKE ESSENTIALLY
CASH TRANSFERS OR ARE WE FUNDING
PROGRAMS THAT BENEFIT PEOPLE AND
THAT THOSE PEOPLE WILL LIKE AS A
RESULT, AND BOTH OF THEM REQUIRE
AN EXPENDITURE, BUT THEY I THINK
THEY HAVE SORT OF DIFFERENT
LOGICS AND FUNCTIONS. UM AND
THINKING ABOUT THE BALANCE OF
THOSE BOTH NOW AND IN AN
ENVIRONMENT WITH SIGNIFICANTLY
HIGHER CARBON. IS IN GREATER
REVENUES, I THINK IS AN
IMPORTANT PRIORITY. SO I MEAN RE
REBATES IN THAT CONTEXT CAN BE
KIND OF FUNNY, BECAUSE, UM, ON
THE ONE HAND YOU'RE RAISING THE
ENERGY COST, AND THEN YOU'RE
TAKING IT AWAY AND WHAT YOU'RE
BASICALLY JUST CREATING A
BUREAUCRACY TO MANAGE THE LINE
ITEM IN THE ON PEOPLE'S BUTT
BILLS. YOU KNOW HOW MUCH HAS
THAT REALLY BENEFIT? I? I, YOU
KNOW, MAYBE THE MAYBE. LET LET
ME LET ME THROW IT OVER TO YOU,
UM, CATHERINE I. I MEAN, IN A
PERFECT WORLD IN YOUR PERFECT
WORLD. WOULD YOU JUST DO AWAY
WITH THE WHOLE PROGRAM? AND
WHAT? WHAT? WHAT'S YOUR UM,
WHAT'S YOUR, UH, UH, ADVICE TO
US? IF YOU WEREN'T CONSTRAINED
BY, UM ALL THESE OTHER PEOPLE IN
THE ROOM. YOU MEAN DO AWAY WITH
THE ENTIRE CAP AND TRADE
PROGRAM? YEAH, POTENTIALLY. I
MEAN, WHAT? YEAH. WHAT? WHAT
WOULD BE YOUR, UM WHAT? WHAT ARE
YOUR THOUGHTS ON ALL THIS? UM I
MEAN, I THINK IN MY OVERARCHING
STATEMENTS, I SAID THE FRAMEWORK
SHOULD BE MANDATORY EMISSIONS
REDUCTIONS STARTING IN FRONT
LINE COMMUNITIES IF WE'RE
SERIOUS ABOUT PHASING OUT FOSSIL
FUELS AT THE SAME TIME, I
UNDERSTAND CAP AND TRADE HAS
BEEN AROUND FOR A REALLY LONG
TIME AND IT IS A REALLY BIG
REVENUE GENERATOR AND PEOPLE ARE
VERY ATTACHED TO IT. SO OUR
POSITION IS WE DON'T LIKE THE
PROGRAM. WE WOULD RATHER NOT
HAVE THE PROGRAM, BUT ALSO IF
THE PROGRAM IS HERE TO STAY, IT
NEEDS SERIOUS REFORM. I THINK,
UM, YOU KNOW, ONE KIND OF ANGLE
TO APPROACH THIS FROM ALONG THE
LINES OF WHAT WE'RE DISCUSSING.
HERE IS WHAT I WOULD
CHARACTERIZE AS MAYBE HOUSEHOLDS
VERSUS ZIP CODES. IT'S REALLY
EASY TO SAY WE'RE SPENDING X
PERCENT OF THIS MONEY IN
DISADVANTAGED COMMUNITIES. IF
YOU'RE JUST TALKING ABOUT CENSUS
TRACKS OR ZIP CODES, IT'S A
WHOLE OTHER THING. IF YOU'RE
USING THAT TO INCENTIVIZE
POLLUTERS TO POTENTIALLY EXPAND
THEIR FOOTPRINT VERSUS MAKING
DIRECT IMPROVEMENTS TO PEOPLE'S
QUALITY OF LIFE, SO SOME OF THE
THINGS I MENTIONED WERE THINGS
LIKE ELECTRIFICATION, UM, HOME
WEATHERIZATION ELECTRIC VEHICLE.
INCENTIVES URBAN GREENING
ECOSYSTEM RESTORATION, WHICH I
GET TO SOME DEGREE EXISTS WITHIN
THESE LISTS. BUT ARE THEY TRULY
REACHING THE MOST IMPACTED LOW
INCOME HOUSEHOLDS IN
ENVIRONMENTAL JUSTICE
COMMUNITIES? AND YOU KNOW, HIGH
SPEED RAIL IS A VERY INTERESTING
EXAMPLE BECAUSE, OF COURSE, THE
LINE THAT'S CURRENTLY BEING
PROPOSED TO BE CONSTRUCTED IS
THROUGH THE SAN JOAQUIN VALLEY,
BUT WE ARE A TRANSIT DESERT IN
MOST OF THE SAN JOAQUIN VALLEY.
IT'S A RURAL AREA. IT'S VERY CAR
DEPENDENT. IT'S VERY HARD FOR
PEOPLE TO GET AROUND. IT'S HARD
FOR THEM TO AFFORD ELECTRIC
VEHICLES. IF THEY HAVE E VÆ S¼.
IS THERE THE CHARGING
INFRASTRUCTURE MOST LIKELY NOT.
SO HOW ARE THEY GETTING TO THE
HIGH SPEED RAIL STATIONS? CAN
THEY AFFORD THE TICKETS?
PROBABLY NOT. UM AND THEN YOU
KNOW, SO THAT'S KIND OF IN THE
CONTINUOUS APPROPRIATIONS BUDGET
. AND THEN I DO WANT TO DIVE
DOWN A LITTLE DEEPER FOR A
SECOND AND A 617 BECAUSE $1.4
BILLION IS ALSO QUITE A BIT OF
MONEY GOING SPECIFICALLY TO THAT
PROGRAM, AND THE BIGGEST ISSUE
IS THAT IT LACKS TEETH,
PARTICULARLY IN TERMS OF
MEASURABLE AND ENFORCEABLE
METRICS TO ENSURE THAT WE'RE
ACTUALLY GETTING EMISSIONS
REDUCTIONS, SO IN TERMS OF
MEASURABILITY, A PART OF THE
COMMUNITY OR PROTECTION PROGRAM
IS TO DO AIR MONITORING WITHIN
THOSE SELECTED COMMUNITIES. BUT
WHAT ARE WE DOING WITH THE AIR
MONITORING DATA? ARE WE TRACKING
PROGRESS? ARE WE FEEDING IT INTO
ALERT SYSTEMS SO THAT LOCAL
COMMUNITY MEMBERS CAN GET A
NOTICE IF AIR POLLUTION LEVELS
ARE SPIKING? NOT IN THE SAN
JOAQUIN VALLEY? AND WHY NOT? WHY
ARE WE SPENDING LOTS OF MONEY ON
AIR MONITORING? NOT DOING
ANYTHING WITH IT, AND IN TERMS
OF ENFORCEABILITY AGAIN WITH AN
INCENTIVES, HEAVY APPROACH.
WE'VE ALREADY TRIED THAT FOR
DECADES WITH SAN JOAQUIN
VALLEY'S STATE IMPLEMENTATION
PLANS, WE HAVEN'T MET THE 1997
STANDARD FOR PM. WE HAVEN'T MET
THE 1979 STANDARD FOR OZONE. SO
AT WHICH POINT DO WE RECOGNIZE
THAT THROWING A BUNCH OF
INCENTIVE MONEY AT THE LARGEST
POLLUTERS IS NOT ACTUALLY
CLEANING UP OUR AIR, AND IN SOME
CASES, IT MAY ACTUALLY BE
SUBSIDIZING THE EXPANSION OF
POLLUTING FACILITIES. UM THESE
PROGRAMS ARE OFTEN LAYERING ON
EACH OTHER. RIGHT SO THE
INCENTIVE MONEY FOR A B 617 IS
GOING TO THINGS TO ACHIEVE GOALS
IN OUR STATE IMPLEMENTATION
PLANS, SO THE AIR DISTRICTS ARE
GETTING TONS OF MONEY TO
CONTINUE BUSINESS AS USUAL WITH
WITH NÓ ACCOUNTABILITY. FOR
WHERE THOSE MONEY, UM, WHERE
THOSE MONIES ARE SPENT. AND WAS
THAT HOW IT WAS STRUCTURED IN
THE 617? I MEAN, I MEAN YOUR
CENTRAL THESIS, IS THAT IT? IT'S
JUST FAR TOO DEFERENTIAL TO THE
TO THE TO THE INDIVIDUAL AREA
DISTRICTS. I MEAN TO THE AIR
DISTRICTS AND CARB HAS A VERY
HANDS OFF APPROACH AND BASICALLY
SAYS ONCE WE GIVE IT TO THE AIR
DISTRICTS, IT'S NOT WITHIN OUR
AUTHORITY TO DO ANYTHING ELSE.
UM AND WHEN IT WAS PASSED, IT
WAS CHARACTERIZED AS A DOWN
PAYMENT RIGHT. THERE WAS
RECOGNITION THAT IT WAS NOT
SUFFICIENT THAT IMPROVEMENTS
WERE GOING TO HAVE TO BE MADE,
BUT UNFORTUNATELY, IT HASN'T
BEEN REVISITED IN THE LAST SEVEN
YEARS, AND I THINK WE'VE BEEN
THROUGH IMPLEMENTATION FOR LONG
ENOUGH TO SEE THAT THERE ARE
VERY LARGE GAPS. INNOCENT OF A
QUICK QUESTION. AND, YEAH, OK.
YEAH. GO FOR IT. OH, SURE. UM,
JUST, UH ON THAT. THANK YOU. SO
YOU MET WE'RE NOT MEETING
OBJECTIVE STANDARDS IS YOUR
POINT. UM, SO CARP DID HAVE
WORKSHOPS ON THIS ON 617. YOU
MENTIONED LACK OF INTEGRATION.
JUST MAYBE YOU CAN TALK ABOUT,
UM EXCUSE ME. I KEEP PUTTING
THAT, UM THE, UH SOME OF THE
OTHER PROBLEMS YOU'VE IDENTIFIED
SO LACK OF INTEGRATION OF DATA
FROM LOCAL AIR MONITORING
NETWORKS OR LIMITED
IMPLEMENTATION FUNDING. UM MAYBE
YOU COULD TALK A LITTLE BIT MORE
ABOUT THAT. UM AND HAVE YOU SEEN
AIR DISTRICTS DOING SITE
INSPECTIONS? UH WHY OR WHY NOT?
UM YEAH, GREAT QUESTION. UM SO
ONE OF THE PROVISIONS THAT I
MENTIONED BRIEFLY IN MY OPENING
COMMENTS WAS THAT THERE WAS
SUPPOSED TO BE REVIEW OF BEST
AVAILABLE CONTROL TECHNOLOGY,
WHICH WE WERE VERY EXCITED BY
BECAUSE TECHNICALLY, WE'RE
ALREADY SUPPOSED TO HAVE THAT IN
THE SAN JOAQUIN VALLEY AND WHAT
WE FOUND, UM IN IMPLEMENTATION
WAS ACTUALLY THAT ALL THEY ALL
THE AIR DISTRICTS WERE REQUIRED
TO DO WAS UPDATE THEIR LISTS OF
WHAT BEST AVAILABLE CONTROL
TECHNOLOGY IS THEY WEREN'T
REQUIRED TO ACTUALLY GO OUT TO
THE LARGEST EMITTERS AND ENSURE
THAT THEY HAD BEST AVAILABLE
CONTROL. UM WHICH IS WHAT
SILENCE OF ACTIONS WOULD ACHIEVE
AND THEN SOURCE TESTING. SO YOU
PUT A PIECE OF TECHNOLOGY ON A
FACILITY OVER YEARS. IT DEGRADES
. IT MAY NOT BE WORKING AS WELL
AS IT WAS WHEN YOU ORIGINALLY
INSTALLED IT. WHICH IS WHY YOU
WOULD THEN GO DO SOURCE TESTING
TO SEE IF THE EMISSIONS LEVELS
ACTUALLY MATCH WITH WHAT'S ON
THEIR PERMITS. UM WE ACTUALLY
WORKED WITH THE CARBON
ENFORCEMENT DIVISION TO MAKE A
PROPOSAL TO THE SAN JOAQUIN
VALLEY AREA DISTRICT TO TAKE A
COLLABORATIVE APPROACH AND
IDENTIFYING THE BIGGEST EMITTERS
IN SOUTH STOCKTON AND THEM AND
IN DOING COMMUNITY ENGAGEMENT
AND EDUCATION AND DOING THE SITE
TEST THE SITE VISITS ON THE
SOURCE TESTING AND THEY REFUSED.
UM THERE ARE ALSO SUPPOSED TO BE
YES. THE SAN JOAQUIN VALLEY AIR
DISTRICT REFUSED. THERE ARE ALSO
SUPPOSED TO BE A SCALING UP OF
THE LESSONS LEARNED RIGHT. THERE
ARE ONLY SO MANY COMMUNITIES
THAT HAVE BEEN SELECTED, BUT
THERE ARE SO MANY MORE
ENVIRONMENTAL JUSTICE
COMMUNITIES IN NEED. SO THE
SOUTH COAST ADOPTED A MUCH MORE
AMBITIOUS, INDIRECT SOURCE RULE
THAN THE SAN JOAQUIN VALLEY AIR
DISTRICT CURRENTLY HAS. WHY
AREN'T THEY REQUIRED TO UPDATE
WHY AREN'T THERE STATEWIDE
STANDARDS THAT ARE SET WHEN ONE
AIR BASE IN LEEDS WITH WHAT THE
BEST RULES ARE, IT SHOULD BE
REQUIRED THAT THE OTHER AIR
BASINS ALSO DO THAT, UM AND THEN
TO TOUCH ON YOUR LAST POINT,
SENATOR BECKER. THERE HAS BEEN
THIS INITIAL INVESTMENT IN
CREATING THE PLANS AND DEPLOYING
THE AIR MONITORING NETWORKS AND
AGAIN THE LION'S SHARE GOING TO
THE AIR DISTRICTS AND TO THE
INCENTIVE FUNDS. WHERE IS THE
MONEY TO ACTUALLY IMPLEMENT
THESE PLANS TO ENSURE THAT THE
MEASURES THAT THE COMMUNITIES
DID ADOPT DID GET INTO THEIR
PLANS ARE ARE AGAIN. ACTUALLY
BEING IMPLEMENTED AND THAT WE
ARE SEEING IMPROVEMENTS.
