AB 32—California’s Global Warming Law
In 2006, the California State Legislature passed Assembly Bill 32 (AB 32), also known as the Global Warming Solutions Act. This major piece of legislation required the state to seriously rework its greenhouse gas regulations. Specifically, the bill called for a new set of policies that would bring emissions down to 1990 levels by the year 2020—a reduction of approximately 25 percent.1 That goal is straightforward, but the path that AB 32 has taken in the five years since its passage is not. Let’s discuss the challenges and setbacks that have arisen as California works to implement a landmark environmental law to tackle global warming.
How is AB Supposed to Work?
After it was passed by the legislature in 2006, the exact details of AB 32 were unclear. This is because the bill didn’t actually specify how the state would reach 1990 emissions levels. Rather, it delegated that responsibility to the California Air Resources Board (CARB), a branch of the California Environmental Protection Agency that is tasked with creating and promoting clean-air policies.2
The decision to leave the details to CARB is not unusual. In fact, it represents good policymaking. Few, if any, California state legislators have enough knowledge and experience with greenhouse gas emissions to craft a complete emission reduction plan, so they delegated that task to the people who do. CARB is staffed by experts on environmental policy and it has the resources to conduct detailed research and analysis on the impact of any proposed regulations. CARB immediately began working to implement AB 32, however, it was not completely without legislative guidance. While AB 32 does not dictate which policy changes to make in order to reach its goal, it does give CARB a set of specific tasks and a timeline to follow.3 The list of tasks includes items such as:4
- Creating a scoping plan that lays out the best method of achieving the greenhouse gas reduction.
- Determining the precise emission levels in 1990.
- Establishing committees to advise CARB on green technology and environmental justice as it carries out AB 32.
The timeline sets out a plan for achieving the reduction by 2020 that frontloads most of the policy work. This is because CARB doesn’t have until 2020 to set new regulations, rather, a significant reduction must be achieved by that year, which means that changes had to be made quickly in order to give them time to work. AB 32 required CARB to produce an emission reduction plan in 2009, begin implementation of this plan in 2010, and enact all regulations into law by January 1, 2012.5
Opposition to AB 32
A law of this size and scope will rarely please everyone, and AB 32 is no exception. The law was opposed for different reasons—some saw it as an example of government overreach, others doubted the legitimacy of climate change science, and still others believed that the regulations would be harmful to the economy.6 Some of the strongest opposition came, naturally, from heavy polluters such as oil and chemical companies. As details of CARB’s new policies emerged, it became clear that the agency would include direct regulation on emissions as well as a cap-and-trade system (discussed later in this article) that required polluters to scale down their emissions or pay for the ability to continue to pollute at current levels.7 This posed a threat to companies with high-pollution operations in California, and many decided to fight the law rather than face the costs associated with conforming to it.
As a result, a campaign was launched for what would become Proposition 23 on the November 2010 California ballot. The initiative did not aim to override AB 32 completely, but rather sought to block its implementation until the state sustained an unemployment rate of 5.5% or less for an entire year.8 Supporters argued that because of the costs of compliance with the new law and the risk of negative economic consequences, waiting for a period of low unemployment would reduce the potential for harmful outcomes.9 Opponents of Prop 23 argued that the goal of 5.5% unemployment for a year had only been attained a handful of times in the last few decades. They suggested that Prop 23 was not intended to protect the state from the economic consequences of AB 32, but rather to enact a sort of “backhanded repeal.” 10
Proposition 23 became one of the largest and most active initiative campaigns of the 2010 election cycle. Supporters brought in over $10 million, much of which came from Valero and Tesoro, two large oil companies with extensive operations in California.11 The “No on 23” campaign had access to significant resources as well, raising over $25 million. Opponents of Prop 23 showed that they had significant business support as well – the campaign was heavily funded by Silicon Valley companies with big investments in clean-energy technology.12 This financial advantage, combined with the support of many prominent California politicians, helped the No on 23 campaign coast to an easy victory and cleared the way for CARB to continue its work.13 Part of this work now included implementing a cap-and-trade plan for AB 32.
Cap-and-Trade
Soon after supporters of AB 32 celebrated their victory over conservative opponents of the legislation, they faced new obstacles and criticism by some on the left. In December 2010, CARB overwhelmingly approved the creation of a statewide cap-and-trade program. The program, which will eventually include 360 California businesses, is one of the last major components of AB 32 implementation.14
Many environmental advocates and activists criticized the cap-and-trade system. They argued that the market-based approach was not the most effective way to reduce emissions and objected to the idea that polluters would be able to avoid reducing their emissions by simply paying a fee.15 A lawsuit began, which alleged that CARB had not adequately explored other emission reduction options as it was legally required to do. A San Francisco County Superior Court judge agreed and ordered CARB to stop its work on the cap-and-trade program as of May 20, 2011.16
In yet another twist, a state appellate court ruled in June 2011 that CARB may continue implementing the cap-and-trade system pending a final ruling. The decision is quite significant as the court is not expected to issue an opinion on the case for a year or more.17 This allowed CARB officials to proceed with their original plan to have cap-and-trade in place by January 1, 2012.18 CARB recently announced that although the program will be ready next year, due to the legal battles it will wait until 2013 to begin enforcement.19 California State Senator Fran Pavley, an author of AB 32, approved of the decision, stating: “This modest delay in implementation is prudent… The one-year period will allow us to road test market mechanisms to see how they work… By getting this right, California can serve as a model for other states and countries.”20
The Future of Global Warming Legislation
When it was passed in 2006, many praised the Global Warming Solutions Act and noted that it would be a model for other states working to reduce their own greenhouse gas emissions. But the lessons of this legislation do not stop with the policy details—in fact, that is only where they start. AB 32 shows us what kind of opposition to expect from legislation of this size. The bill represents a significant change for California, and many who disagree with it continue to fight its implementation every step of the way. This is a critical lesson—passing a law is only the beginning, because big advances in environmental policy are likely to be challenged and resisted for years. If policymakers and environmental advocates want to be successful with future efforts to combat global warming and climate change, they should learn as much as they can from California’s experiences. To keep up to date with CARB’s progress in implementing AB 32, visit: http://www.arb.ca.gov/cc/whatsnew/whatsnew.htm.
