OK AFTERNOON, EVERYONE, UH,
JOINT LEGISLATIVE COMMITTEE ON
CLIMATE CHANGE POLICIES WILL NOW
COME TO ORDER, UM, JOINED HERE
BY A FEW MEMBERS AS WELL AS MY
VICE CHAIR. UM FOR OUR ANNUAL
OVERSIGHT HEARING. TODAY WE'RE
GOING TO BE HEARING FROM THE
ADMINISTRATION AS WELL AS A
NUMBER OF EXPERTS, BUT I DID
WANT TO MAKE A COMMENT AT THE
OUTSET IN TERMS OF JUST THE
FORMAT FOR THE HEARING. UH
PUBLIC COMMENTS CAN BE VERY
IMPORTANT TODAY. SO THE
STAKEHOLDERS WHO ARE HERE, UM,
WE'D LIKE TO GIVE YOU A ROBUST
OPPORTUNITY AT THE AT THE END.
UM, AND TO GIVE YOU AN
OPPORTUNITY, ALSO TO POTENTIALLY
AGGREGATE COMMENTS AND TAKE A
LITTLE LONGER TIME. SO WE'RE NOT
GONNA JUST DO THE STANDARD. YOU
GET A MINUTE. YOU GET A MINUTE.
BUT IF FOLKS WANNA COME UP, UM
IN GROUPS AND AGGREGATE SOME OF
THEIR TIME WE'RE OPEN TO DOING
THAT, AND WE'RE GOING TO TRY TO
LEAVE A GOOD CHUNK AT THE TAIL
END OF HERE, UH, TO LET YOU GUYS
HAVE A CHANCE TO HAVE A LITTLE
BACK AND FORTH WITH THE WITH THE
COMMITTEE. UM AS OPPOSED TO JUST
TO SORT OF CURSORY REMARK. UM
THAT SAID, UM, DID WANT TO GET
STARTED WITH SOME OPENING
COMMENTS. I'M HAPPY TO DEFER TO
ANY OF THE MEMBERS HERE. I'LL
START WITH THE VICE CHAIR FOR
ANY OPENING REMARKS. THANK YOU.
CHAIR STERN. GOOD AFTERNOON,
EVERYONE LOOKING FORWARD TO
ANOTHER ROBUST YEAR, STARTING
WITH OUR ANNUAL OVERSIGHT
HEARING THAT MAYBE JUST TO SET
THE CONTEXT A LITTLE BIT. UH, WE
ARRIVE IN 2024 AT SOMEWHAT OF A
MIDPOINT ROUGHLY TWO DECADES
AFTER A LANDMARK LEGISLATION SET
CALIFORNIA ON THE PATH TO
ADDRESSING CLIMATE CHANGE AND
JUST OVER TWO DECADES FROM OUR
STATE'S AMBITION, AMBITIOUS
CLIMATE GOALS IN 2045 CLIMATE
CHANGE IS HERE IMPACTING THE
EVERYDAY LIVES OF CALIFORNIANS
IN THE FORM OF RECORD HEAT WAVES
, CYCLES OF DEVASTATING DROUGHT
INTERSPERSED WITH WIDESPREAD
FLOODING AND WILDFIRES ON AN
UNPRECEDENTED SCALE. THIS POINT
IN TIME PRESENTS BOTH
SIGNIFICANT CHALLENGES AND
ENORMOUS OPPORTUNITIES WE HAVE
DEVELOPED AND ARE IMPLEMENTING A
SET OF POTENT TOOLS TO ADDRESS
EMISSIONS, BUT THERE IS ALSO AN
EMERGING CONSENSUS THAT WE MUST
RIGHT? UH, WHAT WE ARE DOING AND
THE PACE OF ADMISSIONS
REDUCTIONS TO ACHIEVE OUR GOALS
WE HAVE COMMITTED TO OVERHAULING
THE TYPES OF VEHICLES WE DRIVE,
HOW WE GENERATE ELECTRICITY,
HEAT OUR HOMES, GROW OUR FOOD
AND MANUFACTURE GOODS. THESE
CHANGES WILL BE CHALLENGING, BUT
THEY CARRY WITH THEM THE
OPPORTUNITY TO DEVELOP NEW CLEAN
INDUSTRIES WITH WIDELY AVAILABLE
JOBS TO IMPROVE AIR QUALITY,
PARTICULARLY IN AREAS WHICH HAVE
LONG ENDURED DISPROPORTIONATE
AND UNJUST. SOME BURDENS AND TO
CONTINUE CALIFORNIA'S LEGACY OF
ENVIRONMENTAL LEADERSHIP FAR
INTO THE FUTURE. THIS COMMITTEE
PROVIDES A FORUM TO EVALUATE HOW
WE'RE DOING IN OUR EFFORTS TO
ADDRESS CLIMATE CHANGE FIELD
IDEAS FOR WHAT ELSE CAN BE DONE
AND DISCUSS HOW PRESENT AND
FUTURE ACTIONS CAN BE MAXIMIZED
IN THEIR BENEFIT FOR THE PEOPLE
OF CALIFORNIA. SO WITH THAT I
LOOK FORWARD TO A SOLUTIONS
FOCUSED DISCUSSION, AND I THANK
THE PANELISTS FOR TAKING THE
TIME TO BE HERE TODAY. GREAT.
THANK YOU, MR VICE CHAIR
MEMBERS. ANY OTHER OPENING
COMMENTS. YOU'RE OK. ALL RIGHT,
UM I APPRECIATE AND CONCUR WITH
MY VICE CHAIR'S REMARKS ABOUT
THE SORT OF INFLECTION POINT UM
I THINK AS YOU'LL NOTE IN THE
BACKGROUND PAPER THAT, UH,
COMMITTEE STAFF WORKED ON VERY
HARD AND I WANT TO THANK THEM
BOTH, UH, YOUR STAFF AND MINE AS
WELL AS THE POLICY STAFF. UM, IN
BOTH HOUSES, I THINK WE'VE HAD
REALLY GOOD FEEDBACK AND A SORT
OF SUCCESSION OF HEARINGS HERE,
STARTING WITH THE ENVIRONMENTAL
QUALITY AND OUR SUBCOMITTEE, UM,
ON THE SENATE SIDE AS WELL AS UM
, SOME EFFORTS OVER IN THE
ASSEMBLY TO REALLY TAKE ANOTHER
LOOK AT CAP AND TRADE AND TO
THINK ABOUT, UM, HOW IT'S
SERVING OUR PEOPLE HERE IN
CALIFORNIA. UM WHAT IT'S DOING
TO DELIVER POLLUTION RED UM, ITS
IMPACT ON JOBS. UM AND WHAT MORE
WE CAN DO TO IMPROVE THAT
PROGRAM? UM INTO THE FUTURE. I
THINK THAT THIS IS A MOMENT
WHERE THIS HAS SORT OF BEEN A
BACKSTOP TO ALL OF OUR EFFORTS
ON CLIMATE AND THE HEADLINES
HAVE BEEN ABOUT, UM ZEV PROGRAMS
OR RENEWABLE PORTFOLIO STANDARDS
OR LOW CARBON FUEL STANDARDS.
BUT HERE WE HAVE THIS EMISSIONS
TRADING PROGRAM THAT STANDS, UH,
STANDS ALONE IN THE CERTAINLY IN
THIS CONTINENTAL UNITED STATES
IS THE LARGEST, MOST IMPORTANT
PRICE ON CARBON THAT EXISTS OUT
THERE. UM, AND YET, IT NOT FULLY
DELIVERING WHAT IT NEEDS TO DO,
SO WE'RE GOING TO GET INTO THAT,
UM, AT A NUMBER OF OTHER TOPICS
HERE, UH, PURSUANT TO STATUTE.
UH MY DUTY NOW IS TO CALL UP OUR
STEAM CHAIR OF THE CALIFORNIA
AIR RESOURCES BOARD, LEANNE
RANDOLPH TO GET NOT GET ON THE,
UH, NOT ONLY INTO THESE ISSUES,
BUT TO REALLY LOOK AT AN ANNUAL
UPDATE ON HOW THE SCOPING PLAN
IS GOING TO TAKE SOME OF YOUR
QUESTIONS. WE APPRECIATE YOUR
PRESENCE HERE, MADAM CHAIR. UH,
PLEASE JOIN US. YOU'LL BE SOLO.