COMMUNITIES THAT ARE SELECTED
GET FIVE YEARS A YEAR TO DO A
PLAN AND THEN FOUR YEARS TO
FOLLOW UP ON THAT WHAT HAPPENS
AFTER THAT FIVE YEARS? YEAH, AND
YOUR POINT. WE'RE TALKING ABOUT
BILLIONS OF DOLLARS. IT SHOULD
BE SUFFICIENT MONEY TO MAKE AN
IMPACT. UM IN THESE AREAS LAST
ON THAT, AND THEN WE'LL TURN
OVER TO SENATOR MENDAR. UM I'D
LIKE TO HAVE CARB RESPOND TO
THAT. I MEAN, WHAT ARE CARBS
PLANS TO INCREASE INSPECTIONS
AND OVERSIGHT? UM AND. ARE THERE
. BARRIERS TO THE AGENCIES
INCREASE THOSE EFFORTS AS AS IN
THE ENVIRONMENTAL JUSTICE GROUPS
HAVE ASKED FOR YEAH, AND I'M I'M
SORRY, BUT I'M GONNA GIVE YOU
SOMEWHAT OF AN UNSATISFACTORY
ANSWER IN IN THE FACT THAT I AM
THE DIVISION CHIEF OF OUR
CLIMATE PROGRAMS AND YOU KNOW, I
WILL CIRCLE BACK WITH OUR
LEGISLATIVE DIRECTOR ABOUT
GIVING YOU AN ANSWER ON THE
QUESTIONS RELATED TO OUR QUALITY
PROGRAMS. IT'S NOT SOMETHING
THAT I THAT I OVERSEE. WELL I
KNOW THERE IS A FOLLOW UP
HEARING. I THINK THAT THE JOINT
CLIMATE COMMITTEE IS HAVING, UH,
COMING UP. SO HOPEFULLY FOR THAT
HEARING, WE CAN HAVE AN ANSWER
TO THIS QUESTION AS WELL. THANK
YOU SO MUCH. I'M COMING IN. I'M
I'M ON PAGE THREE. Y'ALL SEEM TO
BE ON PAGE 1000 SOMETHING. UM SO
LET ME SEE IF SOME OF THIS
REPETITIVE BUT ALSO ON THIS
DÍAS. I'M THE ONLY MEMBER THAT
REPRESENTS DISADVANTAGED
COMMUNITIES. SO LIKE THIS IS
REALLY CLOSE AND PERSONAL.
CATHERINE YOU MENTIONED A LOT OF
THESE TOPICS. I WILL AGREE WITH
YOU. THEY'RE NOT HITTING MY
COMMUNITIES. WE DON'T SEE AN
IMPACT. I HAVE THREE AIRPORTS IN
MY DISTRICT. NÓ OTHER MEMBER HAS
THREE AIRPORTS IN THEIR DISTRICT
. I'M INTERESTED IN HOW WE'RE
ADDRESSING HOW WE CAN USE THIS
PROGRAM TO ADDRESS THE, UH
PARTICULATE MATTER EMISSIONS.
RIGHT UM, I'M INTERESTED IN
ADDRESSING THE AIR, THE POOR AIR
QUALITY IN MY DISTRICT. SO I'M
HERE TO TELL YOU YOU'RE RIGHT.
IT'S NOT. YOU'RE 100% RIGHT,
TOO. I CAN READ THAT UTILITY
BILL. MOST OF MY CONSTITUENTS
ARE ACTUALLY JUST BEING SCAMMED
TO GET ALL THESE FALSE REBATES.
RIGHT THERE IS NÓ TRUST IN MY
COMMUNITY. SO EVEN, UM,
PARTICIPATE IN THESE REBATES
BECAUSE THEY HEAR FROM ANECDOTAL
STORIES ABOUT ALL THESE SCAMS IN
MY COMMUNITY, UM SO YOU KNOW,
THIS IS A TOPIC FOR ME. THAT
WASN'T I'M NOT AN EXPERT. I
THINK EVEN THE REPORT SAID THAT
WE TURN TO CARB AS THE EXPERTS
ON THESE ISSUES, YOU KNOW, EVEN
LESS SO THAN MY COLLEAGUES HERE
TO MY RIGHT, YOU KNOW, HAVE HAD
MORE EXPERIENCE IN THIS TOPIC.
MY EXPERIENCE COMES IN FROM THE
DISADVANTAGE SIDE OF IT, AND MY
EXPERIENCE COMES IN FROM THE
ONGOING COMPLAINTS OF MY
CONSTITUENTS REGARDING THE POOR
AIR QUALITY. THE ASTHMA CASES,
UM, THE METHANE LEAK THAT WE HAD
IN THE SAN FERNANDO VALLEY THAT
WAS IN ALMOST A YEAR. AND TO
YOUR POINT, I DON'T KNOW ANY
UPDATED NUMBERS. IS THERE
ANOTHER LEAK HAPPENING RIGHT NOW
? WHAT'S THE ACCOUNTABILITY? THE
ONGOING COMPLAINTS THAT WE GO TO
WE TURN TO A QM Dð, AND OUR
RESPONSE IS THERE'S NÓ. THERE'S
NÓ VIOLATION. THERE'S NÓ
VIOLATION. THERE'S NÓ VIOLATION.
YOU CAN PHYSICALLY SEE THE
VIOLATIONS. BUT THERE'S NÓ
ACCOUNTABILITY. SO ALL THAT I
HAVE COUPLE QUESTIONS REGARDING
THIS IS HOW CAN THIS PROGRAM CAP
AND TRADE, THEN REGULATE OR ARE
WE REGULATING PARTICULATE
MATTER? UM AND SECOND YOU KNOW?
THIS PREDATES MY TIME, BUT, UH,
THIS PROGRAM WAS LARGELY
NEGOTIATED WITHOUT EJ GROUPS AT
THE TABLE. UH, SO HOW CAN WE
THEN? UM HOW HOW CAN WE
STRENGTHEN OR UTILIZE THIS
PROGRAM TO STRENGTHEN OR REDUCE
POLLUTION AND DISADVANTAGED
COMMUNITIES? SO TWO QUESTIONS ON
THE PARTICULATE MATTER AND THEN
ON THE AIR POLLUTION? KATHERINE
I WOULD LOVE YOUR PERSPECTIVE ON
THAT. AND THEN FOR CARB. I DON'T
KNOW IF THIS IS YOUR MAYBE, UH,
YOUR YOUR TOPIC? YEAH, BECAUSE
617 WAS SUPPOSED TO BE THE EJ
FIX, RIGHT? I MEAN, YOU KNOW,
YEAH, SO AND JUST TO BE CLEAR
THERE WAS ABSOLUTELY NOT
CONSENSUS ON WHETHER A B 617 WAS
ACTUALLY A GOOD IDEA. SOME
PEOPLE CALLED IT A POISON PILL
AT THE TIME. AND BASICALLY, WE
TOLD LIKE THIS IS THE THING THAT
YOU GET FOR THE EXTENSION OF CAP
AND TRADE. BUT THERE WERE GROUPS
THAT ABSOLUTELY OPPOSED A 617 AS
A BAD IDEA BECAUSE IT'S NOT
ENFORCEABLE BECAUSE IT TEETH,
BECAUSE THESE ARE JUST KIND OF
ASPIRATIONAL PLANS AND A HUGE
GIVEAWAY TO AIR DISTRICTS TO
KIND OF CONTINUE BUSINESS AS
USUAL, RIGHT, SO SOME OF THE
THINGS I MENTIONED ABOUT
MEASURABILITY AND FORCE ABILITY
CARB ACTUALLY PLAYING AN
OVERSIGHT ROLE INSTEAD OF SAYING
, WELL, WE GAVE THE MONEY TO THE
AIR DISTRICT AND, WELL, THEY
HAVE TO DO THE SITE INSPECTIONS,
WHICH I GET IS TECHNICALLY
CORRECT. BUT WHAT ABOUT THE
ENHANCED ENFORCEMENT PROVISIONS
OF A B SIX AND THAT WAS
ATTEMPTED AS PART OF THE
NEGOTIATION. I WASN'T INVOLVED
IN THOSE NEGOTIATIONS AND IN THE
AIR DISTRICTS F IT OFF. OR WAS
THAT WHAT HAPPENED THERE? UM,
YOU MEAN IT WITHIN 617 WHEN THAT
WAS BEING NEGOTIATED IN 2017. I
MEAN, I BELIEVE THAT INDUSTRY
WAS AT THE TABLE TO WEAKEN THOSE
PROVISIONS AS MUCH AS POSSIBLE
TO BASICALLY MAKE IT A LIKE,
LET'S MONITOR AND CREATE MORE
PLANTS, WHICH IS MORE OF
BASICALLY WHAT WE ALREADY DO.
RIGHT THERE'S NOT ENFORCEABILITY
PROVISIONS TO THIS. OUR STATE
IMPLEMENTATION PLANS ARE FALL
UNDER THE CLEAN AIR ACT, SO AT
LEAST, UM, THEIR CITIZEN
ENFORCEMENT, RIGHT? WE CAN SUE
THE GOVERNMENT IF YOU DON'T MEET
THOSE STANDARDS. UM AND IF YOU
DON'T SHOW PROGRESS, BUT A B 617
IS PURELY ASPIRATIONAL, AND
THERE'S TONS OF MONEY GOING INTO
IT. SO IN TERMS OF REGULATING
PARTICLE POLLUTION THAT DOES
MOSTLY HAPPEN THROUGH STATE AND
LIMITATION PLANS AND PART OF
WHAT I HIGHLIGHTED IN MY OPENING
COMMENTS THAT YOU WEREN'T HERE
FOR SENATOR MANJAR, UM IS THAT A
MARKET BASED MECHANISM
FUNDAMENTALLY IS GOING TO
CONTINUE THE HISTORICAL PATTERN
OF CONCENTRATING POLLUTION IN
ENVIRONMENTAL JUSTICE
COMMUNITIES BECAUSE IT'S MUCH
CHEAPER FOR THEM TO BUY CREDITS.
UM AND YOU KNOW, WE SEE THAT
TIME AND TIME AGAIN. THAT WAS
WHAT EJ ADVOCATES RAISED AT THE
INCEPTION OF THE CAP AND TRADE
PROGRAM AND WHY SO MANY GROUPS
WERE FIERCELY OPPOSED. WE'VE
SOUGHT REFORMS FROM THE
BEGINNING TO TRY TO ADDRESS
THOSE ISSUES. AND IN 2007, WE
WERE TOLD, UM OR SORRY, 2016. WE
WERE TOLD 8617 WILL KIND OF BE
THE SOLUTION FOR THAT, BUT IT
DEFINITELY HAS NOT MET THE GOALS
THAT WERE SET OUT FOR IT FOR THE
REASONS THAT I'VE OUTLINED, UM
IN TERMS OF STRENGTHENING
APPROACHES TO HOW TO MAKE SURE
THAT EMISSIONS ARE ACTUALLY
GOING DOWN, UM, THE WORK GROUP
AND HAND OUT THE CENTRAL VALLEY
AIR QUALITY COALITION ALSO
PROVIDED RECOMMENDS THINGS LIKE
ELIMINATING OFFSETS. UM
ELIMINATING ALLOWANCES, MAKING
SURE THAT WE'RE NOT ALLOWING
OFFSETS THAT ARE INTERNATIONAL
TRYING TO PRIORITIZE OFFSETS
THAT ARE NOT ONLY VALID BUT THAT
OCCUR IN STATES SO THAT OUR
COMMUNITIES ARE SEEING THOSE
BENEFITS AND INSTITUTING THINGS
LIKE FACILITY LEVEL CAPS SO THAT
WE CAN FUNDAMENTALLY BREAK THAT
CYCLE OF CONTINUING TO
INCENTIVIZE INDUSTRY TO EXPAND
IN THE COMMUNITIES WHERE IT
ALREADY EXISTS. RIGHT. IT'S THE
PATH OF LEAST RESISTANCE FOR
THEM TO CONTINUE TO BUILD OUT
ALL OF THESE PROJECTS IN OUR
ENVIRONMENTAL JUSTICE
COMMUNITIES AND A MARKET BASED
SYSTEM IS GOING TO PERPETUATE
THAT CYCLE UNLESS WE BUILD AND
SAFEGUARDS LIKE FACILITY LEVEL
CAPS TO BE CLEAR THAT WILL NOT
SOLVE ALL OF OUR PROBLEMS RIGHT.
THERE WILL STILL BE LOTS OF
OTHER ISSUES AND LOTS OF OTHER
FIXES NECESSARY TO PROGRAMS LIKE
A B 617 AND BEYOND, BUT AT LEAST
IT'S A STEP IN THE RIGHT
DIRECTION OF TRYING TO ENSURE
THAT WE'RE NOT REDUCING
EMISSIONS OVERALL WHILE
CONTINUING TO CONCENTRATE THEM
IN FRONT LINE COMMUNITIES.
SENATOR COULD I ADD SOMETHING
JUST VERY BRIEFLY, UM, JUST TO
EMPHASIZE A PROCESS POINT HERE
AS SOMEBODY WHO HAD THE
UNFORTUNATE DISTINCTION OF BEING
AROUND IN 2017 FOR ALL THIS, BUT
THE CAP AND TRADE BILL AND A B
617. THIS THIS AIR QUALITY BILL
DID NOT GO THROUGH A NORMAL
LEGISLATIVE PROCESS. THERE WAS
NÓ COMMITTEE HEARING THERE
WEREN'T EXTENSIVE DISCUSSIONS
AND VETTING FROM STAFF. SO UM, I
, I HEAR THE FRUSTRATIONS AS
WELL. AND I THINK AND SENATOR
WIKI HAD ONE THAT WAS WHICH I
WORKED ON AND I'M BIASED ABOUT
THE POINT I'M TRYING TO MAKE IS
THESE BILLS DID NOT REFLECT A
NORMAL LEGISLATIVE PROCESS AND
MY PERSONAL VIEW WITH RESPECT TO
THE CAP AND TRADE PROGRAM IS
THAT LEGISLATIVE REAUTHORIZATION
IS SOMETHING THE LEGISLATURE
OUGHT TO CONSIDER AND THE
PROGRAM THEY NEED AND THAT WOULD
AFFORD AN OPPORTUNITY TO ADDRESS
SOME OF THE QUESTIONS YOU RAISED
IN THE DR CATHERINE HAS BROUGHT
UP THANK YOU, SENATOR. UM I, UH,
WITH WITH RESPECT TO A B 617 I.
