Climate Change

Scoping Plan

a amework for change

Prepared by

the California Air Resources Board 

for the State of California

Arnold Schwarzenegger 

Governor

Linda S. Adams 

Secretary, California Environmental Protection Agency

Mary D. Nichols

Chairman, Air Resources Board

James N. Goldstene

Executive Ocer, Air Resources Board

DECEMBER 2008

Pursuant to AB 32 

e California Global Warming Solutions Act of 2006 
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Table of Contents Table of Contents 

EXECUTIVE SUMMARY ................................ EXECUTIVE SUMMARY................................ ................................................... ................................ ........................................... ........................ ........... ES-1

I. INTRODUCTION: A FRAMEWORK FOR CHANGE INTRODUCTION: A FRAMEWORK FOR CHANGE MEWORK FOR CHANGE............................... ............................... ............................... 1

A. Summary of Changes from the Draft Scoping Plan..... Summary of Changes from the Draft Scoping Plan................................ ....................................... .................................. ....... 2

1. General................................ 1. General................................ ................................................... ................................ ................................................... ............................................. ................................................... ............................................. ....................................... .................... ....... 2

2. Proposed Measures .............................. 2. Proposed Measures ................................ ................................................... .................................. ................................................... ............................................. .................................................. ............................... .................. 3

B. Background ................................ Background ................................ ................................................... ................................ ................................................... ............................................. ................................... ................ 4

1. Climate Change Policy in California............ 1. Climate Change Policy in California................................ ................................................... .................................................... ................................................... ...................................... ......................... 4 ...... 4

2. Assembly Bill 2. Assembly Bill32: The Gl 32: The Gl 32: The Global Warming Solutions Act obal Warming Solutions Act obal Warming Solutions Act......................... ................................ ................................................... .................................. ........................... 5 ........ 5

3. Climate Action Team............................ 3. Climate Action Team................................ ................................................... .................................... ................................................... ............................................. ................................................. .............................. ................. 6

4. Development of the Greenhouse Gas Emission Reduction Strategy................................ ction Strategy................................ .................................... 8

5. Implementation of the Scoping Plan............. 5. Implementation of the Scoping Plan................................ ................................................... ................................................... ................................................... .................................... ....................... 9

6. Climate Change in California................... 6. Climate Change in California................................ ................................................... ............................................. ................................................... ............................................. .................................. ............... 10

C. California’s Greenhouse Gas Emissions and the 2020 Target.................... Target.................... ....................11

II. RECOMMENDED ACTIONS................................ RECOMMENDED ACTIONS................................ ................................................... ............................... ............................... 15 ............ 15

A. The Role of State Government: Setting an Example The Role of State Government: Setting an Example nt: Setting an Example ............................ ................................ ..................................24

B. The Role of Local Government: Essential Partners... The Role of Local Government: Essential Partners................................ ..................................... ..................................26

C. Emissions Reduction Measures ....................... Emissions Reduction Measures ................................ ................................................... ......................................... .................................. ...............27

1. California Cap- 1. California Cap-and-Trade Program Linked to Western Climate Initiativ Trade Program Linked to Western Climate Initiative Partner Partner 

Jurisdictions ................................ Jurisdictions ................................ ................................................... ................................ ................................................... ............................................. ................................................... ............................................. .................................. ............... 30

2. California Light- 2. California Light-Duty Vehicle Green Duty Vehicle Green Duty Vehicle Greenhouse Gas Standards house Gas Standards house Gas Standards ................................ ................................ ................................................... ................... ................... 38

3. Energy Efficiency .............................. 3. Energy Efficiency ................................ ................................................... .................................. ................................................... ............................................. ................................................... .................................. ..................... 41

4. Renewables Portfolio Standard .................. 4. Renewables Portfolio Standard ................................ ................................................... .............................................. ................................................... .......................................... ............................. 44 ..........44

5. Low Carbon Fuel Standard ....................... 5. Low Carbon Fuel Standard ................................ ................................................... ......................................... ................................................... ............................................. ..................................... .................. 46

6. Regional Transportation- 6. Regional Transportation-Related Greenhouse Gas Targets Related Greenhouse Gas Targets Related Greenhouse Gas Targets ..................... ................................ ................................................ ........................... ................ 47

7. Vehicle Efficiency Measures 7. Vehicle Efficiency Measures fficiency Measures ................................ ................................ ................................................... ................................ ................................................... ............................................. ................................... ................ 51

8. Goods Movement ................................ 8. Goods Movement ................................ ................................................... ................................ ................................................... ............................................. ................................................... ................................. .................... 52

9. Million Solar Roofs Program .................... 9. Million Solar Roofs Program ................................ ................................................... ............................................ ................................................... ............................................. .................................. ............... 53

10. Medium/Heavy- 10. Medium/Heavy-Duty Vehicles Duty Vehicles Duty Vehicles................................ ................................ ................................................... ................................ ................................................... ........................................... .............................. 53 ...........53

11. Industrial Emissions.......................... 11. Industrial Emissions................................ ................................................... ...................................... ................................................... ............................................. .............................................. ........................... .............. 54

12. High Speed Rail............................... 12. High Speed Rail................................ ................................................... ................................. ................................................... ............................................. ................................................... .................................. ..................... 56

13. Green Building Strategy....................... 13. Green Building Strategy................................ ................................................... ......................................... ................................................... ............................................. ........................................ ..................... ........ 57

14. High Global Warming Potential Gases........... 14. High Global Warming Potential Gases................................ ................................................... ..................................................... ................................................ ............................. ................ 59

15. Recycling and Waste 15. Recycling and Waste g and Waste ................................ ................................ ................................................... ................................ ................................................... ............................................. ............................................ ......................... ............ 62

16. Sustainable Forests ........................... 16. Sustainable Forests ................................ ................................................... ..................................... ................................................... ............................................. .............................................. ........................... .............. 64

17. Water ................................ 17. Water ................................ ................................................... ................................ ................................................... ............................................. ................................................... ............................................. ..................................... .................. 65

18. Agriculture 18. Agriculture riculture ................................ ................................ ................................................... ................................ ................................................... ............................................. ................................................... .......................................... ............................. 67 ..........67

D. Voluntary Early Actions and Reductions ............. Voluntary Early Actions and Reductions ................................ ................................................... ........................................ .....................68

1. Voluntary Early Action ......................... 1. Voluntary Early Action................................ ................................................... ....................................... ................................................... ............................................. ............................................. .......................... ............. 68

2. Voluntary Reductions ........................... 2. Voluntary Reductions................................ ................................................... ..................................... ................................................... ............................................. .............................................. ........................... .............. 69

E. Use of Allowances and Revenues..................... Use of Allowances and Revenues................................ ................................................... ........................................... ................................69 .............69
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III. EVALUATIONS ................................ EVALUATIONS ................................ ................................................... ................................ .................................................. ............................... .................. 73

A. Economic Modeling................................ Economic Modeling................................ ................................................... ................................ ................................................... .................................. ..................... 73

1. Macro- 1. Macro-economic Modeling Results economic Modeling Results economic Modeling Results.......................... ................................ ................................................... ...................................... ................................................... ..................................... ........................ 74 .....74

2. Impact on Specific Business Sectors 2. Impact on Specific Business Sectors ic Business Sectors................................ ................................ ................................................... ................................ ................................................... .................................. ..................... 75

3. Household Impacts .............................. 3. Household Impacts ................................ ................................................... .................................. ................................................... ............................................. ................................................. .............................. ................. 78

4. WCI Economic Analysis.......................... 4. WCI Economic Analysis................................ ................................................... ...................................... ................................................... ............................................. ........................................... ........................ ........... 79

B. Green Technology................................ Green Technology................................ ................................................... ................................ ................................................... ..................................... ........................ 80 ..... 80

C. Cost-Effectiveness Effectiveness Effectiveness ................................ ................................ ................................................... ................................ ................................................... ................................... ...................... 84

D. Small Business Impact.............................. Small Business Impact................................ ................................................... .................................. ................................................ ............................. ................ 85

E. Public Health/Environmental Benefits Analyses ...... Public Health/Environmental Benefits Analyses ................................ ....................................... ................................. ....... 86

1. Key Air Quality- 1. Key Air Quality-Related Public Health Benefits Related Public Health Benefits Related Public Health Benefits..................... ................................ ................................................... ........................................... ..................................... .................. 87

2. Approach ................................ 2. Approach................................ ................................................... ................................ ................................................... ............................................. ................................................... ............................................. .................................. ............... 90

3. Existing Programs for Air Quality Improvement in California ................................ n California................................ .............................................. .............. .............. 90

4. Statewide Analysis ............................. 4. Statewide Analysis ................................ ................................................... ................................... ................................................... ............................................. .................................................. ............................... .................. 91

5. Regional Assessment: South Coast Air Basin Example ................................ ple ................................ ................................................... ....................... ....................... 92 ....

6. Community Level Assessment: Wilmington Example................................................... ......................................................... ......................... 92 ......92

F. Summary of Societal Benefits....................... Summary of Societal Benefits................................ ................................................... ......................................... ..................................... .................. 94

1. Energy Diversification......................... 1. Energy Diversification................................ ................................................... ....................................... ................................................... ............................................. .............................................. ........................... .............. 94

2. Mobility and Shifts in Land Use Patterns 2. Mobility and Shifts in Land Use Patterns d Use Patterns................................ ................................ ................................................... ................................ ............................................... ............................ ............... 95

G. California Environmental Quality Act Functional Equivalent Document .... ivalent Document.... 95

H. Administrative Burden .............................. Administrative Burden ................................ ................................................... .................................. ................................................ ............................. ................ 96

I. De Minimis Emission Threshold ...................... De Minimis Emission Threshold................................ ................................................... .......................................... .................................. ............... 96

IV. IMPLEMENTATION: PUTTING THE PLAN INTO A IMPLEMENTATION: PUTTING THE PLAN INTO A TING THE PLAN INTO ACTION................... ................... ................... 99

A. Personal Action ................................ Personal Action................................ ................................................... ................................ ................................................... ........................................ ........................... 99 ........ 99

B. Public Outreach and Education ...................... Public Outreach and Education ................................ ................................................... .......................................... ................................ 100 ............. 100

1. Involving the Public and Stakeholders in Measure Development e Development Development................................ ................................ .....................................101

2. Education and Workforce Development............ 2. Education and Workforce Development................................ ................................................... .................................................... .............................................. ........................... ..............101

3. Small Businesses ............................... 3. Small Businesses ................................ ................................................... ................................. ................................................... ............................................. .................................................. ............................... ..................104

C. Implementation of the Plan ......................... Implementation of the Plan ................................ ................................................... ....................................... ...................................... ................... 104

D. Tracking and Measuring Progress .................... Tracking and Measuring Progress ................................ ................................................... ........................................ ............................ 107 .........107

1. Report Card................................ 1. Report Card................................ ................................................... ................................ ................................................... ............................................. ................................................... ......................................... ............................107 .........107

2. Tracking Progress by Implementing Agencies..... 2. Tracking Progress by Implementing Agencies................................ ................................................... ........................................................... .................................... .................108

3. Progress Toward the State Government Target.... 3. Progress Toward the State Government Target................................ ................................................... ............................................................ .................................. ...............108

4. Mandatory Reporting Regulation ................. 4. Mandatory Reporting Regulation................................ ................................................... ............................................... ................................................... ...................................... .........................108 ......108

E. Enforcement................................ Enforcement................................ ................................................... ................................ ................................................... ........................................... .............................. 109 ........... 109

F. State and Local Permitting Considerations.......... State and Local Permitting Considerations................................ .............................................. .................................... .............. 110

G. Role of Local Air Districts ........................ Role of Local Air Districts ................................ ................................................... ........................................ ......................................... ...................... ......... 111

H. Program Funding................................ Program Funding................................ ................................................... ................................ ................................................... .................................... ....................... 112 ....112

 

 
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V. A VISION FOR THE FUTURE A VISION FOR THE FUTURE ................................ ................................ ................................................... ........................... ........................... 113 ........113

A. Collaboration ................................ Collaboration ................................ ................................................... ................................ ................................................... .......................................... .............................113 ..........113

1. Working Closely with Key Partners .............. 1. Working Closely with Key Partners................................ ................................................... .................................................. ................................................... ................................... ......................113

2. International ................................ 2. International ................................ ................................................... ................................ ................................................... ............................................. ................................................... ....................................... ..........................114 .......114

B. Research................................ Research................................ ................................................... ................................ ................................................... ............................................. .................................... .................116

1. Unleash the Potential of California’s Universities and Private Sector ies and Private Sector ivate Sector .............................. .............................. ..............................116

2. Public- 2. Public-Private Partnerships Private Partnerships Private Partnerships ............................... ................................ ................................................... ................................. ................................................... ............................................. .................................. ...............116

C. Reducing California’s Emissions Further – Reducing California’s Emissions Further – A Look Forward to 2030 A Look Forward to 2030 A Look Forward to 2030 ......117

D. Conclusion ................................ Conclusion................................ ................................................... ................................ ................................................... ............................................. ................................. ..............120

ACKNOWLEDGMENTS ................................ ACKNOWLEDGMENTS ................................ ................................................... ................................ ............................................. .......................... ............. 122 

BOARD RESOLUTION ................................ BOARD RESOLUTION................................ ................................................... ................................ ............................................... ............................ ............... 123 

 

 

APPENDICES APPENDICES 

Appendix A: Appendix A: Assembly Bill Assembly Bill Assembly Bill32: The Global Warming Solutions Act of 2006 32: The Global Warming Solutions Act of 2006 32: The Global Warming Solutions Act of 2006 

Appendix B: Appendix B: List of Acronyms and Glossary List of Acronyms and Glossary List of Acronyms and Glossary 

Appendix C: Appendix C: Sector Overviews and Emission Reduction Strategies Sector Overviews and Emission Reduction Strategies Sector Overviews and Emission Reduction Strategies 

Appendix D: Appendix D: Western Climate Initi Western Climate Initi Western Climate Initiative Documentation ative Documentation ative Documentation 

Appendix E: Appendix E: List of Measures List of Measures List of Measures 

Appendix F: Appendix F: California’s Greenhouse Gas Emissions Inventory California’s Greenhouse Gas Emissions Inventory California’s Greenhouse Gas Emissions Inventory 

Appendix G: Appendix G: Economic Analysis Economic Analysis Economic Analysis 

Appendix H: Appendix H: Public Health Benefits Analyses Public Health Benefits Analyses Public Health Benefits Analyses 

Appendix I: Appendix I: Measure Documentation Measure Documentation Measure Documentation 

Appendix J: Appendix J: California Environmental Q California Environmental Q California Environmental Quality Act Functional Equ uality Act Functional Equivalent Document ivalent Document
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Scoping Plan Executive Summary 

ES-1 

 

EXECUTIVE SUMMARY EXECUTIVE SUMMARY 

On September 27, 2006, Governor Schwarzenegger signed Assembly Bill 32, the Global 

Warming Solutions Act of 2006 (Núñez, Chapter 488, Statutes of 2006). The event marked a 

watershed moment in California’s history. By requiring in law a reduction of greenhouse gas 

(GHG) emissions to 1990 levels by 2020, California set the stage for its transition to a 

sustainable, clean energy future. This historic step also helped put climate change on the 

national agenda, and has spurred action by many other states. 

The California Air Resources Board (ARB or Board) is the lead agency for implementing 

AB 32, which set the major milestones for establishing the program. ARB met the first 

milestones in 2007: developing a list of discrete early actions to begin reducing greenhouse 

gas emissions, assembling an inventory of historic emissions, establishing greenhouse gas 

emission reporting requirements, and setting the 2020 emissions limit. 

ARB must develop a Scoping Plan outlining the State’s strategy to achieve the 2020 

greenhouse gas emissions limit. This Scoping Plan, developed by ARB in coordination with 

the Climate Action Team (CAT), proposes a comprehensive set of actions designed to reduce 

overall greenhouse gas emissions in California, improve our environment, reduce our 

dependence on oil, diversify our energy sources, save energy, create new jobs, and enhance 

public health. 

This “Approved Scoping Plan” was adopted by the Board at its December 11, 2008 meeting. 

The measures in this Scoping Plan will be developed over the next two years and be in place 

by 2012. 

Reduction Goals Reduction Goals 

This plan calls for an ambitious but achievable reduction in California’s carbon footprint. 

Reducing greenhouse gas emissions to 1990 levels means cutting approximately 30 percent 

from business-as-usual emission levels projected for 2020, or about 15 percent from today’s 

levels. On a per-capita basis, that means reducing our annual emissions of 14 tons of carbon 

dioxide equivalent for every man, woman and child in California down to about 10 tons per 

person by 2020. This challenge also presents a magnificent opportunity to transform 

California’s economy into one that runs on clean and sustainable technologies, so that all 

Californians are able to enjoy their rights in the future to clean air, clean water, and a healthy 

and safe environment. 

Significant progress can be made toward the 2020 goal relying on existing technologies and 

improving the efficiency of energy use. A number of solutions are “off the shelf,” and 

many – especially investments in energy conservation and efficiency – have proven 

economic benefits. Other solutions involve improving our state’s infrastructure, transitioning 
Executive Summary Scoping Plan 

ES-2 

to cleaner and more secure sources of energy, and adopting 21st century land use planning 

and development practices. 

A Clean Energy Future A Clean Energy Future 

Getting to the 2020 goal is not the end of the State’s effort. According to climate scientists, 

California and the rest of the developed world will have to cut emissions by 80 percent from 

today’s levels to stabilize the amount of carbon dioxide in the atmosphere and prevent the 

most severe effects of global climate change. This long range goal is reflected in California 

Executive Order S-3-05 that requires an 80 percent reduction of greenhouse gases from 1990 

levels by 2050. 

Reducing our greenhouse gas emissions by 80 percent will require California to develop new 

technologies that dramatically reduce dependence on fossil fuels, and shift into a landscape 

of new ideas, clean energy, and green technology. The measures and approaches in this plan 

are designed to accelerate this necessary transition, promote the rapid development of a 

cleaner, low carbon economy, create vibrant livable communities, and improve the ways we 

travel and move goods throughout the state. This transition will require close coordination of 

California’s climate change and energy policies, and represents a concerted and deliberate 

shift away from fossil fuels toward a more secure and sustainable future. This is the firm 

commitment that California is making to the world, to its children and to future generations. 

Making the transition to a clean energy future brings with it great opportunities. With these 

opportunities, however, also come challenges. As the State moves ahead with the 

development and implementation of policies to spur this transition, it will be necessary to 

ensure that they are crafted to not just cut greenhouse gas emissions and move toward cleaner 

energy sources, but also to ensure that the economic and employment benefits that will 

accompany the transition are realized in California. This means that particular attention must 

be paid to fostering an economic environment that promotes and rewards California-based 

investment and development of new technologies and that adequate resources are devoted to 

building and maintaining a California-based workforce equipped to help make the transition. 

A Public Process A Public Process 

Addressing climate change presents California with a challenge of unprecedented scale and 

scope. Success will require the support of Californians up and down the state. At every step 

of the way, we have endeavored to engage the public in the development of this plan and our 

efforts to turn the tide in the fight against global warming. 

In preparing the Draft Scoping Plan, ARB and CAT subgroups held dozens of workshops, 

workgroups, and meetings on specific technical issues and policy measures. Since the 

release of the draft plan in late June, we have continued our extensive outreach with 

workshops and webcasts throughout the state. Hundreds of Californians showed up to share 

their thoughts about the draft plan, and gave us their suggestions for improving it. We’ve 

received thousands of postcards, form letters, emails, and over 1,000 unique comments 
Scoping Plan Executive Summary 

ES-3 

posted to our website or sent by mail. All told, more than 42,000 people commented on the 

draft Plan. 

ARB catalogued and publicly posted all the comments we received. In many instances, we 

engaged experts and staff at our partner agencies for additional evaluation of comments and 

suggestions. 

This plan reflects the input of Californians at every level. Our partners at other State 

agencies, in the legislature, and at the local government level have provided key input. 

We’ve met with members of community groups to address environmental justice issues, with 

representatives of California’s labor force to ensure that good jobs accompany our transition 

to a clean energy future, and with representatives of California’s small businesses to ensure 

that this vital part of our state’s economic engine flourishes under this plan. We’ve heeded 

the advice of public health and environmental experts throughout the state to design the plan 

so that it provides valuable co-benefits in addition to cutting greenhouse gases. We’ve also 

worked with representatives from many of California’s leading businesses and industries to 

craft a plan that works in tandem with the State’s efforts to continue strong economic growth. 

In short, we’ve heard from virtually every sector of California’s society and economy, 

reflecting the fact that the plan will touch the life of almost every Californian in some way. 

Scoping Plan Recommendations Scoping Plan Recommendations 

The recommendations in this plan were shaped by input and advice from ARB’s partners on 

the Climate Action Team, as well as the Environmental Justice Advisory Committee (EJAC), 

the Economic and Technology Advancement Advisory Committee (ETAAC), and the 

Market Advisory Committee (MAC). Like the Draft Scoping Plan, the strength of this plan 

lies in the comprehensive array of emission reduction approaches and tools that it 

recommends. 

Key elements of California’s recommendations for reducing its greenhouse 

gas emissions to 1990 levels by 2020 include: 

• Expanding and strengthening existing energy efficiency programs as 

well as building and appliance standards; 

• Achieving a statewide renewables energy mix of 33 percent; 

• Developing a California cap-and-trade program that links with other 

Western Climate Initiative partner programs to create a regional 

market system; 

• Establishing targets for transportation-related greenhouse gas 

emissions for regions throughout California, and pursuing policies 

and incentives to achieve those targets; 
Executive Summary Scoping Plan 

ES-4 

• Adopting and implementing measures pursuant to existing State laws 

and policies, including California’s clean car standards, goods 

movement measures, and the Low Carbon Fuel Standard; and 

• Creating targeted fees, including a public goods charge on water use, 

fees on high global warming potential gases, and a fee to fund the 

administrative costs of the State’s long term commitment to AB 32 

implementation. 

After Board approval of this plan, the measures in it will be developed and adopted through 

the normal rulemaking process, with public input. 

Key Changes Key Changes 

This plan is built upon the same comprehensive approach to achieving reductions as the draft 

plan. However, as a result of the extensive public comment we received, this plan includes a 

number of general and measure-specific changes. The key changes and additions follow. 

Additional Reports and Supplements Additional Reports and Supplements 

1. Economic and Public Health Evaluations: This plan incorporates an evaluation of 

the economic and public health benefits of the recommended measures. These 

analyses follow the same methodology used to evaluate the Draft Scoping Plan.1

2. CEQA Evaluation: This plan includes an evaluation of the potential 

environmental impacts of the Scoping Plan under the California Environmental 

Quality Act (CEQA).2

 

Programmatic Changes Programmatic Changes grammatic Changes 

1. Margin of Safety for Uncapped Sectors: The plan provides a ‘margin of safety,’ 

that is, additional reductions beyond those in the draft plan to account for 

measures in uncapped sectors that do not, or may not, achieve the estimated 

reduction of greenhouse gas emissions in this plan. Along with the certainty 

provided by the cap, this will ensure that the 2020 target is met. 

2. Focus on Labor: The plan includes a discussion of issues directly related to 

California’s labor interests and working families, including workforce 

development and career technical education. This additional element reflects 

ARB’s existing activities and expanded efforts by State agencies, such as the 

Employment Development Department, to ensure that California will have a 

green technology workforce to address the challenges and opportunities presented 

by the transition to a clean energy future. 

 

1

 Staff will provide an update to the Board to respond to comments received on these analyses. 

2

 This evaluation is contained in Appendix J. 
Scoping Plan Executive Summary 

ES-5 

3. Long Term Trajectory: The plan includes an assessment of how well the 

recommended measures put California on the long-term reduction trajectory 

needed to do our part to stabilize the global climate. 

4. Carbon Sequestration: The plan describes California’s role in the West Coast 

Regional Carbon Sequestration Partnership (WESTCARB), a public-private 

collaboration to characterize regional carbon capture and sequestration 

opportunities. In addition, the plan expresses support for near-term development 

of sequestration technology. This plan also acknowledges the important role of 

terrestrial sequestration in our forests, rangelands, wetlands, and other land 

resources. 

5. Cap-and-Trade Program: The plan provides additional detail on the proposed 

cap-and-trade program including a discussion regarding auction of allowances, a 

discussion of the proposed role for offsets, the role of voluntary renewable power 

purchases, and additional detail on the mechanisms to be developed to encourage 

voluntary early action. 

6. Implementation: The plan provides additional detail on implementation, tracking 

and enforcement of the recommended actions, including the important role of 

local air districts. 

Changes to Specific Measures and Programs Changes to Specific Measures and Programs 

1. Regional Targets: ARB re-evaluated the potential benefits from regional targets 

for transportation-related greenhouse gases in consultation with regional planning 

organizations and researchers at U.C. Berkeley. Based on this information, ARB 

increased the anticipated reduction of greenhouse gas emissions for Regional 

Transportation-Related Greenhouse Gas Targets from 2 to 5 million metric tons 

of CO2 equivalent (MMTCO2E). 

2. Local Government Targets: In recognition of the critical role local governments 

will play in the successful implementation of AB 32, ARB added a section 

describing this role. In addition, ARB recommended a greenhouse gas reduction 

goal for local governments of 15 percent below today’s levels by 2020 to ensure 

that their municipal and community-wide emissions match the State’s reduction 

target. 

3. Additional Industrial Source Measures: ARB added four additional measures to 

address emissions from industrial sources. These proposed measures would 

regulate fugitive emissions from oil and gas recovery and transmission activities, 

reduce refinery flaring, and require control of methane leaks at refineries. We 
Executive Summary Scoping Plan 

ES-6 

anticipate that these measures will provide 1.5 MMTCO2E of greenhouse gas 

reductions. 

4. Recycling and Waste Re-Assessment: In consultation with the California 

Integrated Waste Management Board, ARB re-assessed potential measures in the 

Recycling and Waste sector. As a result of this review, ARB increased the 

anticipated reduction of greenhouse gas emissions from the Recycling and Waste 

Sector from 1 to 10 MMTCO2E, incorporating measures to move toward high 

recycling and zero-waste.3

5. Green Building Sector: This plan includes additional technical evaluations 

demonstrating that green building systems have the potential to reduce 

approximately 26 MMTCO2E of greenhouse gases. These tools will be helpful in 

reducing the carbon footprint for new and existing buildings. However, most of 

these greenhouse gas emissions reductions will already be counted in the 

Electricity, Commercial/Residential Energy, Water or Waste sectors and are not 

separately counted toward the AB 32 goal in this plan. 

6. High Global Warming Potential (GWP) Mitigation Fee: Currently many of the 

chemicals with very high Global Warming Potential (GWP)—typically older 

refrigerants and constituents of some foam insulation products—are relatively 

inexpensive to purchase. ARB includes in this plan a Mitigation Fee measure to 

better reflect their impact on the climate. The fee is anticipated to promote the 

development of alternatives to these chemicals, and improve recycling and 

removal of these substances when older units containing them are dismantled. 

7. Modified Vehicle Reductions: Based on current regulatory development, ARB 

modified the expected emissions reduction of greenhouse gases from the HeavyDuty Vehicle Greenhouse Gas Emission Reduction (Aerodynamic Efficiency) 

measure and the Tire Inflation measure. The former measure is now expected to 

achieve 0.9 MMTCO2E while the latter is now expected to achieve 

0.4 MMTCO2E. 

8. Discounting Low Carbon Fuel Standard Reductions: ARB modified the expected 

emission reductions from the Low Carbon Fuel Standard to reflect overlap in 

claimed benefits with California’s clean car law (the Pavley greenhouse gas 

vehicle standards). This has the result of discounting expected reduction of 

greenhouse gas emissions from the Low Carbon Fuel Standard by approximately 

10 percent. 

 

3

 Research to help quantify these greenhouse gas emissions reductions is continuing, so only 1 MMTCO2E of 

these reductions are currently counted toward the AB 32 goal in this plan. Additional tons will be considered 

part of the safety margin. 
Scoping Plan Executive Summary 

ES-7 

A Balanced and Comprehensive Approach A Balanced and Comprehensive Approach sive Approach 

Meeting the goals of AB 32 will require a coordinated set of strategies to reduce emissions 

throughout the economy. These strategies will fit within the comprehensive tracking, 

reporting, and enforcement framework that is already being developed and implemented. By 

2020, a hard and declining cap will cover 85 percent of California’s greenhouse gas 

emissions, helping to ensure that we meet our reduction targets on time. 

AB 32 lays out a number of important factors that have helped to guide the development of 

this plan and will continue to be considered as regulations are developed over the next few 

years. Some of the key criteria that have and will be further considered are: costeffectiveness; overall societal benefits like energy diversification and public health 

improvements; minimization of leakage; and impacts on specific sectors like small business 

and disproportionately impacted communities. The comprehensive approach in the plan 

reflects a balance among these and other important factors and will help to ensure that 

California meets its greenhouse gas reduction targets in a way that promotes and rewards 

innovation, is consistent with and helps to foster economic growth, and delivers 

improvements to the environment and public health. 

Many of the measures in this plan complement and reinforce one another. For instance, the 

Low Carbon Fuel Standard, which reduces the carbon intensity of transportation fuels sold in 

California, will work in tandem with technology-forcing regulations designed to reduce 

greenhouse gas emissions from cars and trucks. Improvements in land use and the ways we 

grow and build our communities will further reduce emissions from the transportation sector. 

Many of the measures also build on highly successful long-standing practices in California—

such as energy efficiency and the use of renewable energy resources—that can be accelerated 

and expanded. Increasing the amount of energy we get from renewable energy sources, 

including placing solar arrays and solar water heaters on houses throughout California, will 

be supported by an increase in building standards for energy efficiency. Other measures 

address the transport and treatment of water throughout the state, reduce greenhouse gas 

emissions that come from ships in California’s ports, and promote changes to agricultural and 

forestry practices. There are also measures designed to safely reduce or recover a range of 

very potent greenhouse gases – refrigerants and other industrial gases – that contribute to 

global warming at a level many times greater per ton emitted than carbon dioxide. 

Many of the measures in this plan are designed to take advantage of the economic and 

innovation-related benefits that market-based compliance strategies can provide. Particularly 

in light of current economic uncertainty, it is important to ensure that California’s climate 

policies be designed to promote and take advantage of economic opportunities while also 

cutting greenhouse gas emissions. For instance, the cap-and-trade program creates an 

opportunity for firms to seek out cost-effective emission reduction strategies and provides an 

incentive for technological innovation. California’s clean car standards, which require 

manufacturers to meet annual average levels of greenhouse gas emissions for all cars they 

sell in California, also offer flexibility to help ensure compliance. Under California’s clean 
Executive Summary Scoping Plan 

ES-8 

car standards, manufacturers who exceed compliance standards are permitted to bank credits 

for future use or sell them to other manufacturers. These types of compliance options will be 

key in ensuring that we are able to meet our reduction targets in a cost-effective manner. 

Working with the Western Climate Initiative Working with the Western Climate Initiative 

California is working closely with six other states and four Canadian provinces in the 

Western Climate Initiative (WCI) to design a regional greenhouse gas emissions reduction 

program that includes a cap-and-trade approach. California’s participation in WCI creates an 

opportunity to provide substantially greater reductions in greenhouse gas emissions from 

throughout the region than could be achieved by California alone. The larger scope of the 

program also expands the market for clean technologies and helps avoid leakage, that is, the 

shifting of emissions from sources within California to sources outside the state. 

The WCI partners released the recommended design for a regional cap-and-trade program in 

September 2008.4 ARB embraces the WCI effort, and will continue to work with WCI 

partners. The creation of a robust regional trading system can complement the other policies 

and measures included in this plan, and provide the means to achieve the reduction of 

greenhouse gas emissions needed from a wide range of sectors as cost-effectively as possible. 

California’s Economy, Environment, and Public Healt California’s Economy, Environment, and Public Health y, Environment, and Public Health 

The approaches in this plan are designed to maximize the benefits that can accompany the 

transition to a clean energy economy. California has a long and successful track record of 

implementing environmental policies that also deliver economic benefits. This plan 

continues in that tradition. 

AB32: Evaluating the Economic Effects 32: Evaluating the Economic Effects 32: Evaluating the Economic Effects 

The economic analysis of this plan indicates that implementation of the recommended 

strategies to address global warming will create jobs and save individual households 

money.

5

 The analysis also indicates that measures in the plan will position California 

to move toward a more secure, sustainable future where we invest heavily in energy 

efficiency and clean technologies. The economic analysis indicates that 

implementation of that forward-looking approach also creates more jobs and saves 

individual households more money than if California stood by and pursued an 

unacceptable course of doing nothing at all to address our unbridled reliance on fossil 

fuels. 

Specifically, analysis of the Scoping Plan indicates that projected economic benefits 

in 2020 compared to the business-as-usual scenario include: 

• Increased economic production of $33 billion 

 

4

 Details of the WCI recommendation are provided in Appendix D. 

5

 See Appendix G. 
Scoping Plan Executive Summary 

ES-9 

• Increased overall gross state product of $7 billion

• Increased overall personal income by $16 billion 

• Increased per capita income of $200 

• Increased jobs by more than 100,000 

Furthermore, the results of the economic analysis may underestimate the economic 

benefits of the plan since the models that were used do not account for savings that 

result from the flexibility provided under market-based programs. 

AB32: The Environmental and Public Health Costs of I 32: The Environmental and Public Health Costs of Inaction 

A key factor that was not weighed in the overall economic analysis is the potential 

cost of doing nothing. When these costs are taken into account, the benefits 

associated with implementing a comprehensive plan to cut greenhouse gas emissions 

become even clearer. As a state, California is particularly vulnerable to the costs 

associated with unmitigated climate change. 

A summary report from the California Climate Change Center notes that a warming 

California climate would generate more smoggy days by contributing to ozone 

formation while also fostering more large brush and forest fires. Continuing 

increases in global greenhouse gas emissions at business-as-usual rates would result, 

by late in the century, in California losing 90 percent of the Sierra snow pack, sea 

level rising by more than 20 inches, and a three to four times increase in heat wave 

days. These impacts will translate into real costs for California, including flood 

damage and flood control costs that could amount to several billion dollars in many 

regions such as the Central Valley, where urbanization and limited river channel 

capacity already exacerbate existing flood risks.6

 Water supply costs due to scarcity 

and increased operating costs would increase as much as $689 million per year by 

2050.7 ARB analysis shows that due to snow pack loss, California’s snow sports 

sector would be reduced by $1.4 billion (2006 dollars) annually by 2050 and shed 

14,500 jobs; many other sectors of California’s economy would suffer as well. 

Failing to address climate change also carries with it the risk of substantial public 

health costs, primarily as a result of rising temperatures. Sustained triple-digit heat 

waves increase the health risk for several segments of the population, especially the 

elderly. But higher average temperatures will also increase the interactions of smogcausing chemicals with sunlight and the atmosphere to produce higher volumes of 

toxic byproducts than would otherwise occur. In the 2006 report to the Governor 

 

6

 A Summary Report from: California Climate Change Center. Our Changing Climate: Assessing the Risks to 

California. Document No. CEC-500-2006-077. July 2006. http://www.energy.ca.gov/2006publications/CEC500-2006-077/CEC-500-2006-077.PDF (accessed October 12, 2008) 

7

 A Report from: California Climate Change Center. Climate Warming and Water Supply Management in 

California. Document No. CEC-500-2005-195-SF. March 2006. pp.13-14 

http://www.energy.ca.gov/2005publications/CEC-500-2005-195/CEC-500-2005-195-SF.PDF (accessed 

October 12, 2008). 
Executive Summary Scoping Plan 

ES-10 

from the California Climate Center, it was reported that global increases in 

temperature will lead to increased concentrations and emissions of harmful pollutants 

in California.8

 Some cities in California are disproportionately susceptible to 

temperature increases since they already have elevated pollution levels and are 

subject to the heat-island effect that reduces nighttime cooling, allowing heat to build 

up and magnify the creation of additional harmful pollution. Low-income 

communities are disproportionately impacted by climate change, lacking the 

resources to avoid or adapt to these impacts. For example, low-income residents are 

less likely to have access to air conditioning to prevent heat stroke and death in heat 

waves. For California, then, taking action with other regions and nations to help 

mitigate the impacts of climate change will help slow temperature rise. This in turn 

will likely result in fewer premature deaths from respiratory and heat-related causes, 

and many thousands fewer hospital visits and days of illness. 

California cannot avert the impacts of global climate change by acting alone. We 

can, however, take a national and international leadership role in this effort by 

demonstrating that taking firm and reasoned steps to address global warming can 

actually help spur economic growth. 

AB32: Providing Savings for Households and Businesse 32: Providing Savings for Households and Businesses 

This plan builds upon California’s thirty-year track record of pioneering energy 

efficiency programs. Many of the measures in the plan will deliver significant gains 

in energy efficiency throughout the economy. These gains, even after increases in per 

unit energy costs are taken into account, will help deliver annual savings of between 

$400 and $500 on average by 2020 for households, including low-income 

households. 

Businesses, both large and small, will benefit too. By 2020, the efficiency measures 

in the plan will decrease overall energy expenditures for businesses even after taking 

into account projected rises in per unit energy costs. Since small businesses spend a 

greater proportional share of revenue on energy-related costs, they are likely to 

benefit the most. Furthermore, businesses throughout the state will benefit from the 

overall economic growth that is projected to accompany implementation of AB 32 

between now and 2020. 

Similar savings are projected in the transportation sector. By reducing greenhouse 

gas pollution from more efficient and alternatively-fueled cars and trucks under 

California’s Clean Car law (the Pavley greenhouse gas standards), consumers save on 

operating costs through reduced fuel use. Although cars will be marginally more 

expensive, owners will be paid back with savings over the lifetime of the car, and the 

average new car buyer will have an extra $30 each month for other expenditures. 

Current estimates indicate that consumer savings in 2020 for California’s existing 

 

8

 A Report from: California Climate Change Center. Scenarios of Climate Change in California: An Overview. 

Document No. CEC-500-2005-186-SF. February 2006. http://www.energy.ca.gov/2005publications/CEC-500-

2005-186/CEC-500-2005-186-SF.PDF (accessed October 12, 2008) 
Scoping Plan Executive Summary 

ES-11 

clean car standards will be over $12 billion. These savings give Californians the 

ability to invest their dollars in other sectors of the state’s economy. 

AB32: Driving Investment and Job Growth 32: Driving Investment and Job Growth 32: Driving Investment and Job Growth 

Addressing climate change also provides a strong incentive for investment in 

California. Our leadership in environmental and energy efficiency policy has already 

helped attract a large and growing share of the nation’s venture capital investment in 

green technologies. Since AB 32 was signed into law, venture capital investment in 

California has skyrocketed. In the second quarter of 2008 alone, California 

dominated world investment in clean technology venture capital, receiving $800 

million of the global total of $2 billion.9

These investments in building a new clean tech sector also translate directly into job 

growth. A study by U.C. Berkeley’s Energy and Resources Group and Goldman 

School of Public Policy found that investments in green technologies produce jobs at 

a higher rate than investments in comparable conventional technologies.10 And the 

National Venture Capital Association estimates that each $100 million in venture 

capital funding helps create 2,700 jobs, $500 million in annual revenues for two 

decades and many indirect jobs.11

AB32: Improving Public Health 32: Improving Public Health 32: Improving Public Health 

The public health analysis conducted for this Plan indicates that cutting greenhouse 

gases will also provide a wide range of additional public health and environmental 

benefits. By 2020, the economic value alone of the additional air-quality related 

benefits is projected to be on the order of $4.4 billion. Our analysis indicates that 

implementing the Scoping Plan will result in a reduction of 15 tons per day of 

combustion-generated soot (PM 2.5) and 61 tons per day of oxides of nitrogen 

(precursors to smog). These reductions in harmful air pollution would provide the 

following estimated health benefits in 2020, above and beyond those projected to be 

achieved as a result of California’s other existing public health protection and 

improvement efforts: 

• An estimated 780 premature deaths statewide will be avoided 

• Almost 12,000 incidences of asthma and lower respiratory symptoms will be 

avoided 

 

9

 Press Release from Cleantech Network LLC, Cleantech Venture Investment Reaches Record of $2 Billion in 

2008. July 08, 2008. http://cleantech.com/about/pressreleases/011008.cfm (accessed October 12, 2008) 

10 Report of the Renewable and Appropriate Energy Laboratory. Putting Renewables to Work: How Many Jobs 

Can the Clean Energy Industry Generate? Energy and Resources Group/Goldman School of Public Policy at 

University of California, Berkeley. April 13, 2004. http://rael.berkeley.edu/old-site/renewables.jobs.2006.pdf

(accessed October 12, 2008) 

11 Report prepared for the National Venture Capital Association. Venture Impact 2004: Venture Capital 

Benefits to the U.S. Economy. Prepared by: Global Insight. June 2004. 

http://www.globalinsight.com/publicDownload/genericContent/07-20-04_fullstudy.pdf (accessed October 12, 

2008) 
Executive Summary Scoping Plan 

ES-12 

• 77,000 work loss days will be avoided 

In addition to the quantified health benefits, our analysis also indicates that 

implementation of the measures in the plan will deliver a range of other public health 

benefits. These include health benefits associated with local and regional 

transportation-related greenhouse gas targets that will facilitate greater use of 

alternative modes of transportation such as walking and bicycling. These types of 

moderate physical activities reduce many serious health risks including coronary 

heart disease, diabetes, hypertension and obesity.12 Furthermore, as specific measures 

are developed, ARB and public health experts will work together to ensure that they 

are designed with an eye toward capturing a broad range of public health co-benefits. 