UM, AND THEN WE BRING THE REST
UP AFTER THANK YOU SO MUCH. AND
WELCOME BACK. THANK YOU.
SPEAKING OF CLIMATE, WE HAD A
QUITE A WHIRLWIND TOUR INDIA,
RIGHT? OK YES, WE SPOKE TO MANY
POLICY MAKERS AND GOVERNMENT
OFFICIALS IN INDIA. OUR FOCUS
WAS PARTICULARLY ON UH, HEAVY
DUTY VEHICLES STANDARDS, UM,
SETTING STRONG CLEAR STANDARDS,
BUT WE HAD A LOT OF OTHER GREAT
CONVERSATIONS SO AND OUR ENERGY
FOLKS ARE THERE THIS WEEK. SO
PRESIDENT REYNOLDS AND VICE
CHAIR GUNA ARE THERE THIS WEEK?
ALL RIGHT. THANK YOU FOR
INVITING ME TODAY, UM, PER THE
CURRENT REQUIREMENTS OF A B 197.
I'M GOING TO TALK ABOUT THE
TREND IN OUR AIR QUALITY AND
GREENHOUSE GAS EMISSIONS
REGULATION, INCLUDING CRITERIA,
POLLUTANTS AND TOXIC AIR
CONTAMINANTS AND ALL THE WORK
WE'RE DOING IN THAT AREA. UM,
AND THEN OUR EFFORTS TO REDUCE G
HÌ G EMISSIONS AND ACHIEVE OUR
2030 2045 TARGETS. OK WE'RE
GONNA START WITH, UM UH, OUR
CRITERIA. POLLUTANTS UM, IN
CALIFORNIA. UH WE CONTROL OXIDES
OF NITROGEN, UH, THE CRITERIA
POLLUTANTS COMMONLY KNOWN AS
KNOX TO PREVENT OZONE FORMATION,
AND THAT HAS BEEN INCREDIBLE
SUCCESS STORY. WE HAVE SEEN A
70% DECLINE IN NOX EMISSIONS
OVER THE PAST 50 YEARS, AND LAST
YEAR WAS NÓ EXCEPTION AS CARBS,
CLEAN ENGINE FUEL AND VEHICLE
STANDARDS AS WELL AS AIR
DISTRICT PROGRAMS FOR STATIONARY
SOURCES CONTINUE TO ACHIEVE
REDUCTIONS. TOXIC AIR
CONTAMINANTS HAVE LIKEWISE
CONTINUED TO DECLINE DUE TO
STATE AND LOCAL AIR TOXIC
CONTROL PROGRAMS. THE EMISSIONS
OF DIESEL PARTICULATE MATTER A
KNOWN CARCINOGEN HAVE DECLINED
BY 80% SINCE 1990. OUR WORK IS
ABSOLUTELY NOT DONE. CARB
CONTINUES TO REFINE OUR EXISTING
EFFORTS TO REDUCE CRITERIA, AIR
POLLUTANTS AND TOXIC AIR
CONTAMINANTS AND PURSUE NEW
PROGRAMS TO ACHIEVE EVEN GREATER
REDUCTIONS. LAST YEAR CARB
APPROVED THE ADVANCED CLEAN
FLEETS RULE OR A èC F. THE
PRIMARY GOAL OF THE ACF
REGULATION IS TO ACCELERATE THE
MARKET FOR ZERO EMISSION TRUCKS,
VANS AND BUSES BY REQUIRING
FLEETS THAT ARE WELL SUITED FOR
ELECTRIFICATION TO TRANSITION TO
ZEV, WHERE FEASIBLE, IT WILL
REDUCE 418 TONS OF NOX EMISSIONS
BY 20 58,000 TONS OF REDUCED
DIESEL PARTICULATE MATTER
EMISSIONS AND REDUCING EMISSIONS
BY 307 MILLION METRIC TONS. THIS
MEASURE, ALONG WITH THE OUR FULL
PORTFOLIO OF PROGRAMS ARE HOW
CARB HAS CONTINUED TO ACHIEVE
REDUCTIONS IN CRITERIA,
POLLUTANTS AND TOXIC AIR
CONTAMINANTS. NOW I'M GONNA TALK
ABOUT OUR EFFORTS ON
IMPLEMENTING RECENTLY ADOPTED
REGULATIONS AND ONGOING
IMPLEMENTATIONS OF RECENT
STATUTES AND UPDATES TO
PROGRAMS. IN 2022. WE ADOPTED
THE MOST RECENT SCOPING PLAN
UPDATE AN ECONOMY WIDE STRATEGY
THAT LAYS OUT THE TRANSFORMATION
NEEDED FOR THE STATE TO ACHIEVE
NOT ONLY THE MORE AGGRESSIVE
2030 TARGET, BUT THE 2040 CARBON
NEUTRALITY GOAL THAT IS
ESSENTIAL TO MITIGATING THE
NEGATIVE EFFECTS OF CLIMATE
CHANGE AND IMPORTANTLY, AN 85%
REDUCTION IN ANTHROPOGENIC GHG
EMISSIONS BY 2045, WHICH WILL
ALSO SUPPORT OUR AIR QUALITY
TARGETS. THE SCOPING PLAN WAS
INFORMED BY EXECUTIVE ORDER B
5518, WHICH SET A CARBON
NEUTRALITY GOAL AND BY ASSEMBLY
MEMBER MERAT SUU KYI'S AB 1279,
WHICH CODIFIED AND MODIFIED THAT
GOAL AS WELL AS THE GOVERNOR'S
DIRECTION TO CARVE TO INCREASE
OUR CLIMATE AMBITION. AMONG
OTHER THINGS, THE ONE THING THE
SCOPING PLAN MADE CLEAR IS THAT
THE LARGEST SOURCE OF GREENHOUSE
GAS EMISSIONS IN CALIFORNIA IS
THE TRANSPORTATION SECTOR. IT
LAID OUT THREE BROAD STRATEGIES
FOR REDUCING GHG EMISSIONS
TRANSITIONING TO ZERO EMISSION
TECHNOLOGY TRANSITIONING TO LOW
AND ZERO CARBON FUELS AND
REDUCING VEHICLE. MILES
TRAVELED. CARB HAS CONTINUED TO
PURSUE WORLD LEADING VEHICLE
REGULATIONS TO INCREASE THE
DEPLOYMENT OF ZERO EMISSION
TECHNOLOGY, INCLUDING ADVANCED
CLEAN CARS, ADVANCED CLEAN
TRUCKS AND ADVANCED CLEAN FLEETS
RULES. ON TOP OF UPDATES TO OUR
EXISTING REGULATIONS ON INTERNAL
COMBUSTION ENGINE VEHICLES,
INCLUDING OUR OMNIBUS RULE, AND
VERY IMPORTANTLY, THE HEAVY DUTY
INSPECTION AND MAINTENANCE SMOG
CHECK PROGRAM FOR HEAVY DUTY
TRUCKS, WHICH IS REALLY CRITICAL
ROLE THAT WILL RESULT IN OVER
100,000 TONS OF NOX REDUCTIONS
BY 2050. UH, SO CALIFORNIA DID
WHAT IT NEEDED TO DO TO ADOPT
THOSE RULES. NOW WE NEED THE
FEDERAL GOVERNMENT TO STEP UP.