I REALLY DEFER TO DOCTOR
CATHERINE. UM I ALSO LIVE RIGHT
NEAR THE AREA SHE'S TALKING
ABOUT IN ONE TOWN NORTH, SO I'M
VERY FAMILIAR WITH THE
CHALLENGES IN STOCKTON. UM AND I
THINK A LOT OF I'M IN, OK,
THAT'S ONE TOWN ALREADY. UM BUT
BUT AN AREA I KNOW REALLY WELL
AND II. I THINK A LOT OF THE
RECOMMENDATIONS THAT SHE IS
MAKING WITH RESPECT TO REFORMS.
607 WOULD BE INCREDIBLY VALUABLE
. UM SO I WANTED, I GUESS START
BY SAYING THAT WITH WITH RESPECT
TO YOUR QUESTION ABOUT, UM,
PARTICULATE MATTER, I MEAN, THE
WAY CAP AND TRADE IS DESIGNED IS
IT COVERS CLIMATE POLLUTION, SO
IT COVERS CARBON DIOXIDE AND
OTHER GREENHOUSE GAS EMISSIONS
IT IT DOES NOT COVER PARTICULATE
MATTER KNOCKS SOCKS THAT SORT OF
THING, HOWEVER, TO VARYING
DEGREES, AND THERE'S A LOT OF
VARIATION DEPENDING ON FACILITY
IN POLLUTANT THERE IS SOME
AMOUNT OF CORRELATION BETWEEN
GREENHOUSE GAS POLLUTION AND
THESE LOCAL AIR POLLUTANTS AS
WELL. UM AND THERE IS, UM I MEAN
, SOME SOME PEER REVIEWED
RESEARCH THAT IS TRYING TO DRAW
A CAUSAL LINK, NOT A CORRELATION
, BUT A CAUSAL LINK BETWEEN
REDUCTIONS IN GREENHOUSE GAS
POLLUTION UNDER CAP AND TRADE
AND REDUCTIONS IN LOCAL AIR
POLLUTION AT FACILITIES THAT ARE
ALSO COVERED BY CAP AND TRADE.
UM AND THEY FIND THAT THEY THERE
HAS BEEN AIR QUALITY BENEFITS.
NOW THERE'S ALSO RESEARCH THAT,
UH, RESOURCES FOR THE FUTURE DID
THAT. THAT SORT OF ACKNOWLEDGE
THIS, BUT ALSO SAW THAT THERE
WAS INCONSISTENCIES AND YOU
KNOW, ONE EXAMPLE IS REFINERIES
REALLY HAVE NOT KEPT UP WITH
EVERYBODY ELSE IN TERMS OF
REDUCING THEIR GREENHOUSE GAS
POLLUTION OR A LOCAL AIR
POLLUTION, AND I THINK THAT IS
ONE EXAMPLE OF WHERE FACILITY
LEVEL EMISSION CAPS OR NÓ TRADE
ZONES COULD BE A HELPFUL
SOLUTION. UM, TO GET IT. SOME OF
THESE YOU KNOW, SPECIFIC
POLLUTERS THAT THAT HAVE A
DISPROPORTIONATE BURDEN ON
DISADVANTAGED COMMUNITIES. UM I
GUESS I'LL I'LL STOP THERE
BEFORE I RAMBLE, BUT A COUPLE
IDEAS FOR YOU. YEAH AND MAP.
BARTEL FROM THE CALIFORNIA A
SPORT. APPRECIATE THE QUESTIONS,
SENATOR. AND I JUST A LAYER IN A
LITTLE BIT. UM I. I DID WANNA
PULL BACK JUST A SECOND AND TALK
A LITTLE ABOUT WHAT OUR BROADER
CLIMATE AND AIR QUALITY STRATEGY
IS FOR THE STATE. WE'VE TALKED A
LITTLE BIT ABOUT, UM IN SOME OF
THE PREVIOUS DIALOGUE, THE GOALS
THAT WE SET FOR CARBON
NEUTRALITY. WE TALKED ABOUT THE
SCOPE AND PLAN THE STRATEGIES TO
GET TO CARBON NEUTRALITY, AND
LARGELY, THE STRATEGIES MEAN
SIGNIFICANT DECREASE IN
COMBUSTION EMISSIONS. ACROSS ALL
SECTORS OF THE ECONOMY IN
CALIFORNIA, AND SOME OF THOSE
MOST BURDENED COMMUNITIES IN
TERMS OF EMISSIONS THAT THEY ARE
EXPERIENCING, AND HEALTH IMPACTS
COME FROM DIESEL PARTICULATE
MATTER THAT ARE COMING FROM THE
TRUCKS AND THE EQUIPMENT THAT
ARE BEING USED IN CALIFORNIA.
THERE'S ALSO EMISSIONS FROM
STATIONARY SOURCES THAT ARE
IMPACTING COMMUNITIES AS WELL.
BUT WHEN YOU LOOK AT THIS LONG
TERM TRAJECTORY WE HAVE AT THE
BOARD. ENACTED POLICIES ADOPTED
REGULATIONS ON THE VEHICLE SIDE.
CERTAINLY THAT ARE PUSHING ZERO
EMISSION VEHICLE TECHNOLOGIES
AND DECREASING WILL DECREASE
COMBUSTION EMISSIONS IN THESE
COMMUNITIES SIGNIFICANTLY OVER
THE NEXT 2025 YEARS. WE ALSO
LOOKED AT AS PART OF THE SCOPING
PLAN. WHAT HAPPENS IF YOU
INCREASE ELECTRIFICATION IN
OTHER SECTORS AND DECREASING
COMBUSTION EMISSIONS? PURSUING
THE CARBON NEUTRALITY APPROACHES
THAT WE NEED AND SAW SIGNIFICANT
HEALTH BENEFITS FROM THE
REDUCTION IN FOSSIL FUEL USE AND
THE REDUCTION? COMBUSTION
EMISSIONS THAT COME INTO THOSE
COMMUNITIES AND SO THERE'S A
CLEAR STRATEGY THAT THEY'RE
WORKING TOWARDS HERE, AND THE
BOARD ITSELF IS ADOPTED RULES TO
ACHIEVE THAT STRATEGY TOWARDS
ZERO EMISSION IN RELATION TO
PRODUCING COMBUSTION ON THE ON
THE QUESTION ABOUT THE
INDUSTRIAL FACILITIES. MORE
SPECIFICALLY, THEY'RE PART OF
THE CAP AND TRADE PROGRAM, TO
THE EXTENT THAT WE GET MORE
STRINGENT INTO THE CAP AND TRADE
PROGRAM, THEY'RE GOING TO BE
LOOKING FOR ABATEMENT OPTIONS TO
BE ABLE TO REDUCE THEIR
EMISSIONS GOING FORWARD. DR
CATHERINE MENTIONED A CONCERN
ABOUT OFFSETS AND RELIANCE ON
BUYING CREDITS IN THE FUTURE.
THE PROGRAM CURRENTLY UNDER 8398
INCLUDES A PROVISION TO LIMIT
THE USE OF OFFSETS AS WELL, AND
THAT WAS SOMETHING THAT WAS, UM
UM, ENACTED IN IN THREE 98 AS
PART OF THE DISCUSSIONS ON THE
EXTENSION OF THE PROGRAM. SO
THERE ARE THESE LEGISLATIVE
PROVISIONS THAT ARE MEANT TO
HELP ADDRESS SOME OF THE
CONCERNS THAT HAVE BEEN RAISED
ON THE PROGRAM AND ON THE
INDUSTRIAL FACILITIES. ONE OTHER
POINT THAT I WILL MAKE UH, IN
TERMS OF FOSSIL FUEL USE IN
CALIFORNIA. UH WE ARE WORKING
HARD TO REDUCE FOSSIL FUEL USE
IN CALIFORNIA AND WE'VE SEEN
THAT AS WE DECLINE. DEMAND OF
FOSSIL GASOLINE USE FOSSIL
DIESEL USE THROUGH ALTERNATIVES
IN THE TRANSPORTATION SPACE,
LIKE, UM BATTERY ELECTRIC
VEHICLES LIKE HYDROGEN FUEL CELL
VEHICLES, BIOFUELS IN THE
TRANSPORTATION SPACE THAT YOU'VE
ALSO SEEN A COMMENSURATE DECLINE
IN THE AMOUNT OF FOSSIL GASOLINE
AND DIESEL, YOU KNOW, FINDING
ETCETERA, UM WE HAVE REDUCED
REFINING CAPACITY IN THE STATE.
AS A RESULT, THE SCOPING PLAN
AND CERTAINLY THE GOVERNOR LAST
YEAR CALLED FOR ADDITIONAL
ANALYSIS ON THE TRANSITION TO
PHASE DOWN FOSSIL FUEL USE IN
CALIFORNIA AND FOSSIL FUEL
PRODUCTION IN CALIFORNIA. SO
CARB IN ADDITION TO THE èC èC
IS ALSO UNDERTAKING A PROCESS TO
LOOK AT THE TRANSITION DOWN OF
FOSSIL FUEL PRODUCTION AND
SUPPLY IN CALIFORNIA THAT'S
UNDER S¼ B ONE, X TWO. THAT'S A
SEPARATE PROCESS, BUT WE'VE ALSO
UNDERTAKEN INITIATIVE THAT
EFFORT, AND IT'S GOING AND
CONTINUING THIS YEAR. I HAD SOME
THOUGHT SO WE DO WANT TO GET TO
PUBLIC COMMENT AND WE HAVE, UM
UH, MEETINGS AT AT NOON. SO WE
DO HAVE TO WRAP UP SO WE'LL TRY
TO KEEP THESE, UH, QUICK JUST TO
CARVE FIRST. UH, YOU KNOW THERE.
WE TALKED PREVIOUSLY HOW WE HAVE
IT BOTH REGULAR, YOU KNOW, IN
OTHER SECTORS, WE HAVE, UH, èC
AS A BACKSTOP. BUT WE HAVE OTHER
REGULATIONS. FOR EXAMPLE,
ELECTRICITY SECTOR WE HAVE THE
RP S¼ TO MAKE SURE YOU HAVE TO
PRODUCE PURCHASE MORE FROM UM
RENEWABLE SOURCES. HOWEVER UNDER
A B 398, SOME INDUSTRIES ARE
ONLY ALLOWED TO BE REGULATED BY
CAP AND TRADE. AND CANNOT BE
OTHERWISE REGULATED. SO IT WAS A
REASON WHY WE PROVIDE SPECIAL
TREATMENT TO THOSE INDUSTRIES.
THE WE IN DESIGNING THE CAP AND
TRADE PROGRAM ON THE INDUSTRIAL
SIDE, OBVIOUSLY TOOK OUR
DIRECTION FROM THE LEGISLATURE
UNDER 8398 AND HOW HE DESIGNED
THOSE PROVISIONS AND THE
REQUIREMENTS THAT IE 398
IDENTIFIES BOTH IN TERMS OF
INDUSTRIAL ASSISTANCE AND ALSO
LEAKAGE PREVENTION. THAT'S
SOMETHING THAT WAS RAISED AT THE
BEGINNING OF THIS HEARING.
CONCERNS ABOUT COST PLACED ON
THOSE INDUSTRIES AND RESULTING
IN THOSE INDUSTRIES MOVING OUT
OF CALIFORNIA AND THOSE
EMISSIONS JUST HAPPENING
ELSEWHERE INSTEAD OF WITHIN. AND
FOCUSING ON OPPORTUNITIES TO
INCENT THE EFFICIENT PRODUCTION
FROM THOSE FACILITIES AND
DECLINE THOSE EMISSIONS
CONSISTENT WITH THE DIRECTION OF
398. OK, JUST WANTED TO RAISE
THAT QUESTION. UM YEAH. SO I
THINK WE SHOULD COME BACK TO
THAT. THE UM ARE THERE ARE THERE
REGULATIONS ON AIR POLLUTION
THAT CARB? WHAT ARE THE MOST
EFFECTIVE THINGS YOU'VE DONE IN
AIR POLLUTION? ARE THERE THINGS
UM THAT YOU CAN SPEAK TO ON THE
AIR POLLUTION FRONT. SURE I MEAN
, I'M HAPPY TO AS I MENTIONED
EARLIER. I LARGELY THE CLIMATE
CHANGE DIVISION CHIEF, BUT I CAN
TALK A LITTLE BIT AT BROAD
STROKES HERE, AND, UM, THIS GOES
BACK TO MY PREVIOUS POINTS,
WHICH IS, YOU KNOW OUR WORK IN
THE TRANSPORTATION SECTOR
TRANSPORTATION EMISSIONS OVER
HALF OF THE TOTAL EMISSIONS
INVENTORY, BOTH ON GREENHOUSE
GASSES AND CRITERIA POLLUTANT
INSIDE MAJOR REASON FOR THE
CONTINUED NON ATTAINMENT THAT
ARE HAPPENING IN THE SAN JOAQUIN
VALLEY AND SOUTH COAST. AND THE.
COMBINED EFFORTS THAT CARB HAS
ON CRITERIA, POLLUTANTS AND
GREENHOUSE GAS EMISSIONS TO
PURSUE ZERO EMISSION VEHICLE
STRATEGIES AS WELL AS LOWER
EMISSION TECHNOLOGY IN THE
TRANSPORTATION SECTOR IS DRIVING
THOSE AIR QUALITY BENEFITS AND
THOSE CLIMATE BENEFITS AND THIS
IS ALSO WHY IN MY OPENING
REMARKS I MENTIONED IN RESPECT
TO THE 2030 TARGET, ONE OF THE
IMPORTANT THINGS THAT WE NEED TO
BE ABLE TO DO AS A STATE IS
TRANSITION. THE LIGHT DUTY
SECTOR, THE MEDIUM HEAVY DUTY
SECTOR TO BATTERY ELECTRIC
VEHICLES, HYDROGEN FUEL CELL
VEHICLES AND TO OTHER LOWER
EMITTING. RESOURCES WE NEED TO
BUILD THE INFRASTRUCTURE THAT
WILL SUPPORT FUELING THOSE
VEHICLES, WHETHER IT'S THE
CHARGING OR THE HYDROGEN FUELING
INFRASTRUCTURE. UM AND THAT IS
ONE OF THE MOST IMPORTANT THINGS
THAT WE CAN DO TO BRING DOWN, UH
AIR POLLUTION, IMPROVE AIR
QUALITY AND BRING DOWN
GREENHOUSE GAS EMISSIONS,
PARTICULARLY IN THE IN THE NEAR
TERM. RIGHT, LET'S START. LET'S
GET MOVE FOR A COUPLE OF
QUESTIONS IN QUICK SUCCESSION.