The results of both the economic and public health analyses are clear: guiding 

California toward a clean energy future with reduced dependence on fossil fuels will 

grow our economy, improve public health, protect the environment and create a more 

secure future built on clean and sustainable technologies. 

State Leadership State Leadership 

California is committed to once again lead and support a pioneering effort to protect the 

environment and improve public health while maintaining a vibrant economy. Every agency, 

department and division will bring climate change considerations into its policies, planning 

and analysis, building and expanding current efforts to green its fleet and buildings, and 

managing its water, natural resources, and infrastructure to reduce greenhouse gas emissions. 

In all these efforts, California is exercising a leadership role in global action to address 

climate change. It is also exemplifying the essential role states play as the laboratories of 

innovation for the nation. As California has done in the past in addressing emissions that 

caused smog, the State will continue to develop innovative programs that benefit public 

health and improve our environment and quality of life. 

Moving Beyond 2020 Moving Beyond 2020 

AB 32 requires a return to 1990 emission levels by 2020. The Scoping Plan is designed to 

achieve that goal. However, 2020 is by no means the end of California’s journey to a clean 

energy future. In fact, that is when many of the strategies laid out in this plan will just be 

kicking into high gear. 

Take, for example, the regional transportation-related greenhouse gas emissions targets. In 

order to achieve the deep cuts in greenhouse gas emissions we will need beyond 2020 it will 

be necessary to significantly change California’s current land use and transportation planning 

policies. Although these changes will take time, getting started now will help put California 

 

12 Appendix H contains a reference list of studies documenting the public health benefits of alternative

transportation. 
Scoping Plan Executive Summary 

ES-13 

on course to cut statewide greenhouse gas emissions by 80 percent in 2050 as called for by 

Governor Schwarzenegger. 

Similarly, measures like the cap-and-trade program, energy efficiency programs, the 

California clean car standards, and the renewables portfolio standard will all play central 

roles in helping California meet its 2020 reduction requirements. Yet, these strategies will 

also figure prominently in California’s efforts beyond 2020. Some of these measures, like 

energy efficiency programs and the renewables portfolio standard, have already delivered 

greenhouse gas emissions reduction benefits that will expand over time. Others, like the capand-trade program, will put in place a foundation on which to build well into the future. All 

of these measures, and many others in the plan, will ensure that California meets its 2020 

target and is positioned to continue its international role as leader in the fight against global 

warming to 2050 and beyond. 

A Shared Challenge A Shared Challenge 

Californians are already responding to the challenge of reducing greenhouse gas emissions. 

Over 120 California cities and counties have signed on to the U.S. Conference of Mayors 

Climate Protection Agreement13 and many have established offices of climate change and are 

developing comprehensive plans to reduce their carbon footprint. Well over 300 companies, 

municipalities, organizations and corporations are members of the California Climate Action 

Registry, reporting their greenhouse gas emissions on an annual basis. Many other 

businesses and corporations are making climate change part of their fiscal and strategic 

planning. ARB encourages these initial efforts and has set in place a policy to support and 

encourage other voluntary early reductions. 

Successful implementation of AB 32 will depend on a growing commitment by a majority of 

companies to include climate change as an integral part of their planning and operations. 

Individuals and households throughout the state will also have to take steps to consider 

climate change at home, at work and in their recreational activities. To support this effort, 

this plan includes a comprehensive statewide outreach program to provide businesses and 

individuals with the widest range of information so they can make informed decisions about 

reducing their carbon footprints. 

Californians will not have to wait for decades to see the benefits of a low carbon economy. 

New homes can achieve a near zero-carbon footprint with better building techniques and 

existing technologies, such as solar arrays and solar water heaters. Many older homes can be 

retrofitted to use far less energy than at present. A new generation of vehicles, including 

plug-in hybrids, is poised to appear in dealers’ showrooms, and the development of the 

infrastructure to support hydrogen fuel cell cars continues. Cities and new developments will 

be more walkable, public transport will improve, and high-speed rail will give travelers a 

new clean transportation option. 

 

13 Mayors Climate Protection Center. List of Participating Mayors. 

http://www.usmayors.org/climateprotection/list.asp (accessed October 12, 2008) 
Executive Summary Scoping Plan 

ES-14 

That world is just around the corner. What lies beyond is even more exciting. Where will 

California be in 2050? By harnessing the ingenuity and creativity of our society and 

sparking the imagination of the next generation of Californians, California will make the 

transition to a clean-energy, low-carbon society and become a healthier, cleaner and more 

sustainable place to live. This plan charts a course toward that future. 

ARB invites comment and input from the broadest array of the public and stakeholders as we 

move forward over the next two years to develop the individual measures, and develop the 

policies that will move us toward sustainable clean energy and away from fossil fuels. Your 

participation will help craft the mechanisms and measures to make this plan a reality. This is 

California’s plan and together, we need to make the necessary changes to address the greatest 

environmental challenge we face. As Governor Schwarzenegger stated when he signed 

AB 32 into law two years ago, “We owe our children and we owe our grandchildren. We 

simply must do everything in our power to fight global warming before it is too late.” 
Scoping Plan I. Introduction 

1 

 

I. INTRODUCTION: A Framework for Change INTRODUCTION: A Framework for Change INTRODUCTION: A Framework for Change 

California strengthened its commitment to address climate change when Governor 

Schwarzenegger signed Assembly Bill 32 (AB 32), the Global Warming Solutions Act of 

2006 (Núñez, Chapter 488, Statutes of 2006). This groundbreaking legislation represents a 

turning point for California and makes it clear that a business-as-usual approach toward 

greenhouse gas emissions is no longer acceptable. In light of the need for strong and 

immediate action to counter the growing threat of global warming, AB 32 sets forth an 

aggressive timetable for achieving results. 

AB 32 embodies the idea that California can continue to grow and flourish while reducing its 

greenhouse gas emissions and continuing its long-standing efforts to achieve healthy air, and 

protect and enhance public health. Achieving these goals will involve every sector of the 

state’s $1.7 trillion economy and touch the life of every Californian. 

As the lead agency for implementing AB 32, the California Air Resources Board (ARB or 

the Board) released a Draft Scoping Plan on June 26, 2008, which laid out a comprehensive 

statewide plan to reduce California’s greenhouse gas emissions to 1990 levels by 2020. 

This draft plan set forth a comprehensive reduction strategy that combines market-based 

regulatory approaches, other regulations, voluntary measures, fees, policies, and programs 

that will significantly reduce emissions of greenhouse gases and help make our state cleaner, 

more efficient and more secure. 

Based upon the numerous comments received on the draft, as well as additional staff 

analysis, ARB released a Proposed Scoping Plan on October 15, 2008. At its November 20 

and 21, 2008 meeting, the Board heard staff presentations on the Proposed Scoping Plan and 

directed staff to make a number of modifications. This Approved Scoping Plan incorporates 

these modifications, as well as corrections from the November 14, 2008 errata sheet, but 

otherwise reflects the same measures of the Proposed Scoping Plan. 

The Board approved this Scoping Plan at its December 11, 2008 meeting, providing specific 

direction for the State’s greenhouse gas emissions reduction program. The recommended 

measures will be developed into regulations over the next two years, to go into effect by 

January 1, 2012. As specific measures in the plan are developed, we will update and adjust 

our regulatory proposals as necessary to ensure that they reflect any new information, 

additional analyses, new technologies or other factors that emerge during the process. 

ARB has conducted a transparent, wide-ranging public process to develop the Scoping Plan, 

including numerous meetings, workshops, and seminars with stakeholders. Substantial input 

on the development of the Scoping Plan came from formal advisory committees, meetings 

with industrial and business groups, non-profit organizations and members of the public, as 
I. Introduction Scoping Plan 

2 

well as written comments on the Draft Scoping Plan. ARB will continue its outreach 

activities to seek ongoing public input and will encourage early and continued involvement 

in the implementation of the plan from all Californians. 

A. Summary of Changes from the Draft Scoping Plan Summary of Changes from the Draft Scoping Plan Summary of Changes from the Draft Scoping Plan 

ARB released the June Draft Scoping Plan and requested public comment and input, while 

continuing to analyze the measures and their impact on California. Since the Draft Scoping 

Plan release, ARB received almost 1,000 unique written comments as well as hundreds of 

verbal comments at workshops and in meetings. Taking into account that some written 

comments were submitted by multiple individuals, all told more than 42,000 people have 

commented on the draft plan. ARB has also completed detailed economic and public health 

evaluations of its recommendations. 

The key changes between the Draft Scoping Plan and the Scoping Plan are summarized 

below. The Scoping Plan includes the following modifications: 

1. General 1. General 

• Incorporates economic and public health analyses of the Scoping Plan. These 

analyses show that the recommendations in the Scoping Plan will have a net 

positive impact on both the economy and public health. These analyses follow 

the same methodology used to evaluate the Draft Scoping Plan. 

• Provides a “margin of safety” by recommending additional greenhouse gas 

emissions reduction strategies to account for measures in uncapped sectors that do 

not achieve the greenhouse gas emissions reductions estimated in the Scoping 

Plan. Along with the certainty provided by the cap, this will ensure that the 2020 

target is met. 

• Expands the discussion of workforce development, education, and labor to more 

fully reflect existing activities and the role of other state agencies in ensuring an 

adequate green technology workforce. 

• Assesses how well the recommended measures put California on the long-term 

reduction trajectory needed to do our part to stabilize the global climate. 

• Describes California’s role in the West Coast Regional Carbon Sequestration 

Partnership (WESTCARB), a public-private collaboration to characterize regional 

carbon capture and sequestration opportunities, and expresses support for nearterm advancement of the technology and monitoring of its development. 

Acknowledges the important role of terrestrial sequestration. 

• Provides greater detail on the mechanisms to be developed to encourage voluntary 

early action. 

• Provides additional detail on implementation, tracking and enforcement of the 

recommended actions, including the important role of local air districts. 
Scoping Plan I. Introduction 

3 

• Evaluates the potential environmental impacts of the Scoping Plan under the 

California Environmental Quality Act (CEQA). This evaluation is contained in 

Appendix J. 

2. Proposed Measures 2. Proposed Measures 

• Provides greater detail on the proposed cap-and-trade program including more 

detail on the allocation and auction of allowances, and clarification of the 

proposed role of offsets. 

• Re-evaluates the potential benefits from regional targets for transportation-related 

greenhouse gases in consultation with regional planning organizations and 

researchers at U.C. Berkeley. Based on this information, ARB increased the 

anticipated greenhouse gas emissions reductions for Regional TransportationRelated Greenhouse Gas Targets from 2 to 5 million metric tons of CO2

equivalent (MMTCO2E). 

• In recognition of the importance of local governments in the successful 

implementation of AB 32, adds a section describing this role and recommends a 

greenhouse gas emissions reduction target for local government municipal and 

community-wide emissions of a 15 percent reduction from current levels by 2020 

to parallel the State’s target. 

• Adds four measures to address emissions from industrial sources. These proposed 

measures would regulate fugitive emissions from oil and gas recovery and gas 

transmission activities, reduce refinery flaring, and remove the methane 

exemption for refineries. These proposed measures are anticipated to provide 

1.5 MMTCO2E of greenhouse gas reductions in 2020. 

• In consultation with the California Integrated Waste Management Board, reassesses potential measures in the Recycling and Waste sector. As a result of this 

assessment, ARB increased the reduction of greenhouse gas emissions that can 

ultimately be anticipated from the Recycling and Waste Sector from 1 to 

10 MMTCO2E, recommending measures to move toward high recycling and zerowaste. Research to help quantify these greenhouse gas emissions is continuing, so 

only 1 MMTCO2E of these reductions is currently counted towards the AB 32 

goal in this plan. 

• Estimates the potential reduction of greenhouse gas emissions from the Green 

Building sector. Green building systems have the potential to reduce 

approximately 26 MMTCO2E of greenhouse gas emissions. Since most of these

emissions reductions are counted in the Electricity, Commercial/Residential 

Energy, Water or Waste sectors, emission reductions in the Green Building sector 

are not separately counted toward the AB 32 goal. 

• Adds a High Global Warming Potential (GWP) Mitigation Fee measure to ensure 

that the climate impact of these gases is reflected in their price to encourage 

reduced use and end-of-life losses, as well as the development of alternatives. 

• Reduces the expected greenhouse gas emissions reduction from the Heavy-Duty 

Vehicle Greenhouse Gas Emissions Reduction (Aerodynamic Efficiency) 

measure and the Tire Inflation measure based on ongoing regulatory 
I. Introduction Scoping Plan 

4 

development. The Heavy-Duty Vehicle Greenhouse Gas Emissions Reduction 

(Aerodynamic Efficiency) measure is now expected to achieve 0.9 MMTCO2E 

and the Tire Inflation measure is now expected to achieve 0.4 MMTCO2E. 

• Modifies the expected reduction of greenhouse gas emissions from the Low 

Carbon Fuel Standard to account for potential overlap of benefits with the Pavley 

greenhouse gas vehicle standards. ARB discounted the expected emission 

reductions from the Low Carbon Fuel Standard by 10 percent. 

• After further evaluation, moves the Heavy-Duty Truck Efficiency measure to the 

Goods Movement measure. ARB expects that market dynamics will provide an 

inducement to improve heavy-duty truck efficiency, and reductions in greenhouse 

gases in the future. ARB would consider pursuing direct requirements to reduce 

greenhouse gases if truck efficiency does not improve in the future. 

B. Background Background Background 

1. Climate Change Policy in California 1. Climate Change Policy in California 

California first addressed climate change in 1988 with the passage of AB 4420 (Sher, 

Chapter 1506, Statutes of 1988). This bill directed the California Energy 

Commission (CEC) to study global warming impacts to the state and develop an 

inventory of greenhouse gas emissions sources. In 2000, SB 1771 (Sher, Chapter 

1018, Statutes of 2000) established the California Climate Action Registry to allow 

companies, cities and government agencies to voluntarily record their greenhouse gas 

emissions in anticipation of a possible program that would allow them to be credited 

for early reductions. 

In 2001, the United Nations’ Intergovernmental Panel on Climate Change (IPCC) 

reported that “there is new and stronger evidence that most of the warming observed 

over the last 50 years is attributable to human activities.” The following year, 

AB 1493 (Pavley, Chapter 200, Statutes of 2002) was signed into law, requiring ARB 

to develop regulations to reduce greenhouse gas emissions from passenger vehicles, 

light-duty trucks and non-commercial vehicles sold in California. 

Recognizing the value of regional partners in addressing climate change, the 

governors of California, Washington, and Oregon created the West Coast Global 

Warming Initiative in 2003 with provisions for the states to work together on climate 

change-related programs. 

Two years later Governor Schwarzenegger signed Executive Order S-3-05, calling for 

the State to reduce greenhouse gas emissions to 1990 levels by 2020 and to reduce 

greenhouse gas emissions to 80 percent below 1990 levels by 2050. The 2020 goal 

was established to be an aggressive, but achievable, mid-term target, and the 2050 

greenhouse gas emissions reduction goal represents the level scientists believe is 

necessary to reach levels that will stabilize climate. 
Scoping Plan I. Introduction 

5 

In 2006, SB 1368 (Perata, Chapter 598, Statutes of 2006) created greenhouse gas 

performance standards for new long-term financial investments in base-load 

electricity generation serving California customers. This law is designed to help spur 

the transition toward cleaner energy in California by placing restrictions on the ability 

of utilities to build new carbon-intensive plants or enter into new contracts with high 

carbon sources of electricity. Expiration of existing utility long-term contracts with 

coal plants will reduce greenhouse gas emissions when such generation is replaced by 

lower greenhouse gas-emitting resources. These reductions will reduce the need for 

utilities to submit allowances to comply with the cap-and-trade program. 

2. Assembly Bill 2. Assembly Bill32: The Global Warming Solutions Act 2: The Global Warming Solutions Act 2: The Global Warming Solutions Act 

In 2006, the Legislature passed and Governor Schwarzenegger signed AB 32, the 

Global Warming Solutions Act of 2006, which set the 2020 greenhouse gas emissions 

reduction goal into law. It directed ARB to begin developing discrete early actions to 

reduce greenhouse gases while also preparing a Scoping Plan to identify how best to 

reach the 2020 limit. The reduction measures to meet the 2020 target are to become 

operative by 2012. 

AB 32 includes a number of specific requirements for ARB: 

• Identify the statewide level of greenhouse gas emissions in 1990 to serve as the 

emissions limit to be achieved by 2020 (Health and Safety Code (HSC) §38550). 

In December 2007, the Board approved the 2020 emission limit of 427 million 

metric tons of carbon dioxide equivalent (MMTCO2E) of greenhouse gases. 

• Adopt a regulation requiring the mandatory reporting of greenhouse gas 

emissions (HSC §38530). In December 2007, the Board adopted a regulation 

requiring the largest industrial sources to report and verify their greenhouse gas 

emissions. The reporting regulation serves as a solid foundation to determine 

greenhouse gas emissions and track future changes in emission levels. 

• Identify and adopt regulations for Discrete Early Actions that could be 

enforceable on or before January 1, 2010 (HSC §38560.5). The Board identified 

nine Discrete Early Action measures including potential regulations affecting 

landfills, motor vehicle fuels, refrigerants in cars, port operations and other 

sources in 2007. The Board has already approved two Discrete Early Action 

measures (ship electrification at ports and reduction of high GWP gases in 

consumer products). Regulatory development for the remaining measures is 

ongoing. 

• Ensure early voluntary reductions receive appropriate credit in the 

implementation of AB 32 (HSC §38562(b)(3)). In February 2008, the Board 

approved a policy statement encouraging voluntary early actions and establishing 

a procedure for project proponents to submit quantification methods to be 

evaluated by ARB. ARB, along with California’s local air districts and the 

California Climate Action Registry, is working to implement this program. 

Voluntary programs are discussed further in Chapter II and in Chapter IV. 
I. Introduction Scoping Plan 

6 

• Convene an Environmental Justice Advisory Committee (EJAC) to advise the 

Board in developing the Scoping Plan and any other pertinent matter in 

implementing AB 32 (HSC §38591). The EJAC has met 12 times since early 

2007, providing comments on the proposed Early Action measures and the 

development of the Scoping Plan, and submitted its comments and 

recommendations on the draft Scoping Plan in October 2008. ARB will continue 

to work with The EJAC as AB 32 is implemented. 

• Appoint an Economic and Technology Advancement Advisory Committee 

(ETAAC) to provide recommendations for technologies, research and greenhouse 

gas emission reduction measures (HSC §38591). After a year-long public 

process, The ETAAC submitted a report of their recommendations to the Board in 

February 2008. The ETAAC also reviewed and provided comments on the Draft 

Scoping Plan. 

3. Climate Action Team 3. Climate Action Team 

In addition to establishing greenhouse gas emissions reduction targets for California, 

Executive Order S-3-05 established the Climate Action Team (CAT) for State 

agencies in 2005. Chaired by the Secretary of the California Environmental 

Protection Agency (CalEPA), the CAT has helped to direct State efforts on the 

reduction of greenhouse gas 

emissions and engage key State 

agencies including ARB. The 

Health and Human Services 

Agency, represented by the 

Department of Public Health, is 

the newest member of the 

CAT. Based on numerous 

public meetings and the review 

of thousands of submitted 

comments, the CAT released 

its first report in March 2006, 

identifying key carbon 

reduction recommendations for 

the Governor and Legislature. 

In April 2007, the CAT 

released a second report, 

“Proposed Early Actions to 

Mitigate Climate Change in 

California,” which details 

numerous strategies that should be initiated prior to the 2012 deadline for other 

climate action regulations and efforts. 

AB 32 recognizes the essential role of the CAT in coordinating overall climate policy. 

AB 32 does not affect the existing authority of other state agencies, and in addition to 

Climate Action Team

California Environmental Protection Agency 

Business, Transportation, and Housing Agency 

Health and Human Services Agency 

Resources Agency 

State and Consumer Services Agency 

Governor’s Office of Planning and Research 

Air Resources Board 

California Energy Commission 

California Public Utilities Commission 

Department of Food and Agriculture 

Department of Forestry and Fire Protection 

Department of General Services 

Department of Parks and Recreation 

Department of Transportation 

Department of Water Resources 

Integrated Waste Management Board 

State Water Resources Control Board 
Scoping Plan I. Introduction 

7 

ARB, many state agencies will be responsible for implementing the measures and 

strategies in this plan. The CAT is central to the success of AB 32, which requires an 

unprecedented level of cooperation and coordination across State government. The 

CAT provides the leadership for these efforts and helps ARB work closely with our 

state partners on the development and implementation of the strategies in the Scoping 

Plan. 

There are currently 12 subgroups within the CAT – nine that address specific 

economic sectors, and three that were formed to analyze broad issues related to 

implementing a multi-sector approach to greenhouse gas emissions reduction efforts. 

The CAT sector-based subgroups include: Agriculture, Cement, Energy, Forest, 

Green Buildings, Land Use, Recycling and Waste Management, State Fleet, and 

Water-Energy. The members of these subgroups are drawn from departments that 

work with or regulate industries in the sector. ARB participated in each of the 

subgroups. All of the subgroups held public meetings and solicited public input, and 

many had multiple public workshops. 

In March 2008, the subgroups collectively submitted more than 100 greenhouse gas 

emissions reduction measures to ARB for consideration in the Draft Scoping Plan. 

Many of those recommendations are reflected in this plan, and a number of them 

focus on reducing greenhouse gas emissions from energy production and use. 

Through the Energy Subgroup the California Energy Commission (CEC) and the 

California Public Utilities Commission (CPUC) are conducting a joint proceeding to 

provide recommendations on how best to address electricity and natural gas in the 

implementation of AB 32, including evaluation of how the Electricity sector might 

best participate in a cap-and-trade program. The two Commissions forwarded interim 

recommendations to ARB in March 2008 that supported inclusion of the Electricity 

sector in a multi-sector cap-and-trade program, and measures to increase the 

penetration of energy efficiency programs in both buildings and appliances and to 

increase renewable energy sources. The two Commissions have developed a second 

proposed decision that was released in September 2008. This proposed decision 

provides more detailed recommendations that relate to the electricity and natural gas 

sectors. Because implementation of the Scoping Plan will require careful 

coordination with the State’s energy policy, ARB will continue working closely with 

the two Commissions on this important area during the implementation of the 

recommendations in the Scoping Plan. 

There are also three subgroups which are not sector-specific. The Economic 

Subgroup reviewed cost information associated with potential measures that were 

included in the 2006 CAT report with updates reflected in the report, “Updated 

Macroeconomic Analysis of Climate Strategies,” in October 2007. This report 

provided an update of the macroeconomic analysis presented in the March 2006 CAT 

report to Governor Schwarzenegger and the Legislature. The Research Subgroup 

coordinates climate change research and identifies opportunities for collaboration, 

and is presently working on a report to the Governor. The State Operations Subgroup 
I. Introduction Scoping Plan 

8 

has been created to work with State agencies to create a statewide plan to reduce State 

government’s greenhouse gas emissions by a minimum of 30 percent by 2020. 

In the first quarter of 2009, the Climate Action Team will release a report on its 

activities outside of its involvement in the development of the Scoping Plan. The 

CAT report will focus on several cross-cutting topics with which members of the 

CAT have been involved since the publication of the 2006 CAT report. The topics to 

be covered include research on the physical and consequent economic impacts of 

climate change as well as climate change research coordination efforts among the 

CAT members. There will also be an update on the important climate change 

adaptation efforts led by the Resources Agency and a discussion of cross-cutting 

issues related to environmental justice concerns. The CAT report will be released in 

draft form and will be available for public review in December 2008. 

4. Development of the Greenhouse Gas Emission Reduction 

Strategy Strategy 

In developing the Scoping Plan, ARB considered the State’s existing climate change 

policy initiatives and the Early Action measures identified by the Board. Several 

advisory groups were formed to assist ARB in developing the Scoping Plan, 

including the Environmental Justice Advisory Committee (EJAC), the Economic and 

Technology Advancement Committee (ETAAC), and the Market Advisory 

Committee (MAC). 

The Environmental Justice Advisory Committee (HSC §38591(a) et seq) advises 

ARB on development of the Scoping Plan and any other pertinent matter in 

implementing AB 32. The Board appoints its members, based on nominations 

received from environmental justice organizations and community groups. 

The Economic and Technology Advancement Advisory Committee (HSC §38591(d)) 

includes members who are appointed by the Board based on expertise in fields of 

business, technology research and development, climate change, and economics. The 

ETAAC advises ARB on activities that will facilitate investment in, and 

implementation of, technological research and development opportunities, funding 

opportunities, partnership development, technology transfer opportunities, and related 

areas that lead to reductions of greenhouse gas emissions. 

Members of the Market Advisory Committee (created under Executive Order 

S-20-06) were appointed by the Secretary of CalEPA based on their expertise in 

economics and climate change. The MAC advised ARB on the design of a cap-andtrade program for reducing greenhouse gas emissions. 

Along with input from the advisory groups, ARB received submittals to a public 

solicitation for ideas, and numerous comments during public workshops, workgroup 

meetings, community meetings, and meetings with stakeholder groups. ARB held 

numerous workshops on the Draft Scoping Plan and convened workgroup meetings 

focused on program design and economic analysis. ARB and other involved State 
Scoping Plan I. Introduction 

9 

agencies also held sector-specific technical workshops to look in greater detail at 

potential emissions reduction measures. 

ARB also looked outward to examine programs at the regional, national and 

international levels. ARB met with and learned from experts from the European 

Union, the United Kingdom, Japan, Australia, the United Nations, the Regional 

Greenhouse Gas Initiative, the RECLAIM program, and the U.S. Environmental 

Protection Agency (U.S. EPA). 

After the release of the Draft Scoping Plan, ARB conducted workshops and 

community meetings around the state to solicit public input. The Environmental 

Justice Advisory Committee and the Economic and Technology Advancement 

Advisory Committee held meetings to review and provide additional comments on 

the Draft Scoping Plan. In addition, ARB held meetings with numerous stakeholder 

groups to discuss specific greenhouse gas emissions reduction measures. 

As described before, ARB has reviewed and considered both the written comments 

and the verbal comments received at the public workshops and meetings with 

stakeholders. This input, along with additional analysis, has ultimately shaped this 

Scoping Plan. 

5. Implementation of the Scoping Plan 5. Implementation of the Scoping Plan 

The foundation of the Scoping Plan’s strategy is a set of measures that will cut 

greenhouse gas emissions by nearly 30 percent by the year 2020 as compared to 

business as usual and put California on a course for much deeper reductions in the 

long term. In addition to pursuing the reduction of greenhouse gas emissions, other 

strategies to mitigate climate change, such as carbon capture and storage 

(underground geologic storage of carbon dioxide), should also be further explored. 

And, as greenhouse gas reduction measures are implemented, we will continually 

evaluate how these measures can be optimized to also help deliver a broad range of 

public health benefits. 

Most of the measures in this Scoping Plan will be implemented through the full 

rulemaking processes at ARB or other agencies. These processes will provide 

opportunity for public input as the measures are developed and analyzed in more 

detail. This additional analysis and public input will likely provide greater certainty 

about the estimates of costs and expected greenhouse gas emission reductions, as well 

as the design details that are described in this Scoping Plan. With the exception of 

Discrete Early Actions, which will be in place by January 1, 2010, other regulations 

are expected to be adopted by January 1, 2011 and take effect at the beginning of 

2012. 

Some of the measures in the plan may deliver more emission reductions than we 

expect; others less. It is also very likely that we will figure out new and better ways to 

cut greenhouse gas emissions as we move forward. New technologies will no doubt 

be developed, and new ideas and strategies will emerge. The Scoping Plan puts 
I. Introduction Scoping Plan 

10 

California squarely on the path to a clean energy future but it also recognizes that 

adjustments will probably need to occur along the way and that as additional tools 

become available they will augment, and in some cases perhaps even replace, existing 

approaches. 

California will not be implementing the measures in this Plan in a vacuum. 

Significant new action on climate policy is likely at the federal level and California 

and its partners in the Western Climate Initiative are working together to create a 

regional effort for achieving significant reductions of greenhouse gas emissions 

throughout the western United States and Canada. California is also developing a 

state Climate Adaptation Strategy to reduce California’s vulnerability to known and 

projected climate change impacts. 

ARB and other State agencies will continue to monitor, lead and participate in these 

broader activities. ARB will adjust the measures described here as necessary to 

ensure that California’s program is designed to facilitate the development of 

integrated and cost-effective regional, national, and international greenhouse gas 

emissions reduction programs. (HSC §38564) 

6. Climate Change in California 6. Climate Change in California 

The impacts of climate change on California and its residents are occurring now. Of 

greater concern are the expected future impacts to the state’s environment, public 

health and economy, justifying the need to sharply cut greenhouse gas emissions. 

In the Findings and Declarations for AB 32, the Legislature found that: 

“The potential adverse impacts of global warming include the exacerbation of 

air quality problems, a reduction in quality and supply of water to the state 

from the Sierra snowpack, a rise in sea levels resulting in the displacement of 

thousands of coastal businesses and residences, damage to the marine 

ecosystems and the natural environment, and an increase in the incidences of 

infectious diseases, asthma, and other health-related problems.” 

The Legislature further found that global warming would cause detrimental effects to 

some of the state’s largest industries, including agriculture, winemaking, tourism, 

skiing, commercial and recreational fishing, forestry, and the adequacy of electrical 

power. 

The impacts of global warming are already being felt in California. The Sierra 

snowpack, an important source of water supply for the state, has shrunk 10 percent in 

the last 100 years. It is expected to continue to decrease by as much as 25 percent by 

2050. World-wide changes are causing sea levels to rise – about 8 inches of increase 

has been recorded at the Golden Gate Bridge over the past 100 years – threatening 

low coastal areas with inundation and serious damage from storms. 
Scoping Plan I. Introduction 

11 

C. California’s Greenhouse California’s Greenhouse California’s Greenhouse Gas Emissions and the 2020 Gas Emissions and the 2020 Target Gas Emissions and the 2020 Target 

California is the fifteenth largest emitter of greenhouse gases on the planet, representing 

about two percent of the worldwide emissions. Although carbon dioxide is the largest 

contributor to climate change, AB 32 also references five other greenhouse gases: methane 

(CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), and 

perfluorocarbons (PFCs). Many other gases contribute to climate change and would also be 

addressed by measures in this Scoping Plan. 

Figure 1 and Table 1 show 2002 to 2004 average emissions and estimates for projected 

emissions in 2020 without any greenhouse gas reduction measures (business-as-usual case). 

The 2020 business-as-usual forecast does not take any credit for reductions from measures 

included in this Plan, including the Pavley greenhouse gas emissions standards for vehicles, 

full implementation of the Renewables Portfolio Standard beyond current levels of renewable 

energy, or the solar measures. Additional information about the assumptions in the 2020 

forecast is provided in Appendix F. 

Figure 1: California’s Greenhouse Gas Emissions 

(2002-2004 Average)14

Transportation, 38%

Electricity, 23%

Industry, 20%

Recycling and Waste, 1%

High GWP, 3%

Agriculture, 6%

Commercial and 

Residential, 9%

As seen in Figure 1, the Transportation sector – largely the cars and trucks that move goods 

and people – is the largest contributor with 38 percent of the state’s total greenhouse gas 

emissions. Table 1 shows that if we take no action, greenhouse gas emissions in the 

 

14 Air Resources Board. Greenhouse Gas Inventory. http://www.arb.ca.gov/cc/inventory/inventory.htm 

(accessed October 12, 2008) 
I. Introduction Scoping Plan 

12 

Transportation sector are expected to grow by approximately 25 percent by 2020 (an increase 

of 46 MMTCO2E). 

The Electricity and Commercial/Residential Energy sector is the next largest contributor with 

over 30 percent of the statewide greenhouse gas emissions. Although electricity imported 

into California accounts for only about a quarter of our electricity, imports contribute more 

than half of the greenhouse gas emissions from electricity because much of the imported 

electricity is generated at coal-fired power plants. AB 32 specifically requires ARB to 

address emissions from electricity sources both inside and outside of the state. 

California’s Industrial sector includes refineries, cement plants, oil and gas production, food 

processors, and other large industrial sources. This sector contributes almost 20 percent of 

California’s greenhouse gas emissions, but the sector’s emissions are not projected to grow 

significantly in the future. The sector termed recycling and waste management is a unique 

system, encompassing not just emissions from waste facilities but also the emissions 

associated with the production, distribution and disposal of products throughout the 

economy. 

Although high global warming potential (GWP) gases are a small contributor to historic 

greenhouse gas emissions, levels of these gases are projected to increase sharply over the 

next several decades, making them a significant source by 2020. 

The Forest sector is unique in that forests both emit greenhouse gases and uptake carbon 

dioxide (CO2). While the current inventory shows forests as a sink of 4.7 MMTCO2E, 

carbon sequestration has declined since 1990. For this reason, the 2020 projection assumes 

no net emissions from forests. 

The agricultural greenhouse gas emissions shown are largely methane emissions from 

livestock, both from the animals and their waste. Emissions of greenhouse gases from 

fertilizer application are also important contributors from the Agricultural sector. ARB has 

begun a research program to better understand the variables affecting these emissions. 

Opportunities to sequester CO2 in the Agricultural sector may also exist; however, additional 

research is needed to identify and quantify potential sequestration benefits. 

In December 2007, ARB approved a greenhouse gas emissions target for 2020 equivalent to 

the state’s calculated greenhouse gas emissions level in 1990. ARB developed the 2020 

target after extensive technical work and a series of stakeholder meetings. The 2020 target of 

427 MMTCO2E requires the reduction of 169 MMTCO2E, or approximately 30 percent, from 

the state’s projected 2020 emissions of 596 MMTCO2E (business-as-usual) and the reduction 

of 42 MMTCO2E, or almost 10 percent, from 2002-2004 average emissions. 
Scoping Plan I. Introduction 

13 

Table 1: 2002-2004 Average Emissions and 

2020 Projected Emissions (Business-as-Usual)15

(MMTCO2E) 

Sector 2002-2004 Average Emissions Projected 2020 Emissions [BAU]

Transportation 179.3 225.4 

Electricity 109.0 139.2 

Commercial and Residential 41.0 46.7 

Industry 95.9 100.5 

Recycling and Waste 5.6 7.7 

High GWP 14.8 46.9 

Agriculture 27.7 29.8 

Forest Net Emissions -4.7 0.0 

Emissions Total 469 596 

Figure 2 presents California’s historic greenhouse gas emissions in a different way – based 

not on the source of the emissions, but on the end use. This chart highlights the importance 

of addressing on-road transportation sources of greenhouse gas emissions, as well as the 

significant contribution from the heating, cooling, and lighting of buildings. 

Figure 2: California’s Greenhouse Gas Emissions 

 – A Demand-Side View – 

On-Road Vehicles

36%

Oil and Gas Extraction and 

Refining

14%

Residential Buildings

14%

Commercial Buildings

8%

Industrial Manufacturing, 

Construction and Mining

12%

Agriculture/Food 

Processing

9%

Cement Plants

2%

High GWP Gases

3%

Other Transportation

2%

 

15 Ibid. 
I. Introduction Scoping Plan 

14 

The data shown in this section provide two ways to look at California’s greenhouse gas 

profile – emissions-based and end use (demand side)-based. While it is possible to illustrate 

the inventory many different ways, no chart or graph can fully display how diverse economic 

sectors fit together. California’s economy is a web of activity where seemingly independent 

sectors and subsectors operate interdependently and often synergistically. For example, 

reductions in water use reduce the need to pump water, directly lowering electricity use and 

associated greenhouse gas emissions. Similarly, reducing the generation of waste reduces the 

need to transport the waste to landfills – lowering transportation emissions and, possibly, 

landfill methane emissions. Increased recycling or re-use reduces the carbon emissions 

embedded in products – it takes less energy to make a soda can made from recycled 

aluminum than from virgin feedstock. 

The measures included in this Scoping Plan are identified discretely, but many impact each 

other, and changes in one measure can directly overlap and have a ripple effect on the 

efficacy and success of other measures. The measures and policies outlined in this Plan 

reflect these interconnections, and highlight the need for all agencies to work collaboratively 

to implement the Scoping Plan.
Scoping Plan II. Recommended Actions 

15 

 

II. RECOMMENDED ACTIONS RECOMMENDED ACTIONS RECOMMENDED ACTIONS 

Achieving the goals of AB 32 in a cost-effective manner will require a wide range of 

approaches. Every part of California’s economy needs to play a role in reducing greenhouse 

gas emissions. ARB’s comprehensive greenhouse gas emissions inventory lists emission 

sources ranging from the largest refineries and power plants to small industrial processes and 

farm livestock. The recommended measures were developed to reduce greenhouse gas 

emissions from key sources and activities while improving public health, promoting a cleaner 

environment, preserving our natural resources, and ensuring that the impacts of the 

reductions are equitable and do not disproportionately impact low-income and minority 

communities. These measures also put the state on a path to meet the long-term 2050 goal of 

reducing California’s greenhouse gas emissions to 80 percent below 1990 levels. This 

trajectory is consistent with the reductions that are needed globally to help stabilize the 

climate. While the scale of this effort is considerable, our experience with cultural and 

technological changes makes California well-equipped to handle this challenge. 

ARB evaluated a comprehensive array of approaches and tools to achieve these emission 

reductions. Reducing greenhouse gas emissions from the wide variety of sources can best be 

accomplished though a cap-and-trade program along with a mix of complementary strategies 

that combine market-based regulatory approaches, other regulations, voluntary measures, 

fees, policies, and programs. ARB will monitor implementation of these measures to ensure 

that the State meets the 2020 limit on greenhouse gas emissions. 

An overall limit on greenhouse gas emissions from most of the California economy – the 

“capped sectors” – will be established by the cap-and-trade program. (The basic elements of 

the cap-and-trade program are described later in this chapter.) Within the capped sectors, 

some of the reductions will be accomplished through direct regulations such as improved 

building efficiency standards and vehicle efficiency measures. Whatever additional 

reductions are needed to bring emissions within the cap are accomplished through price 

incentives posed by emissions allowance prices. Together, direct regulation and price 

incentives assure that emissions are brought down cost-effectively to the level of the overall 

cap. ARB also recommends specific measures for the remainder of the economy – the 

“uncapped sectors.” 
II. Recommended Actions Scoping Plan 

16 

Key elements of California’s recommendations for reducing its greenhouse 

gas emissions to 1990 levels by 2020 include: 

• Expanding and strengthening existing energy efficiency programs as 

well as building and appliance standards; 

• Achieving a statewide renewables energy mix of 33 percent; 

• Developing a California cap-and-trade program that links with other 

Western Climate Initiative partner programs to create a regional 

market system; 

• Establishing targets for transportation-related greenhouse gas 

emissions for regions throughout California and pursuing policies and 

incentives to achieve those targets; 

• Adopting and implementing measures pursuant to existing State laws 

and policies, including California’s clean car standards, goods 

movement measures, and the Low Carbon Fuel Standard; and 

• Creating targeted fees, including a public goods charge on water use, 

fees on high global warming potential gases, and a fee to fund the 

administrative costs of the State’s long-term commitment to AB 32 

implementation. 

The recommended greenhouse gas emissions reduction measures are listed in Table 2 and are 

summarized in Section C below. The total reduction for the recommended measures slightly 

exceeds the 169 MMTCO2E of reductions estimated in the Draft Scoping Plan. This is the 

net effect of adding several measures and adjusting the emission reduction estimates for 

some other measures. The 2020 emissions cap in the cap-and-trade program is preserved at 

the same level as in the Draft Scoping Plan (365 MMTCO2E). 