WE HAVE SEVEN PENDING WAIVER AND
AUTHORIZATION REQUESTS FOR CLEAN
VEHICLE REGULATIONS THAT ARE
BEFORE THE FEDERAL ENVIRONMENTAL
PROTECTION AGENCY, INCLUDING OUR
LATEST VERSION OF THE ADVANCED
CLEAN CARS, REGULATION AND
ADVANCE CLEAN FLEETS. SO GETTING
THOSE WAIVERS AND AUTHORIZATIONS
APPROVED ARE A PRIORITY SO THAT
THESE PROGRAMS CAN MOVE FORWARD
AND WE CONTINUE TO ENGAGE WITH
THE EPA ON THAT TOPIC AND PUSH
APPROVAL OF THOSE WAIVERS AND
AUTHORIZATIONS. WE ARE ALSO IN
THE PROCESS OF UPDATING THE LOW
CARBON FUEL STANDARD TO SUPPORT
THE ADVANCED CLEAN TRUCKS AND
ADVANCED CLEAN FLEETS
REGULATIONS. GREATER STRINGENCY
IN L èC F S¼ WILL ALIGN IT WITH
THE 2022 SCOPING PLAN AS WELL AS
DRIVE THE DEVELOPMENT OF CLEAN
FUEL CAPACITY AND INFRASTRUCTURE
NEEDED TO SUPPORT ZERO EMISSION
VEHICLES IN ALL WEIGHT
CATEGORIES. TURNING THE
STATIONARY SOURCES THIS YEAR CAR
WILL BEGIN THE PROCESS OF
IMPLEMENTING S¼ B NINE Ó FIVE
BY SENATOR CABALLERO, WHICH
REQUIRES CARB TO EVALUATE AND
SET STANDARDS FOR CARBON CAPTURE
AND CARBON DIOXIDE REMOVAL
PROJECTS AND TECHNOLOGIES. THE
SCOPING PLAN, AS WELL AS THE IP
èC èC ARE CLEAR THAT CARBON
CAPTURE AND SEQUESTRATION WILL
BE NEEDED TO ACHIEVE CARBON
NEUTRALITY BY 2045 AND DEAL WITH
RESIDUAL EMISSIONS THAT WILL
STILL REMAIN BY MID CENTURY. WE
MUST WE MUST BEGIN LAYING THE
GROUNDWORK FOR THE FIRST OF
THESE PROJECTS NOW SO THAT THE
TECHNOLOGY IS MATURE BY THE TIME
WE NEED THEIR LARGER SCALE
DEPLOYMENT IN THE LATE 20 TH AND
EARLY 20 FORTIES. THE INFLATION
REDUCTION ACT HAS PROVIDED US
WITH POTENTIALLY A ONCE IN A
LIFETIME OPPORTUNITY FOR
GREENHOUSE GAS EMISSIONS
REDUCTIONS, AND CALIFORNIA HAS
JUMPED AT THE CHANCE TO SEIZE
THOSE OPPORTUNITIES. ONE OF THE
WAYS IS THE CLIMATE POLLUTION
REDUCTION GRANTS, WHICH INCLUDES
OVER $5 BILLION IN GRANTS TO
STATES, LOCAL GOVERNMENTS AND
TRIBES TO, UH, DEVELOP AND
IMPLEMENT CLIMATE ACTION PLANS.
WE SUBMITTED OUR PRIORITY
CLIMATE ACTION PLAN OR P CAP
WITH A DESCRIPTION OF WHY
FEDERAL FUNDING IS A ONCE IN A
LIFETIME OPPORTUNITY TO ACHIEVE
REDUCTIONS AT A LOWER COST TO
CALIFORNIANS. CALIFORNIA
SUBMITTED ITS DRAFT CLIMATE
ACTION PLAN ON MARCH 1ST WITH 22
MEASURES PROPOSED FOR FUNDING
THAT IF FUNDING COULD REDUCE
EMISSIONS BY OVER 40 MILLION
TONS BY 2045. OVERALL THE
PROJECTS FUNDED THROUGH THIS
MECHANISM WOULD ACHIEVE
REDUCTIONS THAT WERE IDENTIFIED
IN THE SCOPING PLAN, AS UM, IN
WAYS THAT IS A LOWER COST TO
CALIFORNIANS BY TAKING ADVANTAGE
OF THE FEDERAL FUNDING. ON
HYDROGEN CARB CONTINUES ITS WORK
ON S¼ B 1075 TO REPORT ON THE
DEVELOPMENT, DEPLOYMENT AND USE
OF HYDROGEN IN ALL SECTORS AS
PART OF ACHIEVING CALIFORNIA'S
ENERGY, CLIMATE AND AIR QUALITY
GOALS. CARB IS ENGAGED IN
COLLABORATIVELY WITH PARTNER
AGENCIES, INCLUDING CALIFORNIA'S
HYDROGEN HUB SUPPORTED BY ARCHES
. CALIFORNIA'S HYDROGEN MARKET
DEVELOPMENT STRATEGY WORK CALLED
FOR BY GOVERNOR NEWSOM.
CALIFORNIA PUBLIC UTILITIES WORK
RELATED TO BLENDING HYDROGEN
INTO NATURAL GAS PIPELINES AND
S¼ B 100 HYPER WORK SUPPORTED BY
THE èC E èC. UM I AM GONNA
BRIEFLY PIVOT NOW TO DISCUSS UM,
THE CAP AND TRADE PROGRAM. UM
I'M GONNA GIVE A REALLY QUICK
OVERVIEW. UM I'M GONNA TALK
ABOUT SOME OF THE, UH,
REGULATORY WORK THAT WE ARE
UNDERGOING. TO DISCUSS UPDATES
TO THE PROGRAM. UM FIRST, A
BRIEF PRIMER, UH, CAP AND TRADE
PROGRAM IS AN ECONOMY WIDE CAP
ON GREENHOUSE GAS EMISSIONS IN
CALIFORNIA, COVERING
APPROXIMATELY 400 FACILITIES AND
80% OF THE STATE'S EMISSIONS. A
BUDGET OF ALLOWANCES IS SET
EQUAL TO THE CAP AND THEN
REDUCING THE NUMBER OF
ALLOWANCES IN THE SYSTEM EACH
YEAR ENSURES THAT WE REACH OUR
GREENHOUSE GAS REDUCTION GOALS.
EACH ALLOWANCE CORRESPONDS TO
ONE METRIC TON OF GREENHOUSE GAS
EMISSIONS. EACH ENTITY REGULATED
BY THE PROGRAM IS REQUIRED TO
SURRENDER ONE COMPLIANCE
INSTRUMENT FOR EACH TON OF GHG
GASSES. THEY EMIT EITHER AS AN
ALLOWANCE OR AN OFFSET AS THE
NUMBER OF AVAILABLE ANALYSIS
DECLINE. THIS SENDS A LONG TERM
PRICE SIGNAL TO REGULATING
ENTITIES, ENCOURAGING THEM TO
DECARBONIZE THEIR OPERATIONS. AS
FOR OFFSETS, THE STATUTE LIMITS
OFFSETS TO 4% OF AN ENTITY'S G
HÌ Dð EMISSIONS AND HALF OF
THOSE OFFSETS MUST PROVIDE
DIRECT ENVIRONMENTAL BENEFITS TO
CALIFORNIA. OFFSETS REPRESENT
VERIFIED G HÌ Dð EMISSIONS
REDUCTIONS. PROJECTS THAT FOLLOW
STRICT REQUIREMENTS IN SECTORS
AND SOURCES NOT COVERED BY THE
CAP AND TRADE PROGRAM. THE
PROCEEDS FROM THE SALE OF STATE
OWNED ALLOWANCES FUND CALIFORNIA
CLIMATE INVESTMENTS, THE
GREENHOUSE GAS REDUCTION FUND,
OTHERWISE KNOWN AS GGRF. CAP AND
TRADE AUCTION. PROCEEDS ARE
APPROPRIATED BY THE LEGISLATURE,
NOT BY CAR TO A VARIETY OF
PROGRAMS OVER $26 BILLION HAS
BEEN RAISED BY THE CAP AND TRADE
PROGRAM TO DATE, AND MORE THAN
HALF OF THAT REVENUE HAS BEEN
DIRECTED TO PRIORITY COMMUNITIES
, EXCEEDING THE 50% REQUIRED BY
STATUTE. THESE FUNDING. THESE
FUNDS ARE THE ONLY SOURCE OF
SUSTAINED INVESTMENT FOR
CRITICAL PROGRAMS BENEFITING
PRIORITY COMMUNITIES. THESE
FUNDS HAVE HELPED WEATHERIZE LOW
INCOME HOMES, EXPAND CLEAN
PUBLIC TRANSPORTATION, PROVIDE
REBATES FOR ELECTRIC VEHICLE
DEPLOYMENT AND PRESERVE AND
RESTORE PUBLIC LANDS. THE OVER
567,000 PROJECTS THAT HAVE BEEN
FUNDED SO FAR HAVE REDUCED AN
ESTIMATED 78.6 MILLION METRIC
TONS OF GHG EMISSIONS. THE CAP
AND TRADE PROGRAM WAS FIRST
ADOPTED BY THE BOARD IN 2011 AND
HAS BEEN AMENDED EIGHT TIMES
OVER THE PAST 13 YEARS,
REFLECTING LEGISLATIVE DIRECTION
, THE LATEST DATA AND
IMPLEMENTATION EXPERIENCE. THE
CURRENT PROGRAM REFLECTS
LEGISLATIVE DIRECTION PURSUANT
TO A B THREE 98, WHICH ADDED A
PRICE CEILING TO MANAGE COSTS.