HERE, UM SPEAKING OF 398, IT
REQUIRED CARB TO ASSUME THAT ALL
INDUSTRIES ARE AT MEDIUM OR LOW
RISK TO LEAKAGE OR AT HIGH RISK
OF LEAKAGE. SO DANNY MAY BE MR
COLIN WORD. WHAT ARE THE
INDUSTRIES THAT YOU THINK ARE
GETTING UNSCIENTIFICALLY
ACCOUNTED. ALLOCATIONS SO THE
PROGRAM PROVIDES FREE ALLOWANCES
TO PROTECT AGAINST THIS
POSSIBILITY OF LEAKAGE OF THE
FACILITIES, CLOSING DOWN AND
MOVING TO ANOTHER STATE OR OR
IMPORTING INSTEAD OF THE
DOMESTIC PRODUCTION, WHICH WHICH
DOESN'T LEAD TO ANY CLIMATE
BENEFITS FOR MANY YEARS, STAFF
HAVE PROPOSED REDUCING THOSE
LEVELS BASED ON THEIR
ASSESSMENTS OF LEAKAGE RISK,
INCLUDING MOST RECENTLY IN 2016
PRIOR TO THE PASSAGE OF A B
THREE 198. THERE'S A VARIETY OF
INDUSTRIES THAT WERE AFFECTED BY
DIRECTION AT A B 398 TO PROVIDE
THE MAXIMUM LEAKAGE ALLOCATION.
THE DOMINANT BENEFICIARY IS THE
REFINING SECTOR, WHICH GETS
ABOUT 60% OF THE TOTAL FREE
ALLOCATION IN THE PROGRAM, A
VARIETY OF OTHER INDUSTRIAL
SOURCES AND INDUSTRIAL
MANUFACTURING AND AGRICULTURAL
FOOD MANUFACTURING ALSO BENEFIT,
BUT BY FAR THE LION'S SHARE IS
THE REFINING SECTOR. FOR
CATHERINE. YOU MENTIONED THE
FACILITY. SPECIFIC CAPS ON
EMISSIONS. WHAT IMPACT WOULD
THAT HAVE ON SUPPLY? UM UH, YOU
KNOW, OR IS IT THE CASE WOULD
HAVE A RELATIVELY SMALL IMPACT.
UM YEAH. SO SOME, UH, DALLAS
BEW, WHO'S THE CHAIR OF I EAC
AND ALSO WORKS FOR RESOURCES FOR
THE FUTURE? RECENTLY DID AN
ANALYSIS OF THE IMPACT OF
FACILITY LEVEL CAPS AND THEY
SHOWED THAT IT WOULD BE ROUGHLY
0.7% IMPACT ON TOTAL SUPPLY. OK,
UM THAT'S HELPFUL. I DID WANT TO
GET TO A COUPLE OF OTHER
STRUCTURAL THINGS, CAITLIN, UM
THERE'S BEEN DISCUSSION OF RULE
BASED MECHANISMS VERSUS MANUAL
ADJUSTMENTS TO SUPPLY AND, UH
MAYBE YOU CAN COMMENT ON THAT
AND WHETHER STATES ARE USING
RULE BASED MECHANISMS AND HAS IT
PROVED SUCCESSFUL? YEAH UM, I
MEAN, SO THE IDEA HERE IS THAT
YOU SORT OF HAVE, UM SOME AMOUNT
OF PREDICTABILITY WHEN THE
PROGRAM IS GONNA BE REVIEWED
WHEN QUESTIONS LIKE YOU KNOW,
ARE ARE OUR INVESTMENTS,
DELIVERING THE KIND OF RETURN
THAT WE'RE HOPING THEY'RE
DELIVERING. DO WE HAVE TOO MANY
ALLOWANCES IN THE PROGRAM? UM
AND SO THE IDEA IS TO DO THIS ON
A REGULAR BASIS AND A
PREDICTABLE BASIS. I MEAN, I
MENTIONED IN MY OPENING
STATEMENT THAT YOU KNOW, WE'VE
BEEN ASKING CARB TO REVISIT THE
ALLOWANCE BUDGET, SINCE 2018
WOULD BE A LOT EASIER FOR
EVERYONE IF THERE WAS SOME
REGULATORY CERTAINTY, AND WE
KNEW WHEN THESE QUESTIONS WERE
GOING TO BE CONSIDERED, AND WHEN
POTENTIAL CHANGES TO THE PROGRAM
MIGHT BE ENACTED. WASHINGTON
STATE HAS A FOUR YEAR REVIEW
SORT OF BUILT INTO THEIR PROGRAM
. OBVIOUSLY THE PROGRAM HASN'T
BEEN AROUND THAT LONG YET, SO WE
HAVEN'T HAD A REVIEW. UM THE
REGIONAL GREENHOUSE GAS
INITIATIVE, DOES IT, UM EVERY
LIKE THREE TO FIVE YEARS. IT'S
NOT LIKE A SET YEAR SYSTEM. BUT
UM, BUT I MEAN, THAT'S WHEN THEY
RAISE THESE QUESTIONS OF COST
AND STRINGENCY. AND ALL OF THAT,
UM, THE EUROPEAN UNION HAS A
SIMILAR PROCESS WHERE IT'S LIKE,
UM I THINK IN THE PAST, I'VE
USED THE ANALOGY OF LIKE, YOU
KNOW, YOU GO TO THE DOCTOR EVERY
YEAR WHETHER YOU NEED OR NOT,
HOPEFULLY AND IT'S LIKE A
CHECKUP, AND IF THERE'S
SOMETHING WRONG, YOU CAN DEAL
WITH IT, AND NOTHING'S WRONG.
YOU ALL MOVE ON. THIS IS WHAT A
RULE BASED ADJUSTMENT COULD LOOK
LIKE IS OR A RULE BASED PROCESS.
I SHOULD SAY, UM, IS TO HAVE
THAT REGULAR CHECKUP, WHETHER
IT'S A COMPLIANCE PERIOD, OR, UM
, ALIGNED WITH THE SCOPING PLAN,
BUT TO DIG INTO ALL OF THESE
QUESTIONS ON A REGULAR BASIS, UM
AND THEN EVERYBODY HAS
CONSISTENCY AND PREDICTABILITY.
SO SOMETHING WE SHOULD CONSIDER
FOR THE FUTURE? ABSOLUTELY UM,
TINA, WHEN I ASK YOU I KNOW
WE'VE TALKED ABOUT OFFSETS. UM
ONE OF THE POLICY MEX CARB USE
IS TO HEDGE AGAINST POTENTIAL
RISK. IS THIS BUFFER INSURANCE
POOL? UH, WHAT IS THE CURRENT
STATE OF THIS INSURANCE PROGRAM?
HOW FREQUENTLY IS USED AND, UM
UH, YOU KNOW, HOW IS CLIMATE
CHANGE GOING TO AFFECT THIS
BUFFER POOL? UH IT'S NOT A GOOD
STORY. UH SO THE PROGRAM
REQUIRES, UM PEOPLE WHO GENERATE
OFFSET CREDITS TO SET A PORTION
OF THOSE CREDITS ASIDE TO ACT AS
A SELF INSURANCE PROGRAM, AND
ALTHOUGH THE STATUTORY DIRECTION
THE OFFSETS PROGRAM IS TO PURSUE
ONLY PERMANENT OFFSETS, CARB IS
DEFINED THE WORD PERMANENT TO
MEAN 100 YEARS. SO THEY DESIGN
100 YEAR INSURANCE PROGRAM. 100
DOES NOT MEAN PERMANENT AS FAR
AS I SEE IT, BUT THAT'S WHAT THE
AGENCY DECIDED. THE INSURANCE
PROGRAM IS NOT BANKRUPT. IT'S
NOT AT RISK OF BANKRUPTCY, BUT
IT WAS HIT VERY BADLY IN THE
2020 2021 WILDFIRE SEASONS, AND
IT IS VERY CLEAR. I'VE PUBLISHED
RESEARCH ON THIS THAT IT'S
SEVERELY UNDER CAPITALIZED. I
WOULD DESCRIBE IT AS INSOLVENT,
NOT AT RISK OF BANKRUPTCY, BUT
THERE'S ABSOLUTELY NÓ WAY IT'S
GONNA COVER 100 YEARS OF
LIABILITIES. THE RISK FACTORS IN
THE PROGRAM DON'T ACCOUNT FOR
CLIMATE CHANGE. THEY DON'T
ACCOUNT FOR REGIONAL VARIATION,
EVEN THOUGH WE KNOW THAT ARID
INTERIOR WESTERN FORESTS ARE
UNDER SEVERE CURRENT STRESS AND
EVEN MORE SEVERE FUTURE CLIMATE.
THEY ARE GIVEN THE SAME REVERSAL
RATINGS AS FOREST AND UPSTATE
NEW YORK OR VERMONT. EVEN THOUGH
AGAIN WE KNOW THAT THAT IS NOT
THE CORRECT WAY TO THINK ABOUT
IT. CARB TO THEIR GREAT CREDIT,
HAS COMMISSIONED A STUDY TO
THINK ABOUT REVIEWING THIS, BUT
CONTINUES TO CREDIT PROJECTS IN
FIRE PRONE AREAS THAT ARE
DEFINITELY GOING TO BURN AND ARE
NOT USING GOOD WILDFIRE
MANAGEMENT PRACTICES. THANK YOU
AND FOR CAR WHAT HAPPENS IF THE
LOSSES EXCEED THE BUFFER POOL?
SO THE BUFFER POOL RIGHT NOW HAS
BEEN AT, I THINK 28 MILLION
CREDITS. AT THIS POINT. I WAS
CHECKING THE ACCOUNTS, UH, THE
PUBLIC INFORMATION THAT WE HAVE
JUST THIS MORNING, AND I THINK
THE RECENT REVERSAL THAT
HAPPENED IN RESPECT TO A
WILDFIRE WAS AND THIS WAS A
LARGER ONE. BUT IT WAS ROUGHLY 2
MILLION, SO HOPEFULLY THAT GIVES
YOU A SENSE OF SCALE THAT WE'RE
TALKING ABOUT HERE. THE BUFFER
POOL HAS CONTINUED TO GROW, UH,
OVER THE LIFE OF THE UM,
ORIGINALLY STARTING WITH JUST
THE INITIAL PRO, UM OFFSET
PROJECTS AND, UM, YOU KNOW, LESS
THAN A MILLION CREDITS TO NOW
WHERE IT'S AT OVER 28 MILLION
CREDITS. RIGHT, BUT IF IT'S
SUCCEEDED, I MEAN, I THINK THE
POINT IS THAT DOESN'T TAKE INTO
ACCOUNT THE IMPACTS OF CLIMATE
CHANGE AND SOME OTHER CONCERNS
THAT WERE JUST RAISED WITH MR
COLLIN WORD. WE HAD A WORKSHOP
ON THE U S¼ OFFSET FOR PROTOCOL
ABOUT A YEAR AND A HALF AGO AND
SOUGHT FEEDBACK ON THE PROTOCOL,
AND THEN WE ALSO HAVE A CONTRACT
AS MR COLIN WARD MENTIONED AND
TO LOOK AT THIS IN TERMS OF LOOK
AT POTENTIAL, UM, ADJUSTMENTS TO
RISK RATINGS. UH UH AND SO THAT
WE COULD POTENTIALLY UPDATE THE
PROTOCOL IN THE FUTURE. COULD
COME ANY FURTHER COMMENTS ON THE
RISK CALCULATIONS. JUST I WANT
TO EMPHASIZE THAT THE WILDFIRE
CONTRIBUTIONS THAT WERE SET
ASIDE FOR 100 YEARS WERE BURNED
THROUGH IN LESS THAN 10 LIKE
THIS IS NOT. THIS IS NOT A
ROUNDING ERROR AND PONZI SCAMS
ALSO GROW UNTIL THEY COLLAPSE.
AND THAT IS HOW I WOULD
ANALOGIZE THE ACCOUNTING HERE. I
HOPE IT WILL IMPROVE. LAST THING
I WANT TO SAY IS THERE ARE NOW
SIX PEER REVIEWED STUDIES
FINDING MAJOR PROBLEMS AT THE
OFFSETS PROGRAM. MOST OF THEM
HAVE TO DO WITH HOW THE CARBON
IS COUNTED. AND WE HAVE THE èC
E Ó OF A LARGE TIMBER COMPANY
THAT EARNS OFFSET CREDITS IN THE
PROGRAM, SAYING HE WAS GIVEN
CREDIT FOR NOT CUTTING DOWN
TREES. IS LEGALLY PROHIBITED
FROM CUTTING DOWN AND I JUST
WANT TO EMPHASIZE THAT SOUNDS
CRAZY AND EXTREME. THAT'S WHAT
THE PROGRAM IS RIGHT NOW, AND
THERE'S VERY SEVERE PROBLEMS
THAT GO BEYOND THIS FIRE RISK
PROBLEM. WELL, THANK YOU FOR
POINTING OUT THOSE CONCERNS. UM
BACK OVER TO YOU OR SENATOR BEN.
WELL, THERE'S SO MUCH TO SAY, I
MEAN, AND THERE'S A LOT OF AND A
BACK STORY TO A LOT OF THIS
STUFF, UM, IN TERMS OF HOW WE
GOT HERE, AND, UM SOME OF THE
POLITICS BEHIND THOSE 2017
NEGOTIATIONS. UM. GOSH, OK, UM
LET ME. I COULD ADD WHILE YOU'RE
THINKING ABOUT THAT, UH, I I'LL
JUST I WILL MENTION ON THE
BUDGET SIDE. I DO APPRECIATE THE
DISCUSSION AND AS BUDGET SUB TWO
CHAIR THIS SOMETHING OBVIOUSLY
DEEPLY DEEPLY FOCUSED ON AND THE
EXPENDITURES AND AS WAS
MENTIONED, ESPECIALLY WITH OUR,
UH BY THE LE Ó WITH OUR CURRENT
BUDGET CRUNCH AND FORESEEABLE
BUDGET CRUNCH IN THE IN THE
UPCOMING YEARS. THIS IS REALLY
OUR MONEY TO REDUCE EMISSIONS
AND WE HAVE TO BE, I THINK MUCH
MORE DISCIPLINED AND FOCUS GOING
FORWARD ABOUT, UH, HOW THIS IS
USED TO REDUCE EMISSIONS. I WANT
MORE. I THINK WE HAD A GOOD
DISCUSSION ABOUT IT. BUT I THINK
SOMETHING CERTAINLY, UH, UH, TO
COME BACK TO, UM ONE MORE
QUESTION FOR DANNY AROUND èC
èC S¼ FOR ACCOUNTING. UM DO YOU
SEE ANY? WHAT ARE YOUR FEELINGS
ABOUT THAT, DO YOU? DO YOU SEE
ANY ISSUES WITH THAT GOING
FORWARD? SO I'VE HEARD CONCERNS
FROM STAKEHOLDER GROUPS ABOUT
CARBON CAPTURE AND STORAGE AND
SETTING ASIDE. THERE ARE
OBVIOUSLY DIFFERENT VIEWS ABOUT
WHETHER OR NOT IT'S DESIRABLE,
BUT IF A FACILITY WERE TO
INSTALL A CARBON CAPTURE CONTROL
SYSTEM AND SEQUESTER THAT CO TWO
UNDERGROUND HOW THAT WOULD BE
ACCOUNTED FOR, AND WHETHER THAT
CAPTURED CO TWO WOULD REPRESENT
AN EMISSIONS LIABILITY. I
CONFESS I DON'T SEE ANYTHING IN
THE REGS THAT WOULD REQUIRE THAT
TO BE CARRIED AS A LIABILITY,
BUT I'VE HEARD CONCERNS FROM
STAKEHOLDERS AND I KNOW IN IMAC
DISCUSSIONS WE HAVE OUR DRAFT
REPORT IS UP RIGHT NOW. ONE OF
THE ISSUES THAT UP VERY BRIEFLY,
IS HOW TO ACCOUNT FOR THAT. SO
UM, I. I PERSONALLY DON'T THINK
IT SHOULD BE CONTROVERSIAL THAT
IF THE CO TWO IS CAPTURED AND
SAFELY STORED UNDERGROUND, IT'S
NOT AN EMISSIONS LIABILITY. BUT
THERE APPEARS TO BE SOME
STAKEHOLDER CONCERN ABOUT
AMBIGUITY IN THE CURRENT RULES.