The measures listed in Table 2 lead to emissions reductions from sources within the capped 

sectors (146.7 MMTOCO2E) and from sources or sectors not covered by cap-and-trade (27.3 

MMTCO2E). As mentioned, within the capped sectors the reductions derive both from direct 

regulation and from the incentives posed by allowance prices. Further discussion of how the 

cap-and-trade program and the complementary measures work together to achieve the overall 

target is provided below. 

Table 2 also lists several other recommended measures which will contribute toward 

achieving the 2020 statewide goal, but whose reductions are not (for various reasons 

including the potential for double counting) additive with the other measures. Those 

measures and the basis for not including their reductions are further discussed in Section C. 
Scoping Plan II. Recommended Actions 

17 

Table 2: Recommended Greenhouse Gas Reduction Measures 

Recommended Reduction Measures 

Reductions 

Counted Towards 

2020 Target (MMTCO2E) 

ESTIMATED REDUCTIONS RESULTING FROM THE COMBINATION OF CAPAND-TRADE PROGRAM AND COMPLEMENTARY MEASURES 146.7 

California Light-Duty Vehicle Greenhouse Gas Standards 

• Implement Pavley standards 

• Develop Pavley II light-duty vehicle standards 

31.7 

Energy Efficiency 

• Building/appliance efficiency, new programs, etc. 

• Increase CHP generation by 30,000 GWh

• Solar Water Heating (AB 1470 goal)

26.3 

Renewables Portfolio Standard (33% by 2020) 21.3 

Low Carbon Fuel Standard 15 

Regional Transportation-Related GHG Targets16 5 

Vehicle Efficiency Measures 4.5 

Goods Movement 

• Ship Electrification at Ports 

• System-Wide Efficiency Improvements 

3.7 

Million Solar Roofs 2.1 

Medium/Heavy Duty Vehicles 

• Heavy-Duty Vehicle Greenhouse Gas Emission Reduction 

(Aerodynamic Efficiency) 

• Medium- and Heavy-Duty Vehicle Hybridization 

1.4 

High Speed Rail 1.0 

Industrial Measures (for sources covered under cap-and-trade program) 

• Refinery Measures 

• Energy Efficiency & Co-Benefits Audits 

0.3 

Additional Reductions Necessary to Achieve the Cap 34.4 

ESTIMATED REDUCTIONS FROM UNCAPPED SOURCES/SECTORS 27.3 

High Global Warming Potential Gas Measures 20.2 

Sustainable Forests 5.0 

Industrial Measures (for sources not covered under cap and trade program) 

• Oil and Gas Extraction and Transmission 1.1 

Recycling and Waste (landfill methane capture) 1.0 

TOTAL REDUCTIONS COUNTED TOWARDS 2020 TARGET 174 

Other Recommended Measures Estimated 2020 

Reductions (MMTCO2E) 

State Government Operations 1-2 

Local Government Operations TBD 

Green Buildings 26 

Recycling and Waste 

• Mandatory Commercial Recycling 

• Other measures 

9 

Water Sector Measures 4.8 

Methane Capture at Large Dairies 1.0 

 

16 This number represents an estimate of what may be achieved from local land use changes. It is not the

SB 375 regional target. ARB will establish regional targets for each Metropolitan Planning Organization 

(MPO) region following the input of the Regional Targets Advisory Committee and a public consultation 

process with MPOs and other stakeholders per SB 375.
II. Recommended Actions Scoping Plan 

18 

The development of a California cap-and-trade program that links with other Western 

Climate Initiative partner programs to create a regional market system is a central feature of 

the overall recommendation. This program will lead to prices on greenhouse gas emissions, 

prices that will spur reductions in greenhouse gas emissions throughout the California 

economy, through application of existing technologies and through the creation of new 

technological and organizational options. The rationale for combining a cap-and-trade 

program with complementary measures was outlined by the Market Advisory Committee, 

which noted the following in its recommendations to the ARB: 

Before setting out the key design elements of a cap-and-trade program it is important 

to explain how the proposed emissions trading approach relates to other policy 

measures. The following considerations seem especially relevant: 

• The emissions trading program puts a cap on the total emissions generated by 

facilities covered under the system. Because a certain number of emissions 

allowances are put in circulation in each compliance period, this approach 

provides a measure of certainty about the total quantity of emissions that will 

be released from entities covered under the program. 

• The market price of emissions allowances yields an enduring price signal for 

GHG emissions across the economy. This price signal provides incentives for 

the market to find new ways to reduce emissions. 

• By itself, a cap-and-trade program alone will not deliver the most efficient 

mitigation outcome for the state. There is a strong economic and public policy 

basis for other policies that can accompany an emissions trading system. 17

 

The Economic and Technology Advancement Advisory Committee (ETAAC) also addressed 

the benefits associated with a combined policy of cap and trade and complementary 

measures. 

A declining cap can send the right price signals to shape the behavior of consumers 

when purchasing products and services. It would also shape business decisions on 

what products to manufacture and how to manufacture them. Establishing a price for 

carbon and other GHG emissions can efficiently tilt decision-making toward cleaner 

alternatives. This cap and trade approach (complemented by technology-forcing 

performance standards) avoids the danger of having government or other centralized 

decision-makers choose specific technologies, thereby limiting the flexibility to allow 

other options to emerge on a level playing field. 

 

17 Recommendations of the Market Advisory Committee to the California Air Resources Board. 

Recommendations for Designing a Greenhouse Gas Cap-and-Trade System for California. June 30, 2007. 

p. 19. http://www.climatechange.ca.gov/publications/market_advisory_committee/2007-06-

29_MAC_FINAL_REPORT.PDF (accessed October 12, 2008) 
Scoping Plan II. Recommended Actions 

19 

If markets were perfect, such a cap and trade system would bring enough new 

technologies into the market and stimulate the necessary industrial RD&D to solve 

the climate change challenge in a cost effective manner. As the Market Advisory 

Committee notes, however, placing a price on GHG emissions addresses only one of 

many market failures that impede solutions to climate change. Additional market 

barriers and co-benefits would not be addressed if a cap and trade system were the 

only state policy employed to implement AB 32. Complementary policies will be 

needed to spur innovation, overcome traditional market barriers (e.g., lack of 

information available to energy consumers, different incentives for landlords and 

tenants to conserve energy, different costs of investment financing between 

individuals, corporations and the state government, etc.) and address distributional 

impacts from possible higher prices for goods and services in a carbon-constrained 

world.18

The Environmental Justice Advisory Committee (EJAC) also supports an approach that 

includes a price on carbon along with complementary measures. Although the EJAC 

recommends that the carbon price be established through a carbon fee rather than through a 

cap-and-trade program, they recognize the importance of mutually supportive policies: 

California should establish a three-pronged approach for addressing greenhouse 

gases: (1) adopting standards and regulations; (2) providing incentives; and 

(3) putting a price on carbon via a carbon fee. The three pieces support one another 

and no single prong can work without equally robust support from the others.19

In keeping with the rationale outlined above, ARB finds that it is critically important to 

include complementary measures directed at emission sources that are included in the capand-trade program. These measures are designed to achieve cost-effective emissions 

reductions while accelerating the necessary transition to the low-carbon economy required to 

meet the 2050 target: 

• The already adopted Light-Duty Vehicle Greenhouse Gas Standards are designed to 

accelerate the introduction of low-greenhouse gas emitting vehicles, reduce emissions 

and save consumers money at the pump. 

• The Low Carbon Fuel Standard (LCFS) is a flexible performance standard designed 

to accelerate the availability and diversity of low-carbon fuels by taking into 

consideration the full life-cycle of greenhouse gas emissions. The LCFS will reduce 

emissions and make our economy more resilient to future petroleum price volatility. 

• The Regional Transportation-Related Greenhouse Gas Targets provide incentives for 

channeling investment into integrated development patterns and transportation 

 

18 Recommendations of the Economic and Technical Advancement Advisory Committee (ETAAC), Final 

Report. Technologies and Policies to Consider for Reducing Greenhouse Gas Emissions in California. 

February 14, 2008. pp. 1-4 http://www.arb.ca.gov/cc/etaac/ETAACFinalReport2-11-08.pdf (accessed October 

12, 2008) 

19 Recommendations and Comments of the Environmental Justice Advisory Committee on the Implementation 

of the Global Warming Solutions Act of 2006 (AB32) on the Draft Scoping Plan. October 2008. p. 10. 

http://www.arb.ca.gov/cc/ejac/ejac_comments_final.pdf (accessed October 12, 2008) 
II. Recommended Actions Scoping Plan 

20 

infrastructure, through improved planning. Improved planning and the resulting 

development are essential for meeting the 2050 emissions target. 

• In the Energy sector, measures will provide better information and overcome 

institutional barriers that slow the adoption of cost-effective energy efficiency 

technologies. Enhanced energy efficiency programs will provide incentives for 

customers to purchase and install more efficient products and processes, and building 

and appliance standards will ensure that manufacturers and builders bring improved 

products to market. 

• The Renewables Portfolio Standard (RPS) promotes multiple objectives, including 

diversifying the electricity supply. Increasing the RPS to 33 percent is designed to 

accelerate the transformation of the Electricity sector, including investment in the 

transmission infrastructure and system changes to allow integration of large quantities 

of intermittent wind and solar generation. 

• The Million Solar Roofs Initiative uses incentives to transform the rooftop solar 

market by driving down costs over time. 

• The Goods Movement program is primarily intended to achieve criteria and toxic air 

pollutant reductions but will provide important greenhouse gas benefits as well. 

• Similar to the light duty vehicle greenhouse gas standards, the heavy duty and 

medium duty vehicle measures and the additional light duty vehicle efficiency 

measures aim to achieve cost-effective reductions of GHG emissions and save fuel. 

Each of these complementary measures helps to position the California economy for the 

future by reducing the greenhouse gas intensity of products, processes, and activities. When 

combined with the absolute and declining emissions limit of the cap-and-trade program, 

these policies ensure that we cost-effectively achieve our greenhouse gas emissions goals and 

set ourselves on a path towards a clean low carbon future. 

Figure 3 illustrates how the recommended emission reduction measures together put 

California on a path toward achieving the 2020 goal. The left hand column in Figure 3 

shows total projected business as usual emissions in 2020, by sector (596 MMTCO2E). The 

right hand column shows 2020 emissions after applying the Scoping Plan recommended 

reduction measures (422 MMTCO2E). The measures that accomplish the needed reductions 

are listed in between the columns. As Figure 3 shows, there are a total of 27.3 MMTCO2E in 

reductions from uncapped sectors, and 146.7 MMTCO2E in reductions from capped sectors. 
Scoping Plan II. Recommended Actions 

21 

Figure 3: California Greenhouse Gas Emissions in 2020 and 

Recommended Reduction Measures 

0

100

200

300

400

500

600

700

Business-as-Usual Scoping Plan

Transportation

Recycling & waste

Industry

Natural gas

Electricity

Agriculture

High GWP

Recycling & waste

Capped sectors

Agriculture

Reductions from High GWP

capped sectors:

Total reductions of 146.7 MMT

(including 112.3 MMT

from specified measures): 

Pavley standards: 31.7 MMT

Energy efficiency: 26.3 MMT

33% RPS: 21.3 MMT

LCFS: 15.0 MMT

Regional targets: 5.0 MMT

Vehicle efficiency: 4.5 MMT

Goods movement: 3.7 MMT

Million solar roofs: 2.1 MMT

Heavy/medium veh: 1.4 MMT

Industrial measures: 0.3 MMT

High speed rail: 1.0 MMT

Reductions from uncapped sectors: 

Total reductions of 27.3 MMT

Industrial measures: 1.1 MMT

High GWP measures: 20.2 MMT

Recycling & waste: 1.0 MMT

Sustainable forests: 5.0 MMT

Reduction Measures

Total Emissions 

 422 MMTCO2E

Cap is set at 365 MMT

Total Emissions: 

 596 MMTCO2E

MMTCO2E 

The recommended cap-and-trade program provides covered sources with the flexibility to 

pursue low cost reductions. It is important to recognize, however, that other recommended 

measures also provide compliance flexibility. As is often the case with ARB regulations, 

many of the measures establish performance standards and allow regulated entities to 

determine how best to achieve the required emission level. This approach rewards 

innovation and allows facilities to take advantage of the best way to meet the overarching 

environmental objective. 

Table 3 lists the proposed measures that include compliance flexibility or market 

mechanisms. This flexibility ranges from the potential for tradable renewable energy credits 

in the Renewables Portfolio Standard to the incentives to encourage emission reductions in 

electricity and natural gas efficiency programs to the averaging, banking and trading 

mechanisms in the Pavley and Low Carbon Fuel Standard programs to a multi-sector capand-trade program. 
II. Recommended Actions Scoping Plan 

22 

Table 3: Measures With Flexible Market Compliance Features 

Measure Estimated Reductions 

Additional Reductions from Capped Sectors 34.4 

California Light-Duty Vehicle Greenhouse Gas Standards 

(Pavley I & II) 31.7 

Renewables Portfolio Standard 21.3 

Electricity Efficiency 15.2 

Low Carbon Fuel Standard 15.0 

Mitigation Fee on High GWP Gases 5.0 

Natural Gas Efficiency 4.3 

Goods Movement Systemwide Efficiency 3.5 

Medium/Heavy Duty Vehicle Hybridization 0.5 

Total 130.9 

The recommended mix of measures builds on a strong foundation of previous action in 

California to address climate change and broader environmental issues. The program 

recommended here relies on implementing existing laws and regulations that were adopted to 

reduce greenhouse gas emissions and other policy goals; strengthening and expanding 

existing programs; implementing the discrete early actions adopted by the Board in 2007; 

and new measures developed during the Scoping Plan process itself. 

The mix of measures recommended in this Plan provides a comprehensive approach to 

reduce emissions to achieve the 2020 target, and to initiate the transformations required to 

achieve the 2050 target. The cap-and-trade program and complementary measures will cover 

about 85 percent of greenhouse gas emissions throughout California’s economy. ARB 

recognizes that due to several factors, including information discovered during regulatory 

development, technology maturity, and implementation challenges, actual reductions from 

individual measures aimed at achieving the 2020 target may be higher or lower than current 

estimates. The inclusion of many of these emissions within the cap-and-trade program, along 

with a margin of safety in the uncapped sectors, will help ensure that the 2020 target is met. 

The combination of approaches provides certainty that the overall program will meet the 

target despite some degree of uncertainty in the estimates for any individual measure. 

Additionally, by internalizing the cost of CO2E emissions throughout the economy, the capand-trade program supports the complementary measures and provides further incentives for 

innovation and continuing emissions reductions from energy producers and consumers 

setting us on a path toward our 2050 goals. 

Some emissions sources are not currently suitable for inclusion in the cap-and-trade program 

due to challenges associated with precise measurement, tracking or sector structure. For 

these emissions sources, ARB is including measures designed to focus on waste 

management, agriculture, forestry, and certain emissions of high GWP gases, a rapidly 

growing component of California’s greenhouse gas emissions inventory. 
Scoping Plan II. Recommended Actions 

23 

California’s economy is expected to continue to experience robust growth through 2020. 

Economic modeling, including evaluation of the effects on low-income Californians, shows 

that the measures included within this Scoping Plan can be implemented with a net positive 

effect on California’s long-term economic growth. The evaluation of related public health 

and environmental benefits of the various measures also shows that implementation will 

result in not only reduced greenhouse gas emissions and improved public health, but also in a 

beneficial effect on California’s environment. The results of these evaluations are presented 

in Chapter III. 

AB 32 includes specific criteria that ARB must consider before adopting regulations for 

market-based compliance mechanisms to implement a greenhouse gas reduction program, 

and directs the Board, to the extent feasible, to design market-based compliance mechanisms 

to prevent any increase in the emissions of toxic air contaminants or criteria air pollutants. In 

the development of regulations that contain market mechanisms, ARB will consider the 

economic, environmental and public health effects, and the evaluation of potential localized 

impacts. These results will be used to institute appropriate economic, environmental and 

public health safeguards. 

ARB has also designed the recommendation to ensure that reductions will come from 

throughout the California economy. Transportation accounts for the largest share of 

California’s greenhouse gas emissions. Accordingly, a large share of the reduction of 

greenhouse gas emissions from the recommended measures comes from this sector. 

Measures include the inclusion of transportation fuels in the cap-and-trade program, the Low 

Carbon Fuel Standard to reduce the carbon intensity of transportation fuels, enforcement of 

regulations that reduce greenhouse gas emissions from vehicles, and policies to reduce 

transportation emissions by changes in future land use patterns and community design as 

well as improvements in public transportation. 

In the Energy sector, the recommended measures increase the amount of electricity from 

renewable energy sources, and improve the energy efficiency of industries, homes and 

buildings. The inclusion of these sectors and the Industrial sector in the cap-and-trade 

program provides further assurance that significant cost-effective reductions will be achieved 

from the sectors that contribute the greatest emissions. Additional energy production from 

renewable resources may also rely on measures suggested in the Agriculture, Water, and the 

Recycling and Waste Management Sectors. 

Other sectors are also called upon to cut emissions. The cap-and-trade program covers 

industrial sources and natural gas use. The recommended measures would require industrial 

processes to examine how to lower their greenhouse gas emissions and be more energy 

efficient, and would require goods movement operations through California’s ports to be 

more energy efficient. Other measures address waste management, agricultural and forestry 

practices, as well as the transport and treatment of water throughout the state. Finally, the 

recommended measures address ways to reduce or eliminate the emissions of high global 

warming potential gases that, on a per-ton basis, contribute to global warming at a level 

many times greater than carbon dioxide. 
II. Recommended Actions Scoping Plan 

24 

As the Scoping Plan is implemented, ARB and other agencies will coordinate with the Green 

Chemistry Initiative, particularly in the Green Building and Recycling/Waste sectors. Green 

Chemistry is a fundamentally new approach to environmental protection that emphasizes 

environmental protection at the design stage of product and manufacturing processes, rather 

than focusing on end-of-pipe or end-of-life activities, or a single environmental medium, 

such as air, water or soil. This new approach will reduce the use of harmful chemicals, 

generate less waste, use less energy, and, accordingly, will contribute toward California’s 

greenhouse gas reduction goals. 

A. The Role of State Government: Setting an Example The Role of State Government: Setting an Example The Role of State Government: Setting an Example 

For many years California State government has successfully incorporated environmental 

principles in managing its resources and running its business. The Governor has directed 

State agencies to sharply reduce their building-related energy use and encouraged our Staterun pensions to invest in energy efficient and clean technologies.20 The State also has been 

active in procuring low-emission, alternative fuel vehicles in its large fleet. 

While State government has already accomplished much to reduce its greenhouse gas 

emissions, it can and must do more. State agencies must lead by example by continuing to 

reduce their greenhouse gas emissions. Therefore, California State government has 

established a target of reducing its greenhouse gas emissions by a minimum of 30 percent 

below its estimated business-as-usual emissions by 2020 – approximately a 15 percent 

reduction from current levels. 

As an owner-operator of key infrastructure, State government has the ability to ensure that 

the most advanced, cost-effective environmental performance requirements are used in the 

design, construction, and operation of State facilities. As a purchaser with significant market 

power, State government has the ability to demand that the products and services it procures 

contribute positively toward California’s targets to reduce greenhouse gas emissions, such as 

through the efforts of Environmentally Preferable Purchasing. As an investor of more than 

$400 billion,21 State government has the ability to prioritize low-carbon investments. With 

more than 350,000 employees, State government is uniquely situated to adopt and implement 

policies that give State workers the ability to decrease their individual carbon impact, 

including encouraging siting facilities within communities to enhance balance in jobs and 

housing, encouraging carpooling, biking, walking, telecommuting, the use of public transit, 

and the use of alternative work schedules. 

 

20Governor Schwarzenegger signed Executive Order Executive Order S-20-04 on December 14, 2004. This 

Order contains a number of directives, including a set of aggressive goals for reducing state building energy use 

and requested the California Public Employees Retirement System (CalPERS) and the California State Teachers 

Retirement System (CalSTRS) to target resource-efficient buildings for real estate investments and commit 

funds toward clean, efficient and sustainable technologies. 

21 CalPERS and CalSTRS are the two largest pension systems in the nation with investments in excess of 

$400 billion as of August 2008. 
Scoping Plan II. Recommended Actions 

25 

Myriad opportunities exist for California State government to operate more efficiently. 

These opportunities will not only reduce greenhouse gas emissions but also will produce 

savings for California taxpayers. Initiatives now underway that will contribute to the State 

government reduction target include the Governor’s Green Building Initiative and the 

Department of General Services’ efforts to increase the number of fuel-efficient vehicles in 

the State fleet. 

Major efforts to expand renewable energy use and divest from coal-fired power plants are 

currently underway. Together with energy conservation and efficiency strategies on water 

projects, roadways, parks, and bridges, these efforts all play major roles in reducing the 

State’s greenhouse gas emissions. State agencies should review their travel practices and 

make greater use of teleconferencing and videoconferencing to reduce the need for business 

travel, particularly air travel. 

State agencies are now examining their policies and operations to determine how they can 

reduce their greenhouse gas emissions. These findings will be instrumental as each cabinetlevel agency registers with the California Climate Action Registry (CCAR) to record and 

report their individual carbon footprints. The Climate Action Team has created a new State 

Government Operations sub-group that will work closely with the agencies to review the 

results of their evaluations and the CCAR reports to determine how best to achieve the 

maximum reductions possible. 

State agencies must take the lead in driving this low-carbon economy by reducing their own 

emissions, and also by serving as a catalyst for local government and private sector activity. 

New “Best Practices” implemented by State agencies can be transferred to other entities 

within California, the nation, and internationally. By increasing cooperation and 

coordination across organizational boundaries, State government will maximize the 

experience and contributions of each agency involved to achieve the 30 percent reduction of 

greenhouse gas emissions while growing the economy and protecting the environment. 

State government’s impact on emissions goes far beyond its own buildings, vehicles, 

projects, and employees. State government casts a sizable “carbon shadow”– that is, the 

climate change impact of legislative, executive, and financial actions of State agencies that 

affect Californians now and in the future. For example, the California Energy Commission 

(CEC) recently initiated a proceeding to consider how to align its permitting process with the 

State’s greenhouse gas and renewable energy policy goals. ARB intends to work closely 

with the CEC during this proceeding. New power plants, both fossil-fuel fired and renewable 

generation, will be a critical part of the state’s electricity mix in coming decades. The 

investments that are made in this new infrastructure in the next several years will become 

part of the backbone of the state’s electricity supply for decades to come. This timely 

investigation will be a critical element of California’s ability to meet the AB 32 emissions 

reduction target for 2020, the ambitious target set by the Governor for 2050, and also the 

specific goal of achieving 33 percent renewables in the state’s electricity mix. The 

Governor’s Office of Planning and Research and the Resources Agency are developing 

proposed amendments to the California Environmental Quality Act (CEQA) Guidelines to 
II. Recommended Actions Scoping Plan 

26 

provide guidance on how to address greenhouse gases in CEQA documents. As required by 

SB 97 (Chapter 185, Statutes of 2007), the amended CEQA guidelines will be adopted by 

January 1, 2010. 

In addition, agencies such as the California Labor and Workforce Development Agency, the 

Business, Transportation and Housing Agency and the newly created Green Collar Jobs 

Council (AB 3018, Chapter 312, Statutes of 2008) are dedicated to economic development, 

training, safety, labor relations, and employment development throughout the State. ARB 

will coordinate with the Council and also with other State agencies to address workforce 

needs and facilitate a smooth transition to California’s emerging low-carbon economy that 

maximizes economic development and employment opportunities in California. 

The State expends funds to provide services to California residents – from preserving our 

natural resources to building and maintaining infrastructure like roads, bridges and dams. 

California residents should reap all of the benefits of these projects, including any associated 

quantifiable and marketable reductions in greenhouse gas emissions. Because of this, 

California should retain ownership of these greenhouse gas emissions reductions and use 

them to promote the goals of AB 32 and other goals of the state. 

California State government can also lead through example by aligning its efforts to reduce 

greenhouse gas emissions with efforts to protect and improve public health. As a new 

member of the Climate Action Team, the Department of Public Health will help ensure that 

measures to combat global warming also incorporate public health protection and 

improvement strategies. As discussed below, these and many other State leadership efforts 

can be built upon at the local level as well. 

B. The Role of Local Government: Essential Partners The Role of Local Government: Essential Partners The Role of Local Government: Essential Partners 

Local governments are essential partners in achieving California’s goals to reduce 

greenhouse gas emissions. They have broad influence and, in some cases, exclusive 

authority over activities that contribute to significant direct and indirect greenhouse gas 

emissions through their planning and permitting processes, local ordinances, outreach and 

education efforts, and municipal operations. Many of the proposed measures to reduce 

greenhouse gas emissions rely on local government actions. 

Over 120 California cities have already signed on to the U.S. Conference of Mayors Climate 

Protection Agreement. In addition, over 30 California cities and counties have committed to 

developing and implementing Climate Action Plans. Many local governments and related 

organizations have already begun educating Californians on the benefits of energy efficiency 

measures, public transportation, solar homes, and recycling. These communities have not 

only demonstrated courageous leadership in taking initiative to reduce greenhouse gas 

emissions, they are also reaping important co-benefits, including local economic benefits, 

more sustainable communities, and improved quality of life. 
Scoping Plan II. Recommended Actions 

27 

Land use planning and urban growth decisions are also areas where successful 

implementation of the Scoping Plan relies on local government. Local governments have 

primary authority to plan, zone, approve, and permit how and where land is developed to 

accommodate population growth and the changing needs of their jurisdictions. Decisions on 

how land is used will have large impacts on the greenhouse gas emissions that will result 

from the transportation, housing, industry, forestry, water, agriculture, electricity, and natural 

gas sectors. 

To provide local governments guidance on how to inventory and report greenhouse gas 

emissions from government buildings, facilities, vehicles, wastewater and potable water 

treatment facilities, landfill and composting facilities, and other government operations, ARB 

recently adopted the Local Government Operations Protocol. ARB encourages local 

governments to use this protocol to track their progress in achieving reductions from 

municipal operations. ARB is also developing an additional protocol for community 

emissions. This protocol will go beyond just municipal operations and include emissions 

from the community as a whole, including residential and commercial activity. These local 

protocols will play a key role in ensuring that strategies that are developed and implemented 

at the local level, like urban forestry and greening projects, water and energy efficiency 

projects, and others, can be appropriately quantified and credited toward California’s efforts 

to reduce greenhouse gas emissions. 

In addition to tracking emissions using these protocols, ARB encourages local governments 

to adopt a reduction goal for municipal operations emissions and move toward establishing 

similar goals for community emissions that parallel the State commitment to reduce 

greenhouse gas emissions by approximately 15 percent from current levels by 2020. To 

consolidate climate action resources and aid local governments in their emission reduction 

efforts, the ARB is developing various tools and guidance for use by local governments, 

including the next generation of best practices, case studies, a calculator to help calculate 

local greenhouse gas emissions, and other decision support tools. 

The recent passage of SB 375 (Steinberg, Chapter 728, Statutes of 2008) creates a process 

whereby local governments and other stakeholders work together within their region to 

achieve reduction of greenhouse gas emissions through integrated development patterns, 

improved transportation planning, and other transportation measures and policies. The 

implementation of regional transportation-related greenhouse gas emissions targets and 

SB 375 are discussed in more detail in Section C. 

C. Emissions Reduction Measures Emissions Reduction Measures Emissions Reduction Measures 

The Scoping Plan will build on California’s successful history of balancing effective 

regulations with economic progress. Several types of measures have been recommended. 

The plan includes a California cap-and-trade program that will be integrated with a broader 

regional market to maximize cost-effective opportunities to achieve GHG emissions 

reductions. The plan also includes transformational measures that are designed to help pave 

the path toward California’s clean energy future. For example, the Low Carbon Fuel 
II. Recommended Actions Scoping Plan 

28 

Standard (LCFS) is a performance standard with flexible compliance mechanisms that will 

incent the development of a diverse set of clean, low-carbon transportation fuel options. 

Similarly, the plan recognizes the importance of local and regional government leadership in 

ensuring that California’s land use and transportation planning processes are designed to be 

consistent with efforts to achieve a clean energy future and to protect and enhance public 

health and safety. 

The Scoping Plan also contains a number of targeted measures that are designed to overcome 

existing barriers to action such as lack of information, lack of coordination, or other 

regulatory and institutional factors. Energy efficiency is a classic example where costeffective action often is not taken due to lack of complete information, relatively high initial 

costs, and mismatches between who pays for and who benefits from efficiency investments. 

These problems often mean that efficiency measures are not taken that would save money in 

the long term for small businesses, home owners and renters. While California has a long 

history of success in implementing regulations and programs to encourage energy efficiency, 

innovative methods to overcome these economic and information barriers are needed to 

provide the benefits of increased efficiency to more Californians and to meet our greenhouse 

gas emissions reduction goals. 

Several of the recommended measures complement each other. For example, the LCFS will 

provide clean transportation fuel options. The Pavley performance standards help deploy 

vehicles that can use many of the low-carbon fuels, including advanced biofuels, electricity 

and hydrogen. The combined operation of both programs will make it more likely that more 

efficient, less polluting vehicles will use the cleanest possible fuels. In addition, both of 

these programs will benefit from ARB’s zero-emission vehicle program, which focuses on 

deployment of plug-in battery-electric and fuel cell vehicles. All of these strategies are 

expandable beyond 2020, and are needed as vital components to reach the State’s 2050 goal. 

The cap-and-trade program creates an emissions limit or “cap” on the sectors responsible for 

the vast majority of California’s greenhouse gas emissions and provides capped sources 

significant flexibility in how they collectively achieve the reductions necessary to meet the 

cap. The other measures in these capped sectors provide a clear path toward achieving 

reductions required by the cap, while simultaneously addressing market barriers and creating 

the low-carbon energy options needed to achieve our long term climate goals. In the design 

of the cap-and-trade program, ARB will also evaluate possible ways to include features that 

complement the other measures, such as consideration of allowance set-asides that could be 

used to help achieve or exceed the aggressive energy efficiency goals included in this Plan. 

Both required measures and other cost-effective actions by capped sectors will contribute 

toward achievement of the cap. For example, increasing energy efficiency will reduce 

electricity demand, thereby reducing the need for utilities to submit allowances to comply 

with the cap-and-trade program. In this way, energy efficiency contributes to real reductions 

toward the cap. Expiration of existing utility long-term contracts with coal plants will reduce 

GHG emissions when such generation is replaced by renewable generation, coal with carbon 

sequestration, or natural gas generation, which emits less CO2 per megawatt-hour. 
Scoping Plan II. Recommended Actions 

29 

Additionally, measures and other actions that result in reductions in energy demand 

‘downstream’ of capped sectors will help achieve the cap. For example, the Pavley vehicle 

standards, building efficiency standards, and land use planning that contributes to reduced 

transportation fuel demand will all reduce emissions by reducing the demand for upstream 

energy production. These downstream entities will further benefit from these reductions by 

avoiding any costs that would be passed through from a cap-and-trade system. 

Discrete Early Actions Discrete Early Actions 

In September 2007, ARB approved a list of nine Discrete Early Actions to reduce 

greenhouse gas emissions and is currently in the process of developing regulations 

and programs based on these measures. Regulations implementing the Discrete Early 

Action measures must be adopted and in effect by January 1, 2010 

(HSC §38560.5 (b)). All the Discrete Early Actions are included in the recommended 

measures and are shown below in Table 4. 

Table 4: Anticipated Board Consideration Dates 

for Discrete Early Actions 

Discrete Early Action Anticipated Board 

Consideration 

Green Ports – Ship Electrification at Ports December 2007 – Adopted 

Reduction of High GWP Gases in Consumer Products June 2008 – Adopted 

SmartWay – Heavy-Duty Vehicle Greenhouse Gas Emission 

Reduction (Aerodynamic Efficiency) December 2008 

Reduction of Perfluorocarbons from Semiconductor 

Manufacturing February 2009 

Improved Landfill Gas Capture January 2009 

Reduction of HFC-134a from Do-It-Yourself Motor Vehicle 

Servicing January 2009 

SF6 Reductions from the Non-Electric Sector January 2009 

Tire Inflation Program March 2009 

Low Carbon Fuel Standard March 2009 

The following sections describe the recommended measures in this Scoping Plan. 

Additional information about these measures is provided in Appendix C. 
II. Recommended Actions Scoping Plan 

30 

1. California Cap- 1. California Cap-and-Trade Program Linked to Trade Program Linked to Trade Program Linked to 

Western Climate Initiative Partner Jurisdictions Western Climate Initiative Partner Jurisdictions 

Implement a broad-based California cap-and-trade program to provide a firm limit 

on emissions. Link the California cap–and-trade program with other Western 

Climate Initiative Partner programs to create a regional market system to achieve 

greater environmental and economic benefits for California. Ensure California’s 

program meets all applicable AB 32 requirements for market-based mechanisms. 

California is working closely with other states and provinces in the Western Climate 

Initiative (WCI) to design a regional cap-and-trade program that can deliver 

reductions of greenhouse gas emissions throughout the region. ARB will develop a 

cap-and-trade program for California that will link with the programs in the other 

WCI Partner jurisdictions to create a regional cap-and-trade program. The WCI 

Partner jurisdictions released the program design document on September 23, 2008 

(see Appendix D). ARB will continue to work with the WCI Partner jurisdictions to 

develop and implement the cap-and-trade program. ARB will also design the 

California program to meet the requirements of AB 32, including the need to consider 

any potential localized impacts and ensure that reductions are enforceable by the 

Board. 

Based on the requirements of AB 32, regulations to implement the cap-and-trade 

program need to be developed by January 1, 2011, with the program beginning in 

2012. This rule development schedule will be coordinated with the WCI timeline for 

developing a regional cap-and-trade program. Preliminary plans for this rulemaking 

are described later in this section. 

A cap-and-trade program sets the total amount of greenhouse gas emissions allowable 

for facilities under the cap and allows covered sources, including producers and 

consumers of energy, to determine the least expensive strategies to comply. The 

emissions allowed under the cap will be denominated in metric tons of CO2E. The 

currency will be in the form of allowances which the State will issue based upon the 

total emissions allowed under the cap during any specific compliance period. 

Emission allowances can be banked for future use, encouraging early reductions and 

reducing market volatility. The ability to trade allows facilities to adjust to changing 

conditions and take advantage of reduction opportunities when those opportunities are 

less expensive than buying additional emissions allowances. 

Provisions could be made to allow a limited use of surplus reductions of greenhouse 

gas emissions that occur outside of the cap. These additional reductions are known as 

offsets and are discussed further below. In order to be used to meet a source’s 

compliance obligation, offsets will be subject to stringent criteria and verification 

procedures to ensure their enforceability and consistency with AB 32 requirements. 

Appendix C describes the fundamentals of a cap-and-trade program and program 

design elements. Appendix D contains the WCI Design Recommendations and 

related background documents. 
Scoping Plan II. Recommended Actions 

31 

California Cap- California Cap-and-Trade Program Trade Program Trade Program 

By providing a firm cap on 85 percent of the state’s greenhouse gas emissions, the 

cap-and-trade regulatory program is an essential component of the overall plan to 

meet the 2020 target and provides a robust mechanism to achieve the additional 

reductions needed by 2050. To meet the emissions reduction target under AB 32, the 

limit on emissions allowed under the cap, plus emissions from uncapped sources, 

must be no greater than the 2020 emissions goal. 

By setting a limit on the quantity of greenhouse gases emitted, a well-designed capand-trade program will complement other measures for entities within covered 

sectors. Additionally, starting a cap-and-trade program now will set us on a course to 

achieve further emissions cuts well beyond 2020 and ensure that California is primed 

to take advantage of opportunities for linking with other programs, including future 

federal and international efforts. 

The proposed cap-and-trade measure phases in the following sectors: 

Starting in the first compliance period (2012): 

• In-state electrical generating facilities that emit over 25,000 metric tons CO2E 

per year,

22 including imports not covered by a WCI Partner jurisdiction. 

• Large industrial facilities that emit over 25,000 metric tons CO2E per year, 

including high global warming potential gases. 

Starting in the second compliance period (2015): 

• Upstream treatment of industrial fuel combustion at facilities with emissions 

at or below 25,000 metric tons CO2E per year, and all commercial and 

residential fuel combustion regulated where the fuel enters into commerce

• Transportation fuel combustion regulated where the fuel enters into 

commerce. 

For some energy-intensive industrial sources such as cement, stringent requirements 

in California, either through inclusion in a cap-and-trade program or through sourcespecific regulation, have the potential to create a disadvantage for California facilities 

relative to out-of-state competitors unless those locations have similar requirements 

(e.g., through the WCI). If production shifts outside of California in order to operate 

without being subject to these requirements, emissions could remain unchanged or 

even increase. This is referred to as “leakage.” AB 32 requires ARB to design 

measures to minimize leakage. Minimizing leakage will be a key consideration when 

developing the cap-and-trade regulation and the other AB 32 program measures.23

 

 

22 Allowances will not be required for combustion emissions from carbon-neutral projects. 

23 The cement industry is an example of a sector that may be susceptible to this type of leakage, and the Draft 

Scoping Plan included consideration of a measure to institute an intensity standard at concrete batch plants that 

would consider this type of life-cycle emissions. ARB will evaluate whether this type of intensity standard 

could be incorporated into the cap-and-trade program or instituted as a complementary measure during the capand-trade rulemaking. 
II. Recommended Actions Scoping Plan 

32 

As shown in Table 5, the preliminary estimate of the cap on greenhouse gas 

emissions for sectors covered by the cap-and-trade program is 365 MMTCO2E in 

2020, which covers about 85 percent of California’s total greenhouse gas emissions.24 

Greenhouse gas emissions from most of the sectors covered by a cap-and-trade 

program will also be governed by other measures, including performance standards, 

efficiency programs, and direct regulations. These other measures will provide real 

reductions which will contribute reductions toward the cap. 

In addition, ARB will work closely with the CPUC, CEC, and The California 

Independent System Operator to ensure that the cap-and-trade program works within 

the context of the State’s energy policy and enables the reliable provision of 

electricity. 

Table 5: Sector Responsibilities Under Cap-and-Trade Program 

(MMTCO2E in 2020) 

Projected 2020 

Business-as-Usual 

Emissions Sector 

By Sector Total 

Preliminary 2020 

Emissions Limit 

under Cap-andTrade Program 

Transportation 225 

Electricity 139 

Commercial and Residential 47 

Industry 101 

512 365 

Linkage with the Western Climate Initiative Partner Jurisdictions Jurisdictions 

The WCI was formed in 2007. Members are California, Arizona, New Mexico, 

Oregon, Washington, Utah, and Montana, and the Canadian provinces of British 

Columbia, Manitoba, Ontario, and Quebec. The WCI Partner jurisdictions, including 

California, have adopted goals to reduce greenhouse gas emissions that, in total, 

reduce regional emissions to 15 percent below 2005 levels by 2020. This regional 

goal is approximately equal to California’s goal of returning to 1990 levels by 2020. 

A cap-and-trade program is one element of the effort by the WCI Partner jurisdictions 

to identify, evaluate, and implement ways to reduce greenhouse gas emissions and 

achieve related co-benefits. 

 

24 The actual cap for the program will be established as part of the rulemaking process. The preliminary cap of 

365 MMTCO2E in 2020 assumes that all of California’s electricity imports would be covered under a California 

cap. Because a significant portion of California’s imported electricity is from power plants located in other 

WCI Partner Jurisdictions, emissions from those sources could be included in the cap of the states within which 

the power plants are located. In establishing the California cap, ARB will need to consider the degree to which 

emissions from these sources are addressed as part of the WCI regional market. 
Scoping Plan II. Recommended Actions 

33 

The WCI Partner jurisdictions released their recommendation for the design of a 

regional cap-and-trade program in September 2008. This design document and the 

background paper that accompanied it are presented in Appendix D. These 

recommendations were developed collaboratively by the WCI Partner jurisdictions, 

including California, with a goal of achieving regional targets to reduce greenhouse 

gas emissions equitably and effectively. The WCI Partner jurisdictions’ 

recommendations are generally consistent with the recommendations provided in 

June 2007 by the California Market Advisory Committee,25 the recommendations 

provided to ARB by the California Public Utilities Commission and the California 

Energy Commission in March 2008,26 and the proposed opinion released by the two 

Commissions in September 2008.27

Participating in a regional system has several advantages for California. The 

reduction of greenhouse gas emissions that can be achieved collectively by the WCI 

Partner jurisdictions are approximately double what can be achieved through a 

California-only program. The broad scope of a WCI-wide market will provide 

additional opportunities for reduction of emissions, therefore providing greater 

market liquidity and more stable carbon prices within the program. The regional 

system also significantly reduces the potential for leakage, which is a shift in 

economic and emissions activity out of California that could hurt the state’s economy 

without reducing global greenhouse gas emissions. Harmonizing the approach and 

timing of California's requirements for reducing greenhouse gas emissions with other 

states and provinces in the region can encourage retention of local businesses in the 

state. Further, by creating a cost-effective regional market system, California and the 

other WCI Partner jurisdictions will continue to demonstrate leadership in preparation 

for future federal and international climate action. 