REDUCE THE COMPLIANCE OFFSET
USAGE LIMIT TO 4% WITH AS I
MENTIONED HALF OF THOSE OFFSETS
PROVIDING DIRECT ENVIRONMENTAL
BENEFITS AND ADDRESS GHG LINKAGE
CONCERNS BY DIRECTING CAR TO
TREAT ALL COVERED INDUSTRY AS
HIGH RISK FOR LEAKAGE WHEN
DISTRIBUTING FREE ALLOWANCES.
WE'RE CURRENTLY ENGAGING IN A
PUBLIC DECISION MAKING PROCESS
TO UPDATE THE CAP AND TRADE
PROGRAM TO ALIGN IT WITH THE
AMBITION REFLECTED IN THE 2022
SCOPING PLAN. THE MOST IMPORTANT
CHANGE TO THE REGULATION WE ARE
CONSIDERING IS REMOVING
ALLOWANCES THROUGH 2030. WE
ANALYZED SEVERAL DIFFERENT
SCENARIOS FOR DOING THAT ONE
SCENARIO IS TO ALIGN WITH THE
LATEST INVENTORY UPDATE FOR THE
S¼ B 32 40% TARGET BY 2030. BUT
WE'RE ALSO EVALUATING THE
REMOVAL OF ADDITIONAL ALLOWANCES
TO ALIGN WITH A 48% REDUCTION,
AS CALLED FOR IN THE SCOPING
PLAN TO ACHIEVE OUR 2045 CARBON
NEUTRALITY GOAL. AND WE ARE
CONSIDERING A 55% REDUCTION
TARGET TO EVALUATE INCREASED
AMBITION. AS PART OF THESE
DISCUSSIONS, QUESTIONS HAVE BEEN
RAISED ABOUT THE APPROXIMATELY
5% BANKED OR UNUSED ALLOWANCES
IN THE PROGRAM BEING HELD BY
PRIVATE COMPANIES. EVALUATING
THIS WILL BE PART OF THE RULE
MAKING AND IT WILL BE CONSIDERED
AS PART OF THE FORTHCOMING
TECHNICAL WORK AND IN THE PUBLIC
WORKSHOPS WE'VE BEEN ENGAGED IN.
AT THIS TIME. WE ARE NOT
CURRENTLY ANTICIPATING CHANGES
TO THE OFFSET PROGRAM. UM
OBVIOUSLY, COMPLIANCE. OFFSETS
ARE ONE OF THE KEY LEVERS CARB
HAS AVAILABLE TO HELP MANAGE
COSTS FROM THE PROGRAM WHILE
ALSO DIRECTING PRIVATE FUNDING
TO ACTIONS SUCH AS SUSTAINABLE
FOREST MANAGEMENT AND
DESTRUCTION OF HIGH GLOBAL
WARMING POTENTIAL GASSES. SO
BEFORE I CLOSE, I JUST WANTED TO
SHARE A FEW THOUGHTS REGARDING
THE CAP AND TRADE PROGRAM AND
THE FUTURE OF OUR CLIMATE
PROGRAM MORE GENERALLY. FOR CAP
AND TRADE. WE MUST KEEP IN MIND
THAT MAKING A CHANGE TO JUST ONE
FEATURE OF A CAREFULLY
CONSTRUCTED MARKET PROGRAM WILL
IMPACT THE REST OF THE PROGRAM.
SO AS WE'RE CONSIDERING, UH,
DESIGN FEATURES IN OUR
REGULATORY WORK, WE HAVE TO KEEP
IN MIND THAT NÓ DESIGN FEATURE
CAN BE CONSIDERED IN ISOLATION
AND WE MUST KEEP IN MIND THE
CONTEXT THAT WE NEED A MORE
STRINGENT PROGRAM FOR THE REST
OF THIS DECADE AND BEYOND.
DURING THE DEVELOPMENT OF CAP
AND TRADE. THERE WERE MANY
PREDICTIONS THAT IT WOULD RUIN
OUR STATE'S ECONOMY, BUT WE HAVE
ACHIEVED OUR 2020 G HÌ G
EMISSION GOALS SIX YEARS EARLY
IN AN ERA OF SUSTAINED ECONOMIC
GROWTH. SO WHILE WE KNOW THAT
THE MARKET WILL HAVE TO TIGHTEN
A B THREE 198 MAKES IT CLEAR
THAT WE ARE STATUTORILY REQUIRED
TO FIND THE MOST COST EFFECTIVE
SOLUTION TO OUR CLIMATE GOALS.
AND SO WE WANT TO AVOID
CONSIDERING HIGH PRICES JUST FOR
THE SAKE OF HIGH PRICES AND
REALLY THINK ABOUT HOW THE
PROGRAM FUNCTIONS AS A WHOLE. WE
ARE ENTERING A PERIOD OF
TRANSITION TO ZERO EMISSIONS IN
ALL SECTORS. THIS TRANSITION
REQUIRES NOTHING LESS THAN AN
UNPRECEDENTED TRANSFORMATION IN
OUR BUILT ENVIRONMENT AND IN OUR
TRANSPORTATION SYSTEM. AND THIS
TRANSFORMATION DEPENDS HEAVILY
ON IMPLEMENTATION ACROSS
MULTIPLE AGENCIES AND MULTIPLE
LEVELS OF GOVERNMENT. WE NEED
KEY CLIMATE INFRASTRUCTURE
DEPLOYMENT TO ACCELERATE. SO
THAT DELIVERY OF EVERYTHING FROM
LIGHT RAIL LINES TO UTILITY
SCALE BATTERY PROJECTS TO
INNOVATIVE CARBON STORAGE
FACILITIES IS IN PLACE WHEN WE
NEED IT. WE NEED CONTINUED
PARTNERSHIP WITH THE FEDERAL
GOVERNMENT IN THE FORM OF THE
WAIVER APPROVALS I MENTIONED
EARLIER. ALL OF THIS WORK IS
GONNA BE MORE CHALLENGING AND
MORE COMPLEX THAN WHAT WE HAVE
DONE THUS FAR. THIS REQUIRES
CAREFUL MANAGEMENT, NOT JUST AT
CARB AND AT THE LEGISLATURE. BUT
AMONGST OTHER STATE AGENCIES
AMONGST LOCAL AND REGIONAL
GOVERNMENTS THROUGHOUT THE
STATE. TO SAFEGUARD OUR MOST
VULNERABLE COMMUNITIES AND GROW
OUR ECONOMY. BUT WE ALSO KNOW
THAT WE NEED TO HAVE A MORE
COMPLETE AND DETAILED ANALYSIS
OF THE COST OF INACTION. THE
COSTS OF CLIMATE ACTION ARE
KNOWN AND SPECIFIC BUT TOO
FREQUENTLY. THE COST OF INACTION
ARE INCOMPLETE AND
UNACKNOWLEDGED. IT NEEDS TO BE
CLEAR THAT OUR CHOICES ARE NOT
BETWEEN DOING NOTHING. OR PAYING
FOR CLIMATE ACTION. BUT BETWEEN
PAYING FOR CLIMATE ACTION NOW OR
PAYING DEARLY FOR CLIMATE
INACTION. IN TERMS NOT JUST OF
ECONOMIC IMPACTS, BUT IN TERMS
OF LIVES AND LIVELIHOODS.
CALIFORNIA IS KNOWN FOR ITS
INNOVATION FOR ITS DETERMINATION
TO REACH FOR THINGS BEYOND THE
HORIZON. AND THAT SPIRIT LIVES
ON. AND THAT IS WHAT IS GOING TO
GET US TO THE CARBON NEUTRAL
FUTURE. SO THANK YOU AND HAPPY
TO ANSWER ANY QUESTIONS. OK
THANK YOU, MADAM CHAIR. YEAH,
LET'S GO. LET'S TAKE SOME MEMBER
QUESTIONS, AND WE'LL COME BACK.