I WANT TO DISTINGUISH THAT FROM
WHEN WE TALK ABOUT REMOVING CO
TWO FROM THE ATMOSPHERE BY ANY
NUMBER OF DIFFERENT MEANS,
WHETHER OR NOT THAT SHOULD CARRY
A CREDIT IN THE CAP AND TRADE
PROGRAM PRESENTS SIGNIFICANT
CHALLENGES, PARTICULARLY BECAUSE
THE SCOPE AND PLAN CALLS FOR
CARBON REMOVAL ON TOP OF
REDUCTIONS AND IF WE CREDIT IT
IN THESE PROGRAMS, WE ALLOW
EMISSIONS INCREASES THAT OFFSET
THE REDUCTIONS AND SO I WOULD
FLAG. THE ACCOUNTING ISSUES FOR
CARBON REMOVAL ARE QUITE A BIT
MORE CONTROVERSIAL AND
COMPLICATED. I WOULD WELCOME
STAKEHOLDER FEEDBACK ON ON HOW
THAT ACCOUNTING ISSUE WITH
RESPECT TO POINTS OR èC èC S¼
WORKS IN THE IMAC INTENDS TO
MAKE THAT A TOPIC FOR THIS
UPCOMING REPORT CYCLE AS WELL.
OK IT'S REALLY IMPORTANT TOPIC
AND ON THE REMOVAL OF YOUR POINT
IS WELL TAKEN, BECAUSE, UH,
UNDER THE BILL, WE PASSED 85%
DIRECT EMISSIONS DIRECT AND 15%
CAR. SO THAT'S ON TOP OF THE
EMISSIONS REDUCTIONS, OK? RIGHT
UM, I WANTED TO ASK, UM THERE
ARE SO MANY DIFFERENT DIRECTIONS
THAT GO IN THIS DISCUSSION. IT'S
BEEN GREAT, BY THE WAY. I
APPRECIATE EVERYONE'S, UM,
INDULGENCE AND CAITLIN, CAN YOU
TALK A LITTLE BIT ABOUT, UM SOME
OF THE POLITICAL CHALLENGES THAT
THE WASHINGTON SITUATION IS
FACING AND WHAT LESSONS WE MIGHT
BE ABLE TO LEARN? I MEAN, I
GUESS PART OF THEIR CHALLENGE
WAS THEY JUST SPIKED, THE PRICES
SPIKED TOO QUICKLY. AND THAT IS
A GOOD CAUTIONARY TALE. WELL, I
THINK WASHINGTON. UM I MEAN,
THERE'S THEIR PROGRAM. I MEAN,
THEY THEY, REALLY THEIR POWER
SECTOR LOOKS VERY DIFFERENT THAN
CALIFORNIA'S. SO I GUESS TO BACK
UP. I MEAN, CALIFORNIA SET OUR
TARGETS YEARS AND YEARS AGO. PUT
A CAP ON EMISSIONS YEARS AGO. UM
SO WE GOT A HEAD START, FRANKLY
AND WASHINGTON HAD ALREADY DONE
A LOT OF THE EASIER, LOW HANGING
FRUIT TYPE EMISSION REDUCTIONS.
UM THEY ALSO REALLY RELY HEAVILY
ON HYDROELECTRIC POWER. UM,
WHICH WHICH IS ZERO EMISSION AND
SO THE SPACE THEY HAVE TO MAKE
REDUCTIONS IN THEIR POWER SECTOR
IS SMALLER THAN IT IS IN
CALIFORNIA. UM EVEN YOU KNOW,
WITH ALL OF THE PROGRESS
CALIFORNIA HAS MADE IN OUR POWER
SECTOR, UM SO FROM THE BEGINNING
IT WAS, IT WAS SET UP. UM, NOT I
MEAN, AS FRANKLY A MORE
STRINGENT PROGRAM AND SOME OF
THAT WAS A DELIBERATE DECISION
BECAUSE CLIMATE CHANGE IS
ACCELERATING, AND WE NEED TO
HAVE MORE AMBITION. UM, BUT SOME
OF IT IS ALSO JUST STRUCTURAL TO
HOW, UM THE PROGRESS THEY'D
ALREADY MADE AND WITH THEIR
POWER SECTOR LOOKS LIKE SO I
JUST WANT TO SAY THAT THAT SORT
OF FROM THE BEGINNING THEIR CAP
TRAJECTORY NECESSARILY LOOKED
DIFFERENT THAN CALIFORNIA'S DOES
. UM AND THEN WHAT WE'VE WHAT
WE'VE SEEN IS I MEAN, AS THEY'VE
IMPLEMENTED THIS PROGRAM WE'VE
HAD INITIALLY HIGH PRICES, UM,
HIGHER PRICES THAN THAN
CALIFORNIA'S IN THE WASHINGTON
PROGRAM THAT IS DECLINED A
LITTLE BIT AS THERE IS, UM, A
MEASURE ON THE BALLOT THIS
NOVEMBER THAT COULD POTENTIALLY
REPEAL THE PROGRAM. UM THIS WAS
BEFORE MY TIME, BUT BUT YOU
PROBABLY WILL RECALL CALIFORNIA
WENT THROUGH THE SAME THING.
AFTER A B 32 WAS PASSED WITH
PROPOSITION 23 SO, SO IT IS VERY
SIMILAR IN TRYING TO UNDO
CLIMATE PROGRESS. UM SO THAT'S
THAT IS THE LEVEL. THAT'S THE
UNCERTAINTY THAT WASHINGTON IS
FACING. RIGHT NOW. CALIFORNIA
HAS FACED THIS UNCERTAINTY
BEFORE AND HAS ALWAYS GOTTEN
THROUGH IT, UM, AND HAD MORE
CLIMATE AMBITION ON THE OTHER
SIDE. SO I THINK THAT IS ONE
SORT OF PERSPECTIVE TO HAVE ON
WHAT'S GOING ON IN WASHINGTON.
UM THE OTHER THING I'LL SAY IS
WASHINGTON IS WORKING REALLY
DILIGENTLY. I MEAN, THEIR
LEGISLATURE IS ALSO IN SESSION
RIGHT NOW, UM THEIR REGULATOR,
THE DEPARTMENT OF ECOLOGY HAS
REQUESTED LEGISLATION. WOULD
MAKE SOME AMENDMENTS TO THE
PROGRAM TO MAKE IT EVEN MORE
CLOSELY ALIGNED WITH
CALIFORNIA'S BECAUSE THEY ARE
VERY INTERESTED IN LINKAGE WITH
CALIFORNIA AND BEING PART OF A
LARGER A LARGER MARKET AND ARE
MAKING MOVES TO MAKE THAT EVEN,
UM EASIER AND FACILITATE THAT
EVEN EVEN MORE GOING FORWARD.
COULD YOU COULD YOU TELL? UM
WHAT? WHAT THE CONVERSATION. CAN
YOU TELL ME A LITTLE BIT MORE
ABOUT THE ENVIRONMENTAL JUSTICE?
UM ENGAGEMENT IN THE WASHINGTON
PROGRAM, HOW THAT WORKED AND HOW
THAT PLAYED OUT. YEAH I MEAN, IT
PARALLELS TO OUR YEAH, I AND,
LIKE DOCTOR, CATHERINE SAID. I
MEAN, THE ENVIRONMENTAL JUSTICE
COMMUNITY IS NOT A MONOLITH.
IT'S REALLY HARD TO SORT OF
PAINT WITH WITH BROAD STROKES.
UM THERE. THERE WERE CERTAINLY
GROUPS THAT RAISED MANY OF THE
SAME CONCERNS ABOUT MARKET BASED
MECHANISMS AND, UM, HOW THAT IS
GOING TO IMPACT LOCAL
COMMUNITIES, AND I THINK AS A
RESULT OF THAT, A LOT OF THE, UM
AIR QUALITY PROVISIONS THAT ARE
BUILT INTO THEIR PROGRAM. UM OR
OR THOSE ARE A RESULT OF THOSE
CONCERNS IS BUILDING IN A LOT OF
THOSE AIR QUALITY PROVISIONS,
MANY OF WHICH LOOK SIMILAR TO
THINGS THAT CALIFORNIA HAS HAS
DONE AS WELL, UM, JUST MAYBE NOT
AS PART OF A CAP AND TRADE
PROGRAM, UM THERE'S ALSO I MEAN,
SORT OF AN INTERESTING DYNAMIC
IN WASHINGTON BECAUSE THERE
THERE WAS A HUGE NEED FOR
FUNDING. UM THERE'S UH, I DON'T
WANNA BE LIKE SPEAKING OUT OF
SCHOOL HERE, BUT I MEAN, THEY
THEY HAVE VERY LITTLE REVENUE
FOR THINGS LIKE TRANSPORTATION
AND TRANSIT. YOU KNOW, THERE'S
NÓ. THERE'S NÓ SALES TAX.
THERE'S NÓ INCOME TAX. UM SO
LIKE THE REVENUE THAT'S
AVAILABLE TO SPEND ON PRIORITIES
IS MINIMAL. UM SO THERE WAS A
NEED FOR FUNDING, WHICH WHICH
CAUSED UM, YOU KNOW, A LOT OF
GROUPS NEED FOR THESE MASSIVE
PRICE HIKES. UM THERE WAS A YOU
KNOW, A LOT OF GROUPS SUPPORTED
THIS TYPE OF PROGRAM BECAUSE
THEY RECOGNIZE WE NEED REVENUE
TO SUPPORT OUR PRIORITIES. UM
THERE'S ALSO A SIGNIFICANT
TRIBAL PRESENCE IN WASHINGTON,
AS THERE IS IN CALIFORNIA AND
THE TRIBES WERE VERY, VERY
SUPPORTIVE OF THIS PROGRAM. FOR
THE MOST PART, UM, BECAUSE THERE
IS A SPECIFIC CARVE OUT FOR
OFFSETS, UM, THAT ARE SOLD BY
TRIBES. UM, CALIFORNIA DOES NOT
HAVE SUCH AN OFFSET, BUT UM OR
SUCH A PROVISION IN OUR OFFSET
PROGRAM. UM BUT A RECOGNITION
THAT IF WE WANT SOME OF THESE
BENEFITS TO GO TO TRIBES IN THE
STATE OF WASHINGTON, UM THAT WE
NEED TO PUT THAT INTO LAW. OK
UM, I HAVE FOLLOW UP WITH EACH
OF YOU, UH, ON DIFFERENT TOPICS
COMING OUT OF THIS DISCUSSION IF
WE'RE NOT HEARING ADDITIONAL
QUESTIONS FROM THE SENATORS I, I
DO THINK WE NEED TO GO TO PUBLIC
COMMENT, BUT THIS IS BEEN A WIDE
RANGING AND IMPORTANT DISCUSSION
AND I. I REALLY DO APPRECIATE
EVERYONE'S YOU KNOW, THOUGHTFUL
AND ENGAGING PARTICIPATION. SO
LET'S UM LET'S LET'S GO TO THE
MICROPHONE. GOOD MORNING TO THE
COMMITTEE. THANK YOU FOR THE
TIME AND THANK YOU FOR THIS RICH
DISCUSSION. I THINK IT WAS
REALLY GENERATIVE AND EXACTLY
THE TYPE OF CONVERSATIONS WE
NEED TO BE HAVING IN THE
LEGISLATURE. MY NAME IS AMI
RAVO. I AM POLICY DIRECTOR WITH
THE ASIAN PACIFIC ENVIRONMENTAL
NETWORK OR A P N. UM THANK YOU
AGAIN FOR THIS HEARING. WE
REPRESENT EJ COMMUNITIES IN
RICHMOND AND WILMINGTON THAT
HAVE LONG LIVED IN THE SHADOW OF
THE STATE'S OIL REFINERIES. AND
ONE THING THAT I WANNA JUST
REITERATE FROM THIS
CONVERSATION. FOR OUR
COMMUNITIES THAT'S REALLY
IMPORTANT IS THAT UNDER THE CAP
AND TRADE PROGRAM, SOME SECTORS
COVERED UNDER THE UNDER THE
PROGRAM, LIKE OIL REFINERIES ARE
ACTUALLY SEEING INCREASED
EMISSIONS UNDER THE PROGRAM, AND
THEY ARE NOW THE LARGEST
STATIONARY SOURCE OF GREENHOUSE
GAS EMISSIONS IN CALIFORNIA. UM
AND SO WE ARE NOT SEEING CARB
EFFECTIVELY REGULATE INDUSTRIAL
POLLUTION IN OUR NEIGHBORHOODS,
AND WE SEE THE PROGRAM REALLY
LET LETTING BIG POLLUTERS LIKE
OIL REFINERIES OFF THE HOOK
THROUGH CAP AND TRADE VIA
ACCOUNTING GIMMICKS LIKE
ALLOWANCE, SPANKING AND OFFSETS.