To achieve the individual WCI Partner jurisdiction goals and the regional goal, each 

WCI Partner jurisdiction will have an allowance budget based on its goal that 

declines to 2020. For example, California’s allowance budget will be based on the 

level of emissions needed to achieve the AB 32 target for 2020, as described above. 

Once California links with the other WCI Partner jurisdictions, allowances could be 

 

25 Recommendations of the Market Advisory Committee to the California Air Resources Board. 

Recommendations for Designing a Greenhouse Gas Cap-and-Trade System for California. June 30, 2007. 

p. 19. http://www.climatechange.ca.gov/publications/market_advisory_committee/2007-06-

29_MAC_FINAL_REPORT.PDF (accessed October 12, 2008) Cal/EPA The Market Advisory Committee 

(MAC) consisted of a consortium of economists, policy makers, academics, government representatives, and 

environmental advocates who came together through the auspices of CalEPA, pursuant to Executive Order 

S-20-06 from Governor Schwarzenegger. 

26 Joint Agency Decision of the CEC and the CPUC. Final Adopted Interim Decision on Basic Greenhouse Gas 

Regulatory Framework for Electricity and Natural Gas Sectors, March 13, 2008. Document number CEC-100-

2008-002-F. http://www.energy.ca.gov/2008publications/CEC-100-2008-002/CEC-100-2008-002-F.PDF

(accessed October 12, 2008) 

27 Joint Agency proposed final opinion of the CEC and the CPUC. Proposed Final Opinion on Greenhouse Gas 

Regulatory Strategies. Published September 12, 2008 and to be considered for adoption on October 16, 2008 by 

the CEC and the CPUC. Document Number CEC-100-2008-007-D 

http://www.energy.ca.gov/ghg_emissions/index.html (accessed October 12, 2008) 
II. Recommended Actions Scoping Plan 

34 

traded across state and provincial boundaries. As a result of trading, emissions in a 

state may vary from its allowance budget, although total regional emissions will not 

exceed the regional cap. 

The overall number of allowances issued in a given year by the WCI Partner 

jurisdictions will set a limit on emissions from sectors covered by the program for the 

region. Details of distribution of allowances will be established by each partner 

within the general guidelines set forth in the WCI program design framework. The 

WCI Partner jurisdictions have agreed to consider standardizing allowance 

distribution across specific sectors if necessary to address competitiveness issues. In 

addition, the WCI Partner jurisdictions have agreed to phase in regionally coordinated 

auctions of allowances, with a minimum percentage of allowances auctioned in each 

period starting with 10 percent in the first compliance period and increasing to 25 

percent in 2020. WCI partners aspire to reach higher auction percentages over time, 

possibly to 100 percent. Under the program design, each WCI Partner jurisdiction, 

including California, can auction a greater portion of its allowance budget in any 

compliance period. The distribution of California’s allowances will be determined 

during the cap-and-trade rulemaking process, as discussed below. 

The WCI Partner jurisdictions are also proposing the use of an allowance reserve 

price for the first 5 percent of the auctioned allowances in the regional cap. A reserve 

price will help to ensure that the cap is set at a level that will motivate real emissions 

reductions and may provide an opportunity for the regional cap-and-trade program to 

provide reductions that exceed the regional target. 

A regional coordinated cap-and-trade program with strong reporting and enforcement 

rules will provide a high degree of certainty that emissions will not exceed targeted 

levels and that leakage will not occur. 

Federal Action Federal Action 

A cap-and-trade program is expected to be a significant element in any future federal 

action taken to reduce greenhouse gas emissions. ARB’s efforts to design a broad 

cap-and-trade system that works in concert with sector- or source-related measures 

and meets the requirements of AB 32 can serve as a model for a federal program. An 

effective, enforceable regional cap-and-trade program can promote the type of federal 

legislation needed to meet the pressing challenge of climate change. In the event that 

California businesses, organizations, or individuals hold regional allowances when a 

federal system is implemented, California will work to ensure that those allowances 

continue to have value, either in a continuing regional program or within the federal 

program. 

Cap-and-Trade Rulemaking Trade Rulemaking Trade Rulemaking 

To implement the cap-and-trade program, ARB will embark on regulatory 

development that includes extensive and broad-based public participation. Major 

program design elements will include setting an emissions cap in conjunction with the 
Scoping Plan II. Recommended Actions 

35 

WCI Partner jurisdictions, determining the method of distributing both allowances 

and revenues raised through auctions, and establishing the rules for the use of offsets. 

ARB will continue to work with all affected stakeholders, State and local agencies, 

and our WCI partners to create a robust regional market system. 

After adoption of the Scoping Plan, ARB will establish a formal structure to elicit 

ongoing participation in the rulemaking process from a wide range of affected 

stakeholders. While the process will be open to involvement by all interested parties, 

ARB anticipates creation of a series of focused working groups that include 

participation by representatives of the regulated community, environmental and 

community advocates and other public interest groups, prominent academics with 

expertise in cap-and-trade issues and new technology development, local air pollution 

control districts, stakeholders in the WCI, and other State agencies with existing 

authority for regulating capped sectors. 

This process will integrate economic and administrative design considerations and 

include consideration of environmental and public health issues. ARB will convene a 

series of technical workshops to examine mechanisms to address the concerns related 

to the cap-and-trade program raised by the Environmental Justice Advisory 

Committee and other stakeholders. The first workshop will explore cap-and-trade 

program design options that could provide incentives to maximize additional 

environmental and economic benefits, and to analyze the proposed program to 

prevent increases in emissions of toxic air contaminants or criteria pollutants through 

the design and architecture of the program itself. Similar technical workshops will 

focus on issues related to offsets and the WCI proposal. 

Allowances and Revenues 

Emission allowances represent a significant economic value whether they are freely 

allocated or sold through auction. Section E includes a preliminary discussion of 

some of the options that have been suggested for use of allowance value or revenues. 

ARB will evaluate the possible uses of allowances or revenues as part of the 

rulemaking process. One approach would be to dedicate a portion of the allowances 

for such purposes as rewarding early actions to reduce emissions, providing 

incentives for local governments and others to promote energy efficiency, better land 

use planning, and other reduction strategies, and targeting projects to reduce 

emissions in low-income or disadvantaged communities. This type of dedicated use 

of allowances is typically referred to as an allowance ‘set-aside.’ 

The California Public Utilities Commission and the California Energy Commission 

addressed the question of allocation and auction of allowances in their joint 

proceeding on implementation of AB 32 for the Electricity and Natural Gas sectors. 

They have recently released a proposed opinion that recommends to ARB a transition 
II. Recommended Actions Scoping Plan 

36 

to 100 percent auction for the Electricity sector by 2016.28 The CPUC and CEC 

included in their draft opinion the recommendation that all auction revenues be used 

for purposes related to AB 32, and all revenue from allowances allocated to the 

Electricity sector and received by retail providers would be used for the benefit of the 

Electricity sector to support investments in renewable energy, efficiency, new energy 

technology, infrastructure, customer bill relief, and other similar programs. 

The Market Advisory Committee also recommended the eventual transition to full 

auction within the cap-and-trade program, noting that a system in which California 

ultimately auctions all of its emission allowances is consistent with fundamental 

objectives of cost-effectiveness, fairness and simplicity.29 ARB agrees that the 

transition to a 100 percent auction, with auction revenue going to further the policy 

objectives of California’s climate change program, is a worthwhile goal. ARB 

expects that California will auction significantly more than the WCI minimum levels 

and will transition to 100 percent auction. However a broad set of factors must be 

considered in evaluating the potential timing of a transition to a full auction including 

competiveness, potential for emissions leakage, the effect on regulated vs. 

unregulated industrial sectors, the overall impact on consumers, and the strategic use 

of auction revenues. 

Allowance allocation and revenue use decisions can greatly affect the equity of a capand-trade system. Addressing both these issues will be a major part of the 

rulemaking process. ARB will seek input from a broad range of experts in an open 

public process regarding the options for allocation and revenue use under 

consideration by ARB and the WCI Partner jurisdictions. This process will evaluate 

various mechanisms ARB is considering for allowance distribution and potential uses 

of allowance value, including the recommendations offered by CPUC and CEC. 

Issues to be considered will include the appropriate timing and structure of a 

transition to full auction of allowances, the potential need to harmonize the allocation 

process regionally for certain sectors subject to inter-state competition, and equity 

across the various sectors here in California. 

Offsets 

Individual projects can be developed to achieve the reduction of emissions from 

activities not otherwise regulated, covered under an emissions cap, or resulting from 

government incentives. These projects can generate "offsets,” i.e., verifiable 

reductions of emissions whose ownership can be transferred to others. The cap-andtrade rulemaking will establish appropriate rules for use of offsets. As required by 

 

28 Op. Cit. The proposed opinion has not yet been voted on by either the CPUC or the CEC. The Commissions 

are expected to vote on this proposed opinion before the December Board meeting when the Proposed Scoping 

Plan will be considered for approval. 

29Recommendations of the Market Advisory Committee to the California Air Resources Board. 

Recommendations for Designing a Greenhouse Gas Cap-and-Trade System for California. June 30, 2007. 

p. 55. http://www.climatechange.ca.gov/publications/market_advisory_committee/2007-06-

29_MAC_FINAL_REPORT.PDF (accessed October 12, 2008) 
Scoping Plan II. Recommended Actions 

37 

AB 32, any reduction of greenhouse gas emissions used for compliance purposes 

must be real, permanent, quantifiable, verifiable, enforceable, and additional (HSC 

§38562(d)(1) and (2)). Offsets used to meet regulatory requirements must be 

quantified according to Board-adopted methodologies, and ARB must adopt a 

regulation to verify and enforce the reductions (HSC §38571). The criteria developed 

will ensure that the reductions are quantified accurately and are not double-counted 

within the system. 

Offsets can provide regulated entities a source of low-cost emissions reductions. 

Reductions from compliance offset projects must be quantified using rigorous 

measurement and enforcement protocols that provide a basis to determine whether the 

reductions are also additional, i.e., beyond what would have happened in the absence 

of the offset project. Establishing that reductions are additional is one of the major 

challenges in establishing the validity of particular offset projects. Once a project can 

quantify emissions using an approved methodology, the reductions of emissions must 

be verified to ensure that reductions actually occurred. 

While some offsets provide benefits, allowing unlimited offsets would reduce the 

amount of reductions of greenhouse gas emissions occurring within the sectors 

covered by the cap-and-trade program. This could reduce the local economic, 

environmental and public health co-benefits and delay the transition to low-carbon 

energy systems within the capped sectors that will be necessary to meet our long term 

climate goals. The limit on the use of offsets and allowances from other systems 

within the WCI Partner jurisdiction program design assures that a majority of the 

emissions reductions required from 2012 to 2020 occur at entities and facilities 

covered by the cap and trade program. Consequently, the use of offsets and 

allowances from other systems are limited to no more than 49 percent of the required 

reduction of emissions. This quantitative limit will help provide balance between the 

need to achieve meaningful emissions reductions from capped sources with the need 

to provide sources within capped sectors the opportunity for low-cost reduction 

opportunities that offsets can provide. The WCI offset program may incorporate 

flexibility to use offsets and non-WCI allowances across the three compliance 

periods, which each WCI Partner jurisdiction could use at its discretion. ARB will 

apply the limit on offsets that is within its jurisdiction, such that the allowable offsets 

in each compliance period is less than half of the emissions reductions expected from 

capped sectors in that compliance period. Each WCI Partner jurisdiction may choose 

to adopt a more stringent limit on the use of offsets and non-WCI allowances. 

Offsets can also encourage the spread of clean, low carbon technologies outside 

California. High quality offset projects located outside the state can help lower the 

compliance costs for regulated entities in California, while reducing greenhouse gas 

emissions in areas that would otherwise lack the resources needed to do so. 

International projects may also have significant environmental, economic and social 

benefits. Projects in the Mexican border region may be of particular interest, 

considering the opportunity to realize considerable co-benefits on both sides of the 

border. The Governor has recently signed a Memorandum of Understanding with the 
II. Recommended Actions Scoping Plan 

38 

six Mexican border states that calls for cooperation on the development of project 

protocols for Mexican greenhouse gas emissions reduction projects.30 Additionally, 

defining project types related to imported commodities (such as cement) would 

enable California to provide incentives to reduce emissions associated with products 

that are imported into the state for our consumption. 

California is committed to working at the international level to reduce greenhouse gas 

emissions globally and finding ways to support the adoption of low-carbon 

technologies and sustainable development in the developing world. ARB will work 

with WCI Partner jurisdictions and within the rulemaking process to establish an 

offsets program without geographic restrictions that includes sufficiently stringent 

criteria for creating offset credits to ensure the overall environmental integrity of the 

program. 

One concept being evaluated for accepting offsets from the developing world is to 

limit offsets to those jurisdictions that demonstrate performance in reducing 

emissions and/or achieving greenhouse gas intensity targets in certain carbon 

intensive sectors (e.g., cement), or in reducing emissions or enhancing sequestration 

through eligible forest carbon activities in accordance with appropriate national or 

sub-national accounting frameworks. This could be achieved through an agreement 

to work jointly to develop minimum performance standards or sectoral benchmarks, 

backed by appropriate monitoring and accounting frameworks. Such agreements 

would encourage early action in developing countries toward binding commitments, 

and could also reduce concerns about competitiveness and risks associated with 

carbon leakage. 

2. California Light- 2. California Light-Duty Vehicle Duty Vehicle Duty Vehicle Greenhouse Gas Standards Greenhouse Gas Standards Greenhouse Gas Standards 

Implement adopted Pavley standards and planned second phase of the program. 

Align zero-emission vehicle, alternative and renewable fuel and vehicle technology 

programs with long-term climate change goals. 

Passenger vehicles are responsible for almost 30 percent of California’s greenhouse 

gas emissions. To address these emissions, ARB is proposing a comprehensive threeprong strategy – reducing greenhouse gas emissions from vehicles, reducing the 

carbon content of the fuel these vehicles burn, and reducing the miles these vehicles 

travel. Transportation fuels and regional transportation-related greenhouse gas targets 

are discussed later in the recommendations. 

There are a number of efforts intended to reduce greenhouse gas emissions from 

California’s passenger vehicles, including the Pavley greenhouse gas vehicle 

 

30 Memorandum of Understanding on Environmental Cooperation between the California Environmental 

Protection Agency, the California Department of Food and Agriculture and the California Resources Agency of 

the State of California, United States of America and the Ministry of Environment and Natural Resources of the 

United Mexican States. February 13, 2008. http://gov.ca.gov/pdf/press/021308_MOU_English.pdf (accessed 

October 12, 2008) 
Scoping Plan II. Recommended Actions 

39 

standards to achieve near-term emission reductions, the zero-emission vehicle (ZEV) 

program to transform the future vehicle fleet, and the Alternative and Renewable Fuel 

and Vehicle Technology Program created by AB 118 (Núñez, Chapter 750, Statutes 

of 2007). 

Pavley Greenhouse Gas Vehicle Standards Pavley Greenhouse Gas Vehicle Standards 

AB 1493 (Pavley, Chapter 200, Statutes of 2002) directed ARB to adopt vehicle 

standards that lowered greenhouse gas emissions to the maximum extent 

technologically feasible, beginning with the 2009 model year. ARB adopted 

regulations in 2004 and applied to the U.S. Environmental Protection Agency 

(U.S. EPA) for a waiver under the federal Clean Air Act to implement the regulation. 

The Pavley regulations incorporate both performance standards and market-based 

compliance mechanisms. To obtain additional reductions from the light duty fleet, 

ARB plans to adopt a second, more stringent, phase of the Pavley regulations. 

Table 6 summarizes the estimated reduction of emissions for the Pavley regulations. 

In addition to delivering greenhouse gas emissions reductions, the standards will save 

money for Californians who purchase vehicles that comply with the Pavley 

standards – an estimated average of $30 each month in avoided fuel costs. 

To date, 13 other states have adopted California’s existing greenhouse gas standards 

for vehicles. Under federal law, California is the only state allowed to adopt its own 

vehicle standards (though other states are permitted to adopt California’s more 

rigorous standards), but California cannot implement the regulations until U.S. EPA 

grants an administrative waiver. In December 2007, U.S. EPA denied California’s 

waiver request to implement the Pavley regulations. California and others are 

challenging that denial in Federal court. The regulations have also been challenged 

by the automakers in federal courts, although to date, those challenges have been 

unsuccessful. 

ARB is evaluating the use of feebates as a measure to achieve additional reductions 

from the mobile source sector, either as a backstop to the Pavley regulation if the 

regulation cannot be implemented, or as a supplement to Pavley if the waiver is 

approved and the regulation takes effect. AB 32 specifically states that if the Pavley 

regulations do not remain in effect, ARB shall implement alternative regulations to 

control mobile sources to achieve equivalent or greater reductions of greenhouse gas 

emissions (HSC §38590). ARB is currently evaluating the use of a feebate program 

as the mechanism to secure these reductions. A feebate regulation would combine a 

rebate program for low-emitting vehicles with a fee program for high-emitting 

vehicles. This program would be designed in a way to generate equivalent or greater 

cumulative reductions of greenhouse gas emissions compared to what would have 

been achieved under the Pavley regulations. ARB would also evaluate the potential 

to expand the program to include additional vehicle classes not currently included in 

the Pavley program for further greenhouse gas benefits. 

If the U.S. EPA grants California’s request for a waiver to proceed with 

implementation of the Pavley regulations, we will analyze the potential for pursuing a 
II. Recommended Actions Scoping Plan 

40 

feebate program that could complement the Pavley regulations and achieve additional 

reductions of greenhouse gas emissions. 

Zero-Emission Vehicle Program Emission Vehicle Program Emission Vehicle Program 

The Zero Emission Vehicle (ZEV) program will play an important role in helping 

California meet its 2020 and 2050 greenhouse gas emissions reduction requirements. 

Through 2012, the program requires placement of hundreds of ZEVs (including 

hydrogen fuel cell and battery electric vehicles) and thousands of near-zero emission 

vehicles (plug-in hybrids, conventional hybrids, compressed natural gas vehicles). In 

the mid-term (2012-2015), the program will require placement of increasing numbers 

of ZEVs and near-zero emission vehicles in California. In 2009, the Board will 

consider a proposal that is currently being developed to ensure that the ZEV program 

is optimally designed to help the State meet its 2020 target and put us on the path to 

meeting our 2050 target of an 80 percent reduction in greenhouse gas emissions. 

It is important to note that while the use of both battery-powered electric vehicles and 

plug-in hybrids (which can be plugged in to recharge batteries) is not expected to 

increase electricity demand in the near term, over the longer term these technologies 

could result in meaningful new electricity demand. However, the expected increased 

electricity demand is likely to be met by off peak vehicle battery charging 

(i.e., overnight) to provide a means of load leveling and other possible benefits.31

Air Quality Improvement Program/Alternative and Renewable Fuel and Vehicle ewable Fuel and Vehicle 

Technology Program Technology Program 

Under AB 118 (Núñez, Chapter 750, Statutes of 2007), ARB is administering the Air 

Quality Improvement Program, which provides approximately $50 million per year 

for grants to fund clean vehicle/equipment projects and research on the air quality 

impacts of alternative fuels and advanced technology vehicles. 

AB 118 also created the Alternative and Renewable Fuel and Vehicle Technology 

Program and authorized CEC to spend up to $120 million per year for over seven 

years (from 2008-2015) to develop, demonstrate, and deploy innovative technologies 

to transform California’s fuel and vehicle types. This program creates the 

opportunities for investment in technologies and fuels that will help meet the Low 

Carbon Fuel Standard, the AB 1007 (Pavley, Chapter 371, Statutes of 2005) goal of 

increasing alternative fuels, the AB 32 goal of reducing greenhouse gas emissions to 

1990 levels by 2020, and the State’s overall goal of reducing greenhouse gas 

emissions 80 percent below 1990 levels by 2050. CEC and ARB are coordinating 

closely in the implementation of AB 118. In the long-term, programs to reduce 

greenhouse gas emissions from cars would reduce highway funds because less fuel 

would be sold, reducing tax revenue. In coordination with other State agencies, ARB 

 

31 There is also a potential for battery-electric and hybrid vehicles (both plug-in and traditional hybrid-electric) 

to be used in the future to provide electricity back into the electricity grid during times of especially high 

demand (peak periods). 
Scoping Plan II. Recommended Actions 

41 

will continue to evaluate the potential impacts of these shifts and identify potential 

solutions. 

Table 6: California Light-Duty Vehicle Greenhouse Gas Standards 

Recommendation 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

T-1 Pavley I and II – Light-Duty Vehicle Greenhouse Gas Standards 31.7 

Total 31.7 

3. Energy Efficiency 3. Energy Efficiency 

Maximize energy efficiency building and appliance standards, and pursue additional 

efficiency efforts including new technologies, and new policy and implementation 

mechanisms. Pursue comparable investment in energy efficiency from all retail 

providers of electricity in California (including both investor-owned and publiclyowned utilities). 

Energy-efficiency measures for both electricity and natural gas can reduce 

greenhouse gas emissions significantly. In 2003, the CPUC and CEC adopted an 

Energy Action Plan that prioritized resources for meeting California’s future energy 

needs, with energy efficiency being first in the “loading order,” or highest priority. 

Since then, this policy goal has been codified into statute through legislation that 

requires electric utilities to meet their resource needs first with energy efficiency.32

This measure would set new targets for statewide annual energy demand reductions 

of 32,000 gigawatt hours and 800 million therms from business as usual33 – enough to 

power more than 5 million homes, or replace the need to build about ten new large 

power plants (500 megawatts each). These targets represent a higher goal than 

existing efficiency targets established by CPUC for the investor-owned utilities due to 

the inclusion of innovative strategies above traditional utility programs. Achieving 

the State’s energy efficiency targets will require coordinated efforts from the State, 

the federal government, energy companies and customers. ARB will work with CEC 

and CPUC to facilitate these partnerships. A number of these measures also have the 

potential to deliver significant economic benefits to California consumers, including 

low-income households and small businesses. California’s energy efficiency 

programs for buildings and appliances have generated more than $50 billion in 

 

32 SB 1037 (Kehoe, Chapter 366, Statutes of 2005) and AB 2021 (Levine, Chapter 734, Statutes of 2006) 

directed electricity corporations subject to CPUC’s authority and publicly-owned electricity utilities to first 

meet their unmet resource needs through all available energy efficiency and demand response resources that are 

cost effective, reliable and feasible. 

33 The savings targeted here are additional to savings currently assumed to be incorporated in CEC’s 2007 

demand forecasts. However, CEC has initiated a public process to better determine the quantity of energy 

savings from standards, utility programs, and market effects that are embedded in the baseline demand forecast. 
II. Recommended Actions Scoping Plan 

42 

savings over the past three decades. Tables 7 and 8 summarize the reduction of 

greenhouse gas emissions. 

Efficiency Efficiency 

Achieving the energy efficiency target will require redoubled efforts to target 

industrial, agricultural, commercial, and residential end-use sectors, comprised of 

both innovative new initiatives that have been embraced by CEC’s energy policy 

reports and CPUC’s long-term strategic plan, and improvements to California’s 

traditional approaches of improved building standards and utility programs. 

High-efficiency distributed generation applications like fuel cell technologies can also 

play an important role in helping the State meet its requirements for reduction of 

greenhouse gas emissions. Key energy efficiency strategies, grouped by type, 

include: 

Cross-cutting Strategy for Buildings 

• “Zero Net Energy” buildings34

Codes and Standards Strategies 

• More stringent building codes and appliance efficiency standards 

• Broader standards for new types of appliances and for water efficiency 

• Improved compliance and enforcement of existing standards 

• Voluntary efficiency and green building targets beyond mandatory codes 

Strategies for Existing Buildings 

• Voluntary and mandatory whole-building retrofits for existing buildings 

• Innovative financing to overcome first-cost and split incentives for energy 

efficiency, on-site, renewables, and high efficiency distributed generation 

Existing and Improved Utility Programs 

• More aggressive utility programs to achieve long-term savings 

Other Needed Strategies 

• Water system and water use efficiency and conservation measures 

• Local government programs that lead by example and tap into local 

authority over planning, development, and code compliance 

• Additional industrial and agricultural efficiency initiatives 

• Providing real time energy information technologies to help consumers 

conserve and optimize energy performance 

With the support of key State agencies, utilities, local governments and others, the 

CPUC has recently adopted the California Long Term Energy Efficiency Strategic 

 

34 Zero net energy refers to building energy use over the course of a typical year. When the building is 

producing more electricity than it needs, it exports its surplus to the grid. When the building requires more 

electricity than is being produced on-site, it draws from the grid. Generally, when constructing a ZNE building, 

energy efficiency measures can result in up to 70% savings relative to existing building practices, which then 

allows for renewables to meet the remaining load. 
Scoping Plan II. Recommended Actions 

43 

Plan.

35 Released September 2008, this Plan sets forth a set of strategies toward 

maximizing the achievement of cost-effective energy efficiency in California’s 

Electricity and Natural Gas sectors between 2009 and 2020, and beyond. Its 

recommendations are the result of a year-long collaboration by energy experts, 

utilities, businesses, consumer groups, and governmental organizations in California, 

throughout the west, nationally and internationally. 

For many of the above goals and others, the Strategic Plan discusses practical 

implementation strategies, detailing necessary partnerships among the state, its 

utilities, the private sector, and other market players and timelines for near-term, midterm and long-term success. While the Strategic Plan is the most current and 

innovative summary of energy efficiency strategies needed to meet State goals, 

additional planning and new strategies will likely be needed, both to achieve the 2020 

emissions reduction goals and to set the State on a trajectory toward 2050. 

Other innovative approaches could also be used to motivate private investment in 

efficiency improvements. One example that will be evaluated during the 

development of the cap-and-trade program is the creation of a mechanism to make 

allowances available within the program to provide incentives for local governments, 

third party providers, or others to pursue projects to reduce greenhouse gas emissions, 

including the bundling of energy efficiency improvements for small businesses or in 

targeted communities. 

Solar Water Heating Solar Water Heating 

Solar water heating systems offer a potential for natural gas savings in California. A 

solar water heating system offsets the use of natural gas by using the sun to heat 

water, typically reducing the need for conventional water heating by about two-thirds. 

Successful implementation of the zero net energy target for new buildings will require 

significant growth in California’s solar water heating system manufacturing and 

installation industry. The State has initiated a program to move toward a self 

sustaining solar water heater industry. The Solar Hot Water and Efficiency Act of 

2007 (SHWEA) authorized a ten year, $250-million incentive program for solar water 

heaters with a goal of promoting the installation of 200,000 systems in California by 

2017.36

Combined Heat and Power Combined Heat and Power 

Combined heat and power (CHP), also referred to as cogeneration, produces 

electricity and useful thermal energy in an integrated system. The widespread 

development of efficient CHP systems would help displace the need to develop new, 

or expand existing, power plants. This measure sets a target of an additional 

 

35 California Public Utilities Commission. California Long Term Energy Efficiency Strategic Plan. September 

2008. http://www.californiaenergyefficiency.com/docs/EEStrategicPlan.pdf (accessed October 12, 2008). 

36 Established under Assembly Bill 1470 (Huffman, Chapter 536, Statues of 2007). 
II. Recommended Actions Scoping Plan 

44 

4,000 MW of installed CHP capacity by 2020, enough to displace approximately 

30,000 GWh of demand from other power generation sources.37

California has supported CHP for many years, but market and other barriers continue 

to keep CHP from reaching its full market potential. Increasing the deployment of 

efficient CHP will require a multi-pronged approach that includes addressing 

significant barriers and instituting incentives or mandates where appropriate. These 

approaches could include such options as utility-provided incentive payments, the 

creation of a CHP portfolio standard, transmission and distribution support payments, 

or the use of feed-in tariffs. 

Table 7: Energy Efficiency Recommendation - Electricity 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

E-1 

Energy Efficiency 

(32,000 GWh of Reduced Demand) 

• Increased Utility Energy Efficiency Programs 

• More Stringent Building & Appliance Standards 

• Additional Efficiency and Conservation Programs 

15.2 

E-2 Increase Combined Heat and Power Use by 30,000 GWh 6.7 

Total 21.9 

Table 8: Energy Efficiency Recommendation - Commercial and Residential 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

CR-1 

Energy Efficiency (800 Million Therms Reduced Consumption) 

• Utility Energy Efficiency Programs 

• Building and Appliance Standards 

• Additional Efficiency and Conservation Programs 

4.3 

CR-2 Solar Water Heating (AB 1470 goal) 0.1 

Total 4.4 

4. Renewables Portfolio Standard 4. Renewables Portfolio Standard 

Achieve 33 percent renewable energy mix statewide. 

CEC estimates that about 12 percent of California’s retail electric load is currently 

met with renewable resources. Renewable energy includes (but is not limited to) 

wind, solar, geothermal, small hydroelectric, biomass, anaerobic digestion, and 

landfill gas. California’s current Renewables Portfolio Standard (RPS) is intended to 

 

37 Accounting for avoided transmission line losses of seven percent, this amount of CHP would actually 

displace 32,000 GWh from the grid. 
Scoping Plan II. Recommended Actions 

45 

increase that share to 20 percent by 2010. Increased use of renewables will decrease 

California’s reliance on fossil fuels, thus reducing emissions of greenhouse gases 

from the Electricity sector. Based on Governor Schwarzenegger’s call for a statewide 

33 percent RPS, the Plan anticipates that California will have 33 percent of its 

electricity provided by renewable resources by 2020, and includes the reduction of 

greenhouse gas emissions based on this level. 

Senate Bill 107 (Simitian, Chapter 464, Statutes of 2006) obligates the investorowned utilities (IOUs) to increase the share of renewables in their electricity 

portfolios to 20 percent by 2010. Meanwhile, the publicly-owned utilities (POUs) are 

encouraged but not required to meet the same RPS. The governing boards of the 

state’s three largest POUs, the Los Angeles Department of Water and Power 

(LADWP), the Sacramento Municipal Utility District (SMUD), and the Imperial 

Irrigation District (IID), have adopted policies to achieve 20 percent renewables by 

2010 or 2011. LADWP and IID have established targets of 35 and 30 percent, 

respectively, by 2020. 

In 2005, CEC and CPUC committed in the Energy Action Plan II to “evaluate and 

develop implementation paths for achieving renewable resource goals beyond 2010, 

including 33 percent renewables by 2020, in light of cost-benefit and risk analysis, for 

all load serving entities.” The proposed opinion in the CPUC/CEC joint proceeding 

lends strong support for obtaining 33 percent of California’s electricity from 

renewables, and states the two Commissions’ belief that this target is achievable if the 

State commits to significant investments in transmission infrastructure and key 

program augmentation. As with the energy efficiency target, achieving the 33 percent 

goal will require broad-based participation from many parties and the removal of 

barriers. CEC, CPUC, California Independent System Operator (CAISO), and ARB 

are working with California utilities and other stakeholders to formally establish and 

meet this goal. 

A key prerequisite to reaching a target of 33 percent renewables will be to provide 

sufficient electric transmission lines to renewable resource zones and system changes 

to allow integration of large quantities of intermittent wind and solar generation. The 

Renewable Energy Transmission Initiative (RETI) is a broad collaborative of State 

agencies, utilities, the environmental community, and renewable generation 

developers that are working cooperatively to identify and prioritize renewable 

generation zones and associated transmission projects. Although biomass, 

geothermal, and small-scale hydroelectric generation can provide steady baseload 

power, other renewable generation is intermittent (wind) or varies over time (solar). 

Therefore, integration of intermittent generation into the electricity system will 

require grid improvements so that fluctuations in power availability can be 

accommodated. Improved communications technology, automated demand 

response, electric sub-station improvements and other modern technologies must be 

implemented both to facilitate intermittent renewables, and to improve grid reliability. 
II. Recommended Actions Scoping Plan 

46 

Another key action that may help to achieve the renewable energy goals is to reduce 

the complexity and cost faced by small renewable developers in contracting with 

utilities to supply renewable generation. This is particularly important for projects 

offering below 20 megawatts of generation capacity. One such option may be a feedin tariff for all RPS-eligible renewable energy facilities up to 20 megawatts in size. 

This mechanism was recommended in CEC’s 2007 Integrated Energy Policy Report. 

Such a tariff, set at an appropriate level, could benefit small-scale facilities by 

allowing them to be brought into the electricity grid more rapidly. 

For the purposes of calculating the reduction of greenhouse gas emissions in this 

Scoping Plan, ARB is counting emissions avoided by increasing the percentage of 

renewables in California’s electricity mix from the current level of 12 percent to the 

33 percent goal, as shown in Table 9. 

Table 9: Renewables Portfolio Standard Recommendation 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

E-3 Achieve a 33% renewables mix by 2020 21.3 

Total 21.3 

5. Low Carbon Fuel Standard 5. Low Carbon Fuel Standard 

Develop and adopt the Low Carbon Fuel Standard. 

Because transportation is the largest single source of greenhouse gas emissions in 

California, the State is taking an integrated approach to reducing emissions from this 

sector. Beyond including vehicle efficiency improvements and lowering vehicle 

miles traveled, the State is proposing to reduce the carbon intensity of transportation 

fuels consumed in California. 

To reduce the carbon intensity of transportation fuels, ARB is developing a Low 

Carbon Fuel Standard (LCFS), which would reduce the carbon intensity of 

California's transportation fuels by at least ten percent by 2020 as called for by 

Governor Schwarzenegger in Executive Order S-01-07.

LCFS will incorporate compliance mechanisms that provide flexibility to fuel 

providers in how they meet the requirements to reduce greenhouse gas emissions. 

The LCFS will examine the full fuel cycle impacts of transportation fuels and ARB 

will work to design the regulation in a way that most effectively addresses the issues 

raised by the Environmental Justice Advisory Committee and other stakeholders. 

ARB identified the LCFS as a Discrete Early Action item, and is developing a 

regulation for Board consideration in March 2009. A 10 percent reduction in the 

intensity of transportation fuels is expected to equate to a reduction of 

16.5 MMTCO2E in 2020. However, in order to account for possible overlap of 
Scoping Plan II. Recommended Actions 

47 

benefits between LCFS and the Pavley greenhouse gas standards, ARB has 

discounted the contribution of LCFS to 15 MMTCO2E. 

Table 10: Low Carbon Fuel Standard Recommendation 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

T-2 Low Carbon Fuel Standard (Discrete Early Action) 15 

Total 15 

6. Regional Transportation 6. Regional Transportation Regional Transportation-Related Greenhouse Gas Targets Related Greenhouse Gas Targets Related Greenhouse Gas Targets 

Develop regional greenhouse gas emissions reduction targets for passenger vehicles. 

Establishment of Regional Targets Establishment of Regional Targets 

On September 30, 2008, Governor Arnold Schwarzenegger signed Senate Bill 375 

(Steinberg) which establishes mechanisms for the development of regional targets for 

reducing passenger vehicle greenhouse gas emissions. Through the SB 375 process, 

regions will work to integrate development patterns and the transportation network in 

a way that achieves the reduction of greenhouse gas emissions while meeting housing 

needs and other regional planning objectives. This new law reflects the importance of 

achieving significant additional reductions of greenhouse gas emissions from changed 

land use patterns and improved transportation to help achieve the goals of AB 32. 

SB 375 requires ARB to develop, in consultation with metropolitan planning 

organizations (MPOs), passenger vehicle greenhouse gas emissions reduction targets 

for 2020 and 2035 by September 30, 2010. It sets forth a collaborative process to 

establish these targets, including the appointment by ARB of a Regional Targets 

Advisory Committee to recommend factors to be considered and methodologies for 

setting greenhouse gas emissions reduction targets. SB 375 also provides 

incentives – relief from certain California Environmental Quality Act (CEQA) 

requirements for development projects that are consistent with regional plans that 

achieve the targets. 

Reaching the Targets Reaching the Targets 

Transportation planning is done on a regional level in major urban areas, through the 

Metropolitan Planning Organizations. These MPOs are required by the federal 

government to prepare regional transportation plans (RTPs) in order to receive federal 

transportation dollars. These plans must reflect the land uses called out in city and 

county general plans. Regional planning efforts provide an opportunity for 

community residents to help select future growth scenarios that lead to more 

sustainable and energy efficient communities. Such plans should be developed 

through an extensive public process to provide for local accountability. 
II. Recommended Actions Scoping Plan 

48 

SB 375 requires MPOs to prepare a sustainable communities strategy to reach the 

regional target provided by ARB. MPOs would use the sustainable communities 

strategy for the land use pattern underlying the region’s transportation plan. If the 

strategy does not meet the target, the MPO must document the impediments and show 

how the target could be met with an alternative planning strategy. The CEQA relief 

would be provided to those projects that are consistent with either the sustainable 

communities strategy or alternative planning strategy, whichever meets the target. 

Many regions in California have conducted comprehensive scenario planning, called 

Blueprint planning, that engages a broad set of stakeholders at the local level on the 

impacts of land use and transportation choices. The State has allocated resources to 

initiate or augment existing Blueprint efforts of MPOs. These efforts focus on 

fostering efficient land use patterns that not only reduce vehicle travel but also 

accommodate an adequate supply of housing, reduce impacts on valuable habitat and 

productive farmland, increase resource use efficiency, and promote a prosperous 

regional economy. Blueprint planning can play an important role in the SB 375 

process by helping inform target-setting efforts and building strong sustainable 

communities strategies. 

Local governments will play a significant role in the regional planning process to 

reach passenger vehicle greenhouse gas emissions reduction targets. Local 

governments have the ability to directly influence both the siting and design of new 

residential and commercial developments in a way that reduces greenhouse gases 

associated with vehicle travel, as well as energy, water, and waste. A partnership of 

local and regional agencies is needed to create a sustainable vision for the future that 

accommodates population growth in a carbon efficient way while meeting housing 

needs and other planning goals. Integration of the sustainable communities strategies 

or alternative planning strategies with local general plans will be key to the 

achievement of these goals. State, regional, and local agencies must work together to 

prioritize and create the supporting policies, programs, incentives, guidance, and 

funding to assist local actions to help ensure regional targets are met. 

Enhanced public transit service combined with incentives for land use development 

that provides a better market for public transit will play an important role in helping 

to reach regional targets. 

SB 375 maintains regions’ flexibility in the development of sustainable communities 

strategies. There are many different ways regions can plan and work toward reducing 

the growth in vehicle travel. Increasing low-carbon travel choices (public transit, 

carpooling, walking and biking) combined with land use patterns and infrastructure 

that support these low-carbon modes of travel, can decrease average vehicle trip 

lengths by bringing more people closer to more destinations. The need for integrated 

strategies is supported by the current transportation and land use modeling literature. 

Supporting measures that should be considered in both the regional target-setting and 

sustainable communities strategy processes include the following: 
Scoping Plan II. Recommended Actions 

49 

• Congestion pricing strategies can provide a method of efficiently managing traffic 

demand while raising funds for needed transit, biking and pedestrian 

infrastructure investment. Regional and local agencies, however, do not have the 

authority to pursue these strategies on their own, as federal approval and State 

authorization must be provided for regional implementation of most pricing 

measures. 

• Indirect source rules for new development have already been implemented by 

some local air districts and proposed by others for purposes of criteria pollution 

reduction. Regions should evaluate the need for measures that would ensure the 

mitigation of high carbon footprint development outside of the sustainable 

communities strategies or alternative planning strategies that meet the targets 

established under SB 375. 

• Programs to reduce vehicle trips while preserving personal mobility, such as 

employee transit incentives, telework programs, car sharing, parking policies, 

public education programs and other strategies that enhance and complement land 

use and transit strategies can be implemented and coordinated by regional and 

local agencies and stakeholder groups. 

Another way to encourage greenhouse gas reductions from vehicle travel is through 

pay as you drive insurance (PAYD), a structure in which drivers realize a direct 

financial benefit from driving less. The California Insurance Commissioner recently 

announced support for PAYD and has proposed regulations to permit PAYD on a 

voluntary basis. 

Separate emissions reduction estimates for these strategies are not quantified here. 

As regional targets are developed in the SB 375 process, ARB will work with regions 

to quantify the benefits in the context of the targets. 

Estimating the Benefits of Regional Targets Estimating the Benefits of Regional Targets 

The ARB estimate of the statewide benefit of regional transportation-related 

greenhouse gas emissions reduction targets is based on analysis of research results 

quantifying the effects of land use and transportation strategies. The emissions 

reduction number in Table 11 is not the statewide metric for regional targets that must 

be developed as SB 375 is implemented. The emissions target will ultimately be 

determined during the SB 375 process. 