SO START WITH SENATOR BLAKE
SPEAR AND ANYONE ELSE YOU WANT
ONE? WELL THANK YOU VERY MUCH.
I. I VERY MUCH APPRECIATE YOUR
COMMENTS AND THANK YOU FOR BEING
HERE TODAY. UM, I WAS LISTENING
VERY CLOSELY TO WHAT YOU WERE
SAYING. AND ONE OF THE THINGS
THAT YOU MENTIONED WAS THAT
THERE ARE THREE DIFFERENT
APPROACHES, AND ONE OF THEM IS
REDUCING VEHICLE MILES TRAVELED
AND I WANTED I'M WONDERING IF IN
YOUR ROLE AS CHAIR OF CARB IF
YOU MIGHT REFLECT ON WHAT WE
COULD DO BETTER TO INVEST IN
TRANSIT TO REDUCE VÆ M Tð. AND
WHEN I SAY INVEST, I MEAN NOT
JUST INVEST MONEY BUT ALSO
INVEST ATTENTION BECAUSE IT
SEEMS TO ME THAT THE WAY THINGS
CURRENTLY WORK IS THAT CARBS SET
CERTAIN STANDARDS THAT THEN N P
, S¼ AND TRANSIT AGENCIES ARE
REQUIRED TO SUBMIT PLANS THAT
COMPLY WITH THOSE STANDARDS. BUT
THEN IT'S UP TO LOCALS, LOCAL
AGENCIES AND SOMETIMES VERY
HYPERLOCAL PAROCHIAL INTERESTS,
WHETHER THEY RAISE SALES TAX TO
FUND EXPANSIONS, OR EVEN JUST
FUNDING OF TRANSIT OR FIXED RAIL
AND THAT THOSE DECISIONS ARE
THEN PUSHED DOWN TO A LEVEL AT
WHICH THE INVESTMENTS ARE NOT
STATEWIDE OR REGIONAL REGIONAL.
ABOUT HOW DO PEOPLE ACTUALLY
MOVE AROUND THE STATE? BECAUSE
VÆ M Tð IS NOT ACTUALLY GOING
DOWN RIGHT NOW, AND IT'S UM IT
IS CONCERNING TO ME THAT WE THAT
WE HAVE UNDER INVESTED OUR
ATTENTION IN THIS AND SO I'M
WONDERING ABOUT YOUR REFLECTIONS
ON THAT. AND IF YOU HAVE ANY
SUGGESTIONS FOR WHAT WE COULD
DO, GOING FORWARD UM BE MASS
TRAVEL IS ONE OF THE YOU KNOW
THE MOST DIFFICULT CHALLENGES
RIGHT? BECAUSE TO YOUR POINT IT
IS VERY, UM THERE'S A MANY
LEVELS OF GOVERNMENT THAT HAVE
TO MAKE THESE DECISIONS. UM SO I
GUESS I WOULD, UM I THINK I
WOULD SAY A COUPLE THINGS. FIRST
OF ALL, I THINK, UM, YOU KNOW,
AS YOU ALL ARE THINKING ABOUT
MAKING INVESTMENTS, UM YOU KNOW,
THINKING ABOUT THAT FUNDING
PIECE AND MAKING SURE THAT THE
STRATEGIES THAT YOU'RE FUNDING,
UM, ARE CONSISTENT WITH OVERALL
CLIMATE GOALS. UM IS KIND OF IS
A KEY STRATEGY AND SOME OF THOSE
SOME OF THOSE STRATEGIES CAN
REALLY COME FROM LOCAL
GOVERNMENTS THEMSELVES. UM, FOR
INSTANCE, UM THE FOUR LARGEST N
P Ó S¼ HAVE IDENTIFIED UM
VARIOUS ROAD PRICING STRATEGIES
IN THEIR SUSTAINABLE COMMUNITY
STRATEGIES. SO THAT'S AN EXAMPLE
WHERE THE MP Ó S¼ HAVE
IDENTIFIED A STRATEGY AND GIVING
THEM AND SUPPORTING THEIR
EFFORTS IN GETTING THEIR LOCAL
GOVERNMENT TO IMPLEMENT THOSE
STRATEGIES AND ENSURING THAT
THEY HAVE THE LEGISLATIVE
FLEXIBILITY, THE LEGAL
FLEXIBILITY TO DO THAT, UM, I
THINK IS A ROLE. UM THAT THE
LEGISLATURE COULD TAKE. UM THERE
IS LEGISLATIVE AUTHORITY TO
STUDY. UM ROAD PRICING. UM AND
THERE'S A PILOT PROGRAM. UM BUT
SORT OF THINKING ABOUT TAKING
THE NEXT STEP. THAT'S A STRATEGY
THAT COULD BE IDENTIFIED. UM
FINDING WAYS FOR LEGISLATURE TO
SUPPORT INCREASING INFILL
DEVELOPMENT INFILL HOUSING. UM,
THAT'S A, UH YOU KNOW, CLEAR VÆ
M Tð STRATEGY THAT AGAIN. MANY
LOCAL GOVERNMENTS ARE VERY
SUPPORTIVE OF AND THEY'RE JUST
LOOKING FOR HELP AND ASSISTANCE
AND AUTHORITY TO DO WHAT THEY
NEED TO DO. SO I THINK THOSE ARE
A COUPLE OF EXAMPLES. THANK YOU.
BUT SOME OF THEM ARE FRIEDMAN.
BM Tð ISSUE. IT'S WHAT I WAS,
UH, UM, INTERESTED IN IN TALKING
TO YOU ABOUT SO JUST TO FOLLOW
UP ON THAT QUESTION. I HAVE A
COUPLE OF QUESTIONS FIRST, IF WE
IF WE ARE NOT ABLE TO REDUCE VÆ
M Tð. IF WE CONTINUE THE TREND
LINE THAT WE HAVE NOW OF BM Tð
INCREASING. WHAT'S THE RISK?
WHAT'S THE IMPACT OF THAT GOING
TO BE IN YOUR MIND? WELL, THE
ONE OF THE BENEFITS OF THINKING
ABOUT REDUCTION IS THAT IT HAS G
HÌ Dð EMISSIONS. BENEFITS. UM
BUT IT ALSO HAS A LOT OF OTHER
BENEFITS AS WELL, RIGHT? MORE
SUSTAINABLE COMMUNITIES, UM,
MAKING PROVIDING AN OPPORTUNITY
FOR AFFORDABLE HOUSING WITH
MULTIMODAL CONNECTIONS TO JOBS
TO SERVICES. UM IT REDUCES THE
FRICTION OF DAILY LIFE AND IT IT
SUPPORT SUSTAINABLE COMMUNITIES
THAT FURTHER PUBLIC HEALTH. UM
AND THERE ARE SURVEYS SHOWING
THAT PEOPLE IN CALIFORNIA
UNDERSTAND THAT THEY NEED TO
DRIVE MORE, BUT THEY WOULD
PREFER NOT TO DRIVE MORE RIGHT.
LIKE THEY KNOW THAT THEY NEED TO
DRIVE TO GET TO THEIR JOBS. BUT
IF THEY IF YOU SAY IF YOU HAD,
YOU KNOW A DIFFERENT WAY. MOVE
AROUND YOUR COMMUNITY. WOULD YOU
TAKE IT? NOW OF COURSE, THE NEXT
STEP IS GETTING PEOPLE TO
ACTUALLY TAKE IT. UM AND I THINK
THAT'S AN IMPORTANT UM CHALLENGE
FOR THE LEGISLATURE AND FOR
TRANSIT AGENCIES IN TERMS OF
SUPPORTING THE LEVEL OF SERVICE
THAT PEOPLE WILL WANT AND NEED
TO USE TO TAKE PUBLIC TRANSIT.
UM BUT ALSO HAVING COMMUNITIES
THAT ARE MORE WALKABLE AND BIKE.