AND SO AS THE LEGISLATURE
REVISITS THE ROLE OF THE CAP AND
TRADE PROGRAM, WE URGE THE STATE
TO PUT CALIFORNIA ON A PATH
TOWARDS A FULL CO ORDINATED
PHASE OUT OF FOSSIL FUELS,
ESPECIALLY IN SECTORS LIKE OIL
REFINERY WHERE WE HAVE SEEN
EMISSIONS INCREASE OVER THE
COURSE OF THE PROGRAM. UM AND I
DO APPRECIATE THIS CONVERSATION
ABOUT REVENUE. UM I THINK THAT'S
A CONVERSATION WORTH CONTINUING
AROUND. REALLY OPENING UP THE
DISCUSSION ON WHAT IT SHOULD
FUND OR NOT, AS AN EJ ADVOCATE.
I DO REALLY WANT TO REITERATE WE
, IN ADDITION TO EMISSIONS
REDUCTIONS, ONE REALLY CENTER
THE EQUITY TARGETS THAT ARE
SOMETHING WE ADVOCATED FOR
THROUGH OUR HISTORY OF
ORGANIZING TO MAKE SURE IT IS
ALSO CONCENTRATING BENEFITS IN
OVERBURDENING COMMUNITIES AND
AMONG LOW INCOME HOUSEHOLDS. UM
FINALLY, I DO THINK THE
CONVERSATION ON REVENUE POINTS
TO THE FACT THAT THIS PROGRAM
ALONE AS WELL AS OTHER MARKET
BASED MECHANISMS AREN'T ACTUALLY
, UH, FOCUSING ON THE GOAL OF
DIRECT EMISSIONS REDUCTIONS, NOR
ARE THEY INTENDED TO, AND
THEREFORE WE NEED A BROADER
FRAMEWORK AROUND ACHIEVING
EMISSIONS REDUCTIONS AT THE
SOURCE IN COMMUNITIES LIKE THE
ONES WE REPRESENT. THANK YOU.
THANK YOU. ALL RIGHT. THANK YOU
VERY MUCH, AND WE'RE GONNA ASK
PEOPLE TO KEEP THEIR COMMENTS
ABOUT TWO MINUTES IF THAT'S
POSSIBLE. THANK YOU, MR CHAIR
AND MEMBERS UH, BRENDAN TIG ON
BEHALF OF THE CALIFORNIA AIR
POLLUTION CONTROL OFFICERS
ASSOCIATION. THAT'S THE
EXECUTIVE OFFICERS REPRESENTING
ALL 35 LOCAL AIR DISTRICTS. I I
WOULD LIKE TO INFORM THE RECORD
THAT, UM, THE AIR DISTRICTS WERE
NOT INVOLVED IN THE IN THE
NEGOTIATIONS FOR THE A B 617
PROGRAM, SO I WANTED TO, UH,
INFORM THE RECORD ON THAT. UM,
ALSO, THERE'S BEEN A LOT OF, UM,
ASSERTIONS MADE HERE. UH UH,
TODAY AND, UH AND COMMENTS AND
WE WOULD MORE THAN WELCOME THE
OPPORTUNITY TO SIT DOWN WITH YOU
DIRECTLY, UH, TO PROVIDE A MORE
ACCURATE AND COMPLETE PICTURE OF
THE PROGRAM AND WHICH ACT WHAT'S
ACTUALLY HAPPENING IN THE AIR
DISTRICT ROLE AND WHAT WE'RE
DOING TO TRY TO GET EMISSIONS
REDUCTIONS AND IMPROVE PUBLIC
HEALTH IN DISADVANTAGED AND
VULNERABLE COMMUNITIES. UM. TWO
POINTS. UH ONE IS THAT, UM, THE
LEGISLATIVE ANALYST'S OFFICE IN
THEIR 2022 23 ANALYSIS OF THE
PROPOSED ZEV PACKAGE. UH, PUT
THE A B 617 INCENTIVES IN THE
TOP THREE OF THE MOBILE SOURCE
INCENTIVE PROGRAMS FOR COST
EFFECTIVENESS, BOTH ON THE GHG
SIDE AND ON THE CRITERIA
POLLUTANT SIDE. THE OTHER TWO
PROGRAMS WERE ALSO AIR DISTRICT.
PROGRAMS THAT CARL MOYER PROGRAM
AND THE FARMER PROGRAM, UM SO WE
CAN GET EMISSIONS REDUCTIONS.
UH, PUBLIC HEALTH BENEFITS AND
CLIMATE AT THE SAME TIME IN A
VERY COST, EFFECTIVE WAY. THE
LAST THING I WANTED TO SAY IS
THAT THE A B 617 COMMUNITY AIR
PROTECTION PROGRAM. IS
UNDERFUNDED. IT ALWAYS HAS BEEN.
UM THERE ARE CURRENTLY 19
COMMUNITIES IN THE PROGRAM AND
THE FUNDING THAT GOES TOWARDS
INCENTIVES AND AIR DISTRICT
IMPLEMENTATION IS COMPARABLE TO
WHEN WE HAD 10 COMMUNITIES. SO
IN ESSENCE, YOU EVERY TIME YOU
ADD A COMMUNITY, UH YOU ARE
WITHOUT PROVIDING FUNDING WITH
THAT. IT'S IN EFFECT, A CUT. AND
NOW THE PROPOSED BUDGET CON
PLAY. IT'S ANOTHER 50 MILLION
REDUCTION FOR THE PROGRAM, SO I
LIKE YOU TO KEEP THESE THINGS IN
MIND AGAIN. A LOT OF COMMENTS
MADE TODAY AND WE WOULD REALLY
WELCOME THE OPPORTUNITY TO SIT
DOWN WITH YOU AND SHARE. UH UH
WHAT? WHAT WE BELIEVE IS
HAPPENING ON THE PROGRAM. AND
WHEN A LOT OF COMMENTS YOU'RE
SPECIFICALLY REFERRING TO THIS
DISCUSSION OF THE SOUTH STOCKTON
SITUATION WELL, SOUTH, YOU KNOW
THAT'S 11 COMMUNITY, AND SO I'M
SURE THE SAN JOAQUIN VALLEY WAS
617 IN GENERAL, AND I'M TALKING
617 IN GENERAL BECAUSE THERE WAS
A LOT OF DISCUSSION HERE ABOUT
THE PROGRAM IN GENERAL. AND UM
OK, THANK YOU. I APPRECIATE IT.
THANK YOU. THANK YOU. YES, SIR.
GOOD MORNING. UH, UH. CHAIRS
ALLEN ABS WITH THE BAY AREA AIR
QUALITY MANAGEMENT DISTRICT. I'D
LIKE TO START WITH ECHOING MY
COUNTERPART FROM CAP CO OP AND
ALSO JUST RE RELATE THAT THE A B
617 PROCESS IS BY NATURE A
BOTTOM UP PROCESS. IT'S
COMPRISED OF INDIVIDUAL
STAKEHOLDERS. UH, ENVIRONMENTAL
GROUPS, UM SMALL BUSINESS OWNERS
, LARGE BUSINESS OWNERS, CITIES,
MUNICIPALITIES AND THE AIR
DISTRICT, AND SO THERE'S ALWAYS
GOING TO BE A LITTLE BIT OF
DISAGREEMENT ABOUT WHAT THE BEST
WAY TO GET REDUCTIONS ARE THAT'S
THE WAY THE PROCESS WAS DESIGNED
. AND AS, UH ONE OF THE
PANELISTS MENTIONED, UH,
INDIVIDUALS ARE NOT A MONOLITH
ON ON WHAT'S RIGHT AND WHAT'S
WRONG IN THE 617 PROGRAM. ONE
THING I DID HEAR DURING THE
PANEL DISCUSSION WAS THIS
CONCEPT THAT THE BEST AVAILABLE
RETROFIT CONTROL TECHNOLOGY
REQUIREMENT IN 617 ENDED UP JUST
BEING A LIST THAT AIR DISTRICTS
PUT OUT WITH NÓ ENFORCEMENT NÓ
FOLLOW UP ACTION, AND SO I'D
LIKE TO RELATE SOME BREAKING
NEWS TO, UH, TO THE MEMBERS OF
THE COMMITTEE THIS MORNING. THE
617 WAS PASSED THE AIR DISTRICT,
UM WENT ABOUT CREATING A RULE
CALLED RULE 65 FOR REFINERIES
FOR FLUID CATALYTIC CONVERTER
UNITS THAT WOULD REDUCE PM
EMISSIONS FROM THOSE UNITS BY
OVER 70% WE PASSED THAT RULE IN
2021. THAT WAS A RESULT OF THE A
B 617 PROGRAM. UH THE REFINERS
THAT WERE, UM, THAT WERE
AFFECTED BY THAT FILED A LAWSUIT
TO DELAY HAVING THAT REQUIREMENT
PUT IN EFFECT, BUT THIS MORNING,
THE AIR DISTRICT AND THE
REFINERIES ANNOUNCED A
SETTLEMENT THAT LAWSUIT AND THE
REFINERIES ARE GOING TO BE
MOVING FORWARD WITH WITH, UM,
MEETING THOSE RULE REQUIREMENTS
AS WELL AS CREATING A COMMUNITY
AIR PROTECTION FUND FOR THE CITY
OF RICHMOND. PLUS, UM PLUS
OBLIGATING THEMSELVES TO PAY UP
TO $130 MILLION IN PENALTIES FOR
NOT MEETING THE REQUIREMENTS TO
HAVE ALL THIS DONE BY 2026. AND
SO IT'S REALLY KIND OF OFFENSIVE
WHEN I HEAR THAT. YOU KNOW, THE
AIR DISTRICTS HAVEN'T BEEN, UH,
YOU KNOW, MEETING THE
REQUIREMENTS OF 617 THAT IT'S
JUST SOMETHING THAT OCCURS ON
PAPER THAT THERE'S NÓ FOLLOW UP
FROM THE AIR DISTRICT AND, LIKE
MY COUNTERPART SAID, WE'D
CERTAINLY BE WILLING TO SIT DOWN
WITH ANY OF THE MEMBERS OF THE
COMMITTEE TALK ABOUT WHAT WE'VE
DONE AND WHAT WE SEE OURSELVES
DOING IN THE FUTURE. THANK YOU.
THANK YOU VERY MUCH. OK? YES,
MA'AM. HØI UH, THANKS, NICOLE
HUTCHINSON FOR ON BEHALF OF CAL
START. I WANT TO THANK YOU ALL
FOR HAVING THIS HEARING TODAY.
IT'S BEEN A GREAT CONVERSATION,
AND CASTOR LOOKS FORWARD TO
STAYING ENGAGED. THE CAP AND
TRADE PROGRAM PLAYS A CRITICAL
ROLE IN CALIFORNIA'S CLIMATE
STRATEGY AND THE FUNDING IT
PROVIDES THROUGH G Dð RF HAS
BEEN ESSENTIAL IN FURTHERING ZEV
DEPLOYMENT, LEADING TO
REDUCTIONS IN THE TRANSPORTATION
SECTOR FOR BOTH CRITERIA.
POLLUTANTS WHICH DO HAVE A
DIRECT BENEFIT TO PUBLIC HEALTH,
AS WELL AS AS WELL AS G HÌ G
AMBITIONS. UM, WE LOOK FORWARD
TO WORKING WITH THE
ADMINISTRATION AND THE
LEGISLATURE AS YOU WORK TO
REAUTHORIZE THIS PROGRAM. THANK
YOU. VIRGIL WELCH WITH THE
CALIFORNIA CARBON SOLUTIONS
COALITION. THANK YOU, SENATORS.
UM FOR THE, UH, FOCUS TODAY ON
THE CAP AND TRADE PROGRAM. UM AS
WE HEARD FROM, UH, SEVERAL FOLKS
, ACTUALLY, UH UH, CARBON
CAPTURE AND REMOVAL TECHNOLOGIES
ARE A KEY PART OF THE SUITE OF
STRATEGIES THAT, UH, CARB IS
IDENTIFIED IN THE SCOPING PLAN.
UH, AS NEEDED TO ACHIEVE OUR
2013 30. CERTAINLY OUR 2045
CARBON NEUTRALITY. UH, SENATOR
BECKER. YOU RAISED THE QUESTION
AT THE END WITH RESPECT TO èC
èC S¼ IN PARTICULAR AND ITS
ROLE IN, UH, CAP AND TRADE GOING
FORWARD, AND I DID WANT TO
HIGHLIGHT THE, UH, STAFF REPORT
THAT THE COMMITTEE STAFF PUT
TOGETHER ACKNOWLEDGING THE NEED
TO TAKE A LOOK AT THAT. UH, CARB
IS, UH, TAKING A LOOK AT THAT AS
WELL, UH, AS I THINK YOU ALL
KNOW RIGHT NOW, EMISSION
REDUCTIONS ACHIEVED VIA
DEPLOYMENT OF CARBON CAPTURE DO
NOT COUNT IN THE CAP AND TRADE
PROGRAM. AS WE'VE HEARD TODAY,
TRYING TO FIND THE EXQUISITE. UH
UH, A NUMBER OF POLICY DRIVERS
TO SUPPORT DEPLOYMENT OF ALL OF
THESE CARBON MANAGEMENT
TECHNOLOGIES IS GONNA BE REALLY
IMPORTANT. SO KEEPING, UH, FOCUS
ON THAT AS WE'RE MOVING FORWARD
IN TERMS OF INCORPORATING INTO
THE PROGRAM, EMISSION REDUCTIONS
ACCOUNTED FOR èC èC S¼ IS
GOING TO BE REALLY IMPORTANT.