The possible impacts of land use and transportation policies have been well 

documented. Most recently, a 2008 U.C. Berkeley study38 reviewed over 20 

 

38Rodier, Caroline. U.C. Berkeley, Transportation Sustainability Research Center, “A Review of the 

International Modeling Literature: Transit, Land Use, and Auto Pricing Strategies to Reduce Vehicle Miles 

Traveled and Greenhouse Gas Emissions,” August 2008. http://www.arb.ca.gov/planning/tsaq/docs/rodier_8-1-

08_trb_paper.pdf (accessed October 12, 2008) 
II. Recommended Actions Scoping Plan 

50 

modeling studies from California (including the State’s four largest MPOs), other 

states and Europe. The study found a range of 0.4 to 7.7 percent reduction in vehicle 

miles traveled (VMT) resulting from a combination of land use and enhanced transit 

policies compared to a business-as-usual case over a 10-year horizon, with benefits 

doubling by 2030, as shown in Figure 4. With the inclusion of additional measures 

such as pricing policies, the reduction of greenhouse gas emissions can be greater. 

These strategies will be considered during the target-setting process. Sophisticated 

land use and transportation models can best assess these effects. As part of the 

development of regional targets, technical tools will need to be refined to ensure 

sound quantification techniques are available. 

Figure 4 

The potential benefits of this measure that can be realized by 2020 (as shown in 

Table 11) were estimated after first accounting for the benefits of the vehicle 

technology and efficiency measures in the plan. It was calculated based on the U.C. 

Berkeley study’s median value of 4 percent per capita VMT reduction over a 10-year 

time horizon. This value should not be interpreted as the final estimate of the benefits 

of this measure. The current academic literature supports this realistic statewide 

estimate of potential benefits, but the ultimate benefit will be determined as an 

outcome of SB 375 implementation on a regional level. The incentives for 

sustainable planning in SB 375 can set California on a new path. ARB’s 

establishment of regional targets in 2010, combined with the Regional Targets 

Advisory Committee process, required by the legislation, provides a clear mechanism 

for maximizing the benefits of this measure. 

Additional Benefits of Regional Targets and Land Use Strategies e Strategies 

Land use and transportation measures that help reduce vehicle travel will also provide 

multiple benefits beyond greenhouse gas reductions. Quality of life will be improved 
Scoping Plan II. Recommended Actions 

51 

by increasing access to a variety of mobility options such as transit, biking, and 

walking, and will provide a diversity of housing options focused on proximity to jobs, 

recreation, and services. Other important state and community goals that could be 

met through better integrated land use and transportation planning include 

agricultural, open space and habitat preservation, improved water quality, positive 

health effects, and the reduction of smog forming pollutants. 

Growing more sustainably has the potential to provide additional greenhouse gas and 

energy savings by encouraging more compact, mixed-use developments resulting in 

reduced demand for electricity and heating and cooling energy. These land userelated energy savings will contribute toward the Plan’s energy efficiency measures 

to achieve the goal of reducing electricity and natural gas usage. ARB is continuing 

to evaluate the greenhouse gas emissions reductions that may be additional to the 

proposed measures in this plan. 

Table 11: Regional Transportation-Related Greenhouse Gas Targets 

Recommendation 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

T-3 Regional Transportation-Related Greenhouse Gas Targets39 5 

Total 5 

7. Vehicle Efficiency Measures 7. Vehicle Efficiency Measures 

Implement light-duty vehicle efficiency measures. 

Several additional measures could reduce light-duty vehicle greenhouse gas 

emissions. The California Integrated Waste Management Board (CIWMB) with 

various partners continues to conduct a public awareness campaign to promote 

sustainable tire practices. ARB is pursuing a regulation to ensure that tires are 

properly inflated when vehicles are serviced. In addition, CEC in consultation with 

CIWMB is developing an efficient tire program focusing first on data gathering and 

outreach, then on potential adoption of minimum fuel-efficient tire standards, and 

lastly on the development of consumer information requirements for replacing tires. 

ARB is also pursuing ways to reduce engine load via lower friction oil and reducing 

the need for air conditioner use. ARB is actively engaged in the regulatory 

development process for the tire inflation component of this measure. Current 

information indicates the reduction of greenhouse gas emissions is likely to be less 

than estimated in the Draft Scoping Plan. ARB has adjusted the estimated reductions 

shown in Table 12 to reflect this. 

 

39 This number represents an estimate of what may be achieved from local land use changes. It is not the 

SB 375 regional target. ARB will establish regional targets for each MPO region following the input of the 

Regional Targets Advisory Committee and a public consultation process with MPOs and other stakeholders per 

SB 375. 
II. Recommended Actions Scoping Plan 

52 

Table 12: Vehicle Efficiency Recommendation 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

T-4 Vehicle Efficiency Measures 4.5 

Total 4.5 

8. Goods Movement 8. Goods Movement 

Implement adopted regulations for the use of shore power for ships at berth. Improve 

efficiency in goods movement activities. 

A significant portion of greenhouse gas emissions from transportation activities 

comes from the movement of freight or goods throughout the state. Activity at 

California ports is forecast to increase by 250 percent between now and 2020. Both 

the Goods Movement Emission Reduction Plan (GMERP) and the 2007 State 

Implementation Plan (SIP) contain numerous measures designed to reduce the public 

health impact of goods movement activities in California. ARB has already adopted a 

regulation to require ship electrification at ports. Proposition 1B funds, as well as 

clean air plans being implemented by California’s ports, will also help reduce 

greenhouse gas emissions while cutting criteria pollutant and toxic diesel emissions. 

ARB is proposing to develop and implement additional measures to reduce 

greenhouse gas emissions due to goods movement from trucks, ports and other 

related facilities. The anticipated reductions would be above and beyond what is 

already expected in the GMERP and the SIP. This effort should provide 

accompanying reductions in air toxics and smog forming emissions. The estimated 

reduction of greenhouse gas emissions is shown in Table 13. 

After further evaluation, ARB incorporated the Draft Scoping Plan’s Heavy-Duty 

Vehicle-Efficiency measure into the Goods Movement measure. A Heavy-Duty 

Engine Efficiency measure could reduce emissions associated with goods movement 

through improvements which could involve advanced combustion strategies, friction 

reduction, waste heat recovery, and electrification of accessories. ARB will consider 

setting requirements and standards for heavy-duty engine efficiency in the future if 

higher levels of efficiency are not being produced either in response to market forces 

(fuel costs) or federal standards. 

Table 13: Goods Movement Recommendation 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

T-5 Ship Electrification at Ports (Discrete Early Action) 0.2 

T-6 

Goods Movement Efficiency Measures 

• System-Wide Efficiency Improvements 3.5 

Total 3.7 
Scoping Plan II. Recommended Actions 

53 

9. Million Solar Roofs Program 9. Million Solar Roofs Program s Program 

Install 3,000 MW of solar-electric capacity under California’s existing solar 

programs. 

As part of Governor Schwarzenegger’s Million Solar Roofs Program, California has 

set a goal to install 3,000 megawatts (MW) of new solar capacity by 2017 – moving 

the state toward a cleaner energy future and helping lower the cost of solar systems 

for consumers. The Million Solar Roofs Initiative is a ratepayer-financed incentive 

program aimed at transforming the market for rooftop solar systems by driving down 

costs over time. Created under Senate Bill 1 (Murray, Chapter 132, Statutes of 2006), 

the Million Solar Roofs Program includes CPUC’s California Solar Initiative and 

CEC’s New Solar Homes Partnership, and requires publicly-owned utilities (POUs) 

to adopt, implement and finance a solar incentive program. This measure would 

offset electricity from the grid, thereby reducing greenhouse gas emissions. The 

estimated emissions reductions are shown in Table 14. 

Obtaining the incentives requires the building owners or developers to meet certain 

efficiency requirements: specifically, that new construction projects meet energy 

efficiency levels that exceed the State’s Title 24 Building Energy Efficiency 

Standards, and that existing commercial buildings undergo an energy audit. Thus, the 

program is also a mechanism for achieving the efficiency targets for the Energy 

sector. By requiring greater energy efficiency for projects that seek solar incentives, 

the State would be able to reduce both electricity and natural gas needs and their 

associated greenhouse gas emissions. 

Table 14: Million Solar Roofs Recommendation 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

E-4 

Million Solar Roofs (including California Solar Initiative, New 

Solar Homes Partnership and solar programs of publicly owned 

utilities) 

• Target of 3000 MW Total Installation by 2020 

2.1 

Total 2.1 

10. Medium/Heavy- 10. Medium/Heavy-Duty Vehicles Duty Vehicles Duty Vehicles 

Adopt medium and heavy-duty vehicle efficiency measures. 

Medium- and heavy-duty vehicles account for approximately 20 percent of the 

transportation greenhouse gas inventory. Requiring retrofits to improve the fuel 

efficiency of heavy-duty trucks could include a requirement for devices that reduce 

aerodynamic drag and rolling resistance. In addition, hybridization of medium- and 
II. Recommended Actions Scoping Plan 

54 

heavy-duty vehicles would also reduce greenhouse gas emissions through increased 

fuel efficiency. Hybrid trucks would likely achieve the greatest benefits in urban, 

stop-and-go applications, such as parcel delivery, utility services, transit, and other 

vocational work trucks. The recommendation for this sector is summarized in 

Table 15. 

Table 15: Medium/Heavy-Duty Vehicle Recommendation

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

T-7 Heavy-Duty Vehicle Greenhouse Gas Emissions Reduction 

Measure - Aerodynamic Efficiency (Discrete Early Action) 0.9 

T-8 Medium/Heavy-Duty Vehicle Hybridization 0.5 

Total 1.4 

11. Industrial Emissions 11. Industrial Emissions 

Require assessment of large industrial sources to determine whether individual 

sources within a facility can cost-effectively reduce greenhouse gas emissions and 

provide other pollution reduction co-benefits. Reduce greenhouse gas emissions from 

fugitive emissions from oil and gas extraction and gas transmission. Adopt and 

implement regulations to control fugitive methane emissions and reduce flaring at 

refineries. 

Energy Efficiency and Co- Energy Efficiency and Co-Benefits Audits for Large Industrial Sources Benefits Audits for Large Industrial Sources Benefits Audits for Large Industrial Sources 

This measure would apply to the direct greenhouse gas emissions at major industrial 

facilities emitting more than 0.5 MMTCO2E per year. In general, these facilities also 

have significant emissions of criteria air pollutants, toxic air pollutants, or both. 

Major industrial facilities include power plants, refineries, cement plants, and 

miscellaneous other sources. ARB would implement this measure through a 

regulation, requiring each facility to conduct an energy efficiency audit of individual 

combustion and other direct sources of greenhouse gases within the facility to 

determine the potential reduction opportunities, including criteria air pollutants and 

toxic air contaminants. The audit would include an assessment of the impacts of 

replacing or upgrading older, less efficient units such as boilers and heaters, or 

replacing the units with combined heat and power (CHP) units. The measure is 

summarized in Table 16. 

The audit would help ARB to identify potential reductions of greenhouse gas 

emissions reductions, the associated costs and cost-effectiveness, their technical 

feasibility, and the potential to reduce air pollution impacts at the local or regional 

level. ARB will use the results to determine if certain emissions sources within a 

facility can make cost-effective reductions of greenhouse gas emissions that also 

provide reductions in other criteria or toxic pollutants. Where this is the case, rule 

provisions or permit conditions would be considered to ensure the best combination 
Scoping Plan II. Recommended Actions 

55 

of pollution reductions. Nothing in this measure would delay known cost-effective 

strategies that otherwise would be required. 

The California Long Term Energy Efficiency Strategic Plan (CPUC) discusses a 

number of strategies associated with improving industrial sector efficiency and 

greenhouse gas emissions reductions, including the development of certification 

protocols for industrial efficiency improvements to develop market recognition for 

efficiency gains. 

Oil and Gas Recovery Operations and Transmission/Refineries fineries 

California is a major oil and gas producer. Crude oil, both from in-state and imported 

sources, is processed at 21 oil refineries in the state. In addition to conforming to the 

requirements of the cap-and-trade program and the audit measure, ARB has identified 

four specific measures for development and implementation, two for oil and gas 

recovery operations and gas transmission, and two for refineries. Other industrial 

measures that were under consideration affect greenhouse gas emissions sources that 

are fully regulated under cap and trade, which ARB concluded would provide costeffective reductions of greenhouse gas emissions. All measures would be designed to 

secure a combination of cost-effective reductions in greenhouse gas emissions, 

criteria air pollutants and air toxics. Two measures would be developed to reduce 

methane emissions in the oil and gas production and gas transmission processes from 

leaks and incomplete combustion of methane (used as fuel). These measures would 

include improved leak detection, process modifications, equipment retrofits, 

installation of new equipment, and best management practices. The first measure 

would affect oil and gas producers. The second would impact operators of natural 

gas pipeline systems. These fugitive emissions are not proposed to be covered by a 

cap and trade program, although combustion-related emissions from these operations 

are proposed to be covered. The WCI partner jurisdictions are currently evaluating 

the inclusion of fugitive methane emissions to the extent that adequate quantification 

methods exist. During implementation of this measure, ARB will determine whether 

these emissions will also be covered in California’s cap-and-trade program. If the 

emissions are covered under the cap, ARB will evaluate the need for the measures 

described here. 

Two measures would be developed for oil refineries. The first would limit the 

greenhouse gas emissions from refinery flares while preserving flaring as needed for 

safety reasons. The second would remove the current fugitive methane exemption in 

most refinery Volatile Organic Compounds (VOC) regulations. This exemption was 

established because methane does not appreciably contribute to urban smog, but is 

inappropriate given the role that methane plays in global warming. ARB believes 

these measures would provide cost-effective greenhouse gas, criteria pollutants and 

air toxics emissions reductions. Most combustion and other process emissions at 

refineries would be governed by the cap-and-trade program. As with the oil and gas 

production measures above, the need for these measures would be evaluated if 

fugitive methane is included in the WCI cap-and-trade program. 
II. Recommended Actions Scoping Plan 

56 

Table 16: Industrial Emissions Recommendation 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

I-1 Energy Efficiency and Co-Benefits Audits for Large Industrial 

Sources TBD 

I-2 Oil and Gas Extraction GHG Emissions Reduction 0.2 

I-3 GHG Leak Reduction from Oil and Gas Transmission 0.9 

I-4 Refinery Flare Recovery Process Improvements 0.33 

I-5 Removal of Methane Exemption from Existing Refinery

Regulations 0.01 

Total 1.4 

12. High Speed Rail 12. High Speed Rail High Speed Rail 

Support implementation of a high speed rail system.

A high speed rail (HSR) system is part of the statewide strategy to provide more 

mobility choice and reduce greenhouse gas emissions. This measure supports 

implementation of plans to construct and operate a HSR system between northern and 

southern California. As planned, the HSR is a 700-mile-long rail system capable of 

speeds in excess of 200 miles per hour on dedicated, fully-grade separated tracks with 

state-of-the-art safety, signaling and automated rail control systems. The system 

would serve the major metropolitan centers of California in 2030 and is projected to 

displace between 86 and 117 million riders from other travel modes in 2030. 

For Phase 1 of the HSR, between San Francisco and Anaheim, 2020 is projected to be 

the first year of service, with 26 percent of the projected 2030 full system ridership 

levels. The anticipated reduction of greenhouse gas emissions are shown in Table 17. 

HSR system ridership and the benefits associated with it are anticipated to increase 

over time as additional portions of the planned system are completed. Over the long 

term, the system also has the potential to support the reduction of greenhouse gas 

emissions in the transportation sector from land use strategies, by providing 

opportunities for and encouraging low-impact transit-oriented development. 

HSR implementation was initiated recently when California voters approved 

Proposition 1A, the “Safe, Reliable High-Speed Passenger Train Bond Act for the 

21st Century,” as it appeared on the November 2008 ballot. HSR is anticipated to 

begin in 2010, with full implementation anticipated in 2030. 

Table 17: High Speed Rail Recommendation 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

T-9 High Speed Rail 1.0 

Total 1.0 
Scoping Plan II. Recommended Actions 

57 

13. Green Building Strategy 13. Green Building Strategy 

Expand the use of green building practices to reduce the carbon footprint of 

California’s new and existing inventory of buildings. 

Collectively, energy use and related activities by buildings are the second largest 

contributor to California’s greenhouse gas emissions. Almost one-quarter of 

California’s greenhouse gas emissions can be attributed to buildings.40 As the 

Governor recognized in his Green Building Initiative (Executive Order S-20-04), 

significant reductions in greenhouse gas emissions can be achieved through the 

design and construction of new green buildings as well as the sustainable operation, 

retrofitting, and renovation of existing buildings. 

A Green Building strategy offers a comprehensive approach to reducing direct and 

upstream greenhouse gas emissions that cross-cuts multiple sectors including 

Electricity/Natural Gas, Water, Recycling/Waste, and Transportation. Green 

buildings are designed, constructed, renovated, operated, and maintained using an 

integrated approach that reduces greenhouse gas emissions by maximizing energy and 

resource efficiency. Employing a whole-building design approach can create 

tremendous synergies that result in multiple benefits at little or no net cost, allowing 

for efficiencies that would never be possible on an incremental basis. 

A Green Building strategy will produce greenhouse gas saving through buildings that 

exceed minimum energy efficiency standards, decrease consumption of potable 

water, reduce solid waste during construction and operation, and incorporate 

sustainable materials. Combined these measures can also contribute to healthy indoor 

air quality, protect human health and minimize impacts to the environment. A Green 

Building strategy also includes siting considerations. Buildings that are sited close to 

public transportation or near mixed-use areas can work in tandem with transportationrelated strategies to decrease greenhouse gas emissions that result from that sector. 

In July 2008, the California Building Standards Commission (CBSC) adopted the 

Green Building Standards Code (GBSC) for all new construction in the state. While 

the current version of the commercial green building code is voluntary, CBSC 

anticipates adopting a mandatory code in 2011 which will institute minimum 

environmental performance standards for all occupancies. The Green Building 

Strategy includes Zero Net Energy (ZNE) goals for new and existing homes and 

commercial buildings consistent with the recently-adopted California Long Term 

Energy Efficiency Strategic Plan. ARB encourages local governments to raise the bar 

by adopting “beyond-code” green building requirements. To assist this effort, State 

government would develop and regularly tighten voluntary standards, written in 

GBSC language for easy adoption by local jurisdictions. 

 

40 Greenhouse gas emission estimates from electricity, natural gas, and water use in homes and commercial 

buildings. 
II. Recommended Actions Scoping Plan 

58 

As we approach the 2020 and 2030 targets for zero energy buildings, these “percent 

above code” targets must shift to “percent of ZNE” targets. Zero energy new and 

existing buildings can be an overarching and unifying concept for energy efficiency 

in buildings, as discussed above (building energy efficiency measures E-1 and CR-1). 

In order to achieve statewide GHG emission reductions, these targets should be 

expanded to address other aspects of environmental performance. For example, these 

targets could be re-framed as a carbon footprint reduction goal for a 35 percent 

reduction in both energy and water consumption. For commercial buildings, a 2011 

target should be established such that a quarter of all new buildings reduce energy and 

water consumption by at least 25 percent beyond code. 

Furthermore, retrofitting existing residential and commercial buildings would achieve 

substantial greenhouse gas emissions reduction benefits. This Scoping Plan 

recommends the establishment of an environmental performance rating system for 

homes and commercial buildings and further recommends that California adopt 

mechanisms to encourage and require retrofits for buildings that do not meet 

minimum standards of performance. 

An effective green building framework can operate to deliver reductions of 

greenhouse gas emissions in multiple sectors. The green building strategies provide a 

vehicle to achieve the statewide electricity and natural gas efficiency targets and 

lower greenhouse gas emissions from the waste and water transport sectors. 

Achieving these green building emissions reductions will require coordinated efforts 

from a broad range of stakeholders, and new financing mechanisms to motivate 

investment in green building strategies. 

Achieving significant greenhouse gas emissions reductions from new and existing 

buildings will require a combination of green building measures for new construction 

and retrofits to existing buildings. The State of California will set an example by 

requiring all new State buildings to exceed existing Green Building Initiative energy 

goals and achieve nationally-recognized building sustainability standards such as 

Leadership in Energy and Environmental Design - New Construction (LEED-NC) 

“Gold” certification. Existing State buildings would also be retrofitted to achieve 

higher standards equivalent to LEED-EB for existing buildings (EB) “Silver.” All 

new schools should be required to meet the Collaborative for High Performance 

Schools (CHPS) 2009 criteria. Existing schools applying for modernization funds 

should also be required to meet CHPS 2009 criteria. 

ARB estimates that the greenhouse gas savings from green building measures as 

approximately 26 MMTCO2E, as shown in Table 18 below. Most of these reductions 

are accounted for in the Electricity, Waste and Water sectors. Because of this, ARB 

has assigned all emissions reductions that occur as a result of green building 

strategies to other sectors for purposes of meeting AB 32 requirements, but will 

continue to evaluate and refine the emissions from this sector. As such, this strategy 

will require implementation from various entities within California, including CEC, 
Scoping Plan II. Recommended Actions 

59 

PUC, State Architect, and others, each taking the lead in their area of authority and 

expertise. 

Table 18: Green Buildings Recommendation 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

GB-1 Green Buildings41 26 

Total 26 

14. High Global Warming Potential Gases 14. High Global Warming Potential Gases 

Adopt measures to reduce high global warming potential gases. 

High global warming potential (GWP) gases pose a unique challenge. Just a few 

pounds of high GWP materials can have the equivalent effect on global warming as 

several tons of carbon dioxide. For example, the average refrigerator has about a 

half-pound of refrigerant and about one pound of “blowing agents” used to make the 

insulating foam. If these gases were released into the atmosphere, they would have a 

global warming impact equivalent to five metric tons of CO2. 

High GWP chemicals are very common and are used in many different applications 

such as refrigeration, air conditioning systems, fire suppression systems, and the 

production of insulating foam. Because these gases have been in use for years, old 

refrigerators, air conditioners and foam insulation represent a significant “bank” of 

these materials yet to be released. High GWP gases are released primarily in two 

ways. The first is through leaking systems, and the second is during the disposal 

process. Once high GWP materials are released, they persist in the atmosphere for 

tens or even hundreds of years. Recommended measures to address this growing 

problem take the form of direct regulations and use of mitigation fees. 

ARB identified four Discrete Early Action measures to reduce greenhouse gas 

emissions from the refrigerants used in car air conditioners, semiconductor 

manufacturing, air quality tracer studies, and consumer products. ARB has identified 

additional potential reduction opportunities based on specifications for future 

commercial and industrial refrigeration, changing the refrigerants used in auto air 

conditioning systems, and ensuring that existing car air conditioning systems as well 

as stationary refrigeration equipment do not leak. Recovery and destruction of high 

GWP materials in the banks described above could also provide significant 

reductions. 

 

41 Although some of these emissions reductions may be additional, most of them are accounted for in the 

Energy, Waste, Water, and Transportation sectors. In addition, some of these reductions may occur out of state, 

making quantification more difficult. Because of this, these emissions reductions are not currently counted 

toward the AB 32 2020 goal. 
II. Recommended Actions Scoping Plan 

60 

ARB is also proposing to establish an upstream mitigation fee on the use of high 

GWP gases. Even with the reductions from the specific high GWP measures 

described above, this sector’s emissions are still projected to more than double from 

current levels by 2020. This is because of the high growth in the sector due, in part, 

to the replacement of ozone-depleting substances being phased out of production. 

These emissions would be difficult to address via traditional approaches since the 

gases are used in small quantities in very diverse applications. Additionally, there are 

no proven substitutes or alternatives for some uses, and the relative low price of most 

high GWP compounds provides little incentive to develop alternatives, reduce 

leakage, or recover the gases at end-of-life. 

An upstream fee would ensure that the climate impact of these substances is reflected 

in the total cost of the product, encouraging reduced use and end-of-life losses, as 

well as the development of alternatives. The fee would be variable and associated 

with the impact the product makes on public health and the environment. This could 

encourage product innovation because fees would correspondingly decrease as the 

manufacturer or producer redesigned their product or found lower-cost alternatives. 

This mitigation fee would complement many of the downstream high GWP 

regulations currently being developed.42 Fees on high GWP gases would be set to be 

consistent with the cost of reducing greenhouse gas emissions and could be set to 

reduce multiple environmental impacts. Revenues could be used to mitigate 

greenhouse gas emissions either from other high GWP compounds or other 

greenhouse gases. 

Table 19 summarizes the recommendations for measures in the High GWP sector. 

These measures address both high GWP gases identified in AB 32 and also other high 

GWP gases, such as ozone-depleting substances that are only partially covered by the 

Montreal Protocol. The emissions reductions shown are only for the six greenhouse 

gases explicitly identified in AB 32. 

 

42 Industrial process emissions of high GWP gases are also expected to be part of the cap-and-trade program. 

As ARB moves through the rulemaking for both the high GWP fee and the cap-and-trade program, staff will 

evaluate whether these are complementary approaches or if one or the other needs to be adjusted to prevent 

duplicative regulation of the industrial process emissions of these gases. 
Scoping Plan II. Recommended Actions 

61 

Table 19: High GWP Gases Sector Recommendation 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

H-1 

Motor Vehicle Air Conditioning Systems: Reduction of 

Refrigerant Emissions from Non-Professional Servicing (Discrete 

Early Action) 

0.26 

H-2 SF6 Limits in Non-Utility and Non-Semiconductor Applications 

(Discrete Early Action) 0.3 

H-3 Reduction of Perfluorocarbons in Semiconductor Manufacturing 

(Discrete Early Action) 0.15 

H-4 Limit High GWP Use in Consumer Products 

(Discrete Early Action) (Adopted June 2008) 0.25 

H-5 

High GWP Reductions from Mobile Sources 

• Low GWP Refrigerants for New Motor Vehicle Air 

Conditioning Systems 

• Air Conditioner Refrigerant Leak Test During Vehicle 

Smog Check 

• Refrigerant Recovery from Decommissioned 

Refrigerated Shipping Containers 

• Enforcement of Federal Ban on Refrigerant Release 

during Servicing or Dismantling of Motor Vehicle Air 

Conditioning Systems 

3.3 

H-6 

High GWP Reductions from Stationary Sources 

• High GWP Stationary Equipment Refrigerant 

Management Program: 

o Refrigerant Tracking/Reporting/Repair Deposit 

Program 

o Specifications for Commercial and Industrial 

Refrigeration Systems 

• Foam Recovery and Destruction Program 

• SF6 Leak Reduction and Recycling in Electrical 

Applications 

• Alternative Suppressants in Fire Protection Systems

• Residential Refrigeration Early Retirement Program 

10.9 

H-7 Mitigation Fee on High GWP Gases43 5 

Total 20.2 

 

43 The 5 MMTCO2E reduction is an estimate of what might occur with a fee in place. Additional emissions 

reductions from a fee would be expected as resulting revenues are used in mitigation programs. Using the funds 

to mitigate greenhouse gas emissions could substantially increase the emissions reductions from this measure. 
II. Recommended Actions Scoping Plan 

62 

15. Recycling and Waste 15. Recycling and Waste 

Reduce methane emissions at landfills. Increase waste diversion, composting and 

other beneficial uses of organic materials, and mandate commercial recycling. Move 

toward zero-waste. 

California has a long track record of reducing greenhouse gas emissions by turning 

waste into resources, exemplified by the waste diversion rate from landfills of 54 

percent (which exceeds the current 50 percent mandate) resulting from recovery of 

recyclable materials. Re-introducing recyclables with intrinsic energy value back into 

the manufacturing process reduces greenhouse gas emissions from multiple phases of 

product production including extraction of raw materials, preprocessing and 

manufacturing. Additionally, by recovering organic materials from the waste stream, 

and having a vibrant composting and organic materials industry, there is an 

opportunity to further reduce greenhouse gas emissions through the indirect benefits 

associated with the reduced need for water and fertilizer for California’s Agricultural 

sector. Incentives may also be an effective way to secure greenhouse gas emissions 

reductions in this sector. Table 20 summarizes the emissions reductions from 

Recycling and Waste sector. 

Reduction in Landfill Methane Reduction in Landfill Methane 

Methane emissions from landfills, generated when wastes decompose, account for 

one percent of California’s greenhouse gas emissions. Greenhouse gas emissions can 

be substantially reduced by properly managing all materials to minimize the 

generation of waste, maximize the diversion from landfills, and manage them to their 

highest and best use. Capturing landfill methane results in greenhouse gas benefits, 

as well as reductions in other air pollutants such as volatile organic compounds. ARB 

is working closely with the California Integrated Waste Management Board 

(CIWMB) to develop a Discrete Early Action measure for landfill methane control 

that will be presented to ARB in January. 

CIWMB is also pursuing efforts to reduce methane emissions by diverting organics 

from landfills, and to promote best management practices at smaller uncontrolled 

landfills. Landfill gas may also provide a viable source of liquefied natural gas 

(LNG) vehicle fuel. Reductions from these types of projects would be accounted for 

in the Transportation sector.

High Recycling / Zero Waste High Recycling / Zero Waste 

This measure reduces greenhouse gas emissions primarily by reducing the substantial 

energy use associated with the acquisition of raw materials in the manufacturing stage 

of a product’s life-cycle. As virgin raw materials are replaced with recyclables, a 

large reduction in energy consumption should be realized. Implementing programs 

with a systems approach that focus on consumer demand, manufacturing, and 

movement of products will result in the reduction of greenhouse gas emissions and 

other co-benefits. Reducing waste and materials at the source of generation, 
Scoping Plan II. Recommended Actions 

63 

increased use of organic materials to produce compost to benefit soils and to produce 

biofuels and energy, coupled with increased recycling – especially in the commercial 

sector – and Extended Producer Responsibility (EPR) plus Environmentally 

Preferable Purchasing (EPP) also have the potential to reduce emissions, both in-state 

and within the connected global economy. This measure could also assist in meeting 

the 33 percent renewables energy goal through deployment of anaerobic digestion for 

production of fuels/energy. 

As noted by ETAAC, recycling in the commercial sector could be substantially 

increased. This will be implemented through mandatory programs and enhanced 

partnerships with local governments. The provision of appropriate financial 

incentives will be critical. ARB will work with CIWMB to develop and implement 

these types of programs. ARB will also work with CIWMB, the California 

Department of Food and Agriculture, the Department of Transportation, and others to 

provide direct incentives for the use of compost in agriculture and landscaping. 

Further, CIWMB will explore the use of incentives for all Recycling and Waste 

Management measures, including for commercial recycling and for local jurisdictions 

to encourage the collection of residentially and commercially-generated food scraps 

for composting and in-vessel anaerobic digestion. 

Table 20: Recycling and Waste Sector Recommendation - Landfill 

Methane Capture and High Recycling/Zero Waste 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions

RW-1 Landfill Methane Control (Discrete Early Action) 1 

RW-2 Additional Reductions in Landfill Methane 

• Increase the Efficiency of Landfill Methane Capture TBD

RW-3 

High Recycling/Zero Waste 

• Mandatory Commercial Recycling 

• Increase Production and Markets for Organics Products 

• Anaerobic Digestion 

• Extended Producer Responsibility 

• Environmentally Preferable Purchasing 

5 

2 

2 

TBD 

TBD 

Total 10(44)

 

44 Reductions from RW-2 and RW-3 are not counted toward the AB 32 goal. ARB is continuing to work with 

CIWMB to quantify these emissions and determine what portion of the reductions can be credited to meeting 

the AB 32 2020 goal. These measures may provide greater emissions reductions than estimated. 
II. Recommended Actions Scoping Plan 

64 

16. Sustainable Forests 16. Sustainable Forests 

Preserve forest sequestration and encourage the use of forest biomass for sustainable 

energy generation. 

The 2020 Scoping Plan target for California’s forest sector is to maintain the current 5 

MMTCO2E of sequestration through sustainable management practices, potentially 

including reducing the risk of catastrophic wildfire, and the avoidance or mitigation 

of land-use changes that reduce carbon storage. California’s Board of Forestry and 

Fire Protection has the existing authority to provide for sustainable management 

practices, and will, at a minimum, work to maintain current carbon sequestration 

levels. The Resources Agency and its departments will also have an important role to 

play in implementing this measure. 

In addition, the Resources Agency is supporting voluntary actions, including 

expenditure of public funds for projects focused largely on conserving biodiversity, 

providing recreation, promoting sustainable forest management and other projects 

that also provide carbon sequestration benefits. The federal government must also 

use its regulatory authority to, at a minimum, maintain current carbon sequestration 

levels for land under its jurisdiction in California. 

Forests in California are now a carbon sink. This means that atmospheric removal of 

carbon through sequestration is greater than atmospheric emissions from processes 

like fire and decomposition of wood. However, several factors, such as wildfires and 

forest land conversion, may cause a decline in the carbon sink. The 2020 target 

would provide a mechanism to help ensure that current carbon stocks are, at a 

minimum, maintained and do not diminish over time. The 5 MMTCO2E emission 

reduction target is set equal to the magnitude of the current estimate of net emissions 

from California’s forest sector. As technical data improve, the target can be 

recalibrated to reflect new information. 

California’s forests will play an even greater role in reducing carbon emissions for the 

2050 greenhouse gas emissions reduction goals. Forests are unique in that planting 

trees today will maximize their sequestration capacity in 20 to 50 years. As a result, 

near-term investments in activities such as planting trees will help us reach our 2020 

target, but will also play a greater role in reaching our 2050 goals. 

Monitoring carbon sequestered on forest lands will be necessary to implement the 

target. The Board of Forestry and Fire Protection, working with the Resources 

Agency, the Department of Forestry and Fire Protection and ARB would be tasked 

with developing a monitoring program, improving greenhouse gas inventories, and 

determining what actions are needed to meet the 2020 target for the Forest sector. 

Future climate impacts will exacerbate existing wildfire and insect disturbances in the 

Forest sector. These disturbances will create new uncertainties in reducing emissions 

and maintaining sequestration levels over the long-term, requiring more creative 

strategies for adapting to these changes. In the short term, focusing on sustainable 

management practices and land-use issues is a practical approach for moving forward. 
Scoping Plan II. Recommended Actions 

65 

Future land use decisions will play a role in reaching our greenhouse gas emissions 

reduction goals for all sectors. Loss of forest land to development increases 

greenhouse gas emissions levels because less carbon is sequestered. Avoiding or 

mitigating such conversions will support efforts to meet the 2020 goal. When 

significant changes occur, the California Environmental Quality Act is a mechanism 

providing for assessment and mitigation of greenhouse gas emissions. 

Going forward there are a number of forestry-related strategies that can play an 

important role in California’s greenhouse gas emissions reduction efforts. Biomass 

resources from forest residue will factor into the expansion of renewable energy 

sources (this is currently accounted for in the Energy sector). Similarly, fuels 

management strategies have the potential to reduce the risk of catastrophic fires. 

However, fuels management needs to be evaluated to determine whether, and if so 

under what circumstances, quantifiable greenhouse gas emission reductions are 

achieved. Additionally, public investments to purchase and preserve forests and 

woodlands would also provide greenhouse gas emission reductions that will be 

accounted for as projects are funded. Urban forest projects can also provide the dual 

benefit of carbon sequestration and shading to reduce air conditioning load. 

Furthermore, the Forest sector currently functions as a source of voluntary reductions 

that would not otherwise occur and this role could expand even further in the future. 

ARB has already adopted a methodology to quantify reductions from forest projects, 

and recently adopted additional quantification methodologies. Table 21 summarizes 

the emission reductions from the forest measure. 

Table 21: Sustainable Forests Recommendation 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

F-1 Sustainable Forest Target 5 

Total 5 

17. Water 17. Water 

Continue efficiency programs and use cleaner energy sources to move and treat 

water. 

Water use requires significant amounts of energy. Approximately one-fifth of the 

electricity and one-third of the non-power plant natural gas consumed in the state are 

associated with water delivery, treatment and use. Although State, federal, and local 

water projects have allowed the state to grow and meet its water demands, greenhouse 

gas emissions can be reduced if we can move, treat, and use water more efficiently. 

As is the case with energy efficiency, California has a long history of advancing 

water efficiency and conservation programs. Without this ongoing, critical work, 
II. Recommended Actions Scoping Plan 

66 

baseline or business-as-usual greenhouse gas emissions associated with water use 

would be much higher than is currently the case. 

Six greenhouse gas emissions reduction strategies measures are proposed for the 

Water sector, and are shown in Table 22. Three of the measures target reducing 

energy requirements associated with providing reliable water supplies and two 

measures are aimed at reducing the amount of non-renewable electricity associated 

with conveying and treating water. The final measure focuses on providing 

sustainable funding for implementing these actions. The greenhouse gas emissions 

reductions from these measures are indirectly realized through reduced energy 

requirements and are accounted for in the Electricity and Natural Gas sector. 

In addition, a mechanism to make allowances available in a cap-and-trade program 

could be used to provide additional incentives for local governments, water suppliers, 

and third party providers to bundle water and energy efficiency improvements. This 

type of allowance set-aside will be evaluated during the rulemaking for the cap-andtrade program. 

ARB recommends a public goods charge for funding investments in water 

management actions that improve water and energy efficiency and reduce GHG 

emissions. As noted by the Economic and Technology Advancement Advisory 

Committee, a public goods charge on water can be collected on water bills and then 

used to fund end-use water efficiency improvements, system-wide efficiency projects, 

water recycling, and other actions that improve water and energy efficiency and 

reduce GHG emissions. Depending on how the fee schedule is developed in a 

subsequent rulemaking process, a public goods charge could generate $100 million to 

$500 million. These actions would also have the co-benefit of improving water 

quality and water supply reliability for customers.

Table 22: Water Recommendation 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

W-1 Water Use Efficiency 1.4 

W-2 Water Recycling 0.3 

W-3 Water System Energy Efficiency 2.0 

W-4 Reuse Urban Runoff 0.2 

W-5 Increase Renewable Energy Production 0.9 

W-6 Public Goods Charge TBD 

Total 4.8(45)

 

45 Greenhouse gas emission reductions from the water sector are not currently counted toward the 2020 goal. 

ARB anticipates that a portion of these reductions will be additional to identified reductions in the Electricity 

sector and is working with the appropriate agencies to refine the electricity/water emissions inventory. 
Scoping Plan II. Recommended Actions 

67 

18. Agriculture 18. Agriculture 

In the near-term, encourage investment in manure digesters and at the five-year 

Scoping Plan update determine if the program should be made mandatory by 2020. 

Encouraging the capture of methane through use of manure digester systems at dairies 

can provide emission reductions on a voluntary basis. This measure is also a 

renewable energy strategy to promote the use of captured gas for fuels or power 

production. Initially, economic incentives such as marketable emission reduction 

credits, favorable utility contracts, or renewable energy incentives will be needed. 

Quantified reductions for this measure (shown in Table 23) are not included in the 

sum of statewide reductions shown in Table 2 since the initial approach is voluntary. 

ARB and the California Climate Action Registry worked together on a manure 

digester protocol to establish methods for quantifying greenhouse gas emissions 

reductions from individual projects; the Board adopted this protocol in September 

2008. The voluntary approach will be re-assessed at the five-year update of the 

Scoping Plan to determine if the program should become mandatory for large dairies 

by 2020. 

Nitrogen fertilizer, which produces N2O emissions, is the other significant source of 

greenhouse gases in the Agricultural sector. ARB has begun a research program to 

better understand the variables affecting fertilizer N2O emissions (Phase 1), and based 

on the findings, will explore opportunities for emission reductions (Phase 2). 

There may be significant potential for additional voluntary reductions in the 

agricultural sector through strategies, such as those recommended by ETAAC. These 

opportunities include increases in fuel efficiency of on-farm equipment, water use 

efficiency, and biomass utilization for fuels and power production. 

Increasing carbon sequestration, including on working rangelands, hardwood and 

riparian woodland reforestation, also hold potential as a greenhouse gas strategies. 

As we evaluate the role that this sector can play in California’s emissions reduction 

efforts, we will explore the feasibility of developing sound quantification protocols so 

that these and other related strategies may be employed in the future. 

Table 23: Agriculture Recommendation 

(MMTCO2E in 2020) 

Measure No. Measure Description Reductions 

A-1 Methane Capture at Large Dairies46 1.0 

Total 1.0 

 

46 Because the emission reductions from this measure are not required, they are not counted in the total. 
II. Recommended Actions Scoping Plan 

68 

D. Voluntary Early Actions and Reductions Voluntary Early Actions and Reductions

Many individual activities that are not currently addressed under regulatory approaches can 

nevertheless result in cost-effective, real, additional, and verifiable greenhouse gas emissions 

reductions that will help California meet its 2020 target. Ensuring that appropriate credit is 

available to these types of emissions reduction projects will also help jump-start a new wave 

of technologies that will feature prominently in California and the world’s long-term efforts 

to combat climate change. ARB will pursue several approaches that will recognize and 

reward these types of projects. 