UM AND LOCATING SERVICES AND
HOUSING CLOSER TOGETHER AS A KEY
LAND USE STRATEGY. ALL OF THESE
ARE THINGS THAT WE IDENTIFIED IN
OUR SUSTAINABLE COMMUNITIES
CHAPTER IN THE SCOPING PLAN. AND
I THINK CONTINUING TO SUPPORT
THE EFFORTS OF COMMUNITIES TO
ACTUALLY IMPLEMENT THOSE
STRATEGIES COULD RESULT IN
BENEFITS BEYOND JUST GHG
EMISSIONS REDUCTIONS. SO I
APPRECIATE YOU BRINGING UP ALL
THE CO BENEFITS, BUT, UH, TABLE
2.1 OF THE SCOPING PLAN LAYS OUT
THE NEED FOR A REDUCTION OF VÆ M
Tð TO BE REDUCED BY 25% BELOW
2019 EFFORTS BY 2030 30% BELOW
2019 EFFORTS BY 2045. SO I AM
WONDERING WHAT THE IMPLICATIONS
ARE, IF YOU COULD SPELL OUT TO
OUR EMISSIONS NEEDS NOT TO THE
CO BENEFITS, BUT TO THE
EMISSIONS NEEDS IF WE CONTINUE
ON THE PATH THAT WE ARE
CURRENTLY ON OF INCREASING VÆ M
Tð RATHER THAN DECREASING IT.
WELL, IT THE CHALLENGE. IS THAT
WE NEED ALL OF OUR PROGRAMS TO
BE EFFECTIVE AND REDUCE
EMISSIONS AS LAID OUT IN THE
SCOPING PLAN AND THE AS ANY
PILLARS OF THE OVERALL STRATEGY
ARE UNSUCCESSFUL, THEN WE HAVE
THE POTENTIAL OF NOT MEETING OUR
TARGETS, SO WE NEED EACH PROGRAM
TO PERFORM. UM AS WELL AS OR
BETTER THAN IDENTIFIED IN THE
SCOPING PLAN IN ORDER TO ACHIEVE
OUR GOALS. SO DO YOU HAVE ANY
SPECIFIC THOUGHTS ABOUT WHAT
CHANGES WE CAN DO AT THE
LEGISLATIVE LEVEL BESIDES
FUNDING, BUT ACTUAL CHANGES YOU
YOU MADE A REFERENCE TO ONE OF
THE SENATOR BLAKESPEAR. UH, UH,
QUESTIONS TO BARRIERS TO, UM,
BEING ABLE TO REDUCE VÆ M Tð. SO
UH, DO YOU HAVE THOUGHTS ABOUT
SPECIFIC CHANGES THAT WE COULD
MAKE HERE THAT WOULD HELP REMOVE
BARRIERS AND HELP. YOU DID TALK
ABOUT CONGESTION PRICING, SO
THAT WAS ONE. DO YOU HAVE ANY
OTHER THOUGHTS ABOUT WAYS? WE
COULD BE HELPFUL TO THIS GOAL.
UM I THINK I MEAN, I. I THINK
THAT'S ONE WAY AND TO ME. THAT
IS THE ISSUE OF CONGESTION
PRICING THE ISSUE OF FINDING
WAYS TO ACCELERATE INFILL
DEVELOPMENT. THOSE ARE
STRATEGIES THAT MANY LOCAL
JURISDICTIONS SUPPORT AND HAVE
ASKED FOR AND I THINK SO. TO ME.
THE FIRST STEP IS IT'S REALLY
KIND OF A CONVERSATION WITH THE
WITH THE LOCAL JURISDICTIONS,
YOU KNOW WITH AT THE MP Ó
LEVEL, BUT ALSO AT, UM THE
INDIVIDUAL CITY LEVEL. UM ABOUT
WHAT WOULD BEST SUPPORT WHAT
THEY'RE TRYING TO ACHIEVE. AND
YOU KNOW WHEN WE SAW THAT
HAPPEN, UM WITH THE YOU KNOW
SOME OF THE ISSUES AROUND
GETTING HOUSING? UH NEAR, UH,
THE UNIVERSITY OF CALIFORNIA,
BERKELEY. RIGHT UM, WHERE THE
LEGISLATURE SAID, YOU KNOW, WE
UNDERSTAND THAT THAT THIS
HOUSING IS NECESSARY. AND UH,
AND IN THAT CASE THAT THAT
SPECIFIC PROJECT NEEDED TO MOVE
FORWARD UM SO I THINK, UH,
WORKING WITH LOCAL GOVERNMENT
AND IN AREAS WHERE LOCAL
GOVERNMENTS ARE NOT SUPPORTIVE
OF EM Tð REDUCTIONS THAN
LISTENING TO THE COMMUNITIES
RIGHT. THE COMMUNITIES HAVE A
LOT OF EXAMPLES OF AREAS WHERE
THEY FEEL THAT LOCAL GOVERNMENTS
HAVE NOT FULLY STEPPED UP, UM,
IN WAYS THAT REDUCE VÆ M Tð. UM
SO I THINK THEY ARE HAVE A
PROBABLY A BETTER SENSE OF THE
RIGHT SUGGESTIONS FOR SPECIFIC
ACTION THAN I DO. WELL I HOPE
THAT YOU'RE RIGHT ABOUT THE
LOCAL COMMUNITIES WANTING INFILL
, HOUSING AND DEVELOPMENT. I
THINK THE LEGISLATURES
EXPERIENCE HAS BEEN THAT IT
HASN'T ALWAYS BEEN A
CONVERSATION THAT LOCAL
GOVERNMENTS HAVE BEEN
PARTICULARLY RECEPTIVE TO, UM,
YOU KNOW, HENCE A LOT OF SOME OF
THE BIGGEST FIGHTS IN THE
LEGISLATURE IN MY EIGHT YEARS
HERE HAVE BEEN ABOUT EXACTLY
THAT, WITH LOCAL GOVERNMENTS
ACTUALLY BEING EXTREMELY
RESISTANT TO INFILL HOUSING. UM
YOU KNOW, ALMOST ACROSS THE
BOARD, SO THAT'S WHY I WAS
SAYING FOR YOU KNOW, WHEN LOCAL
GOVERNMENTS ARE BEING YOU KNOW,
NOT PARTICULARLY, UH, SUPPORTIVE
THAN I THINK COMMUNITY GROUPS
HAVE GOOD STRATEGY IDEAS. UM SO
YOU KNOW, I AM GLAD THAT WE'RE
FOCUSING A BIT ON BM Tð, BECAUSE
, UH, I THINK THE SCOPING PLAN
DOES POINT OUT AND AS YOU SAY
WITHOUT THE SCOPING PLAN SEEMS
TO PUT A LOT OF WEIGHT ON VÆ M
Tð REDUCTIONS AS PART OF OUR
EMISSIONS STRATEGY, AND AS WE
HAVE SEEN WITH ELECTRIFICATION
OF VEHICLES THAT IN SOME, YOU
KNOW, IT'S A LITTLE SPOTTY,
RIGHT? I MEAN, WE'RE SEEING YOU.
WE'VE SEEN EBBS AND FLOWS IN THE
PUBLIC'S, UM, INTEREST IN ZERO
EMISSION VEHICLES. WE CANNOT
COUNT ON THAT THAT TRANSITION IS
NOT GOING TO HAPPEN VERY
QUICKLY. THE BM Tð REDUCTIONS
ARE EXTREMELY IMPORTANT IN THE
SCOPING PLAN, BUT IT'S HARD TO
SEE THE CONNECTION. IT SEEMS
VERY ASPIRATIONAL WITHOUT HAVING
THE AS MUCH WEIGHT OF REGULATION
OR A VERY CLEAR STRATEGY AS TO
HOW WE GET THESE VÆ M Tð
REDUCTIONS AND THAT'S MY CONCERN
IS THAT I THINK THAT THE
LEGISLATURE AND ALL AND ALL OF
THE AGENCIES NEED TO HAVE A VERY
CLEAR, UH, A ROAD MAP FOR HOW WE
ACHIEVE THESE VÆ M Tð REDUCTIONS
YEAR BY YEAR. UM I DON'T THINK
IT'S ENOUGH TO JUST THROW OUT.
WE WANT TO REDUCE VÆ M Tð WHEN
WE SEE A TREND LINE MOVING IN
THE OPPOSITE DIRECTION WITHOUT
REALLY KNOWING HOW DO WE GET
THESE REDUCTIONS YEAR AFTER
YEAR? WHAT DOES THAT LOOK LIKE?