LAST POINT I DID WANNA RAISE IS,
UM JUST WITH RESPECT TO THE, UM
RIGOR OF ACCOUNTING FOR
REDUCTIONS ACHIEVED VIA èC èC
S¼, UH, AS I THINK YOU ALL
PROBABLY KNOW WE HAVE A, UM èC
èC S¼ PROTOCOL THAT LIVES IN
CALIFORNIA'S LOW CARBON FUEL
STANDARD, WHICH, IF NOT THE MOST
RIGOROUS, IS CERTAINLY AMONG THE
MOST RIGOROUS IN THE WORLD, AND
IT INCLUDES, UM SIGNIFICANT
PROVISIONS WITH RESPECT TO
PERMANENT AND LIABILITY AND ALL
OF THE ASSOCIATED THINGS THAT WE
WOULD EXPECT TO SEE FROM A
EMISSION REDUCTIONS ACHIEVE. èC
èC S¼, SO APPRECIATE IT. THANK
YOU. THANK YOU, VIRGIL. THANK
YOU. YES, SIR. HØI MIKHAIL SCOLA
HERE ON BEHALF OF THE CALIFORNIA
COUNCIL FOR ENVIRONMENTAL
ECONOMIC BALANCE. WE'RE BUSINESS
LABOR ORGANIZATION. UM MANY OF
OUR MEMBERS IS OBLIGATED PARTIES
, UH, JUST WANTED TO KNOW, UH,
OF THE PANELISTS AND WHAT WE
APPRECIATE THE COMMITTEE PUTTING
THIS TOGETHER TWO COMMITTEES
PUTTING THIS TOGETHER. UM, THERE
IS A NOTICEABLE ABSENCE OF
ANYONE WHO ACTUALLY PAYS INTO
THE CAP AND TRADE PROGRAM OR HAS
AN OBLIGATION WITHIN THE PROGRAM
. AND THERE YOU REPRESENTED
WITHIN THE CONVERSATION TODAY,
AND OUR SUPPORT OF THE PROGRAM
IS WHY IT WAS REAUTHORIZED BY
TWO THIRDS. AND WHY IT CONTINUES
TO HAVE THE SUPPORT THAT MAY NOT
BE SEEN IN OTHER JURISDICTIONS
AS WE'RE EVIDENCING IN
WASHINGTON AND FURTHER NORTH IN
CAÑADA. AND SO TO THAT END WE DO
WANT TO NOTE THAT AS WE START TO
BAKE IN, MAYBE 1297 THE 2022
BILL THAT HAS CARBON NEUTRALITY
IN IT AND SHOOT TOWARDS THAT 48%
TRAJECTORY BY 2030 FOR OUR
INTERIM TARGET THAT WE'RE GOING
TO SEE A 27% INCREASE PER YEAR
ON THE OBLIGATION PER PARTY
WITHIN THE PROGRAM, WHICH IS
AGAIN A SUBSTANTIALLY HAVE
IMPACTS ON ENERGY AND FUEL
PRICES AS WE GO FORWARD, AND SO
TO THAT END, AS WE START TO
THINK ABOUT REAUTHORIZATION, IT
MAY BE GOOD TO SEE CARB ADOPT
THE RULE. MAYBE GET AN AUCTION
OR TWO UNDER OUR BELT TO
UNDERSTAND WHAT OUR FOCUS NEED.
TO BE FOR POST 2030. AND SO WE
WE'D URGE THAT KIND OF, UH, YOU
KNOW. PATIENTS AND LOOK FORWARD
AS WE AS WE GO TO SEE WHAT
EXACTLY WE NEED TO ADJUST, THE
48% MAY BE ENOUGH TO INDUCE YOU
KNOW FAIRLY HIGH PRICES. IF
WE'RE NOT ABLE TO ACHIEVE OUR
MITIGATIONS THROUGH THE
CONSTRUCTION OF CARBON
NEUTRALITY TYPE TECHNOLOGY èC
èC U S¼ HYDROGEN, UH,
INTERCONNECTION, YOU KNOW,
SIMPLY PUT, UM AND THE REVENUES
FROM THE PROGRAM ARE IMPORTANT
TO GETTING ALL THOSE PROGRAMS
OFF THE GROUND. ADDITIONALLY,
WE'VE GOT TO BE CAREFUL. CLIMATE
CHANGE A 32 WHAT WE ARE SEEKING
CO BENEFITS FROM AIR QUALITY AND
CRITERIA POLLUTANT REDUCTIONS.
IT IS NOT IN AND OF ITSELF A
CRITERIA POLLUTANT OR QUALITY
PROGRAM. WE WANT THEM TO BE VERY
GOOD AT REDUCING GREENHOUSE GAS
MOST COST EFFECTIVELY AND
EFFICIENTLY AND WE CAN'T DO THAT
IF WE'RE ALSO ASKING IT TO
MULTITASK. AND SO WE'D BE
CAUTIOUS IN IN HOW WE FRAME THAT
CONVERSATION, TRYING TO KEEP THE
PROGRAM AS PURE AS POSSIBLE SO
THAT IT'S DOING ITS BEST JOB AND
THEN WE CAN USE THE REVENUES FOR
THOSE OTHER PROGRAMS. UM
ADDITIONALLY, I'D CAUTION ON
WASHINGTON. IT IS NOT A SUCCESS.
AT THIS POINT. IT IS FACING A
REPEAL FOR DIFFERENT REASONS
THAN CALIFORNIA. OURS WAS BASED
ON WHETHER IT'S TAX OR A FEE
THEIRS IS BASED ON THEY HAVE THE
HIGHEST GAS PRICES IN THE
COUNTRY. RIGHT NOW. THE PROGRAM
WAS TOO HEAVILY DESIGNED WITHOUT
LIQUIDITY. THERE'S A FUNDAMENTAL
CHANGE THAT'S TAKEN PLACE WE
HOPEFULLY THAT WILL ALIGN WITH
CALIFORNIA. BUT CALIFORNIA IS
THE LEADER. WE DON'T LOOK BEHIND
US AT PEOPLE WHO JUST ADOPTED
THEY ARE MEMBERS OF W èC IN
2006. WHEN WE ADOPTED A B 32.
THEY DIDN'T COME ALONG FOR OVER.
IT'S TIME FOR THEM TO FOLLOW
TIME FOR US TO LEAD AND CONTINUE
TO GO DOWN TO SUCCESSFUL PATH.
SO LOOK FORWARD TO FOLLOWING UP
AND APPRECIATE THE HEARING.
THANK YOU. THANKS VERY MUCH.
YES. THANK YOU FOR THE HEARING
TODAY. MY NAME IS KENDRA HARRIS.
I'M WITH THE CLIMATE CENTER. UM
THANK YOU FOR DOING THE HEARING.
TODAY WE LOOK FORWARD TO A
FUTURE CONVERSATIONS AS THIS
PROGRAM IS LOOKING AT
REAUTHORIZATION. WE WANTED JUST
TO POINT OUT A FEW SHORTCOMINGS
OF THE CLIMATE CENTER RECOGNIZES
THE CAP AND TRADE PROGRAM. UM
THERE'S CURRENT OVERSUPPLY OF
COMPLIANCE INSTRUMENTS
ALLOWANCES TO ENSURE A MORE
BALANCED AND EFFICIENT CARBON
MARKET. THERE NEEDS TO BE A
MECHANISM TO REDUCE THE NUMBER
OF ALLOWANCES. THE OVERSUPPLY
THREATENS TO DERAIL THE
ATTAINMENT OF THE LEGISLATIVE
REQUIRED ANNUAL 2030 BEYOND
EMISSIONS REDUCTION TARGETS.
SECOND OFFSET PROTOCOLS ARE NOT
RIGOROUS, AND STUDIES HAVE SHOWN
THE PURPORTED EMISSIONS
REDUCTIONS ARE OFTEN NOT LONG
LASTING, PERMANENT OR ADDITIONAL
. WE ADVOCATE A BÀN ON THE USE
OF OFFSETS IN CALIFORNIA CAP AND
TRADE PROGRAM. IF THAT IS NOT
FEASIBLE, THEN REPLACE OFFSETS
OF POSSIBLE INSETS. THIRD FREE
ALLOWANCES ARE GIVEN TO
EMISSIONS INTENSIVE TRADE
EXPOSED FIRMS AND ELECTRIC AND
GAS UTILITIES. THESE MAKE UP
ABOUT 50% ALLOWANCES IN THE
MARKET. THIS IS A SUBSTANTIAL
SUBSIDY OF POLLUTING FIRMS,
WHICH DUDES INCENTIVES FOR
CARBON REDUCTIONS IN THESE
SECTORS. WE ADVOCATE REFORM. THE
ALLOWANCES ALLOCATION FOR THESE
INDUSTRIES TO PROVIDE INCENTIVES
FOR INNOVATION AND LASTLY, AN
EXTENSION OF THE CAP AND TRADE
PROGRAM BEYOND 23RD IS NECESSARY
TO REACH LEGISLATIVE TARGET OF
NET ZERO GHG EMISSIONS NÓ WAY
THAN 2045. THIS EXTENSION MUST
BE A TOP PRIORITY AS IT OFFERS A
CRUCIAL PRICE SIGNAL THAT
REDUCING FUTURE CARBON EMISSIONS
WILL BE ECONOMICALLY BENEFICIAL.
A CRITICAL PREREQUISITE FOR
INVESTMENTS. INNOVATIVE EMERGING
CARBON FREE TECHNOLOGIES. THANK
YOU. THANK YOU. THANK YOU. YES,
SIR. SENATORS MIKE MONAHAN, ON
BEHALF OF THE STATE BUILDING
TRADES. UH WE WERE VERY ACTIVELY
INVOLVED IN THE ORIGINAL PART OF
THE PROGRAM. AND COMMIT TO BE
REMAIN SO INVOLVED. THIS IS A
COMMON SENSE PROGRAM. HELP US
MEET OUR CLIMATE GOALS. OUR
MEMBERS 500,000 MEMBERS. UM HAVE
BUILT A UTILITY GRADE SOLAR
WIND, BATTERY STORAGE AND
GEOTHERMAL. AND IN THE FUTURE.
WE PLAN TO BUILD THE NEXT
GENERATION OF PROJECTS,
INCLUDING CARBON CAPTURE. UM
SUSTAINABLE FUELS AND HYDROGEN.
IN CLOSING. I'D LIKE TO SAY THAT
THE PREDICTABILITY OF THE
PROGRAM SHOULD BE A PRIORITY IN
ORDER TO ENSURE THAT PRIVATE
INVESTMENT WILL COME TO
CALIFORNIA. THANK YOU. THANK
YOU. YES, SIR. SENATORS ANDRES
RAMIREZ ON BEHALF OF THE TRANS
BAY JOINT POWERS AUTHORITY,
WHICH OWNS AND OPERATES THE
SALES FORCE TRANSIT CENTER, UM,
SERVING ACROSS THE MEGA REGION
AND IS ALSO GOING TO BE THE
NORTHERN TERMINUS FOR FUTURE
HIGH SPEED RAIL AND ELECTRIFIED
CALTRAIN AS WELL. UM REALLY JUST
LOOKING FORWARD TO WORKING WITH
THE LEGISLATURE AND
ADMINISTRATION ON THE
REAUTHORIZATION OF THE CAP AND
TRADE PROGRAM. Tð JP A'S PORTAL
PROJECT, UM, IS GONNA SERVE
CLEAN TRAINS SUCH AS ELECTRIFIED
èC TRAIN, HIGH SPEED RAIL AND
IS RELIANT ON FUNDING SOURCES
SUCH AS THE Tð IR èC P PROGRAM,
WHICH CURRENTLY GETS 10% OF THE
CAP AND TRADE DOLLARS. UM, SO IF
WE WISH TO LEVERAGE, YOU KNOW
THE ONE IN A GENERATION FUNDING
FROM THE BIDEN ADMINISTRATION
AND THEIR TRANSIT FUNDING, WE
ARE GONNA NEED TO SEE THE EARLY
REAUTHORIZATION OF THE CAP AND
TRADE PROGRAM TO ENSURE THAT THE
Tð IR èC P PROGRAM CAN CONTINUE
TO FUND PROJECTS SUCH AS OURS
AND OTHER MEGA PROJECTS. IF WE
WISH TO SEE THEM COME TO
FRUITION. THANK YOU. THANK YOU.
GOOD MORNING. SENATORS UH BRADY
VAN ENGLAND, CALIFORNIA CHAMBER
OF COMMERCE HERE ON BEHALF OF
THE 14,000 MEMBERS OF THE
CHAMBER ITSELF. UM FIRST, I'D
JUST LIKE TO ECHO ALL THE
COMMENTS WERE MADE BY THE
PANELISTS. REBECCA YOU ALLUDED
TO IT AT THE EARLY PART OF THE
CONVERSATION, CENTER, ALAN, YOU
RAISE IT AS WELL, TOO. UM
CONTEMPLATION OF HOW THOSE, UH,
GGRF DOLLARS ARE SPENT. AS YOU
KNOW, THE 65% ARE CURRENTLY
CONTINUOUSLY APPROPRIATED, WHICH
MIGHT NOT REFLECT THE
LEGISLATURE'S CURRENT PRIORITIES
. AND I CERTAINLY DON'T THINK IT
REFLECTS CARBS. THE IMPLEMENTING
BODY PRIORITIES AS WELL, TOO.
UM, GIVEN THAT THE SCOPING NOT
THAT A 48% REDUCTION AND RELIED
HEAVILY ON èC, èC, S¼, èC,
Dð, R AND HYDROGEN TO ACTUALLY
HELP US ACHIEVE THOSE GOALS AND
I DON'T KNOW HOW OR OR WHAT FROM
THE FUNDING WOULD ACTUALLY HELP
US ACHIEVE. YOU KNOW THOSE GOALS
IN AND OF ITSELF? UM, LASTLY,
THE LAST POINT I'D LIKE TO MAKE
I JUST ALIGN MYSELF WITH THE
COMMENTS OF, UH, MIX BARLET FROM
èC. UM, INDUSTRY PLAYED A HUGE
ROLE IN THE PASSAGE OF A B 398
AS WE TRANSITION TO A
CONVERSATION ABOUT THE EXTENSION
OF CAP AND TRADE. WE FULLY
EXPECT TO BE PART OF THAT
CONVERSATION AS WELL, TOO. THANK
YOU. THANK YOU. HØI THANK YOU.
CHAIRS AND MEMBERS. HELLO MY
NAME IS OLIVIA SEIDMAN WITH
LEADERSHIP COUNCIL FOR JUSTICE
AND ACCOUNTABILITY. WE'RE AN
ENVIRONMENTAL JUSTICE
ORGANIZATION THAT WORKS
ALONGSIDE COMMUNITIES IN THE SAN
JOAQUIN AND EASTERN COACHELLA
VALLEYS. CALIFORNIA'S CLIMATE
STRATEGIES MUST MITIGATE AND
ELIMINATE ENVIRONMENTAL
INJUSTICES, NOT EXACERBATE THEM
DIRECT EMISSIONS REDUCTIONS THAT
REDUCE CARBON EMISSIONS AND
IMPROVE AIR QUALITY ARE THE MOST
EFFECTIVE AND EQUITABLE METHOD
OF REACHING CALIFORNIA'S CLIMATE
GOALS AND SHOULD BE PRIORITIZED
OVER MARKET BASED MECHANISMS
LIKE CAP AND TRADE THAT STILL
PERMIT POLLUTION AND
DISADVANTAGED COMMUNITIES, AS IS
THE CASE IN PLACES LIKE SOUTH
SOUTH FRESNO, WHERE LEADERSHIP
COUNCIL WORKS. ALONGSIDE
COMMUNITIES, WHICH IS AN A B 61
COMMUNITY, A B 617 COMMUNITY AND
AN INDUSTRIAL DEVELOPMENT HUB. A
B 617 HAS FAILED TO ADDRESS AIR
QUALITY ISSUES IN AREAS LIKE
SOUTH FRESNO, WHICH IS ONE OF
THE MOST POLLUTED COMMUNITIES IN
THE STATE, ACCORDING TO KEN VIRO
SCREEN AND WHERE LIFE EXPECTANCY
IS 20 YEARS SHORTER THAN JUST A
FEW MILES NORTH IN NORTH FRESNO.