1. Volunt 1. Voluntary Early Action ary Early Action ary Early Action 

ARB is required to design regulations to encourage early action to reduce greenhouse 

gas emissions, and to provide appropriate recognition or credit for that action. 

(HSC §38562(b)(1) and (3)) Recognizing and rewarding greenhouse gas emissions 

reductions that occur prior to the full implementation of the AB 32 program can set 

the stage for innovation by incentivizing the development and employment of new 

clean technologies and by generating economic and environmental benefits for 

California. 

In February 2008, ARB adopted a policy statement encouraging the early reductions 

of greenhouse gas emissions.47 The policy statement describes a process for 

interested parties to submit proposed emission quantification methodologies for 

voluntary greenhouse gas emissions reductions to ARB for review. The intent is to 

provide a rapid assessment of methodologies for evaluating potential greenhouse gas 

emissions reduction projects to encourage early actions. Where appropriate, ARB 

will issue Executive Orders to confirm the technical soundness of the methodologies, 

and the methodology would be available for use by other parties to demonstrate the 

creation of voluntary early reductions. ARB is currently in the process of evaluating 

a number of submitted project methodologies. 

ARB will provide appropriate credit for voluntary early reductions that can be 

adequately quantified and verified through three primary means. First, within the 

cap-and-trade program, ARB would set aside a certain number of allowances from 

the first compliance period to use to reward voluntary reductions that occur before 

2012. In addition, ARB will assure that the allocation process in the first compliance 

period does not disadvantage facilities that have made reductions after AB 32 went 

into effect at the start of 2007 and before 2012.48 The third approach will be to design 

 

47Board Meeting Agenda. California Air Resources Board. February 28, 2008. 

http://www.arb.ca.gov/board/ma/2008/ma022808.htm (accessed October 12, 2008) 

48 ARB will evaluate whether some reductions that occurred prior to AB 32 going into effect on 

January 1, 2007, should also receive credit under these rules. For example, many facilities in California 

registered with the California Climate Action Registry after its creation in 2002 to document early actions to 

reduce emissions by having a record of entities profiles and baselines. ARB will evaluate what reductions made 

prior to 2007 should be eligible for credit from the allowance set-aside as part of the cap-and-trade program 

rulemaking. 
Scoping Plan II. Recommended Actions 

69 

other regulations, to the extent feasible, to recognize and reward early action. These 

approaches are discussed in more detail in Appendix C. 

2. Voluntary Reductions 2. Voluntary Reductions Reductions 

Emissions reduction projects that are not otherwise regulated, covered under an 

emissions cap, or undertaken as a result of government incentive programs can 

generate “offsets.” These are verifiable reductions whose ownership can be 

transferred to others. Voluntary offset markets have recently flourished as a way for 

companies and individuals to offset their own emissions by purchasing reductions 

outside of their own operations. These sorts of voluntary efforts to reduce greenhouse 

gas emissions can play an important role in helping the State meet its overall 

greenhouse gas reduction goals. 

ARB will adopt methodologies for quantifying voluntary reductions. (HSC §38571) 

The Board adopted a methodology for forest projects in October 2007 and for urban 

forestry and manure digesters in September 2008. The recognition of voluntary 

reduction or offset methodologies does not in any way guarantee that these offsets 

can be used for other compliance purposes. The Board would need to adopt 

regulations to verify and enforce reductions achieved under these or other approved 

methodologies before they could be used for compliance purposes. (HSC §38571) 

Allowance set-asides, in addition to being used to potentially reward voluntary early 

actions by facilities that will be included in the cap-and-trade program, could also be 

used to reward voluntary early action at other facilities not covered by the cap and to 

ensure that voluntary actions, such as voluntary renewable power purchases by 

individuals, businesses, and others, serve to reduce greenhouse gas emissions under 

the cap. An early action allowance set-aside could be utilized both by entities that are 

covered by the cap, and by those who develop emissions reducing projects outside of 

the cap, or purchase the reductions associated with those projects, and have not sold 

or used them. Additional discussion of voluntary offsets is included in Appendix C. 

E. Use of Allowances and Revenues Use of Allowances and Revenues Use of Allowances and Revenues 

Revenues may be generated from the implementation of various proposed components of the 

Scoping Plan, including by the use of auctions within a cap-and-trade system or through the 

imposition of more targeted measures, such as a public goods charge on water. These 

revenues could be used to support AB 32 requirements for greenhouse gas emissions 

reductions and associated socio-economic considerations. This section summarizes some of 

the recommendations and ideas that ARB has received to date. As discussed in the 

description of the cap-and-trade measure above, ARB will seek input from a broad range of 

experts in an open public process regarding the options for allocation and revenue use under 

consideration. 

The Economic and Technology Advancement Advisory Committee (ETAAC) recommended 

the creation of a California Carbon Trust as a possible mechanism for using revenues 
II. Recommended Actions Scoping Plan 

70 

generated by the program, leveraged with private funds, to further the overall program goals. 

ETAAC’s recommendation is roughly based on the United Kingdom Carbon Trust. The 

United Kingdom program was established with public funds, but now functions as a standalone corporation, providing management and consulting services to corporations and small 

and medium businesses on reducing greenhouse gas emissions. It also funds innovations in 

carbon reduction technologies. ETAAC recommended the creation of a similar organization 

that would use revenue from the sale of carbon allowances or from carbon fees to: 

• Fund research, development and demonstration projects, 

• Help bring promising and high potential technologies through the often challenging 

early stages of development and get them to market,

• Manage the early carbon market and mitigate price volatility, purchasing credits and 

selling them or retiring them as needed, 

• Dedicate resources to fund projects to achieve AB 32 Environmental Justice goals, or 

• Support a green technology workforce training program. 

The most appropriate use for some of the allowances and revenue generated under AB 32 

may be to retain it within or return it to the sector from which it was generated. For example, 

CEC and CPUC specifically recommended that significant portions of the revenue generated 

from the electricity sector under a cap-and-trade program be used for the benefit of that 

sector to support investments in renewable energy, efficiency, new energy technology, 

infrastructure, customer utility bill relief, and other similar programs. In the case of more 

targeted revenues from a public goods charge, the intent would be to use the funds for 

program purposes within the sector in which it was raised, for example in the water sector. 

ARB will seek input from a broad range of experts in an open public process, and will work 

with other agencies, the WCI partner jurisdictions, and stakeholders to consider the options 

for use of revenues from the AB 32 program. 

Possible uses of allowances and of the revenue generated under the program include: 

• Reducing costs of emissions reductions or achieving additional reductions – 

Funding energy efficiency and renewable resource development could lower overall 

costs to consumers and companies, and provide the opportunity to achieve greater 

emissions reductions than would otherwise be possible. Program revenues could be 

used to fund programs directly, or create financial incentives for others. Allowance 

set-asides could also be used to provide incentives for voluntary renewable power 

purchases by individuals and businesses, and for increased energy efficiency. 

• Achieving environmental co-benefits – Criteria and toxic air pollutants create health 

risks, and some communities bear a disproportionate burden from air pollution. 

Revenues could be used to enhance greenhouse gas emission reductions that also 

provide reductions in air and other pollutants that affect public health. 
Scoping Plan II. Recommended Actions 

71 

• Incentives to local governments – Funding or other incentives to local governments 

for well-designed land-use planning and infrastructure projects could lead to shorter 

commutes and encourage walking, bicycling and the use of public transit. Funding of 

other incentives for local governments could also be used to increase recycling, 

composting, and to generating renewable energy from anaerobic digestion. 

• Consumer rebates – Utilities and other businesses could use revenues to support and 

increase rebate programs to customers to offset some of the cost associated with 

increased investments in renewable resources and to encourage increased energy 

efficiency. 

• Direct refund to consumers – Revenue from the program could be recycled directly

back to consumers in a variety of forms including per capita dividends, earned 

income tax credits, or other mechanisms. 

• Climate change adaptation programs – Climate change will impact natural and 

human environments. Program revenues could be used to help the state adapt to the 

effects of climate change which will be detailed in the State’s Climate Adaptation 

Strategy being prepared by the Resources Agency to be completed in early 2009. 

• Subsidies – Revenues could be used to reduce immediate cost impacts to covered 

industries required to make substantial upfront capital investments to reduce 

greenhouse gas emissions. 

• RD&D funding – Revenues could be used to support research, development, and 

deployment of green technologies. 

• Worker transition assistance – Regulating greenhouse gas emissions will probably 

shift economic growth to some sectors and green technologies and away from higher 

carbon intensity industries. Worker training programs could help the California labor 

force be competitive in these new industries. 

• Administration of a greenhouse gas program – A portion of revenues could be 

used to underwrite the State’s AB 32 programs and operating costs. 

• Direct emission reductions – Revenues could be used to purchase greenhouse gas 

reductions for the sole purpose of retirement, providing direct additional greenhouse 

gas emission reductions. Potential projects, such as afforestation and reforestation, 

would both sequester CO2 and provide other environmental benefits. 

Many of the potential uses of revenue would help ARB implement the community benefit 

section of the AB 32 (HSC §38565) which directs the Board, where applicable and to the 

extent feasible, to ensure that the greenhouse gas emissions reduction program directs public 

and private investment toward the most disadvantaged communities in California. 
72 

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Scoping Plan III. Evaluations 

73 

 

III. EVALUATIONS EVALUATIONS EVALUATIONS 

The primary purpose of the Scoping Plan is to develop a set of measures that will provide the 

maximum technologically feasible and cost-effective greenhouse gas emission reductions. In 

developing this Plan, ARB evaluated the effect of these measures on California’s economy, 

environment, and public health. This Chapter outlines these analyses. 

ARB conducted broad evaluations of the potential impacts of the Scoping Plan, and will 

conduct more specific evaluations during regulatory development (HSC §38561(d), and 

HSC §38562(b)). Prior to inclusion of market-based compliance mechanisms in a regulation, 

to the extent feasible, the Board will consider direct, indirect and cumulative emission 

impacts, and localized impacts in communities that are already adversely impacted by air 

pollution (HSC §38570(b)). 

Based on the evaluation of the recommendations included in this Plan, implementing AB 32 

is expected to have an overall positive effect on the economy. In addition, implementation of 

the measures in the Recommended Actions section (Chapter II) will reduce statewide oxides 

of nitrogen (NOx), volatile organic compounds (VOC) and atmospheric particulate matter 

(PM) emissions primarily due to reduced fuel consumption, with resulting public health 

benefits. ARB will also work at the measure-specific level to further maximize the public 

health benefits that can accompany implementation of greenhouse gas emissions reduction 

strategies. The following sections provide a summary of the ARB evaluations of the 

recommended measures included in this Scoping Plan. More detailed information on the 

evaluations and their results are provided in Appendices G and H. 

A. Economic Modeling Economic Modeling Economic Modeling 

To evaluate the economic impacts of the Scoping Plan, ARB compared estimated economic 

activity under a business-as usual (BAU) case to the results obtained when actions 

recommended in this Plan are implemented. The BAU case is briefly described below. The 

estimated costs and savings used as model inputs for individual measures are outlined in 

Appendix G, and additional documentation on the calculation of those costs and savings is 

provided in Appendix I. All dollar estimates are in 2007 dollars. 

Under the BAU case, Gross State Product (GSP) in California is projected to increase from 

$1.8 trillion in 2007 to almost $2.6 trillion in 2020. The results of our economic analysis 

indicate that implementation of the Scoping Plan will have an overall positive net economic 

benefit for the state. Positive impacts are anticipated primarily because the investments 

motivated by several measures result in substantial energy savings that more than pay back 

the cost of the investments at expected future energy prices. 
III. Evaluations Scoping Plan 

74 

The business-as-usual case is a representation of what the State of the California economy 

will be in the year 2020 assuming that none of the measures recommended in the Scoping 

Plan are implemented. While a number of the measures in the plan will be implemented as 

the result of existing federal or State policies and do not require additional regulatory action 

resulting from the implementation of AB 32, they are not included in the BAU case to ensure 

that the economic impacts of all of the measures in the Scoping Plan are fully assessed. 

The BAU case is constructed using forecasts from the California Department of Finance, the 

California Energy Commission, and other sources, and is described in more detail in 

Appendix G. ARB used a conservative estimate of future petroleum price in this analysis, 

$89 per barrel of oil in 2020. Aspects of the BAU case are subject to uncertainty, for 

example, the possibility that future energy prices could deviate from those that are included 

in the BAU case. 

1. Macro- 1. Macro-economic Modeling Res economic Modeling Res economic Modeling Results 

Table 24 summarizes the key findings from the economic modeling. Gross State 

Product, personal income and employment are shown for 2007 and for two cases for 

2020, the BAU case and for implementation of the Scoping Plan. For both the BAU 

case and the Scoping Plan case, Gross State Product increases by almost $800 billion 

between 2007 and 2020, personal income grows by 2.8 percent per year from $1.5 

trillion in 2007 to $2.1 trillion in 2020, and employment grows by 0.9 percent per 

year from 16.4 million jobs in 2007 to 18.4 million (BAU) or 18.5 million (Scoping 

Plan) in 2020. The results consistently show that implementing the Scoping Plan will 

not only significantly reduce California’s greenhouse gas emissions, but will also 

have a net positive effect on California’s economic growth through 2020. 

Table 24: Summary of Key Economic Findings from 

Modeling the Scoping Plan Using E-DRAM 

Business-as-Usual*

Scoping Plan 

Economic Indicator 2007 

2020 

Average 

Annual 

Growth 

2020 Change 

from BAU 

Average 

Annual 

Growth 

Gross State Product 

($Billion) 1,811 2,586 2.8% 2,593 0.3% 2.8% 

Personal Income 

($Billion) 1,464 2,093 2.8% 2,109 0.8% 2.8% 

Employment 

(Million Jobs) 16.41 18.41 0.9% 18.53 0.7% 0.9% 

Emissions 

(MMTCO2E) 500** 596 1.4%** 422 -28% -1.2%**

Carbon Prices 

(Dollars) - - - 10.00 NA - 

*

 Business-as-usual is a forecast of the California economy in 2020 without implementation of any of 

the measures identified in the Scoping Plan. 

** Approximate value. ARB is in currently estimating greenhouse gas emissions for 2007. 
Scoping Plan III. Evaluations 

75 

The macroeconomic modeling results presented here understate the benefits of 

market-based policies, including the cap-and-trade program. Consequently, our 

estimate of the economic impact of implementing the Scoping Plan understates the 

positive impact on the California economy. Nonetheless, using the current best 

estimates of the costs and savings of the measures, which are documented in 

Appendix I, the models demonstrate that implementing the Plan will have a positive 

effect on California’s economy. 

The modeling results reflect a carbon price for the cap-and-trade program of $10 perton. It is important to note that the $10 per-ton figure does not reflect the average 

cost of reductions; rather it is the maximum price at which reductions to achieve the 

cap are pursued based on the marketing program. 

The positive impacts are largely attributable to savings that result from reductions in 

expenditures on energy. These savings translate into increased consumer spending on 

goods and services other than energy. Many of the measures entail more efficient use 

of energy in the economy, with savings that exceed their costs. In this way, 

investment in energy efficiency results in money pumped back into local economies. 

Table 25 summarizes the energy savings that are projected from implementation of 

the Scoping Plan. These savings are estimated to exceed $20 billion annually by 

2020. 

Table 25: Fuels and Electricity Saved in 2020 from

Implementation of the Scoping Plan 

Gasoline Diesel Electricity Natural Gas*

Use Avoided** 

4,600 million 

gallons 

670 million 

gallons 74,000 GWh 3,400 million therms 

Value of Avoided Fuel Use 

(Million $2007) $17,000 $2,500 $6,400*** $2,700 

Percent Reduction from 

BAU 25% 17% 22%**** 24% 

* Not including natural gas for electric generation. 

** These estimates are based on reduced use of these fuels due to increased efficiencies, 

reduced vehicle miles travelled, etc. Changes to the fuel mix, such as those called for 

under the RPS or the LCFS, are not included here. These estimates are not the same as 

the estimates of reduced fuel consumption used in the public health analysis. 

*** Based on estimated avoided cost based on average base-load electricity, including 

generation, transmission and distribution. 

**** This is as a percentage of BAU total California electricity consumption in 2020. 

2. Impact on Specific Business Sectors 2. Impact on Specific Business Sectors 

As indicated in Table 26 and Table 27, the effects of the Plan are not uniform across 

sectors. Implementation of the Scoping Plan would have the strongest positive 

impact on output and employment for the agriculture, forestry and fishing sector, the 
III. Evaluations Scoping Plan 

76 

finance, insurance and real estate sector, and the mining sector. Similar to the 

statewide economic impacts projected by the model, however, these results also 

indicate that relative to the business-as-usual case, the impacts due to implementation 

of the Plan change current growth projections for most sectors by only very small 

amounts. 

Table 26 and Table 27 also show that a decrease in output is projected for the utility 

and retail trade sectors as compared to the business-as-usual case, and a decrease in 

employment is projected for the utility sector. In the utility sector, the modeling 

indicates that implementation of the Scoping Plan would significantly reduce the need 

for additional power generation and natural gas consumption, which subsequently 

reduces the growth in output for this sector. This results in a reduction from businessas-usual for economic output and employment of approximately 17 and 15 percent 

respectively in 2020. The primary reason for these projections is the implementation 

of efficiency measures and programs for both consumers and producers. While 

increasing spending on efficiency and renewable energy is expected to increase 

employment, many of the resulting jobs will not appear in the utility sector. 

The retail trade sector, which is projected to grow by nearly 50 percent in both the 

business-as-usual and the Scoping Plan case, is also projected to experience a slight 

net decline in output relative to business-as-usual. Since gasoline is considered a 

consumer retail purchase under this model, the reduced growth is mostly due to the 

decrease of approximately $19 billion in retail transportation fuel purchases, which is 

largely offset by the positive $14 billion increase in spending at other retail 

enterprises. 
Scoping Plan III. Evaluations 

77 

Table 26: Summary of Economic Output by Sector from 

Modeling the Scoping Plan Using E-DRAM 

Output ($Billions) 

Sector 

2007 Business-asUsual Scoping Plan Percent Change 

from BAU 

Agriculture, Forestry 

and Fishing 76 109 113 3.9% 

Mining 27 29 31 7.2% 

Utilities 51 72 60 -16.7% 

Construction 114 164 166 1.7% 

Manufacturing 673 943 948 0.5% 

Wholesale Trade 120 171 173 1.0% 

Retail Trade 207 296 291 -1.6% 

Transportation and 

Warehousing 76 109 111 1.9% 

Information 164 235 238 1.1% 

Finance, Insurance and 

Real Estate 391 559 572 2.3%

Services 636 910 927 1.9%

Government - - - - 

Total 2,535 3,597 3,630 0.8%

Table 27: Summary of Employment Changes by Sector from 

Modeling the Scoping Plan Using E-DRAM 

Employment (thousands) 

Sector 

2007 Business-asUsual Scoping Plan Percent Change 

from BAU 

Agriculture, Forestry 

and Fishing 398 449 464 3.5% 

Mining 26 26 26 1.3% 

Utilities 60 67 57 -14.7% 

Construction 825 929 934 0.5% 

Manufacturing 1,821 2,046 2,057 0.5% 

Wholesale Trade 703 791 793 0.1% 

Retail Trade 1,688 1,901 1,916 0.8% 

Transportation and 

Warehousing 447 503 510 1.2% 

Information 398 448 450 0.4% 

Finance, Insurance and 

Real Estate 911 1,026 1,046 2.0%

Services 5,975 6,729 6,773 0.7%

Government 3,100 3,491 3,502 0.3%

Total 16,352 18,405 18,528 0.6%
III. Evaluations Scoping Plan 

78 

3. Household Impacts 3. Household Impacts 

Implementation of the Scoping Plan will provide low- and middle-income households 

savings on the order of a few hundred dollars per year in 2020 compared to the 

business-as-usual case, primarily as a result of increased energy efficiencies. 

Low-Income Households: Based on current U.S. Department of Health and Human 

Services poverty guidelines, we evaluated the projected impacts of the plan on 

households with earnings at or below both 100 and 200 percent of the poverty 

guidelines. For all households, including those with incomes at 100 percent and 

200 percent of the poverty level, implementation of the Scoping Plan produces a 

slight increase in per-capita income relative to the business-as-usual case. 

At the same time, the analysis projects an increase of approximately 50,000 jobs 

available for lower-income workers49 relative to business-as-usual as a result of 

implementing the Plan. The largest employment gains come in the retail, food 

service, agriculture, and health care fields. A decline in such jobs is projected in the 

retail gasoline sector due to the overall projected decrease in output from this sector. 

This decline, however, is more than offset by the increases experienced in other areas. 

Another important factor to consider when analyzing the impact of the Scoping Plan 

on households is how it will affect household expenditures. As indicated in Table 28, 

analysis based on the modeling projections estimates a savings (i.e., reduced 

expenditures) of around $400 per household in 2020 for low-income households 

under both federal poverty guideline definitions. These savings are driven primarily 

by the implementation of the clean car standards and energy efficiency measures in 

the Scoping Plan that over time are projected to outweigh potential increases in 

electricity and natural gas prices that may occur. As the measures in the Scoping Plan 

are implemented, ARB will work to ensure that the program is structured so that low 

income households can fully participate in and benefit from the full range of energy 

efficiency measures. Many of California’s energy efficiency efforts are targeted 

specifically at low income populations, and the CPUC’s Long Term Strategic Plan for 

energy efficiency has redoubled its objective for the delivery of energy efficiency 

measures to low income populations. Additional information regarding the data in 

Table 28 can be found in Appendix G. 

 

49 Low-income jobs are defined as those with a median hourly wage below $15 per hour (2007 dollars) based on 

wage data and staffing pattern projections from the California Employment Development Department. The

shares of low-wage occupations for each industry are then applied to the corresponding E-DRAM sector 

employment projections. 
Scoping Plan III. Evaluations 

79 

Table 28: Impact of Implementation of the Scoping Plan on 

Total Estimated Household Savings in 2020 (2007 $) 

Income at 100% 

of Poverty 

Guideline 

Income at 200% 

of Poverty 

Guideline 

Middle 

Income*

High 

Income**

All 

Households***

$400 $400 $500 $500 $500 

* All households between 200% and 400% of the poverty guidelines. 

** All households above 400% of the poverty guidelines. 

*** Average of households of all income levels. 

The analysis indicates that implementation of the Scoping Plan is likely to result in 

small savings for most Californians, with little difference across income levels. 

Largely due to increased efficiencies, low-income households are projected to be 

slightly better off from an economic perspective in 2020 as a result of implementing 

AB 32. 

Middle-Income Households: Implementation of the plan produces a small increase 

in household income across all income levels, including middle-income households, 

relative to the business-as-usual case.50 In terms of how jobs for middle-income 

households51 would be impacted, the modeling indicates a slight overall increase of 

almost 40,000 in 2020. 

As shown in Table 28, the analysis projects a net-savings in annual household 

expenditures of about $500 in 2020 for middle-income households. These savings 

are driven by the emergence of greater energy efficiencies that will be implemented 

as a result of the plan. 

4. WCI Economic Analysis 4. WCI Economic Analysis 

The Scoping Plan recommends that California develop a cap-and-trade program that 

links to the broader regional market being developed by the Western Climate 

Initiative (WCI). In order to examine the economic impacts of WCI program design 

options, WCI Partner jurisdictions contracted with ICF International and Systematic 

Solutions, Inc. (SSI) to perform economic analyses using ENERGY 2020, a multiregion, multi-sector energy model. The WCI economic modeling results are reported 

in full in Appendix D and are discussed in the Background Report on the Design 

Recommendations for the WCI Regional Cap-and-Trade Program, also included in 

Appendix D. 

To help inform the program design process, the WCI analysis examined the 

implications of key design decisions, including: program scope, allowance banking, 

 

50 For purposes of our analysis we define "middle-income" households as those earning between 200% and 

400% of the federal poverty guidelines. 

51 Hourly wage between $15 and $30 per hour. 
III. Evaluations Scoping Plan 

80 

and the use of offsets. Due to time and resource constraints, the modeling was 

limited to the eight WCI Partner jurisdictions in the Western Electric Coordinating 

Council (WECC) area, thereby excluding from the analysis three Canadian provinces, 

Manitoba, Quebec, and Ontario. Future analyses are planned that will integrate these 

provinces so that a full assessment of the WCI Partner jurisdictions can be performed. 

The WCI modeling work is not directly comparable to the ARB results reported here. 

The WCI analysis relies on a more aggregated set of greenhouse gas emissions 

reduction measures rather than the specific individual policies recommended in the 

Scoping Plan; it uses somewhat different assumptions regarding what measures are 

included in the “business-as-usual” case, and it models the entire WECC rather than 

California. Nevertheless, the results of the WCI modeling provide useful insight into 

the economic impact of greenhouse gas emissions reduction policies. 

Consistent with the conclusions of the ARB evaluation, overall the WCI analysis 

found that the WCI Partner jurisdictions can meet the regional goal of reducing 

emissions to 15 percent below 2005 levels by 2020 (equivalent to the AB 32 2020 

target) with small overall savings due to reduced energy expenditures exceeding the 

direct costs of greenhouse gas emissions reductions. The savings are focused 

primarily in the residential and commercial sectors, where energy efficiency 

programs and vehicle standards are expected to have their most significant impacts. 

Energy-intensive industrial sectors are estimated to have small net costs overall (less 

than 0.5 percent of output). 

The WCI analysis does not examine the potential macroeconomic impacts of the costs 

and savings estimated with ENERGY 2020. The WCI Partner jurisdictions are 

planning to continue the analysis so that macroeconomic impacts, such as income, 

employment, and output, can be assessed. Once completed, the macroeconomic 

impacts can be compared to previous studies of cap-and-trade programs considered in 

the United States and Canada. 

B. Green Technology Green Technology Green Technology 

The development of green technologies and a trained workforce equipped to design, develop 

and deploy them will be key to the success of California’s long-term efforts to combat global 

warming. Bold, long-range environmental policies help drive innovation and investment in 

emission-reducing products and services in part by attracting private capital. Typically, the 

private sector under invests in research and development for products that yield public 

benefits. However, when environmental policy is properly designed and sufficiently robust 

to support a market for such products, private capital is attracted to green technology 

development as it is to any strategic growth opportunity. 

California’s leadership in environmental and energy efficiency policy has helped attract an 

increasing share of venture capital investment in green technologies. According to statistics 

from PricewaterhouseCoopers and the National Venture Capital Association, California’s 

share of U.S. venture capital investment in innovative energy technologies increased 
Scoping Plan III. Evaluations 

81 

dramatically from 1995 to 2007 (see Figure 5 below).

52 The same period saw a stream of 

pioneering environmental policy initiatives, including energy efficiency codes for buildings 

and appliances, a renewables portfolio standard for electricity generation, climate change 

emissions standards for light-duty automobiles and, most recently, AB 32. Flows of venture 

capital into California are escalating as a direct result of the focus on reductions of 

greenhouse gas emissions. As mentioned above, California captured the largest single 

portion of global venture capital investment ($800 million out a total of two billion dollars) 

during the second quarter of 2008. 

Figure 5 

California's Growing Share of Venture Capital Investment

in Energy Innovation, 1995-2007 (current $, % share) 

$0

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Annual VC Investment

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

CA VC $

Linear (CA %)

Source: PricewaterhouseCoopers MoneyTree Report, available at: [https://www.pwcmoneytree.com]. 

A survey of clean technology investors by Global Insight and the National Venture Capital 

Association found that public policy influences where venture capitalists invest.53

 

Furthermore, investments in green technology solutions produce jobs at a higher rate than 

investments in comparable conventional technologies.

54 Venture capitalists estimate that 

 

52 Based on historical trend data for the ‘Industrial/Energy’ industry for California and the United States from 

the PricewaterhouseCoopers MoneyTree Report. 

https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=historical (accessed October 12, 2008) 

53 Clean Tech Entrepreneurs & Cleantech Venture Network LLC. Creating Cleantech Clusters: 2006 Update. 

May 2006. p.43 

http://www.e2.org/ext/doc/2006%20National%20Cleantech%20FORMATTED%20FINAL.pdf (accessed 

October 12, 2008) 

54 Report of the Renewable and Appropriate Energy Laboratory. Putting Renewables to Work: How Many Jobs 

Can the Clean Energy Industry Generate? Energy and Resources Group/Goldman School of Public Policy at 
III. Evaluations Scoping Plan 

82 

each $100 million in venture capital funding, over a period of two decades, helps create 

2,700 jobs, $500 million in annual revenues, and many indirect jobs.55

Access to capital controlled by institutional investors is also enhanced by policies that 

encourage early adoption of green technologies. When California-based corporations use 

green technologies to reduce their exposure to climate change risk, institutional investors 

reward them by facilitating their access to capital. The Investor Network on Climate Risk – 

including institutional investors with more than $8 trillion of assets under management – 

endorsed an action plan in 2008 that calls for requiring asset managers to consider climate 

risks and opportunities when investing; investing in companies developing and deploying 

clean technologies; and expanding climate risk scrutiny by investors and analysts.56

Additional capital for green technologies helps drive increased employment, both indirectly, 

as energy savings are plowed back into other sectors of the economy, and directly, as new 

green products are successfully commercialized. 

McKinsey & Company projects average annual returns of 17 percent on global investments 

in energy productivity, and estimates the global investment opportunity at $170 billion 

annually through 2020.57 Meanwhile, global investment in energy efficiency and renewable 

energy has grown from $33 billion to more than $148 billion in the last four years. Beyond 

2020, green technologies are expected to attract investment of more than $600 billion 

annually.58 In short, green technology is now a bona fide global growth industry. 

Today, green technology businesses directly employ at least 43,000 Californians, primarily in 

energy efficiency and energy generation, according to a 2008 study from the California 

Economic Strategy Panel. Green jobs are concentrated in manufacturing (41 percent), and 

professional, scientific and technical services (28 percent), with median annual earnings of 

 

University of California, Berkeley. April 13, 2004. http://rael.berkeley.edu/old-site/renewables.jobs.2006.pdf

(accessed October 12, 2008) 

55 Report prepared for the National Venture Capital Association. Venture Impact 2004: Venture Capital 

Benefits to the U.S. Economy. Prepared by: Global Insight. June 2004. 

http://www.globalinsight.com/publicDownload/genericContent/07-20-04_fullstudy.pdf (accessed October 12, 

2008) 

56 The Investor Network on Climate Risk. Final Report, 2008 Investor Summit on Climate Risk. February 14, 

2008. http://www.ceres.org//Document.Doc?id=331 (accessed October 12, 2008) 

57 McKinsey Global Institute. The Case for Investing in Energy Productivity. McKinsey & Company. 

February, 2008. p.8 

http://www.mckinsey.com/mgi/reports/pdfs/Investing_Energy_Productivity/Investing_Energy_Productivity.pdf

(accessed October 12, 2008) 

58 United Nations Environment Programme-New Energy Finance Ltd. Global Trends in Sustainable Energy 

Investment 2008: Analysis of Trends and Issues in the Financing of Renewable Energy and Energy Efficiency

2008. p.12 ISBN: 978-92-807-2939-9 http://www.unep.fr/energy/act/fin/sefi/Global_Trends_____2008.pdf

(accessed October 12, 2008) 
Scoping Plan III. Evaluations 

83 

$35,725 and $56,754, respectively.59 By 2030, under a moderate growth scenario, green 

businesses nationwide are expected to generate revenues of $2.4 trillion, (2006 dollars), and 

employ 21 million Americans.60

 

As a leader in green technology development and use, California has already realized 

substantial economic benefits from the adoption of energy efficiency policies. State energy 

efficiency measures have saved enough energy over the past 30 years to avoid construction 

of two dozen 500-megawatt power plants. Today, California’s per capita electricity 

consumption is 40 percent below the national average, and the carbon intensity of 

California’s economy is among the lowest in the nation.61 

Renewable energy, such as solar, wind, biomass, geothermal, will also bring new 

employment opportunities to Californians while spurring economic growth. California 

enjoys significant comparative advantages for renewable energy: concentrated innovation 

resources, a large potential customer base, key natural resources such as reliable solar and 

wind, and supportive regulatory programs, including the California Renewables Portfolio 

Standard, the Million Solar Roofs Initiative, the California Global Warming Solutions Act of 

2006, and the Solar Water Heating and Efficiency Act of 2007. 

Other researchers have estimated that under a national scenario with 15 percent renewables 

penetration by 2020, California will experience a net gain in direct employment of 140,000 

jobs.62 Because investments in green technologies produce jobs at a higher rate than 

investments in conventional technologies, jobs losses that occur in traditional fossil fuel 

industries will be more than compensated for by gains in the clean energy sector. 

Furthermore, if California’s renewable energy suppliers field products that are sufficiently 

competitive to penetrate the export market, employment and earnings dividends for the state 

will also increase. California renewable energy industries servicing the export market can 

generate up to 16 times more employment than those that only manufacture for domestic 

 

59 California Economic Strategy Panel with Collaborative Economics. Clean Technology and the Green 

Economy. March 2008. P.14-15 http://www.labor.ca.gov/panel/pdf/DRAFT_Green_Economy_031708.pdf

(accessed October 12, 2008) 

60 The American Solar Energy Society. Renewable Energy and Energy Efficiency: Economic Drivers for the 

21st Century. 2007. p.39 ISBN 978-0-89553-307-3 http://www.ases.org/images/stories/ASES-JobsReportFinal.pdf (accessed October 12, 2008) 

61 California Energy Commission. 2007 Integrated Energy Policy Report. Document No. CEC-100-2007-008-

CMF. 2007. p. 3 http://www.energy.ca.gov/2007publications/CEC-100-2007-008/CEC-100-2007-008-

CMF.PDF (accessed October 12, 2008) 

62 Tellus Institute and MRG Associates. Clean Energy: Jobs for America’s Future. As cited in: Putting 

Renewables to Work: How Many Jobs Can the Clean Energy Industry Generate? Energy and Resources 

Group/Goldman School of Public Policy at University of California, Berkeley. April 13, 2004. 

http://rael.berkeley.edu/old-site/renewables.jobs.2006.pdf (accessed October 12, 2008) 
III. Evaluations Scoping Plan 

84 

consumption, according to a study by the Research and Policy Center of Environment 

California.63

C. Cost-Effecti Effecti Effectiveness 

As noted in several provisions of AB 32, cost-effectiveness is an important requirement to be 

considered in the design and implementation of emission reduction strategies. (See 

HSC §§38505, 38560, 38561, 38562.) AB 32 defines “cost-effective” or “costeffectiveness” as “the cost per unit of reduced emissions of greenhouse gases adjusted for its 

global warming potential.” (HSC §38505(d)) This definition specifies the metric (i.e., dollars 

per ton) by which the Board must express cost-effectiveness, but it does not provide criteria 

to assess if a regulation is or is not cost-effective. It also does not specify whether there 

should be a specific upper-bound dollar per ton cost that can be considered cost-effective, or 

how such a bound would be determined or adjusted over time. ARB has investigated 

different approaches that could be used to evaluate the cost-effectiveness of regulations and 

is recommending the following approach. 

The estimated cost per ton of greenhouse gas emissions reduced by the measures 

recommended in this Plan ranges from $-408 (net savings) to $133, with all but one (the 

Renewables Portfolio Standard) costing less than $55 per ton. The RPS is being 

implemented for energy diversity purposes, not just greenhouse gas reductions, and the $133 

per ton figure does not take these other benefits into account. Therefore, it should not be 

used as a reference to define the range of cost-effective greenhouse gas measures. These 

estimates are based on the best information available as ARB prepared this Plan. Updated 

estimates and greater certainty will be provided as the measures are further developed during 

the rulemaking process. 

In the meantime, the current estimates provide a range illustrating the cost per ton of the mix 

of measures that collectively meet the 2020 target. This range will assist the Board in 

evaluating the cost-effectiveness of individual measures when considering adoption of 

regulations. The range of acceptable cost-effectiveness may change if effective lower-cost 

measures and options are identified. Because both the projections of “business-as-usual” 

2020 emissions and the degree of reductions from any given measures may be greater or less 

than current estimates, the determination should remain flexible to accommodate a higher or 

lower estimate of cost-effectiveness. In addition, the approach must provide flexibility to 

pursue measures that simultaneously achieve policy objectives other than greenhouse gas 

emissions reduction (such as energy diversity). 

The criteria for judging cost-effectiveness will be updated as additional technological data 

and strategies become available. As ARB moves from adoption of the Scoping Plan to 

 

63 Environment California Research and Policy Center. Renewable Energy and Jobs. Employment Impacts of 

Developing Markets for Renewables in California. July 2003. As cited in: Putting Renewables to Work: How 

Many Jobs Can the Clean Energy Industry Generate? Energy and Resources Group/Goldman School of Public 

Policy at University of California, Berkeley. April 13, 2004. http://rael.berkeley.edu/oldsite/renewables.jobs.2006.pdf (accessed October 12, 2008) 
Scoping Plan III. Evaluations 

85 

developing specific regulations, and as regulations continue to be adopted, updated costeffectiveness estimates will be established in a rigorous and transparent process with full 

stakeholder participation. As ARB progresses from proposed measures and estimated costs 

to actual regulations, the comparison of cost-effectiveness would move toward the well 

established practice of comparing the cost-effectiveness of new regulations to the costeffectiveness of previously enacted and/or similar regulations. This approach is consistent 

with how cost-effectiveness is evaluated for strategies to reduce criteria and toxic pollutants. 

D. Small Business Impact Small Business Impact Small Business Impact 

Small businesses play an important role in California’s economy. As required under AB 32, 

ARB analyzed the impact that implementation of the Scoping Plan would have on small 

businesses in the state. The analysis indicates that the primary impacts on small businesses 

as a result of AB 32 will come in the form of changes in the costs of goods and services that 

they procure, and in particular, changes in energy expenditures. Due to the number of 

measures in the plan that will deliver significantly greater energy efficiencies, our analysis 

projects that implementation of the plan will have a positive impact on small business in 

California even after taking into account the higher per-unit energy prices that are likely to 

occur between now and 2020. Small businesses also will benefit as a result of the robust 

economic growth and the increases in jobs, production, and personal income that are 

projected between now and 2020 as AB 32 is implemented. Additional information is 

provided in Appendix G. 

Recent analysis from Energy and Environmental Economics, Inc. (E3) forecasts that a 

package of greenhouse gas emissions reduction measures similar to those recommended in 

this Plan would deliver a five percent decrease in electricity expenditures for the average 

California electricity customer relative to business-as-usual in 2020.64 This projection is 

based on the assumption that increases in electricity prices will be more than offset by the 

continued expansion of energy efficiency measures and that more efficient technologies will 

be developed and implemented.65 For purpose of this analysis, expenditures on natural gas 

are assumed to remain the same, balancing the projected 29 percent decrease in natural gas 

consumption in California with the model's projected natural gas price increase of almost 

9 percent. 

Based on this assessment, implementation of the Scoping Plan will likely have minor but 

positive impacts on small businesses in the state. These benefits are attributable primarily to 

the measures in the plan that will deliver significantly greater energy and fuel efficiencies. 

Even when higher per unit energy prices are taken into account, these efficiencies will 

decrease overall energy expenditures for small businesses. Additionally, as previously 

described, the California economy is projected to experience robust economic growth 

 

64 Based on their GHG Calculator, CPUC/CEC GHG Docket (CPUC Rulemaking.06.04.009, CEC Docket 07-

OIIP-01), available at http://www.ethree.com/cpuc_ghg_model.html. 

65 The E3 analysis focuses on direct programmatic measures and does not include the incremental price impact 

of the cap-and-trade program, which will depend upon allowance price, allocation strategy, the capped sector 

industry response, and other program design decisions. 
III. Evaluations Scoping Plan 

86 

between now and 2020 as AB 32 is implemented. Small businesses will experience many of 

the benefits associated with this growth in the form of more jobs, greater production activity, 

and rising personal income. 

The projected decrease in electricity expenditures is especially important for small businesses 

since they typically spend more on energy as a percentage of revenue compared to larger 

enterprises. For example, firms with a single employee spend approximately 3.3 percent of 

each sales dollar on electricity, while businesses with between ten and forty-nine employees 

spend around 1.2 percent. As a result, smaller businesses are likely to experience a greater 

relative benefit from decreased energy expenditures relative to their larger counterparts. 