AND HOW DO WE GUARANTEE WE DO
THAT? OTHERWISE THE SCOPING PLAN
IS ASPIRATIONAL WITHOUT YOU
KNOW, WE REALLY DON'T KNOW AS
FAR AS FAR AS I'M CONCERNED, YOU
KNOW, I'VE BEEN WORKING ON TWO
BILLS ON THIS THAT ARE NOW ON
THE SENATE SIDE. UH, A B SIX AND
A B, SEVEN THAT ARE LOOKING TO
TRY TO, UH, HELP WITH SOME OF
THAT ROAD MAPPING. UH, I WOULD
CERTAINLY LOVE FOR STAKEHOLDERS
TO COME AND HELP US WITH ALL THE
STAKEHOLDERS. YOU KNOW, WE WANT
TO DO THIS IN A WAY THAT THAT
EVERYONE IS COMFORTABLE WITH OR
WHO ARE MAJORLY INVESTED IN THIS
SPACE, WHETHER IT'S OUR FRIENDS
AND LABOR, WHETHER IT'S CARB.
WHETHER IT'S OUR LOCAL
GOVERNMENTS. WE WANT EVERYONE AT
THE TABLE BECAUSE WE'RE ALL
GOING TO HAVE TO BE ROWING IN
THE SAME DIRECTION OR THIS IS
ALL JUST GONNA IT'S JUST NOT
GONNA WORK. AND IF WE REALLY
COMMITTED TO THESE G HÌ Dð
REDUCTIONS AND TO SETTING THAT
STANDARD PLUS TO ALL THE CO
BENEFITS YOU MENTIONED THAT ARE
EXTREMELY REAL AND VERY, VERY
IMPORTANT TO EVERYBODY'S QUALITY
OF LIFE, NOT TO MENTION TO OUR
ABILITY TO PUT ROOFS OVER
EVERYBODY'S HEADS. BECAUSE I'M
I'M YOU RIGHTFULLY POINTED OUT
THE CONNECTION BETWEEN HOUSING
AND TRANSPORTATION POLICIES THAT
AREN'T ALWAYS SO OBVIOUS. AND
EQUITY IN PUBLIC HEALTH AND
EVERYTHING ELSE YOU KNOW, WE
COULD HAVE SUCH A BETTER FUTURE
IF WE'RE ALL ON THE SAME PAGE
ABOUT THIS, SO I WOULD LOVE TO
HAVE HELP WITH WITH THAT
LEGISLATION. I'M CERTAINLY
WILLING TO HELP WITH ANYONE ELSE
WHO'S WORKING ON THIS? UM I. I
ALSO WANT TO MAKE SURE THAT THE
STATE IS INVESTED IN PROGRAMS
LIKE REAP 2.0 THAT WILL FUND
THOSE INVESTMENTS IN AFFORDABLE
HOUSING AND TRANSIT AND EXISTING
COMMUNITIES RATHER THAN TRYING
TO FURTHER YOU KNOW, SPRAWL. UM,
YOU KNOW, THAT'S VERY IMPORTANT
TO COMMUNITIES, AND THEY ARE
VERY WORRIED ABOUT THE CLAWBACKS
TO A LOT OF THOSE TRANSIT
PROGRAMS AND THE FUNDING SOURCES
. SO I REALLY APPRECIATE YOU
HERE. I'M REALLY APPRECIATE THE
CHAIR. I'M BEGINNING THESE
CONVERSATIONS AND THANKS. THANK
YOU. I'LL JUST PUT A LITTLE
FINER POINT AND THEN MOVE OVER.
UM I THINK TO SENATOR AND THE
ASSEMBLY MEMBERS POINTS, IF
THOSE IF THOSE EMISSIONS
REDUCTIONS DON'T SHOW UP,
THERE'S GONNA BE PRESSURE ON THE
OTHER PROGRAMS. TO HIT OUR
TARGET, SO SAY WE HAVE A 48%
ADOPT ARE MIDTERM PATH FOR 2030,
THOSE S¼ GO UP AND NOT DOWN
PROGRAMS LIKE CAP AND TRADE OR
OTHER SOURCES BECOME EVEN MORE
CENTRAL. IS THAT FAIR TO SAY?
YEAH. OK AND, YEAH, WE'LL WE'LL
GET INTO THE SOME OF THE OTHER
SORT OF BIG PROMISES THAT WHAT
HAPPENS IF THEY DON'T GET MET? I
KNOW THAT THERE'S A YOU KNOW THE
SCOPING PLAN CONTEMPLATES. LET'S
SEE IF I ADD IT ALL UP. ALMOST A
BILLION TONS. UM 920 MILLION
TONS OF ABATEMENT FROM THINGS
LIKE, UH, BIOMASS WITH èC èC
S¼ DIRECTOR CAPTURE AGAIN IF
THOSE DON'T SHOW UP IN THE IN
THE NEAR TERM THAT ALSO PUTS
MORE PRESSURE ON CAP AND TRADE
OR OTHER SORT OF PARTS OF THE
PROGRAM. I MEAN, HOW WOULD YOU
CHARACTERIZE LIKE VÆ M Tð S¼,
BUT THEN THESE OTHER THINGS,
TOO. IF THEY DON'T SHOW UP WITH
THE SAME QUANTITY THAT IS
PREDICATED ON IN THE SCOPING
PLAN. WHAT DOES THAT DO TO THE
RIGHT? I MEAN, YOU KNOW, THE
BOTTOM LINE IS WE'VE FREQUENTLY
IN THE ADMINISTRATION CALL THIS
THE ERA OF IMPLEMENTATION, AND
THAT'S ABSOLUTELY TRUE, RIGHT? I
MEAN, THE SCOPING PLAN LAYS OUT
STRATEGIES. AND LAYS OUT A WAY
TO GET THERE. BUT WE NEED TO
MAKE SURE THAT THE ENERGY THAT
NEEDS TO POWER ALL OF THOSE
STRATEGIES HAPPENS. WE NEED TO
MAKE SURE THAT ALL OF THE
DEPLOYMENT ANTICIPATED. UM YOU
KNOW, DEPLOYING HEAT PUMPS IN
HOMES. UM REDUCING VEHICLE MILES
TRAVELED, DEPLOYING èC èC S¼,
UM, DEPLOYING DIRECT AIR CAPTURE
THAT YOU MEAN THERE ARE
OPPORTUNITIES TO REDUCE
EMISSIONS? IF WE DEPLOY AT THE
SCALE THAT IS IDENTIFIED IN THE
SCOPING PLAN. UM ALAN, DID YOU
HAVE A COMMENT? QUESTION? WELL,
SO COUPLE OF DIFFERENT THINGS.