DESPITE THIS, THE CITY AND
COUNTY CONTINUE TO PUSH FOR
INDUSTRIAL DEVELOPMENT IN THE
COMMUNITY, AND CALTRANS IS
PUSHING A HIGHWAY EXPANSION
PROJECT THAT WILL FACILITATE
THIS INDUSTRIAL DEVELOPMENT.
IT'S AN INCREDIBLE FAILURE OF
BOTH LOCAL AND STATE AGENCIES TO
ACTUALLY IMPROVE AIR QUALITY AND
MEET CLIMATE AND EQUITY GOALS.
THE STATE NEEDS TO TAKE A HARD
LOOK AT THIS PROGRAM IN ANY
CONVERSATIONS AROUND MEANINGFUL
REFORM MUST INCLUDE LAND USE
POLICIES, DIRECT EMISSIONS
REDUCTIONS AT THE SOURCE AND
ENFORCEABILITY AS PROGRAM
REQUIREMENTS BECAUSE CAP AND
TRADE FAILS TO MEANINGFULLY
REDUCE AIR POLLUTION AND INSTEAD
ALLOWS PING LAND USES TO
CONTINUE IN NEIGHBORHOODS.
CALIFORNIA SHOULD INSTEAD
IMPLEMENT CLIMATE STRATEGIES
THAT ADDRESS BOTH CARBON
EMISSIONS AND CO POLLUTANTS
MANDATING EMISSIONS REDUCTIONS
AT THE SOURCE INSTEAD OF RELYING
ON MARKET BASED MECHANISMS LIKE
CAP AND TRADE, WHILE WE'RE
OPPOSED TO THE CONTINUATION OF
CAP AND TRADE, AND URGED
CALIFORNIA TO PRIORITIZE DIRECT
EMISSIONS REDUCTIONS, ANY
UPDATES TO THE RULE MUST INCLUDE
CRITICAL GUARDRAILS THAT PRO
PROTECT COMMUNITIES. THIS
INCLUDES THE PROHIBITION OF
CARBON OFFSETS THE USE OF NÓ
TRADE ZONES THAT PROHIBIT CREDIT
PURCHASES AND DISADVANTAGED
COMMUNITIES AND THE SIMULTANEOUS
ADOPTION OF EFFECTIVE LAND USE
POLICIES THAT PREVENT THE
ENCROACHMENT OF POLL. ACTIVITIES
IN ROUSE POLLUTION AND POLLUTING
LAND USES IN NEIGHBORHOODS
ACROSS THE STATE. SIMULTANEOUSLY
ANY CAP AND TRADE RENEWAL
CONVERSATIONS MUST ALSO ENSURE
THAT FUNDS GENERATED BY AUCTIONS
AND CONTRIBUTED TO THE GGRF MUST
PRIORITIZE DIRECT, MEANINGFUL
AND ASSURED BENEFITS TO THE MOST
POLLUTED AND IMPACTED
COMMUNITIES IN THE STATE BY BOTH
FUNDING CRITICAL INVESTMENTS
LIKE Tð, èC AND èC, R, èC S¼
AND BY REFORMING PROGRAMS AGAIN
LIKE A B 617 TO ENSURE THAT
THERE'S ENFORCEMENT AND
ACCOUNTABILITY THANK YOU. THANK
YOU SO MUCH. YES, SIR. MY NAME
IS KEN JOHNSON. I'M WITH CLIMATE
REALITY PROJECT SILICON VALLEY
CHAPTER. A B 1279 ESTABLISHES A
STATE POLICY TO ACHIEVE NET ZERO
GREENHOUSE GAS EMISSIONS AS SOON
AS POSSIBLE, BUT CARB IS NOT
CONSIDERING ALLOWANCE BUDGET
SCENARIOS OR POLICIES THAT WOULD
ACHIEVE NET ZERO EMISSIONS ANY
SOONER THAN 2045. THE SCOPING
PLAN CLEARLY INDICATES THAT MORE
AMBITIOUS CLIMATE GOALS COULD BE
POSSIBLE. THE REPORT STATES THAT
QUOTE UNDER THE SCOPING PLAN
SCENARIO IMPACTS ECONOMIC AND
JOB GROWTH WOULD BE NEGLIGIBLE,
UNQUOTE BY CONTRAST, ONE
STAKEHOLDER. THE WESTERN STATES
PETROLEUM ASSOCIATION HAS
ASSERTED THAT A 55% REDUCTION
TARGET FOR 2030 PROBABLY ALSO
THE 48% TARGET ARE NOT
TECHNOLOGICALLY FEASIBLE. BUT
WHETHER OR NOT THAT IS TRUE IS
IRRELEVANT BECAUSE THE CAP IS
NON BINDING. IT IS PREEMPTED BY
THE PRICE CEILING. THE
FUNDAMENTAL QUESTION FOR CARB IS
NOT WHETHER A 55% OR 48% G HÌ G
REDUCTION TARGET IS FEASIBLE,
BUT WHETHER THE PRICE CEILING IS
AFFORDABLE. THE PRICE CEILING
WAS BASED, UH IT IS CURRENTLY
$88 PER TON AND WAS ORIGINALLY
SET IN 2021, BASED ON THE SOCIAL
COST OF CARBON. NOW THE EPA HAS
RECENTLY RAISED THE S¼ E èC
ESTIMATE TO ABOUT $200 PER TON.
BUT S¼ èC IS ONLY ONE OF SIX
STATUTORY REQUIRE CRITERIA THAT
CARB IS REQUIRED TO CONSIDER IN
SETTING THE PRICE CEILING AT
FIRST AND MOST IMPORTANT
CRITERION IS QUOTE THE NEED TO
AVOID ADVERSE ACTS ON RESIDENT
HOUSEHOLDS, BUSINESSES AND
ESTATES ECONOMY. CARB SHOULD
ESTABLISH AN AFFORDABLE PRICE
CEILING, TAKING INTO
CONSIDERATION THE ALLOCATION OF
ALLOWANCE SALES REVENUE AND
SHOULD SEEK TO ACHIEVE NET ZERO
EMISSIONS NOT AS CHEAPLY AS
POSSIBLE, BUT AS SOON AS
POSSIBLE. THE CEILING REPRESENTS
THE LIMIT OF WHAT WE ARE ABLE
AND WILLING TO PAY FOR CLIMATE
CHANGE, MITIGATION AND AS LONG
AS THE PRICE CEILING IS BELOW
THE SOCIAL COST OF CARBON, THERE
IS NÓ JUSTIFICATION FOR ADOPTING
AN EMISSION TARGET THAT RESULTS
IN ALLOWANCE PRICES. WELL BELOW
THE CEILING. THANK YOU. THANK
YOU. YES, SIR. ROB SPIEGEL.
CALIFORNIA MANUFACTURERS AND TE
TECHNOLOGY ASSOCIATION
DEFINITELY APPRECIATE THE ROBUST
DIALOGUE AND COMMENTS HERE ON
CALIFORNIA'S CAP AND TRADE
PROGRAM AND TO KIND OF REITERATE
SOME OF THE COMMENTS BOTH FROM
CAL CHAMBER AND MY COLLEAGUE
FROM THE INDUSTRY PERSPECTIVE IS
ONE AT LEAST FOR MY ASSOCIATION
AS WELL AS CHAMBER AND OF HOW
THE VERY GRANULAR LEVEL OF
IMPACT AND WHAT HAS BEEN DONE
CORRECTLY AT OUR FACILITIES OF
THE REGULATED SECTOR ARE
ACCOMPLISHING, AND IT'S A
PERSPECTIVE AS WELL. THAT CAN
HELP WITH FUTURE PROGRAMMATIC
DESIGN AS WELL AS KIND OF LOOK
HOLISTICALLY AT THE VARIOUS
OTHER PROGRAMS THAT IMPACT OUR
FACILITIES ON A STATEWIDE LEVEL,
BUT WITH THAT AS WELL FOR THE
MANUFACTURING SECTOR
SPECIFICALLY WHY, YES, WE'RE
COVERED ENTITIES. WE'RE ALSO
BIGGER THAN JUST OIL AND GAS. WE
ARE PHARMACEUTICALS. WE ARE FOOD
AND BEVERAGE PROCESSORS, AND
THESE ARE ALSO COVERED ENTITIES
UNDER THE PROGRAM AND TO KIND OF
REFLECT ON SOME OF THE COMMENTS
FROM OUR COLLEAGUE DANNY COHEN
WARD WHEN WE START LOOKING AT
SOME OF THE COST IMPACTS, NOT
SOCIETAL COST OF CARBON, BUT ON
THOSE FUNDAMENTAL IMPACTS IS
WHAT I WOULD CALL KIND OF LIKE
POCKETBOOK COSTS TO CALIFORNIANS
, INCREASED COSTS AND ALLOWANCES
AND PRICES LEAD TO INCREASED
COSTS IN FOOD COMMODITIES,
INCREASED COST OF BEING ABLE TO
CONSTRUCT THE MATERIALS FROM
WHICH WE DO AND SO WITH
AFFORDABILITY CLEARLY IN THE
LENS OF THE LEGISLATURE THIS
YEAR, I THINK THAT RAISES A VERY
SERIOUS CONSIDERATION THAT MAY
NOT HAVE BEEN DONE IN OUR
DISCUSSIONS SURROUNDING A B 32
S¼ B 32 THREE 198 OR EVEN 617.
SO THERE'S A DIFFERENT LENS. I
THINK AS WE LOOK TO EXTENDING
CAP AND TRADE AND KIND OF THE
PROGRAMMATIC ELEMENTS THAT ARE
TAKING A HARDER LOOK AT COST TO
CONSUMERS, I THINK WITH THAT, TO
THE EXTENT THAT èC M Tð, A AND
OUR OTHER INDUSTRY COLLEAGUES
CAN CONTINUE TO BE A
COLLABORATOR AS IT RELATES TO
THE PROGRAM AND PARTICIPATE IN
OTHER CONVERSATIONS ASSOCIATED
TO CAP AND TRADE. WE'RE VERY
HAPPY TO DO SO, UM, FOR OUR
SECTOR IN PARTICULAR. NOT ONLY
ARE WE THE EMITTERS CALIFORNIA
WE'RE ALSO CREATING THE VARIOUS
TECHNOLOGIES ARE GOING TO HELP
CALIFORNIA GET ITS WAY TO A
BRIGHTER CARBON FUTURE IF YOU
WILL, OR CARBON, LESS FUTURE. UM
I THINK WHAT THOSE
CONSIDERATIONS WE DEFINITELY
LOOK FORWARD TO THE CONTINUED
CONVERSATION SURROUNDING THE
PROGRAM, UM, AND TO PRO PROVIDE
ONE MORE COMMENT BEFORE I STEP
AWAY. UM AS WE LOOK AT HOW GGRF
IS FUNDED OR NOT FUNDED, AS, UH,
GGR FIX ARE EXPENDITURES. UM,
PERHAPS IT IS BEST TO NOW TAKE A
GREATER LOOK AT WHAT THOSE
PRIORITIES ARE AND WHETHER OR
NOT THOSE PRIORITIES FOR THAT
FUNDING SOURCE IS MEETING OUR
AMBITIONS UNDER A 1279 AND THE
SCOPING PLAN OR THEY ALIGNING,
ARE THEY HARMONIZING WITH WHAT
CALIFORNIA INTENDS TO DO? WE
ALSO SEE PATHWAYS, OBVIOUSLY FOR
CDR, CARBON CAPTURE AND OTHERS
BUT APPRECIATE THE OPPORTUNITY
TO PROVIDE COMMENT AND LOOK
FORWARD TO BEING, UM, IN FUTURE
DISCUSSIONS. THANK YOU VERY
MUCH. THANK YOU. UM GOOD
MORNING. STILL, MORNING. UH,
CHAIRS AND MEMBERS. UH SYLVIA
SOIA HERE ON BEHALF OF THE SAN
JOAQUIN VALLEY AIR POLLUTION
CONTROL DISTRICT. UM JUST WANNA
MAKE QUICK QUICK COMMENTS. UM
THE LE Ó HAS FOUND THAT AIR
DISTRICT IMPLEMENTED PROGRAMS
SUCH AS THE FARMER PROGRAM AND A
B 617 ARE AMONG THE MOST COST
EFFECTIVE GRF EXPENDITURES WITH
RESPECT TO REDUCTIONS IN AND
CRITERIA POLLUTANT EMISSIONS,
THE DISTRICT TRACKS AND REPORTS
ON ALL OF THESE EXPENDITURES TO
CARB CURRENTLY. AND WE HAVE OUR
REGULATORY PROGRAM HAS ALSO
REDUCED EMISSIONS FROM
STATIONARY SOURCES BY OVER 90%
THE DISTRICT IS COMMITTED TO
WORKING WITH THE SOUTH STOCKTON
COMMUNITY AND OUR OTHER A B 617
COMMUNITIES. WE ARE ACTIVELY
IMPLEMENTING THE COMMUNITY
MISSION REDUCTION PLANS WITH A
VERY ACTIVE COMMUNITY
PARTICIPATION AND INPUT. GIVEN
THE LIMITED TIME TODAY, WE WILL
BE PROVIDING A FOLLOW UP
RESPONSE TO SOME OF THE CLAIMS
RAISED IN THIS HEARING, WHICH
WILL PROVIDE A FULLER PICTURE OF
OUR èC RP. PROJECT
IMPLEMENTATION EMISSION TRENDS
AND OUR REGULAR REGULATORY
ACTIVITIES IN OUR 617 COMMUNITY.
THANK YOU FOR YOUR TIME. THANK
YOU. ALL RIGHT. WELL THANK YOU,
EVERYBODY FOR PARTICIPATION.
WE'RE RUNNING OFF TO CAUCUS. BUT
THIS WAS A GREAT DISCUSSION. AND
THEN WE'VE GOT, UM SEVERAL MORE
HEARINGS TO COME FROM THE JOINT
COMMITTEE AND I DO WANT TO
REALLY THANK THE STAFF FOR
PULLING THIS TOGETHER. UH, FROM
BOTH, BOTH OF OUR COMMITTEES
REALLY, REALLY GOOD DISCUSSION
AND LOTS MORE TO LOTS MORE TO GO
ON. THANK YOU, EVERYONE.