From the broader economic perspective, these changes will make California more 

competitive as a location for small business, moving it from 7th highest to 19th among all 

states in terms of the percentage of revenue that businesses expend on electricity.66 As was 

noted above for low income households, care must be taken to ensure that the program is 

structured to allow small businesses to participate in and benefit from the energy efficiency 

measures. 

While ARB’s analysis indicates a positive impact on small businesses from AB 32 

implementation, to ensure that these benefits are realized to the fullest potential it will take 

additional outreach and communication efforts on the part of ARB and many other state and 

local entities. There are a number of existing programs that are designed to help small 

businesses achieve greater efficiencies in energy use. These programs can be enhanced and 

expanded upon, and new programs and efforts can be developed to ensure that all small 

businesses in California are aware of and able to take cost-effective steps to reduce energy 

use and enjoy the associated economic savings. For example, as discussed more completely 

in Chapter IV, ARB and our partners in State government are working together to develop 

an on-line small business “toolkit” designed for small and medium-sized businesses to 

provide a one-stop shop of technical and financial information resources. As further 

development and implementation of the measures in the plan proceeds, we will work with 

other state and local partners to ensure that small businesses can both benefit from and play a 

role in helping to achieve our greenhouse gas emission reduction requirements. 

E. Public Health/Environmental Benefits Analyses Public Health/Environmental Benefits Analyses Public Health/Environmental Benefits Analyses 

AB 32 requires ARB to evaluate the environmental and public health impacts of the Scoping 

Plan. The analysis of this plan is focused primarily on the quantification of public health 

benefits from air quality improvements that would result from implementation. Unlike 

traditional pollutants and toxic emissions, global warming pollutants do not typically have 

localized impacts. At ambient levels, carbon dioxide, which makes up over 80 percent of 

global warming pollutants in California, has no direct environmental or public health 

consequences. Climate change caused by greenhouse gas pollutants emitted in another state 

 

66 Although the natural gas data is less specific, a similar scenario is expected where increased prices are 

typically offset by greater efficiencies for most small businesses. 
Scoping Plan III. Evaluations 

87 

or country has the same potential to damage our public health and the environment as does 

climate change due to pollutants emitted within California. Although this analysis does not 

consider the public health impacts of climate change, the potential public health impacts are 

great, and have been well documented elsewhere. However, many of the measures aimed at 

reducing global warming pollutants also provide co-benefits to public health and California’s 

natural resources. 

The environmental and cumulative impacts of the Plan are discussed in the California 

Environmental Quality Act (CEQA) document that is included in Appendix J. As the 

Scoping Plan is implemented, and specific measures are developed, ARB will conduct 

further CEQA analyses, including cumulative and multi-media impacts. As ARB further 

develops its approach for consideration of these issues in future rulemakings, and updates 

needed analytical tools and data sets, we will consult with outside experts and the EJAC. 

ARB recognizes that the adoption of the Scoping Plan will launch a variety of regulatory 

proceedings in many different venues. ARB will work closely with other California State 

agencies including: the Office of Planning and Research, Environmental Protection Agency, 

Resources Agency, Integrated Waste Management Board, Department of Public Health, 

Office of Environmental Health Hazard Assessment, State Water Resources Control Board, 

Department of Toxic Substances Control, Department of Water Resources, Board of 

Forestry, Department of Fish and Game, Public Utilities Commission, California Energy 

Commission, and others to identify and address potential multi-media environmental impacts 

early in the regulatory development process. 

California’s actions to reduce greenhouse gas emissions will help transition the State to new 

technologies, improved efficiencies, and land use patterns also necessary to meet air quality 

standards and other public health goals. California’s challenging public health issues 

associated with air pollution are already the focus of comprehensive regulatory and incentive 

programs. These programs are reducing smog forming pollutants and toxic diesel particulate 

matter at a rapid pace. However, to meet increasingly stringent air quality standards and air 

toxics reduction goals, transformative changes are needed in the 2020 timeframe and beyond. 

Implementation of AB 32 will provide additional support to existing State efforts devoted to 

protecting and improving public health. 

1. Key Air Quality- 1. Key Air Quality-Related Public Health Benefits Related Public Health Benefits Related Public Health Benefits 

The primary direct public health benefits of the Scoping Plan are reductions in smog 

forming emissions and toxic diesel particulate matter. The most significant 

reductions are of oxides of nitrogen (NOx), which forms both ozone and particulate 

pollution (PM2.5), and directly emitted PM2.5, which includes diesel particulate 

matter. The analysis focuses on PM2.5 impacts and quantifies 2020 public health 

benefits of this plan in terms of avoided premature deaths, hospitalizations, 

respiratory effects, and lost work days. Additional benefits associated with the 

reductions in ozone forming emissions were not quantified since statewide 2020 

photochemical modeling is not available. 
III. Evaluations Scoping Plan 

88 

The estimated air quality-related public health benefits of the Scoping Plan are above 

and beyond the much greater benefits of California’s existing programs, which are 

reducing air pollutant emissions every year. This continuing progress is the result of 

California’s plans for meeting air quality standards (“State Implementation Plans” or 

SIPs), reducing emissions from goods movement activities, and addressing health risk 

from diesel particulate matter. These programs address both existing and new 

sources of air pollution, taking into account population and economic growth. The 

additional benefits of the Scoping Plan in 2020 are significant, and in the longer term, 

can be expected to increase with further reductions in fossil fuel combustion, the 

primary basis for the estimated public health benefits. 

The recommended measures in the Scoping Plan that reduce smog forming 

(“criteria”) pollutants are shown in Table 29 along with the estimated reductions. 

Statewide, these measures would reduce approximately 61 tons per day of NOx and 

15 tons per day of PM2.5 in 2020. As shown in Table 30, this equates to an estimated 

air quality-related public health benefit of 780 avoided premature deaths statewide. 

In comparison, reductions in PM2.5 from California’s existing programs and 2007 

SIP measures are estimated to result in 12,000 avoided premature deaths statewide in 

the same timeframe. 

Table 29: Statewide Criteria Pollutant Emission Reductions in 2020 from 

Proposed Scoping Plan Recommendation67

(tons per day) 

Measure NOx PM2.5 

Light-Duty Vehicle 

• Pavley I and Pavley II GHG Standards 

• Vehicle Efficiency Measures 

1.6 1.4 

Goods Movement Efficiency Measures 16.9 0.6 

Medium and Heavy-Duty Vehicle GHG Emission Reduction 

• Aerodynamic Efficiency 

• Hybridization 

• Engine Efficiency 

5.6 0.2 

Local Government Actions and Regional Targets 8.7 1.4 

Energy Efficiency and Conservation (Electricity) 7.0 4.0 

Energy Efficiency and Conservation (Natural Gas) 10.4 0.8 

Solar Water Heating 0.3 0.03 

Million Solar Roofs 1.0 0.6 

Renewables Portfolio Standard 9.8 5.6 

Total 61 15 

 

67 Table 29 does not include the criteria pollutant co-benefits of additional greenhouse gas reductions that would 

be achieved from the proposed cap-and-trade regulation because we cannot predict in which sectors they would 

be achieved. 
Scoping Plan III. Evaluations 

89 

Table 30: Estimates of Statewide Air Quality-Related 

Health Benefits in 2020 

Health Endpoint 

Health Benefits of 

Existing Measures 

and 2007 SIP 

mean 

Health Benefits of 

Recommendations in the 

Proposed Scoping Plan

mean 

Avoided Premature Death 12,000 780 

Avoided Hospital Admissions for 

Respiratory Causes 1,300 87 

Avoided Hospital Admissions for 

Cardiovascular Causes 2,600 170 

Avoided Asthma and Lower Respiratory 

Symptoms 190,000 12,000 

Avoided Acute Bronchitis 15,000 980 

Avoided Work Loss Days 1,200,000 77,000 

Avoided Minor Restricted Activity Days 7,000,000 450,000 

In addition to the quantified air-quality-related health benefits, our analysis indicates 

that implementation of the Scoping Plan can deliver other public health benefits as 

well. These include potential health benefits associated with local and regional 

transportation-related greenhouse gas targets that can facilitate greater use of 

alternative modes of transportation, such as walking and bicycling. These types of 

moderate physical activities reduce many serious health risks including coronary 

heart disease, diabetes, hypertension and obesity.68 Finally, it is important to note 

that the steps California is taking to address global warming, along with actions by 

other regions, states, and nations, will help mitigate the public health effects of heat 

waves, more widespread incidence of illness and disease, and other potentially severe 

impacts. 

The measures in the Scoping Plan are designed primarily to help spur the transition to 

a lower carbon economy. However, in addition to improving air quality, these 

measures can also improve California’s environmental resources, including land, 

water, and native species. Land resources will be affected by regional transportationrelated targets leading to improved land use planning, and forest carbon sequestration 

targets which can result in better stewardship of California lands and reduced wildfire 

risk. A number of conservation measures will aid in effective management of the 

State’s precious water resources. Demand for waste disposal and hazardous materials 

should decrease as measures to encourage recycling and reuse transform our wastes 

into fuel, energy, and other useful products are implemented. Additional analysis of 

the way that implementation of the Scoping Plan will impact these environmental 

resources will be conducted as we proceed. Many of these measures serve the dual 

purpose of mitigating greenhouse gas emissions and helping California adapt to the 

impacts of climate change. 

 

68 Appendix H contains a reference list of studies documenting the public health benefits of alternative

transportation. 
III. Evaluations Scoping Plan 

90 

2. Approach 2. Approach 

ARB quantified the potential reductions of NOx and PM2.5 from implementation of 

the Plan’s recommendations, and the public health benefits associated with the 

resulting potential air quality improvement. These analyses compare NOx and PM2.5 

emissions in 2020 with the implementation of the Scoping Plan with NOx and PM2.5 

emissions in 2020 in the absence of the Scoping Plan – a “business-as-usual” 

scenario. The methodology used to evaluate the public health benefits of the 

emission reductions is similar to the methodology used in ARB’s 2006 Goods 

Movement Emission Reduction Plan (GMERP), as updated in the recent staff report 

for estimating premature death from exposure to particulate matter.69 This 

methodology is based on a peer-reviewed methodology developed by the U.S. 

Environmental Protection Agency (U.S. EPA). ARB augmented U.S. EPA’s 

methodology by incorporating the result of new epidemiological studies relevant to 

California’s population, including regionally specific studies, as they became 

available. 

AB 32 directs ARB to conduct several levels of analysis as we proceed through the 

development and implementation of a comprehensive greenhouse gas emissions 

reduction strategy. As part of the Scoping Plan development, ARB is required to 

assess both the economic and non-economic impacts of the plan as noted above. 

Additionally, AB 32 requires ARB to undertake additional analysis at the time of 

adoption of regulations, including market-based compliance mechanisms. 

Although not yet at the stage of regulatory development and adoption, in this analysis 

ARB conducted an evaluation of the air quality-related public health benefits 

associated with the Scoping Plan based on a community level emissions analysis 

example. As regulations that rely on market-based compliance mechanisms are 

further developed for consideration by the Board, more detail about the specific 

regulatory proposals will be developed, enabling ARB to more closely evaluate the 

potential for direct, indirect and cumulative impacts. 

3. Existing Programs for Air Quality Improvement in California n California 

The public health analysis of the Scoping Plan presents air-quality benefits that will 

occur in addition to the benefits of California’s comprehensive air quality programs 

designed to meet health-based standards and reduce health risk from air toxics. It is 

also important to note that under both a “business-as-usual” scenario and under the 

implementation of the Scoping Plan, the population and economy of California are 

projected to continue to grow. New businesses and industries will continue to be 

sited in California, bringing both economic opportunity and potential environmental 

impacts. Federal, State, and local laws and regulations have established requirements 

to ensure that new and modified sources of pollution are carefully evaluated and that 

 

69 Air Resources Board. Methodology for Estimating Premature Deaths Associated with Long-term Exposure 

to Fine Airborne Particulate Matter in California. October 24, 2008. 

http://www.arb.ca.gov/research/health/pm-mort/pm-mort_final.pdf (accessed December 9, 2008) 
Scoping Plan III. Evaluations 

91 

significant impacts are mitigated. Emissions from existing businesses are also tightly 

controlled by local air pollution control districts. Statewide programs are in place to 

reduce emissions from cars, trucks, and off-road equipment, along with smog check, 

cleaner gasoline and diesel fuels, and regulations to reduce evaporative emissions 

from consumer products, paints, and refueling. Additional information about the 

existing regulatory framework for sources of air pollution is provided in Appendix H. 

It is important to evaluate the air quality and public health benefits of the Scoping 

Plan in the context of the State’s on-going air quality improvement efforts. 

California’s long-standing air pollution control programs have substantially improved 

air quality in the state and will continue to do so in the future. By 2020, these 

programs will deliver reductions in statewide NOx emissions of 441 tons per day and 

direct fine particle emission reductions of 34 tons per day. Through 2020, three key 

ARB efforts will deliver deep reductions in air pollutant emissions despite continuing 

growth: 

• Diesel Risk Reduction Plan 

• Goods Movement Emission Reduction Plan 

• 2007 State Implementation Plan 

Measures in these plans will result in the accelerated phase-in of cleaner technology 

for virtually all of California’s diesel engine fleets including trucks, buses, 

construction equipment, and cargo handling equipment at ports. Adoption and 

implementation of these and other measures are critical to achieving clean air and 

public health goals statewide. 

The U.S. Environmental Protection Agency has set a new, more stringent, national 

ambient air quality standard for ozone that will have compliance deadlines well past 

2020 for the most severely impacted areas like southern California.70 The 

unmitigated impacts of climate change will make it harder to meet this standard and 

to provide healthful air to Californians. 

4. Statewide Analysis 4. Statewide Analysis 

For this evaluation, ARB examined the recommended measures to determine the 

potential for impacts on air, land, water, native species and biological resources, and 

waste and hazardous materials. Local government, State government, and green 

building sectors were not included in this evaluation as they represent means of 

implementation of the greenhouse gas emission reduction measures. As noted, the 

main focus of this analysis is on air quality. To the extent feasible, ARB quantified 

estimated emissions reductions in criteria pollutants associated with each 

recommended measure except cap-and-trade. Reductions in NOx and PM2.5 were 

 

70 U.S. Environmental Protection Agency. National Ambient Air Quality Standards for Ozone. Final Rule. 73 

Federal Register 16436. March 27, 2008. http://www.epa.gov/fedrgstr/EPA-AIR/2008/March/Day27/a5645.pdf (accessed October 12, 2008) 
III. Evaluations Scoping Plan 

92 

used to estimate public health benefits. The estimated statewide reductions are 

61 tons per day of NOx and 15 tons per day of PM2.5. Further analysis of the 

potential criteria pollutant benefits of a cap-and-trade program will be done as part of 

regulatory development. 

5. Regional Assessment: South Coast Air Basin Example 

In order to assess potential air quality benefits of the Scoping Plan on a regional level, 

ARB evaluated associated criteria pollutant reductions in the South Coast Air Basin 

as an example case. Existing programs will reduce current NOx emissions by almost 

50 percent in 2020. With the new 2007 SIP measures, NOx emissions will be 

reduced almost 60 percent. Because of the large population and high pollutant 

concentrations in this region, greater benefits occur from each ton of pollution 

reduced. The estimated air quality-related public health benefits of the Scoping Plan 

for the South Coast region are shown in Table 31. The significant air quality-related 

public health benefits in this region are largely attributed to the additional reductions 

in PM2.5. 

 Table 31: Estimated Air Quality-Related Health Benefits of 

Existing Program, 2007 SIP, and Scoping Plan 

in the South Coast Air Basin, 2020 

6. Community Level Assessment: Wilmington Example 6. Community Level Assessment: Wilmington Example l Assessment: Wilmington Example 

ARB also conducted an evaluation of the potential air quality impacts of the Scoping 

Plan in the community of Wilmington as an illustration of the potential for localized 

impacts. Wilmington is in southern Los Angeles County and includes a diverse range 

of stationary and mobile emissions sources, including the ports of Los Angeles and 

Long Beach, railyards, major transportation corridors, refineries, power plants, and 

other industrial and commercial operations. Like the regional analysis, additional 

emission reductions from the 2007 SIP were estimated and show significant 

reductions in Wilmington by 2020 – approximately a 45 percent reduction in NOx 

and a 40 percent reduction in directly-emitted PM2.5. Mobile source emissions are 

projected to continue to be proportionately greater than stationary source emissions in 

2020 even as mobile source emissions decline. 

Health Impacts / Scenario 

Benefits from 

Existing 

Program 

Additional 

Benefits from 

2007 SIP 

Additional CoBenefits from 

Scoping Plan 

Premature Deaths Avoided 4,800 2,000 360 

Hospitalizations Avoided – Respiratory 550 230 40 

Hospitalizations Avoided – Cardiovascular 1,100 440 77 

Asthma & Lower Respiratory Symptoms Avoided 80,000 35,000 6,200 

Acute Bronchitis Avoided 6,400 2,800 500 

Work Loss Days Avoided 510,000 220,000 38,000 

Minor Restricted Activity Days Avoided 3,000,000 1,300,000 220,000 
Scoping Plan III. Evaluations 

93 

For this assessment, ARB evaluated criteria pollutant emission reductions in the 

Wilmington study area assuming that the source-specific quantified measures are 

implemented, including measures to reduce emissions from oil and gas extraction and 

refineries. It was further assumed that the non-source specific program elements, 

such as the proposed cap-and-trade program, result in a 10 percent reduction in fuel 

combustion by affected sources within the study area. For example, it is estimated 

that industrial sources would achieve greenhouse gas emission reductions through 

efficiency measures that reduce on site fuel use by 10 percent either in response to a 

cap-and-trade program, or due to the results of the facility energy efficiency audits. 

While it is likely that the actual onsite reductions will differ across individual 

facilities from the assumed uniform ten percent reduction,71 the analysis identifies 

how reductions at these facilities affect the overall level of co-benefits. 

The estimated NOx co-benefit of about 1.7 tons per day is small relative to the 

projected reductions of 24 tons per day that will occur as a result of the SIP and other 

measures. For example, an 8 ton per day NOx reduction is expected from cleaner 

port trucks. In comparison, the potential NOx benefit from a 10 percent efficiency 

improvement in major goods movement categories is estimated at about 1.5 tons per 

day. The estimated PM2.5 co-benefits, on the order of 0.12 tons per day, are also 

small relative to the projected reductions of 2.3 tons per day that will occur as a result 

of the SIP and other measures. Approximately 30 percent (0.04 ton per day) of the 

PM 2.5 co-benefit reduction is associated with assumed energy efficiency measures at 

the four large refineries in the study area, while another 30 percent would occur due 

to a 10 percent efficiency improvement by goods movement sources. 

The co-benefit emissions reductions in the study area would produce regional air 

quality-related health benefits. A relatively small portion of these benefits would 

occur in the study area (approximately 300,000 area residents). Health benefits due 

to reductions in NOx are mostly at the regional levels, since NOx emissions have 

usually travelled some distance before they are transformed into PM via atmospheric 

reactions. Point source combustion PM emissions persist in the atmosphere and 

increase exposures both in the area where they are emitted and broadly throughout the 

region. Based on previous modeling studies of the impact of port and rail yard PM 

emissions in the South Coast Air Basin conducted by ARB, PM exposures will be 

reduced far beyond the study area, and a majority of the health benefits are expected 

to occur in areas outside of the Wilmington community.72

Using the previously described methodology that correlates emission reductions in 

the air basin with expected regional health benefits there would be an estimated 

 

71 The reductions at any one facility could be much greater or lesser than 10 percent For example, very small 

or no reductions might occur because available cost-effective industrial emission reductions have already been 

implemented at a particular site. 

72 ARB analysis indicates that about 20 percent of the health benefits would occur in the Wilmington area. 
III. Evaluations Scoping Plan 

94 

24 avoided premature deaths attributed to emission reductions that occur in 

Wilmington as a result of the Scoping Plan.73 

F. Summary of Societal Benefits Summary of Societal Benefits Summary of Societal Benefits 

AB 32 requires ARB to “consider the overall societal benefits, including reductions in other 

air pollutants, diversification of energy sources, and other benefits to the economy, 

environment, and public health” (HSC § 38562(b)(6)) when developing regulations to 

implement the Scoping Plan. ARB conducted an initial assessment of societal benefits 

associated with AB 32 implementation. This section summarizes those that have been 

identified during development of the Scoping Plan, including diversification of energy 

sources, mobility, regressivity, and job creation. More detailed economic and 

environment/public health analyses can be found in Appendix G and H, respectively. The 

impact of low income households (regressivity), impacts on small businesses, and impact on 

jobs are described in the Economic Analysis section and Appendix G. 

1. Energy Diversification 1. Energy Diversification 

Generally, energy-related measures in this Scoping Plan are expected to result in a 

transformation of the State’s energy portfolio, driven primarily by the Low Carbon 

Fuel Standard (LCFS), which addresses transportation fuel, and the 33 percent RPS, 

which increases renewably-produced electricity production and distribution to 

households and businesses. 

The LCFS aims to achieve at least a 10 percent reduction in the carbon intensity of 

California’s transportation fuels by 2020. As the State moves toward less dependence 

upon one source of fuel for transportation, our economy will be less at risk from 

significant fluctuations in fuel prices. Measures within the Scoping Plan will force 

energy diversification in California toward low-carbon intensive energy sources and 

encourage significant growth in infrastructure, capital, and investment in biofuels. 

The move toward 33 percent renewables will, by definition, increase the 

diversification of California’s electrical supply. Increased use of wind, solar, 

geothermal and biomass (including from the organic fraction of municipal solid 

waste) generation will all add to ensuring the state has a broader portfolio of energy 

inputs. 

Based on ARB’s economic analysis, the combined energy diversification and 

increased energy efficiency expected from implementation of the Scoping Plan is 

predicted to result in: a 25 percent decrease in gasoline usage (4.6 billion gallons), a 

17 percent decrease in diesel fuel use (670 million gallons), a 22 percent decrease in 

electricity (74,000 GWh reduction) and a 24 percent reduction in natural gas 

(3,400 therms). 

 

73 See Appendix H 
Scoping Plan III. Evaluations 

95 

The cap-and-trade program, offsets, and other measures that contain market-based 

features may also help diversify California’s energy portfolio by incentivizing the 

development and deployment of clean and efficient energy generating technologies. 

2. Mobility and Shifts in Land Use Patterns 2. Mobility and Shifts in Land Use Patterns 

Mobility is analyzed through multiple approaches in the Scoping Plan. Appendix C 

includes an analysis of a proposed measure for regional transportation-related 

greenhouse targets. Reductions in vehicle miles traveled (VMT) are expected to 

result from regional and local planning which target land use, building and zoning 

improvements. 

As the Scoping Plan is implemented, measures that support shifts in land use patterns 

are expected to emphasize compact, low impact growth in urban areas over 

development in greenfields. Communities could realize benefits, such as improved 

access to transit, improved jobs-housing balance, preservation of open spaces and 

agricultural fields, and improved water quality due to decreased runoff. Local and 

regional strategies promoting appropriate land use patterns could encourage fewer 

miles traveled, lowering emissions of greenhouse gases, criteria pollutants and PM. 

More compact communities with improved transit service could increase mobility, 

allowing residents to easily access work, shopping, childcare, health care and 

recreational opportunities. 

Furthermore, if open spaces and desirable locations become more accessible and 

communities are designed to encourage walkability between neighborhoods and 

shopping, entertainment, schools and other destinations, residents are likely to 

increase their levels of physical activity. Research shows that regular physical 

activity can reduce health risks, including coronary heart disease, diabetes, 

hypertension, anxiety and depression, and obesity. Measures in the Scoping Plan 

encourage Californians to use alternatives to personal vehicle travel that could result 

in increased personal exercise. To complement these changes, future community 

developments may evolve to include trails and pedestrian access to major centers. 

However, where compact development may increase proximity to large sources of 

pollution, such as high traffic arterials, distribution centers, and industrial facilities, it 

will be critical to analyze the anticipated and unanticipated impacts and benefits, to 

ensure that increases in exposure to vehicular air pollution and other toxics and 

particulates do not occur . 

G. California Environmental Quality Act Functional Eq California Environmental Quality Act Functional Equivalent ivalent 

Document Document 

The California Environmental Quality Act (CEQA) and ARB policy require an analysis to 

determine the potential adverse environmental impacts of proposed projects. ARB’s analysis 

of the potential adverse environmental impacts of the Scoping Plan is presented in Appendix 

J. The analysis summarizes and discusses the specific strategies in the Scoping Plan that, if 

adopted and implemented, will reduce greenhouse gas emissions throughout the state. The 
III. Evaluations Scoping Plan 

96 

evaluation is programmatic by necessity; it allows consideration of broad policy alternatives 

and program-wide mitigation measures at a time when an agency has greater flexibility to 

deal with basic problems of cumulative impacts. A programmatic document also plays an 

important role in establishing a structure within which future reviews of related actions can 

be effectively conducted. The Secretary of California’s Resources Agency determined that 

ARB meets the criteria for a Certified Regulatory Program and requires ARB to prepare a 

substitute document. This functionally equivalent document (FED) is intended to disclose 

potential adverse impacts and identify mitigation measures specific to the actions identified 

in the Scoping Plan. The analysis generally found that the proposed Low Carbon Fuel 

Standard, Renewables Portfolio Standard and Water measures have the most potential to 

cause adverse environmental impacts due to the potential for land conversion when projects 

are undertaken. Additional environmental analysis will be needed when regulations are 

adopted and at the individual project level to identify mitigation for project specific impacts. 

H. Administrative Burden Administrative Burden Administrative Burden 

ARB conducted a assessment of the administrative burden of implementing the Scoping Plan 

recommendation. (HSC §38562 (b)(7)) The recommendation calls for ARB to develop a 

cap-and-trade program – a market-based regulatory program to cap and reduce emissions 

from the Industrial, Electricity, Natural Gas, and Transportation sectors. This program would 

require stringent monitoring and reporting on the part of the regulated community, and 

comprehensive enforcement on the part of ARB. Sources under the cap would need to 

analyze the best approach for their company to comply with a cap – assessing the cost of 

reducing emissions and comparing that to the cost of purchasing emission reductions in a 

market. Although ARB has not previously developed this type of market regulation, there is 

extensive experience to draw upon from within California, nationally, and internationally. In 

addition, the other regulatory components of the recommendation would require ARB and 

other State agencies to adopt a series of measures requiring regulatory development, outreach 

to stakeholders and the public, implementation by industry, and enforcement for numerous 

measures and programs. 

I. De Minimis Emission Threshold De Minimis Emission Threshold De Minimis Emission Threshold 

A minimum level at which regulations are determined not to apply is termed the ‘de minimis 

threshold.’ In recommending a de minimis level, ARB must take into account the relative 

contribution of each source or source category to statewide greenhouse gas emissions and the 

adverse effect on small business. (HSC §38561(e)) This threshold acts as a buffer below 

which the burden of regulation is determined to outweigh the potential harmful effect of the 

minimal level of emissions. However, it should not be assumed that an individual source of 

greenhouse gas emissions that is minimal if taken by itself will fall below the threshold. 

ARB often looks at the aggregate emissions from a source category or related source 

category when determining regulatory applicability.

A source category may be evaluated as the aggregate of businesses doing the same type of 

work (e.g., semiconductor manufacturers), a type of equipment (cargo handling equipment, 

cars), a process or product (cans of pressurized duster), or other aggregated sources of 
Scoping Plan III. Evaluations 

97 

emissions. Emissions of greenhouse gases from any individual entity within these source 

categories by themselves could be small. However, when emissions from the source 

category are evaluated, the relative contribution to climate change can be significant. 

As ARB developed the Scoping Plan, potential measures were evaluated against criteria that 

included the relative contribution of the source to climate change. After this review and 

considering the level of emissions needed to meet the 1990 target established by AB 32, 

ARB recommends a de minimis level 0.1 MMTCO2E annual emissions per source 

category.74 Source categories whose total aggregated emissions are below this level are not 

proposed for emission reduction requirements in the Scoping Plan but may contribute toward 

the target via other means. 

ARB and other agencies implementing measures included in the Scoping Plan should 

carefully consider this de minimis level in developing regulations, and only regulate smaller 

source categories if there is a compelling necessity. 

As each regulation to implement the Scoping Plan is developed, ARB and other agencies will 

consider more specific de minimis levels below which the regulatory requirements would not 

apply. These levels will consider the cost to comply, especially for small businesses, and 

other factors. 

 

74 The Forest sector was not included in determining the de minimis level because this sector serves both as a 

source and a sink for carbon, making the concept of a de minimis level less applicable. 
98 

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Scoping Plan IV. Implementation 

99 

 

IV. IMPLEMENTATION: Putting the Plan into Action IMPLEMENTATION: Putting the Plan into Action IMPLEMENTATION: Putting the Plan into Action 

Adoption of this Scoping Plan will be a groundbreaking step forward for California. 

However it is only the beginning of a journey that will last for decades, gradually moving the 

State into a low-carbon, clean energy future. Putting the Scoping Plan into action will be 

challenging but with adequate commitment and leadership from Californians up and down 

the state, it will be a success. 

A. Personal Action Personal Action Personal Action 

The greenhouse gas emission reductions required under AB 32 cannot be realized without the 

active participation of the people of California. While many of the measures in this Plan 

must be taken by large sources of emissions, such as power plants and industrial facilities, it 

is the voluntary commitment and involvement of millions of individuals and households 

throughout the State that will truly make this California’s Plan. 

Shifts in individual choices and attitudes drive changes in the economy and in institutions. 

This dynamic of changing individual behavior will influence California’s effort to reduce 

greenhouse gas emissions. For example, as market forces and environmental awareness 

encourage more people to drive low-greenhouse gas emitting vehicles, the auto 

manufacturers will respond with more innovative models and more intensive research. 

Regulations requiring auto manufacturers to provide these cars will complement the market 

demand. 

This means that thinking about climate change and our carbon footprint will naturally 

become part of how individuals make decisions about travel, work, and recreation. Some 

families may choose to purchase a more efficient vehicle when it comes time to replace their 

current model. Households may choose to lower their thermostat to 68 degrees Fahrenheit 

during the colder months, and raise it to 78 degrees when air conditioning is required. Some 

households may choose to swap out incandescent light bulbs for more efficient compact 

fluorescent lights. Others may choose to install solar water heaters, or arrays of solar electric 

panels on their roofs to take advantage of renewable energy, and lower their household 

energy bills. Many households may choose to plant trees to shade and cool their homes, and 

use landscaping and plants that require less water.

This Plan recommends measures that will help support many of these individual decisions to 

improve energy efficiency. Statewide measures and regional efforts will result in programs 

to promote public transportation or riding in carpools, subsidize the purchase of energy 

efficient appliances, or provide incentives to better insulate and weatherize older homes. 

ARB is fully committed to assuring California consumers have the widest possible choice of 

vehicles that emit fewer greenhouse gases than today’s models, including the most advanced 

technology vehicles produced anywhere in the world.
IV. Implementation Scoping Plan 

100 

Californians have embraced statewide programs that support positive change in home and 

business behavior. In less than two decades, separating household waste and recycling at 

home and work have become commonplace, as has the widespread purchase of appliances 

with the Energy Star label to save energy. Reducing our carbon footprint by moving toward 

a cleaner more efficient economy will produce a wide range of benefits to individuals, 

through lower energy bills and a healthier environment for all. 

Conservation can also play a key role. By employing practices to use our resources more 

sparingly, consumers can both save money and reduce greenhouse gas emissions. On August 

18, 2008, Governor Arnold Schwarzenegger launched the EcoDriving program – a 

comprehensive effort to save consumers money at the gas pump, reduce fuel use and cut CO2

emissions. By following a set of easy-to-use best practices for driving and vehicle 

maintenance, a typical EcoDriver can improve mileage by approximately 15 percent. 

Furthermore, safety is improved when driving speeds are reduced, a key EcoDriving strategy. 

Similarly, consumers and businesses can save money and reduce greenhouse gas emissions 

by conserving resources at homes, offices and commercial buildings. For example, wireless 

monitor devices to provide instantaneous energy-usage information inside the home are 

being developed to show users how many kilowatt hours they're consuming at any given 

moment – as well as how much it’s costing them.75 Providing real-time information on 

appliance energy use can greatly assist consumers in conserving electricity use. 

Many Californians concerned about climate change have also begun to buy carbon offsets to 

mitigate the impact of their daily activities. These can take various forms, including options 

that allow consumers to add ‘carbon credits’ when buying airline tickets, or paying a small 

monthly charge on utility bills to buy green power. ARB will be working to establish clear 

rules for voluntary reductions and offsets that might be used for compliance with AB 32. 

These rules will also help establish clear guidelines for these types of voluntary carbon credit 

programs and provide California’s businesses and consumers greater assurance that money 

spent on these programs result in real reductions in greenhouse gas emissions. 

For more information about how to reduce one’s personal carbon footprint, visit 

www.coolcalifornia.org. This web site provides a carbon footprint calculator and a “top ten” 

list of ways to save energy at home. 

B. Public Outreach and Education Public Outreach and Education Public Outreach and Education 

To be successful, a climate action program needs an effective public outreach and education 

program. The Plan calls for a robust statewide program designed to generate awareness and 

involvement in California’s climate change efforts. 

 

75 The Sacramento Municipal Utility District (SMUD) is subsidizing PowerCost Monitors to 5,000 customers as 

a part of a demonstration program. [www.smud.org/residential/saving-energy/monitor.html] 
Scoping Plan IV. Implementation 

101 

The Climate Action Team will convene a steering team that includes State agencies and other 

public agencies such as the state’s air districts, and public and private utilities, which have a 

strong track record of successful efforts at public education to reduce driving (Spare the Air) 

or promote energy efficiency and reduce energy demand. With the release of the California 

Energy Efficiency Strategic Plan, the CPUC has committed to the launch of a new brand for 

California Energy Efficiency in 2009, focused on energy efficiency opportunities and 

coordinated with climate change messaging under AB 32. The steering committee will 

develop a coordinated array of messages and draw upon a wide range of messengers to 

deliver them. These will include regional and local governments whose individual outreach 

campaigns can reinforce the broader State outreach themes while also delivering more 

targeted messages directly tied to specific local and regional programs. 

To ensure that all Californians are included in efforts to address climate change, California 

will also support highly localized efforts at public education and outreach at the community 

and neighborhood level. This includes service club organizations and existing faith-based 

communities – churches, mosques and synagogues. Other private-sector entities including 

businesses and local chambers of commerce will be invited to partner in spreading the word. 

1. Involving the Public and Stakeholders in Measure Development e Development 

In keeping with the requirements of AB 32 and the legacy of four decades of 

regulatory development at ARB, we have worked to make this process fully 

transparent and will continue to do so as regulations to implement the plan are 

developed. We will continue our efforts to involve the public to the greatest extent 

feasible at every stage of the process, including informal and formal rulemaking 

activities. This will include disadvantaged communities and those with localized 

concerns, as well as affected industries and small businesses. 

Local and community meetings and outreach have been and will continue to be a 

central element of all rulemaking, with State agencies working closely with 

disadvantaged communities, EJAC, public health experts, and other stakeholders to 

fully evaluate the impacts associated with California’s greenhouse gas emissions 

reduction strategies. State agencies involved in measure development will continue 

to meet periodically with communities to assess any challenges to implementation, or 

to discover possible new measures or approaches. Stakeholders will be invited to 

participate in the many additional workshops, workgroups and seminars that will be 

held as individual measures are developed. 

2. Education and Workforce Development 2. Education and Workforce Development 

The transition to a clean energy future presents California with a tremendous 

opportunity to continue growing its green economy and to expand the growth of 

green job opportunities throughout the state. Making this transition will require a 

technically educated workforce that is equipped with the skills to develop and deploy 

21st century technologies. Investments in training, career technical education, worker 
IV. Implementation Scoping Plan 

102 

transition assistance, and collaboration between public and private partners will be 

key to ensuring that California fully reaps the economic and job opportunities that 

will accompany implementation of AB 32. 

Setting California on track to a low-carbon future beyond 2020 will be a multigenerational challenge. To meet this challenge, climate-related education in schools 

must be a central element of California’s plan. By 2010, California will develop 

climate change education components to the State’s new K-12 model school 

curriculum as part of the Education and the Environment Initiative (AB 1548, Pavley, 

Chapter 665, Statutes of 2003). Expanding the knowledge and opportunities of young 

people to participate in promoting their own and their communities’ environmental 

health will be an important theme for all these efforts. In the meantime, ARB’s 

educational outreach will continue through the Cool California web pages 

(www.coolcalifornia.org) and the continued support of student educators through the 

California Climate Champions programs. ARB will also rely on partners throughout 

the state to develop and display options for curricula that will enhance the K-12, 

community college, trade technical training programs, and programs at four-year 

colleges. 

The demand for workers to fill green jobs is rising. There are currently more than 

3,000 green businesses in the state, accounting for about 44,000 jobs: 36 percent of 

these jobs are in professional, scientific, and technical services; 19 percent are in 

construction; and 15 percent are in manufacturing.76 Some of these jobs are in new 

fields, yet many others are simply augmentations of existing skills and vocations such 

as electrical, construction, machining, auto tech, and heating ventilation and air 

conditioning. As we move toward 2020, tens of thousands of new green job 

opportunities will be created.77 Whether these opportunities come in entirely new 

fields of employment or in existing areas, it will be critical for California to have a 

trained workforce available. 

Ensuring that California can continue to meet the demand for green jobs will require 

close coordination between workforce development agencies, businesses, State and 

local governments, labor unions, and community colleges and universities. Many 

organizations are already developing strategies and identifying steps to 

simultaneously meet industry workforce needs and help build a more sustainable 

economy. For instance, the California Labor and Workforce Development Agency 

(LWDA) provides a comprehensive range of employment and training services in 

partnership with State and local agencies and organizations. Similar additional efforts 

will be crucial in ensuring that the transition to a green economy benefits working 

 

76 California Economic Strategy Panel. Clean Technology and the Green Economy; Growing Products, 

Services, Businesses and Jobs in California’s Value Network, Draft, March 2008. 

http://www.labor.ca.gov/panel/pdf/DRAFT_Green_Economy_031708.pdf

77 Tellus Institute and MRG Associates. Clean Energy: Jobs for America’s Future. As cited in: Putting 

Renewables to Work: How Many Jobs Can the Clean Energy Industry Generate? Energy and Resources 

Group/Goldman School of Public Policy at University of California, Berkeley. April 13, 2004. p. 11 

http://rael.berkeley.edu/old-site/renewables.jobs.2006.pdf 
Scoping Plan IV. Implementation 

103 

families in California by providing a steady supply of livable-wage jobs. In the area 

of energy efficiency, the California Long Term Energy Efficiency Strategic Plan, 

adopted by the CPUC, details a vision and supporting strategies for the development 

of a workforce trained and engaged to achieve California’s energy-efficiency 

objectives. 

The following strategies will be key to ensure that California’s workforce is equipped 

to help lead the transition to a clean energy future: 

• Strengthen and expand access to Career and Technical Education (CTE) in 

California public schools for the next generation of workers who will build a 

green economy. Over the past several decades, there has been a steady decline in 

career and technical education. In 2007, less than one-third of all high school 

students in the state were enrolled in some form of CTE.78 To take full advantage 

of the emerging green economy and meet the goals of AB 32, California needs to 

expand opportunities for CTE in schools. This could include pursuing strategies 

such as requiring CTE coursework for all middle- and high-school students; 

increasing the number of CTE credentialed teachers; expanding investment in 

facilities and equipment for career and technical education; and aligning 

educational curricula more closely with the skill and workforce needs of the 

emerging green economy. 

• Ensure an adequate pipeline of skilled workers who are trained in the new 

technologies of a greener economy. While some green jobs will be in new 

businesses and new occupations, most green jobs are variations of traditional 

occupations in sectors like construction, utilities, manufacturing and 

transportation.79 In light of the fact that forty percent of the nation’s skilled 

workers are slated to retire in the next 5 to 10 years,80 there is an urgent need for 

educational and training programs to fill these jobs. Strategies to create a steady 

pipeline of skilled workers include expanding curriculum choices in schools, 

colleges, and universities to fully reflect career opportunities available in an 

economy increasingly centered on clean technologies. Other strategies include 

offering a greater array of industry- and technology-specific courses that would 

link directly with postsecondary training such as apprenticeship programs, 

vocational training, or college. 

• Ensure that California’s higher education institutions continue to produce 

the next generation of clean tech engineers, scientists and business leaders. In 

addition to providing valuable research on potential climate-change mitigation 

and adaptation strategies, California’s world-class research institutions are the 

 

78 Get REAL. Aligning California’s Public Education System with the 21st Century Economy Policy Paper for 

Discussion at Governor Arnold Schwarzenegger’s Summit on Career and Technical Education, March 6, 2007 

79 Ibid. 

80 The New Apollo Program, Clean Energy, Good Jobs: A National Economic Strategy for the New American 

Century, July 2008. p. 20 http://apolloalliance.org/downloads/fullreportfinal.pdf (accessed October 12, 2008)
IV. Implementation Scoping Plan 

104 

incubators for many of the clean tech companies that will contribute to 

California’s environmental and economic future. It will be critical for California 

to continue to cultivate university research and training programs in a way that 

takes full advantage of this valuable state resource. 

A successful transition to a clean energy future depends heavily on California’s 

ability to provide a well-trained workforce to meet the demands of the growing green 

economy. ARB and our key partners will continue working throughout the state to 

ensure that an adequate supply of skilled workers is positioned to take advantage of 

the growing opportunities for high quality jobs and careers that implementation of 

AB 32 will bring. 

3. Small Businesses 3. Small Businesses 

Small businesses play a crucial role in California’s economy. As noted in Chapter III, 

our analysis indicates that this plan will have a net positive impact on small 

businesses. These impacts are attributable primarily to the measures in the plan that 

will deliver significantly greater energy and fuel efficiencies. However, as also noted 

in the analysis, ensuring that these benefits are realized to the fullest potential will 

require additional outreach and communication efforts by ARB and many other state 

and local entities. 

One of ARB’s Early Action measures is designed to help businesses during AB 32 

implementation. With our State partners, we are developing an on-line small business 

“toolkit” designed for small and medium-sized businesses that will provide a one-stop 

shop for technical and financial resources. Toolkit components will include a 

business-specific calculator to assess a company’s carbon footprint; a voluntary 

greenhouse gas inventory protocol for measuring greenhouse gas emissions; 

recommended best practices for energy, transportation, building, purchasing, and 

recycling; case studies demonstrating how small and medium California businesses 

have reduced greenhouse gas emissions; program financing resources; peernetworking opportunities; and an awards program to recognize reductions of 

greenhouse gas emissions among California businesses. 

ARB will also continue working with the many business associations, organizations, 

and other State partners, such as the Small Business Advocate’s AB 32 Small 

Business Task Force, the Labor and Workforce Development Agency, and Business, 

Transportation, and Housing Agency that have the resources, input and expertise to 

provide. These partners will help to further develop and implement an effective 

outreach plan to provide technical assistance to businesses through a variety of 

means, including attendance at business events, workshops, and working with local 

economic development agencies. 

C. Implementation of the Plan Implementation of the Plan Implementation of the Plan 

This Scoping Plan outlines the regulations and other mechanisms needed to reduce 

greenhouse gas emissions in California. ARB and other State agencies will work closely 
Scoping Plan IV. Implementation 

105 

with stakeholders and the public to develop regulatory measures and other programs to 

implement the Plan. ARB and other State agencies will develop any regulations in 

accordance with established rulemaking guidelines. Table 32 shows the status of the 

proposed measures in the plan. 

Table 32: Status of Scoping Plan Measures 

Existing Laws, Regulations, Policies And Programs 

Light-Duty Vehicle Greenhouse Gas Standards (Pavley I) 

Renewables Portfolio Standard (to 20%) 

Solar Hot Water Heaters 

Million Solar Roofs 

High Speed Rail 

Measures Strengthening & Expanding Existing Policies & Programs

Electricity Efficiency 

Natural Gas Efficiency 

Renewables Portfolio Standard (from 20% to 33%) 

Sustainable Forests 

Light-Duty Vehicle Greenhouse Gas Standards (Pavley II) 

Discrete Early Actions 

Low Carbon Fuel Standard 

High GWP in Consumer Products (Adopted) 

Smartways 

Landfill Methane Capture 

High GWP in Semiconductor Manufacturing 

Ship Electrification (Adopted) 

SF6 in non-electrical applications 

Mobile Air Conditioner Repair Cans 

Tire Pressure Program 

New Measures 

California Cap-and-Trade Program Linked to WCI Partner Jurisdictions 

Increase Combined Heat and Power 

Regional Transportation-Related GHG Targets 

Goods Movement Systemwide Efficiency 

Vehicle Efficiency Measures 

Medium/Heavy Duty Vehicle Hybridization 

High GWP Reductions from Mobile Sources 

High GWP Reductions from Stationary Sources 

Mitigation Fee on High GWP Gases 

Oil and Gas Extraction 

Oil and Gas Transmission 

Refinery Flares 

Removal of Methane Exemption from Existing Refinery Regulations 
IV. Implementation Scoping Plan 

106 

Rulemakings will take place over the next two years. As with all rulemaking processes, there 

will be ample opportunity for both informal interaction with technical staff in meetings and 

workshops, and formal interaction. ARB will consider all information and stakeholder input 

during the rulemaking process. Based on this information, ARB may modify proposed 

measures to reflect the status of technological development, the cost of the measure, the costeffectiveness of the measures and other factors before presenting them to the Board for 

consideration and adoption. 

In addition to these existing approaches, AB 32 imposes other requirements for the 

rulemaking process. Section 38562(b) explicitly added requirements for any regulations 

adopted for greenhouse gas emissions reductions. ARB also recognizes the need to expand 

the scope of analysis required when adopting future greenhouse gas emission reduction 

regulations. These expanded evaluations include the unique enforcement nature of climate 

change-related regulations and the possible extended permitting considerations and timelines 

that must be taken into account when establishing compliance dates. An important 

consideration in developing regulations will be the potential impact on California businesses. 

The potential for leakage, the movement of greenhouse gas emissions (and economic 

activity) out of state, will be carefully evaluated during the regulatory development. 

As noted above, as the Scoping Plan is implemented and specific measures are developed, 

ARB and other implementing agencies will also conduct further CEQA analyses, including 

cumulative and multi-media impacts. ARB must design equitable regulations that encourage 

early action, do not disproportionately impact low-income and minority communities, ensure 

that AB 32 programs complement and do not interfere with the attainment and maintenance 

of ambient air quality standards, consider overall societal benefits (such as diversification of 

energy resources), minimize the administrative burden, and minimize the potential for 

leakage. AB 32 requires that, to the extent feasible and in furtherance of achieving the 

statewide greenhouse gas emission limit, ARB must consider the potential for direct, indirect 

and cumulative emission impacts from market-based compliance mechanisms, including 

localized impacts in communities that are already adversely impacted by air pollution, design 

the program to prevent any increase in emissions, and maximize additional environmental 

and economic benefits prior to the inclusion of market-based compliance mechanisms in the 

regulations. As ARB further develops its approach for consideration of these issues in future 

rulemakings, and updates needed analytical tools and data sets, we will consult with outside 

experts and the EJAC. 

ARB already conducts robust environmental and environmental justice assessments of our 

regulatory actions. Many of the requirements in AB 32 overlap with ARB’s traditional 

evaluations. In adopting regulations to implement the measures recommended in the 

Scoping Plan, or including in the regulations the use of market-based compliance 

mechanisms to comply with the regulations, ARB will ensure that the measures have 

undergone the aforementioned screenings and meet the requirements established in 

HSC §38562 (b) (1-9) and §38570 (b) (1-3). 
Scoping Plan IV. Implementation 

107 

D. Tracking and Measuring Progress Tracking and Measuring Progress Tracking and Measuring Progress 

Many State agencies, working with the diverse set of greenhouse gas emissions sources, have 

collaborated in the process of developing the strategies presented in this plan. As the agency 

responsible for ensuring that AB 32 requirements are met, ARB must track the regulations 

adopted and other actions taken by both ARB and other State agencies as the plan is 

implemented. 

The emissions reductions enumerated in this plan are estimates that may be modified based 

on additional information. As the proposed measures are developed over the coming years, it 

is possible that some of these strategies will not develop as originally thought or not be 

technologically feasible or cost-effective at the level given in the plan. It is equally likely 

that new technologies and strategies will emerge after the initial adoption schedule required 

in AB 32, that is, regulation adoption by January 1, 2011. If promising new tools or 

strategies emerge, ARB and other affected State agencies will evaluate how to incorporate 

the new measures into the AB 32 program. In this way, new strategies ensuring that the 

commitments in the plan remain whole and that the 2020 goal can be met will be 

incorporated into the State strategy. 

ARB will update the plan at least once every five years (HSC §38561(h)). These updates 

will allow ARB to evaluate the progress made toward the State’s greenhouse gas emission 

reduction goals and correct the Plan’s course where necessary. This section discusses the 

tracking and measurement of progress that ARB envisions. The Report Cards and audits, 

along with an evaluation of new technologies – both emerging and those recently 

incorporated into the Plan – will also provide valuable input into ARB’s update process. 

Continuous atmospheric monitoring of greenhouse gases may also be useful for determining 

the effectiveness of emission reduction strategies and for future inventory development. 

1. Report Card 1. Report Card 

SB 85 (Budget Committee, Chapter 178, Statutes of 2007) requires every State 

agency to prepare an annual “Report Card,” detailing measures the agency has 

adopted and taken to reduce greenhouse gas emissions, including the actual emissions 

reduced as a result of those actions. The information must be submitted to CalEPA, 

which is then required to compile all the State agency data into a report format, which 

is made available on the Internet and submitted to the Legislature. The information 

allows comparisons of each agency’s projected and actual greenhouse gas emissions 

reductions with the targets established by the CAT or the Scoping Plan. This would 

be the State’s ‘Report Card’ on its efforts to reduce greenhouse gas emissions. 

Agencies are also required, as funds are available, to have an outside audit of 

greenhouse gas-related actions completed every three years to verify actual and 

projected reductions. 
IV. Implementation Scoping Plan 

108 

2. Tracking Progress by Implementing Agencies 2. Tracking Progress by Implementing Agencies 

As the lead agency responsible for implementing AB 32, ARB must track the 

progress of both our efforts and the efforts of our partners in implementing their 

respective provisions of this plan. Communication between ARB and the other 

implementing agencies will be especially important as regulations and programs are 

developed. In support of the Report Card requirement noted above, ARB will work 

with CalEPA to develop a process to track and report on progress toward the plan’s 

goals and commitments. 

3. Progress Toward the State Government Target 3. Progress Toward the State Government Target Progress Toward the State Government Target 

The CAT recently established a State Government Subgroup to work with State 

agencies to create a statewide approach to meet the Scoping Plan’s commitment to 

reduce greenhouse gas emissions by a minimum of 30 percent by 2020 below the 

State’s estimated business-as-usual emissions – approximately a 15 percent reduction 

from current levels. State agencies must lead by example by doing their part to 

reduce emissions and employ practices that can also be transferred to the private 

sector. The statewide plan will serve as a guide for State agencies to achieve realistic, 

measurable objectives within specific timelines. This newly created State 

Government Subgroup will assist State agencies through these steps in a timely 

manner. 

4. Mandatory Reporting Regulation 4. Mandatory Reporting Regulation 

ARB’s mandatory reporting rule, adopted in December 2007, will help the State 

obtain facility-level data from the largest sources of greenhouse gas emissions in 

California. This data will help ARB better understand these sources to develop the 

proposed emissions reduction measures outlined in this plan. 

The regulation requires annual reporting from the largest facilities in the state, 

accounting for 94 percent of greenhouse gas emissions from industrial and 

commercial stationary sources in California. There are approximately 800 separate 

sources that fall under the new reporting rules, which include electricity generating 

facilities, electricity retail providers and power marketers, oil refineries, hydrogen 

plants, cement plants, cogeneration facilities, and industrial sources that emit over 

25,000 tons of carbon dioxide each year from on-site stationary source combustions 

such as large furnaces. This last category includes a diverse range of facilities such as 

food processing, glass container manufacturers, oil and gas production, and mineral 

processing. 

Affected facilities will begin tracking their greenhouse gas emissions in 2008, to be 

reported beginning in 2009 with a phase-in process to allow facilities to develop 

reporting systems and train personnel in data collection. Emissions for 2008 may be 

based on best available data. Beginning in 2010, emissions reports will be more 

rigorous and will be subject to third-party verification. Reported emissions data will 

allow ARB to improve its facility-based emissions inventory data. Originally, the 

statewide greenhouse gas inventory was based on aggregated sector data and could 
Scoping Plan IV. Implementation 

109 

not be broken down to the facility level. The facility-level reporting required under 

the Mandatory Reporting regulation will improve data on greenhouse gas emissions 

for individual facilities and their emitting processes. This information could also help 

improve emissions inventories for criteria pollutants, and provide additional data for 

assessing cumulative emission impacts on a community level. 

ARB emissions reporting requirements are expected to be modified over time as 

AB 32 is implemented. 

E. Enforcement Enforcement Enforcement 

Enforcement is a critical component of all of the State’s regulatory programs, both to ensure 

that emissions are actually reduced and to provide a level playing field for entities complying 

with the law. To meet the 2020 target this plan calls for aggressive action by a number of 

State agencies. Each of those agencies will employ its full range of compliance and 

enforcement options to ensure that planned reductions are achieved. The remainder of this 

section discusses ARB’s portion of the enforcement program in more detail. 

ARB has an extensive and effective enforcement program covering a wide variety of 

regulated sources, from heavy-duty vehicle idling, to consumer products, to fuel standards 

and off-road equipment. To increase the effectiveness of its enforcement efforts and provide 

greater assurance of compliance, ARB also partners with local, State and federal agencies to 

carry out inspections and, when necessary, prosecute violators. 

ARB will continue its strong enforcement presence as the State's primary air pollution 

control agency. A critical function of this responsibility is to ensure that all enforcement 

actions are timely, effective, and appropriate with the severity of the situation. ARB will also 

continue its close working relationship with local air districts in the development and 

enforcement of applicable regulations contained within the Scoping Plan and collaborate 

with the appropriate State agencies on greenhouse gas emission reductions measures. 

For the stationary source regulations called for in the plan, ARB will work closely with the 

local air districts that have primary responsibility for implementing and enforcing criteria 

pollutant regulations. Not only are local air districts familiar with the individual facilities 

and their compliance history, but information contained in district permits can be used to 

verify the accuracy of greenhouse gas emissions reported by sources subject to ARB 

mandatory reporting requirements. Using this data, regulators can also examine any 

correlation between greenhouse gases and toxic or criteria air pollutants as a result of 

emissions trading or direct regulations. 

ARB will also continue to partner with the California Highway Patrol and other State and 

local enforcement agencies on mobile source and other laws and regulations where joint 

enforcement authorities apply. 
IV. Implementation Scoping Plan 

110 

Although many of the measures in the Scoping Plan are modeled on existing ARB 

regulations, a multi-sector, regional cap-and-trade program would bring unique enforcement 

challenges. ARB and CalEPA have begun the process of engaging and consulting with other 

State agencies, such as California’s Department of Justice, Public Utilities Commission, 

Energy Commission, as well as the Independent System Operator, on market tracking and 

enforcement. These working group meetings are ongoing and will culminate in a 

comprehensive enforcement plan to accompany the proposed cap-and-trade program when 

the Board considers regulatory requirements. This enforcement plan would describe the 

administrative structures needed for market monitoring, prosecution, and penalty setting. 

Public input regarding these issues would also be a key part of the public stakeholder process 

conducted during development of the cap-and-trade programs regulations. 

Accurate measurement and reporting of all emissions would be necessary to assure 

accountability, establish the integrity of allowances, and provide sufficient transparency to 

sustain confidence in the market. To ensure compliance, ARB would administer penalties 

for entities that hold an insufficient quantity of allowances to cover their emissions or fail to 

report their greenhouse gas emissions. Missed compliance deadlines would also result in the 

application of stringent administrative, civil, or criminal penalties. 

This plan recommends that California implement a cap-and-trade program that links with 

other Western Climate Initiative partner programs to create a regional market system. This 

system would require California to formalize enforcement agreements with its WCI partner 

jurisdictions for all phases of cap-and-trade program operations, including verification of 

emissions, certification of offsets based on common protocols, and detection of and 

punishment for non-compliance. As needed, California would also work with federal 

regulatory and enforcement agencies that oversee trading markets, such as the Commodity 

Futures Trading Commission and the Federal Energy Regulatory Commission. While 

California would work with other jurisdictions on joint enforcement activities, ARB will 

exercise all of its authority under HSC §38580 and other provisions of law to enforce its 

regulations against any violator wherever they may be. 

F. State and Local Permitting Considerations State and Local Permitting Considerations State and Local Permitting Considerations 

Some of the proposed emissions reduction strategies in this Scoping Plan may require 

affected entities to modify or obtain state or local permits. California’s existing permit 

process ensures that health and safety concerns are evaluated, met, and when appropriate, 

mitigated. The State recognizes the potential for conflicts between various federal, state and 

local permitting requirements, which may cross various media – air, water, etc. CalEPA is 

actively involved in identifying and addressing these regulatory overlap issues with the 

ultimate goal of consolidating permits where feasible while maintaining all permit 

requirements. Two such examples are CalEPA’s digester permit working group and the 

CalEPA-Air District Compost Emissions Work Group. 

ARB recognizes that the permitting process may affect the viability of certain strategies and 

that the length of the permitting process could affect the timing of emissions reductions. 
Scoping Plan IV. Implementation 

111 

ARB, along with CalEPA and other State agencies, will continue to evaluate steps to ensure 

that permit requirements harmonize across the affected media. 

This Plan has been developed with an understanding of the important cross-media impacts. 

These efforts will continue during the implementation of the Plan. Particular focus on the 

potential permitting impacts and cross-media consequences of a proposed rule will take place 

during the rulemaking process. 

G. Role of Local Air Districts Role of Local Air Districts Role of Local Air Districts 

Local air districts are ARB’s partners in addressing air pollution. ARB takes primary 

responsibility for transportation, off-road equipment and consumer products. Local districts 

lead in controlling industrial, commercial and other stationary sources of air emissions. 

AB 32 recognizes the need to develop a program that meshes with local and regional 

activities. Although AB 32 does not provide an explicit role for air districts, their local 

presence as advocates for clean air and their resources, experience and expertise in regulating 

and enforcing rules for stationary sources make them a logical choice to have an important 

role in several aspects of implementing California’s greenhouse gas program. ARB would 

partner with local air districts to develop and effectively enforce both source-specific 

requirements on industrial sources, and to enforce related programs, such as the high GWP 

rules, that affect a large number of local businesses. 

ARB and local air districts are also actively working to coordinate emission reporting 

requirements. Some districts, like the South Coast Air Quality Management District, have 

developed software to allow their industrial sources to simultaneously report their criteria 

pollutant emissions to the District and their greenhouse gas emissions to ARB. Many air 

district staff are being trained as third-party verifiers to confirm the greenhouse gas emissions 

information provided by industrial sources under the mandatory reporting regulation, and, 

similarly, could provide verification of voluntary greenhouse gas reductions in the future. 

Local air districts will be key in both encouraging greenhouse gas emissions reductions from 

other regional and local government entities, and providing technical assistance to quantify 

and verify those reductions. Local agencies are an important component of ARB’s outreach 

strategy. 

Many local air districts have already taken a leadership role in addressing greenhouse gas 

emissions in their communities. These efforts are intended to encourage early voluntary 

reductions. For example, local districts are “lead agencies” under the California 

Environmental Quality Act (CEQA) for some projects. In order to ensure high-quality 

mitigation projects, some districts have established programs to encourage local greenhouse 

gas reductions that could be used as CEQA mitigation. As the State begins to institutionalize 

mechanisms to generate and verify greenhouse gas emissions reductions, ARB and the 

districts must work together to smoothly transition to a cohesive statewide program with 

consistent technical standards. 
IV. Implementation Scoping Plan 

112 

H. Program Funding Program Funding Program Funding 

Administration, implementation, and enforcement of the emissions reduction measures 

contained in the Scoping Plan will require a stable and continuing source of funding. AB 32 

authorizes ARB to collect fees to fund implementation of the statute. ARB recently initiated 

a rulemaking for a fee program to fund administration of the program. 

Approximately $36 million per year will be needed on an ongoing basis to fund 

implementation by ARB and other State agencies, based on the positions and funding 

included in the 2009-2010 fiscal year budget. Additional revenues are needed to repay the 

loans from State funds that were used to pay ARB and CalEPA expenses in the startup of the 

program. ARB is moving on an expedited schedule to develop a fee regulation and expects 

to take a regulation to the Board in mid 2009, with the aim of beginning to collect fees in the 

2009/2010 fiscal year. 
Scoping Plan V. A Vision for the Future 

113 

 

V. A VISION FOR THE FUTURE A VISION FOR THE FUTURE A VISION FOR THE FUTURE 

California has the know-how, ingenuity, research capabilities, and culture of innovation to 

meet the challenge of addressing climate change. However, reaching the goals we have set 

for ourselves will not be easy. Successful implementation of many of the proposed programs 

and measures described in this plan will require strong leadership and a shared understanding 

of the need to reach viable and lasting solutions quickly. 

This challenge will also require establishing a wide range of partnerships, both within 

California and beyond our borders. We will need to support additional research, and further 

develop our culture of innovation and technological invention. In order to continue the 

momentum and the commitment to a clean energy future, we will need to both build on 

existing solutions and develop new ones. 

The following sections lay out some of the elements that will be necessary to forge a broadbased institutional strategy to address climate change both within California and beyond. 

Also discussed is the need to build partnerships on the regional, national and international 

levels to ensure that our actions complement and support those being taken on a global scale. 

This section also looks forward to 2030, showing that California is on the trajectory needed 

to do our part to stabilize global climate. 

A. Collaboration Collaboration Collaboration 

1. Working Closely with Key Partners 1. Working Closely with Key Partners 

True climate change mitigation will require many parties to work together for a 

global mitigation plan. California and other states are filling a vacuum created by the 

current lack of leadership at the federal level. By its bold actions, California is 

moving the United States closer to a seat at the table among the developed countries 

that have agreed to reduce their carbon emissions, and lead a new international effort 

for an agreement to replace the Kyoto Protocol that expires in 2012. 

Any national climate program must be built on a partnership with State and local 

governments to ensure that states can continue their role as incubators of climate 

change policy and can implement effective programs such as vehicle standards, 

energy efficiency programs, green building codes, and alternative fuel development. 

California will work for climate solutions with key federal agencies, including the 

U.S. Department of Energy and their national labs, the U.S. Environmental Protection 

Agency, the U.S. Bureau of Land Management, the U.S. Department of Agriculture, 

the U.S. Department of Transportation, and others. 
V. A Vision for the Future Scoping Plan 

114 

Through the Western Climate Initiative and in collaboration with other regional 

alliances of states, California can promote its own best practices and learn from others 

while helping to formulate the structure of a regional and ultimately national cap-andtrade program. 

2. International 2. International 

As one of the largest economies in the world, California is committed to working at 

the international level to reduce global greenhouse gas emissions. As part of this 

effort, Governor Schwarzenegger and other U.S. governors taking the lead in climate 

change are co-hosting a Global Climate Summit on Finding Solutions Through 

Regional and Global Action. This summit, held on November 18th and 19th, 2008, 

began a state-province partnership with leaders from the U.S., Australia, Brazil, 

Canada, China, India, Indonesia, Mexico, the European Union, and other nations, 

taking urgent steps to contain global climate change and jointly setting forth a 

blueprint for the next global agreement on climate change solutions. 

California is also a charter member of the International Carbon Action Partnership 

(ICAP), an organization composed of countries and regions that have adopted carbon 

caps and that are actively pursuing the implementation of carbon markets through 

mandatory cap-and-trade systems. California’s continued involvement in ICAP will 

be very beneficial for sharing experiences and knowledge as we design our own 

market program. 

In addition to participating in ICAP, California hopes to engage developing countries 

to pursue a low-carbon development path. With developing nations expected to 

suffer the most from the effects of climate change, California and others have an 

obligation to share information and resources on cost-effective technologies and 

approaches for mitigating both emissions and future impacts as changes in climate 

and the environment occur. 

California recognizes the “common but differentiated responsibilities” among 

developed and developing countries (as articulated in the Kyoto Protocol), but the 

reality is that rapidly escalating greenhouse gas emissions in developing countries 

could possibly negate any efforts undertaken in California. To the extent that we are 

part of the global economy, California’s demand for goods manufactured in 

developing countries further exacerbates growth of greenhouse gas emissions 

globally. Therefore, it is critical for California to help support the adoption of lowcarbon technologies and sustainable development in the developing world. 

California can advance the international policy debate through state-provincial 

partnerships for achieving early climate action in developing countries. This 

approach envisions commitments by developed countries to provide capacity building 

through technological assistance and investment support in return for developing 

countries adopting enhanced mitigation actions. California will consider working 

with developing countries or provinces that have, at a minimum, pledged to achieve 

greenhouse gas intensity targets in certain carbon-intensive sectors through 
Scoping Plan V. A Vision for the Future 

115 

mechanisms, such as minimum performance standards or sector benchmarks. 

California also recognizes that developing countries have the challenge and 

responsibility to reduce domestic emissions in a way that will promote sustainable 

development, but not undermine their economic growth. 

One possible manifestation of these collaborations could be the establishment of 

sectoral agreements that help to grow developing countries’ economies in a lowcarbon manner. In a sectoral approach, energy-intensive sectors adopt programs for 

reducing greenhouse gas emissions and/or energy use. Such sector-based approaches 

seem likely to win the support of developing countries and could also reduce 

concerns in developed countries about international competitiveness and carbon 

leakage. 

A state-provincial partnership related to imported commodities (such as cement) 

would enable California to provide incentives to reduce greenhouse gas emissions 

associated with products that are imported by our state. California should continue to 

develop current relations and existing partnership arrangements with China – now the 

largest emitter of greenhouse gases in the world – because in addition to other 

compelling reasons much of the state’s imported cement originates in China. 

California should also work to establish similar relations with India and other 

countries to share research on both greenhouse gas mitigation and climate change 

adaptation activities. Projects in the Mexican border region may also be of particular 

interest, considering the opportunity to realize considerable co-benefits on both sides 

of the border. 

Deforestation accounts for approximately 20 percent of global greenhouse gas 

emissions. California has set a strong precedent in the effort to incorporate forest 

management and conservation into climate policy by adopting the CCAR forest 

methodology in October 2007. California also hopes to engage developing countries, 

including Brazil and Indonesia, to reduce emissions and sequester carbon through 

eligible forest carbon activities. Activities aimed at Reducing Emissions from 

Deforestation and Forest Degradation (REDD) were excluded from the rules 

governing the first Kyoto commitment period, but there is considerable momentum 

behind the effort to include provisions that would recognize such activities in a post2012 international agreement. Providing incentives to developing countries to help 

cut emissions by preserving standing forests, and to sequester additional carbon 

through the restoration and reforestation of degraded lands and forests and improved 

forest management practices, will be crucial in bringing those countries into the 

global climate protection effort. California recognizes the importance of establishing 

mechanisms that will facilitate global partnerships and sustainable financing 

mechanisms to support eligible forest carbon activities in the developing world. 
V. A Vision for the Future Scoping Plan 

116 

B. Research Research Research 

1. Unleash the Potential of California’s Universities and Private 

Sector 

Bringing greenhouse gas emissions down to a level that will allow the climate to 

stabilize will take a generation or longer. Many of the ultimate solutions to achieve 

stabilization will be developed and implemented well into the future. Innovation in 

energy and climate will come from people who are now in school. These young 

people will face unprecedented challenges, and they will need both wisdom and 

imagination to craft solutions. California’s respected public and private academic 

institutions must continue to develop and fund programs based on climate change 

science that cut across disciplines to address the multi-dimensional aspects of climate 

change. 

2. Public- 2. Public-Private Partnerships Private Partnerships Private Partnerships 

To most effectively address the climate change dilemma, we must encourage 

collaborations between academia and the private sector. Industry is well-positioned 

to quickly attack problems. Combining the vast knowledge housed in universities 

with businesses’ acumen and agility can unleash a powerful collaborative force to 

tackle the problems associated with climate change. 

Several important programs have already been initiated at California universities, 

including Stanford’s Global Climate and Energy Project and the University of 

California at Berkeley’s Energy Biosciences Institute (EBI).81 These and other efforts 

need to be recognized and encouraged, along with others that can link the results of 

research directly to policy decisions that the State must make. 

Carbon Sequestration Carbon Sequestration 

In addition to terrestrial carbon sequestration or natural carbon sinks, such as forests 

and soil, CO2 can be prevented from entering the atmosphere through carbon capture 

and storage (CCS). This consists of separating CO2 from industrial and energyrelated sources and transporting the CO2 to a storage location for long-term isolation 

from the atmosphere. Potential technical storage methods include geological storage, 

industrial fixation of CO2 into inorganic carbonates, and other strategies. Large point 

sources of CO2 that may pursue CCS include large power plants, fossil fuel-based 

hydrogen production plants, and oil refineries.82

 

81 The EBI is being developed in cooperation with Lawrence Berkeley National Laboratory, the University of 

Illinois at Urbana-Champaign and BP. 

82 Intergovernmental Panel on Climate Change. Carbon Dioxide Capture and Storage: A Special Report of 

Working Group III of the IPCC. Cambridge University Press, UK; 2005. 

http://www.ipcc.ch/ipccreports/srccs.htm (accessed October 12, 2008) 
Scoping Plan V. A Vision for the Future 

117 

According to a 2005 report by the Intergovernmental Panel for Climate Change 

(IPCC), a power plant with CCS could reduce CO2 emissions to the atmosphere by 

approximately 80 to 90 percent compared to a plant without CCS (including the 

energy used to capture, compress and transport CO2).83 While more research and 

development needs to occur, California should both support near-term advancement 

of the technology and ensure that an adequate framework is in place to provide credit 

for CCS projects when appropriate. 

The State is currently an active member of the West Coast Regional Carbon 

Sequestration Partnership (WESTCARB), a public-private collaboration to 

characterize regional carbon sequestration opportunities in seven western states and 

one Canadian province. Established in 2003, this research project is comprised of 

more than 80 public and private organizations. WESTCARB is conducting 

technology validation field tests, identifying major sources of CO2 in its territory, 

assessing the status and cost of technologies for separating CO2 from process and 

exhaust gases, and determining the potential for storing captured CO2 in secure 

geologic formations.84

C. Reducing California’s Emissions Further Reducing California’s Emissions Further Reducing California’s Emissions Further – 

A Look Forward to 2030 A Look Forward to 2030 

In order to assess whether implementing this plan achieves the State’s long-term climate 

goals, we must look beyond 2020 to see whether the emissions reduction measures set 

California on the trajectory needed to do our part to stabilize global climate. 

Governor Schwarzenegger’s Executive Order S-3-05 calls for an 80 percent reduction below 

1990 greenhouse gas emission levels by 2050. This results in a 2050 target of about 

85 MMTCO2E (total emissions), as compared to the 1990 level (also the 2020 target) of 

427 MMTCO2E. Climate scientists tell us that the 2050 target represents the level of 

greenhouse gas emissions that advanced economies must reach if the climate is to be 

stabilized in the latter half of the 21st century. Full implementation of the Scoping Plan will 

put California on a path toward these required long-term reductions. Just as importantly, it 

will put into place many of the measures needed to keep us on that path. 

Figure 6 depicts what an emissions trajectory might look like, assuming California follows a 

linear path from the 2020 AB 32 emissions target to the 2050 goal needed to help stabilize 

climate. While the measures needed to meet the 2050 goal are too far in the future to define 

in detail, we can examine the policies needed to keep us on track through at least 2030. 

 

83 Ibid 

84 WESTCARB. WESTCARB Overview. http://www.westcarb.org/about_overview.htm (accessed October 12, 

2008) 
V. A Vision for the Future Scoping Plan 

118 

Figure 6: Emissions Trajectory Toward 2050 

14.3

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284

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Per-capita Emissions (MT/person/year) Emissions (MMTCO2E)

To stay on course toward the 2050 target our State’s greenhouse gas emissions need to be 

reduced to below 300 MMTCO2E by 2030. This translates to an average reduction of four 

percent per year between 2020 and 2030. An additional challenge comes from the fact that 

California’s population is expected to grow by about 12 percent between 2020 and 2030. To 

counteract this trend, per-capita emissions must decrease at an average rate of slightly less 

than five percent per year during the 2020 to 2030 period. 

Are such reductions possible by 2030? What measures might be able to provide the needed 

reductions? How do the needed measures relate to the efforts put into place to reach the 

2020 goal? All of these are critical questions, and are addressed below. 

The answer to the first question is yes, the reductions are possible. Furthermore, the 

measures needed are logical expansions of the programs recommended in the Scoping Plan 

that get us to the 2020 goal. We could keep on track through 2030 by extending those 

programs in the following ways: 

• Using a regional or national cap-and-trade system to further limit emissions from the 

85 percent of greenhouse gas emissions in capped sectors (Transportation Fuels and 

other fuel use, Electricity, Residential/Commercial Natural Gas, and Industry). By 

2030 a comprehensive cap-and-trade program could lower emissions in the capped 

sectors from 365 MMTCO2E in 2020 to around 250 MMTCO2E in 2030; 
Scoping Plan V. A Vision for the Future 

119 

• Achieving a 40 percent fleet-wide passenger vehicle reduction by 2030, 

approximately double the almost 20 percent expected in 2020; 

• Increasing California’s use of renewable energy; 

• Reducing the carbon intensity of transportation fuels by 25 percent (a further decrease 

from the 10 percent level set for 2020); 

• Increasing energy efficiency and green building efforts so that the savings achieved in 

the 2020 to 2030 timeframe are approximately double those accomplished in 2020; 

and 

• Continuing to implement sound land use and transportation policies to lower VMT 

and shift travel modes. 

The effects of these strategies are presented in Table 33. 

Table 33: Potential Distribution of California Greenhouse Gas 

Emissions by Sector in 2030 

Sector Potential Emissions 

(MMTCO2E) 

Transportation Fuels* 102 

Other Fuel Use* 149 

Uncapped Sectors 33 

Total 284 

* Capped sector

With these polices and measures in place, per-capita electricity consumption would decrease 

by another five percent. Well over half of our electricity demand could be met with zero or 

near zero greenhouse gas emitting technologies, assuming nuclear and large hydro power 

holds constant at present-day levels. In response to a lower cap on emissions, existing coal 

generation contracts would not be renewed, or carbon capture and storage would be utilized 

to minimize emissions. The remaining electricity generation would come from natural gas 

combustion either in cogeneration applications or from highly efficient generating units. 

By 2030, the transportation sector would undergo a similarly massive transition both in terms 

of the vehicle fleet and the diversity of fuel supplies. Due to the combination of California’s 

clean car standards (ARB’s ZEV program and the Low Carbon Fuel Standard), the number 

of battery-electric vehicles, plug-in hybrid electric vehicles, and fuel cell vehicles would 

increase dramatically, to about a third of the vehicle fleet. Flex-fuel vehicles would comprise 

a large fraction of the remaining fleet, with more efficient gasoline and diesel vehicles 

making up the difference. Electricity, advanced biofuels, improved gasoline and diesel, 

renewable natural gas and hydrogen would all play a role in powering this high-tech fleet of 

efficient vehicles. 
V. A Vision for the Future Scoping Plan 

120 

Regional land use and transportation strategies would grow in importance and would reverse 

the trend of per-capita vehicle miles traveled, a reduction of about eight percent below 

business-as-usual in 2030. With ambitious but reasonable action, statewide passenger 

vehicle greenhouse gas emissions could be reduced to half of 2020 levels in 2030, which is 

also about half of business-as-usual for 2030. Efficiency strategies and low carbon fuels for 

heavy-duty and off-road vehicles, as well as for ships, rail, and aviation, would need to be 

greatly expanded in order to achieve additional reductions from the transportation sector in 

2030. 

In tandem with efficiency measures that lower demand for electricity, natural gas and 

transportation fuels, California’s cap-and-trade program would incent large industrial sources 

as well as commercial and residential natural gas customers to further reduce emissions. By 

tightening the cap over time, it is expected that facilities in the industrial and natural gas 

sectors would achieve reductions well beyond those needed to meet the 2020 emissions cap. 

The Scoping Plan proposes several measures for reducing high GWP gases that collectively, 

will substantially reduce emissions. With a transition toward reduced consumption of these 

gases, improved containment in their end uses, and substitution of low GWP alternative 

gases, it is expected that emissions from this sector could decrease by 75 percent between 

2020 and 2030. 

For uncapped sectors, we assume that the agriculture sector will reduce emissions by about 

15 percent between 2020 and 2030. Net forest uptake of CO2 must be preserved or 

enhanced, likely through both expansion of forests and reduction in carbon loss from forest 

fires, which are predicted to increase over this time period. This example assumes a 

10 percent reduction in direct landfill emissions from the recycling and waste sector; 

however, aggressive implementation of the suite of measures proposed in this Plan could 

further reduce emissions from this sector by 2030. 

In total, the measures described above would produce reductions to bring California’s 

statewide greenhouse gas emissions to an estimated 284 MMTCO2E in 2030. While the 

potential mix of future climate policies articulated in this section is only an example, it serves 

to demonstrate that the measures in the Scoping Plan can not only move California to its 

2020 goal, but also provide an expandable framework for much greater long-term greenhouse 

gas emissions reductions. 

D. Conclusion Conclusion Conclusion 

California’s commitment to address global warming has never been greater. The vast 

amount of interest, support, and input that ARB has received since this plan began to take 

shape is evidence of a clear understanding of the need to take action and support for the 

State’s efforts to lead the way. The time has come to shift away from a ‘business-as-usual’ 

approach to climate change and to move toward the lasting and sustainable goal of a clean 

energy future. 
Scoping Plan V. A Vision for the Future 

121 

Reaching our goals will take a great deal of leadership, commitment, and a willingness to 

embrace new approaches and seek out new solutions. California’s plan to reduce greenhouse 

gas emissions must also take into account the impacts of this transition and be designed in 

particular to address the needs of low-income communities, small businesses, and 

California’s working families. 

Reaching our goals will also require involvement and support from all levels of government 

in California, and a coordinated effort with other states, regions, and countries. The solutions 

and technologies we develop here will be used around the world to help others transition to a 

clean energy future and contribute to the fight against global warming. 

Reaching our goals will also require flexibility. As we move forward, we must be prepared 

to make mid-course corrections. AB 32 wisely requires ARB to update its Scoping Plan 

every five years, thereby ensuring that California stays on the path toward a low carbon 

future. 

This plan is part of a new chapter for California that in many ways began with the passage 

and signing of AB 32. It proposes a comprehensive set of actions designed to reduce 

greenhouse gas emissions in California, improve our environment, reduce our dependence on 

oil, diversify our energy sources, save energy, create new jobs, and enhance public health. 

The challenge California has taken on is large but the opportunities are even greater. It is 

now time to turn this plan into action. 
122 

 

ACKNOWLEDGMENTS ACKNOWLEDGMENTS 

This Scoping Plan was prepared by the Air Resources Board. This document was made 

possible by the hard work of numerous contributors. Below is a list of advisory committees 

and State agencies that directly provided input to this Scoping Plan. 

Team Support Team Support 

Climate Action Team 

Climate Action Team Sector Subgroups 

• Agriculture 

• Cement 

• Energy 

• Forest 

• Green Buildings 

• Land Use 

• Recycling and Waste Management 

• State Fleet 

• Water-Energy 

• Economics 

Advisory Committees Advisory Committees 

Market Advisory Committee 

Environmental Justice Advisory Committee 

Economic and Technology Advancement Advisory Committee 

State Agencies State Agencies 

Governor’s Office of Planning and Research 

California Environmental Protection Agency 

Business, Transportation and Housing 

Agency 

Resources Agency 

State and Consumer Services Agency 

Department of Food and Agriculture 

California Energy Commission 

California Public Utilities Commission 

California Transportation Commission 

Department of Conservation 

Department of Forestry and Fire Protection 

Department of General Services 

Department of Parks and Recreation 

Department of Public Health 

Department of Toxic Substances Control 

Department of Transportation 

Department of Water Resources 

Housing and Community Development 

Integrated Waste Management Board 

Office of Environmental Health Hazard 

Assessment 

State Water Resources Control Board 

Department of Pesticide Regulation 

& Roberta Fegg

Sharon L. Anderson Darlene Atkinson Barbara Bamberger Bill Blackburn Jeannie Bla keslee Edie Chang Steve Cliff Jon Costantino Cheri Davis Paul Domich Karin Donhowe Brieanne Dou ke Ashley Dunn Rob DuVall Mary Farr Jennifer Gray Jerry Hart Alana Hitchcock L isa Holm Kevin Kennedy Karen Khamou Bill Knox Renae Maher Dennis O’Bry ant Patti Ochoa Ray Olsson Claudia Orlando Johnn ie Ray mond Christine Seghers Charles M. Shu loc k Sandee Smith Gina Sterlin g Bruce Tuter Lucille van Ommering Rich Varenchik Sam Wade Mark Wenzel Tabetha Willmon Matt Zaragoza
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