FIRST OF ALL, I WAS REALLY
INTRIGUED BY, UM THIS
CONVERSATION THAT MICHAEL WAA
AND HIS FOLKS FROM STANFORD
BROUGHT UP WITH REGARDS TO
LOOKING AT L, èC, F, S¼ AND CAP
AND TRADE. UM BASICALLY
CONSIDERING THE FINAL CHANGES TO
THOSE TWO SIDE BY SIDE BECAUSE
THEY BOTH IMPACT FUEL PRICES AND
UM, I. I WANTED TO SEE IF YOU
HAD ANY COMMENTS ON THAT. AND
THEN I'D LIKE TO ASK YOU ABOUT
SOMETHING ELSE. UM, I THINK AS
WE LOOK AT THESE PROGRAMS, UM
THERE ARE THERE IS AN
OPPORTUNITY TO PARTICULARLY WITH
L èC F S¼. TO REDUCE SORT OF
THE OVERALL, UM, KIND OF COST
BURDEN, UM, FOR MOVING AROUND IF
WE DO IT, RIGHT. YOU KNOW IF WE
SUPPORT TRANSITION TO CLEANER
FUELS AND AWAY FROM USING FOSSIL
FUELS. UM AND THAT'S WHAT WE'RE
REALLY THAT'S WHAT WE'RE REALLY
TRYING TO DO WITH L, èC, F S¼
AND OUR ENERGY PROGRAMS. UM SO I
SEE SOME HUGE OPPORTUNITIES. UM
AND I THINK WE ARE AS WE'RE
WORKING THROUGH THIS INCREDIBLY
DETAILED REGULATORY PROCESS. UM,
I THINK BY THE TIME WE ARE, WE
ARE FINISHED. WE WILL COME UP
WITH A PROGRAM. UM, THAT RESULTS
IN TRANSPORTATION THAT IS
CLEANER AND ULTIMATELY MORE COST
EFFECTIVE. RELYING ON FOSSIL
FUELS IS NÓ IS NÓ WAY TO MAKE
PEOPLE'S COSTS MORE PREDICTABLE
AND MORE SUSTAINABLE. SO YOU
KNOW THESE PROGRAMS REALLY HAVE
THE OPPORTUNITY TO MOVE US IN
THE RIGHT DIRECTION. BUT DO YOU
SEE SO, AND PRESUMABLY YOU,
DON'T YOU? YOU DON'T SEE THE UL
èC F S¼ WORK AND YOUR CAP AND
TRADE WORK IN SILOS. I. I
UNDERSTAND THERE. SEPARATELY
AUTHORIZED. BUT HOW DO THE
INTERPLAY WITH YOUR THE
PERSPECTIVE AS TRYING TO ANALYZE
UM I GUESS I SEE I GUESS I SEE
ALL OF OUR PROGRAMS EXTREMELY
INTERRELATED TO SOME DEGREE,
RIGHT? UM LIKE, FOR INSTANCE, L
èC F S¼ IS, UH, AS WE ARE
RESTRUCTURING IT AS WE ARE
CONSIDERING THE LEVEL OF
STRINGENCY. IT PROVIDES
FINANCIAL SUPPORT FOR ZERO
EMISSION. INFRASTRUCTURE. WHICH
THEN? HELPS TO REDUCE COSTS FOR
UTILITIES AND OTHER AND
COMPANIES THAT ARE TRYING TO
DEPLOY THAT ZERO EMISSION
INFRASTRUCTURE. RIGHT SO THE YOU
KNOW, THESE PROGRAMS HAVE A WAY
OF BUILDING ON THEIR ON THE
BENEFITS. UM, THAT CAN
ULTIMATELY, UM LESSEN THE
BURDEN. OK, UM I WANT TO JUST
ASK A LITTLE BIT ABOUT, UM YOU
KNOW, WE'RE OBVIOUSLY PART OF
WHY WE'RE HAVING ALL THESE
HEARINGS THIS YEAR IS BECAUSE WE
KNOW THAT YOU KNOW THE PROGRAM
IS EXPIRING. WE'RE TRYING TO
FIGURE OUT WHAT REAUTHORIZATION
OUGHT TO LOOK LIKE. AND WHAT
SORT OF, UM WHAT, WHAT WE OUGHT
TO LEARN FROM YOU KNOW THE PAST
AND WHERE WE WANT TO GO, SO I'M
YOU KNOW? I THINK IT'S MY SENSE.
AND I KNOW I KNOW THE CHAIR
FEELS THIS WAY. YOU KNOW THE
DEAL STRUCK IN THE LEGISLATURE
FOR THE LAST CAP AND TRADE
REAUTHORIZATION ENDED UP BEING
FAIRLY PRESCRIPTIVE. IN SOME
WAYS FOR EVERYONE OVER A CAR. UM
AND I. I WAS WONDERING ABOUT
WHETHER YOU MIGHT BE WILLING TO
SPEAK TO SOME OF THOSE DECISIONS
MADE BY THE LEGISLATURE AND HOW
YOU FEEL THAT THEY'RE FARING
TODAY, YOU KNOW, SPECIFICALLY
THE DESIGNATED LIMIT. UM, LIMITS
ON OFFSETS, UM, THE DECISION OF
HOW TO TREAT INDUSTRY.
ASSISTANCE FACTORS. YOU KNOW, I.
I KNOW LEAKAGE IS A VERY REAL
RISK. AND WE DON'T WANT TO DRIVE
ALL BUSINESS OUT OF CALIFORNIA,
OF COURSE. AND I. I VERY MUCH
APPRECIATE ALL THAT, UM UH UH,
YOU KNOW THAT YOU THAT YOU'RE
THAT YOU'RE DOING ON ON THAT, UH
, YOU KNOW THE CONSIDERATIONS
THAT ARE THAT ARE PART OF YOUR
ANALYSIS TO ENSURE THAT WE HAVE
A ROBUST BUSINESS CLIMATE. UM
BUT, YOU KNOW, I GUESS JUST HOW
MUCH OF OUR TOTAL ALLOWANCE
BUDGET GOES TO FREE. UH,
ALLOCATIONS TO, YOU KNOW, KEEP
POLLUTING INDUSTRIES OPERATING
WITHIN THE STATE, AND, UM YOU
KNOW, UNDERSTANDING. THESE
WEREN'T ALL DECISIONS THAT WERE
MADE BY CAR. YOU KNOW? HOW DO
YOU FEEL ABOUT HOW THEY IMPACT
OUR OUR ABILITY TO HIT OUR GOALS
AND PROVIDE BENEFITS TO
CALIFORNIANS? I I YEAH. II I
WANT I LIKE I JUST SAID YOUR
THOUGHTS ON ON. THE SYSTEM THAT
YOU'VE BEEN HANDED AND WHERE WE
GO. UM, BECAUSE WE'RE I THINK,
REALLY TRYING TO GO THROUGH AN
EVALUATION OF UH, OF THESE
QUESTIONS AS WE'RE AS WE'RE
CONSIDERING REAUTHORIZATION.
WELL YOU KNOW, I COME FROM THE
PERSPECTIVE OF HAVING SPENT THE
LAST THREE YEARS. KIND OF, YOU
KNOW, WATCHING THIS PROGRAM.
FUNCTION AND HOW IT'S
IMPLEMENTED. UM AND I, AND I
THINK THE STRUCTURE THAT THE
LEGISLATURE ENDED UP WITH, UM I
THINK HAS WORKED. WELL, UM AND
SOME OF THE DECISIONS THAT WERE
MADE. AT THE TIME. I FEEL LIKE
TO MY MIND HAVE ADDRESSED SOME
OF THE CONCERNS, RIGHT? I MEAN,
THE FACT THAT THERE'S A VERY
CLEAR SORT OF YOU KNOW? THAT
SAYS WE'RE GOING TO HAVE
OFFSETS, BUT ONLY TO A CERTAIN
LEVEL. I THINK THAT'S WORKED.
WELL, UM UH, AND SO I THINK
OVERALL, THE STRUCTURE OF THE
PROGRAM AS I WAS SORT OF
MENTIONING IN MY REMARKS. IT ALL
KIND OF HAS TO FIT TOGETHER IN A
WAY THAT INCENTIVIZES COMPANIES
TO REDUCE THEIR EMISSIONS.
RECOGNIZES THAT IT'S SOMETIMES
VERY CHALLENGING FOR THEM TO DO
THAT, UM, YOU KNOW, SOMETIMES
WHEN I TALK TO FACILITY
OPERATORS IN OTHER PARTS OF THE
STATE, UM, THAT HAVE VERY
SPECIFIC. PROCESSES TO DO WHAT
THEY'RE DOING AS PART OF THEIR,
YOU KNOW. STEEL PRODUCTION OR
MANUFACTURING, OR, YOU KNOW,
PROCESSING. THERE IT THE
CONVERSATION IS USUALLY UH,
SHARING THE EFFORTS THE
TECHNICAL EFFORTS THEY HAVE
UNDERTAKEN TO IMPROVE THEIR
EFFICIENCY AS MUCH AS POSSIBLE.
UM AND A RECOGNITION THAT THE
GOAL IS TO REDUCE THOSE
EMISSIONS. AS MUCH AS THEY CAN.
AT THE SITE. UM AND THEN AN
APPRECIATION FOR THE FACT THAT
THEY RECOGNIZE THAT FOR SOME OF
THESE FACILITIES, THEY DON'T YET
HAVE A PATH TO ZERO. AND I THINK
THE STATE IS DOING AS MUCH AS IT
CAN, AND WE CAN DO MORE IN TERMS
OF HELPING IDENTIFY SOME OF
THOSE TECHNOLOGICAL PATHS TO
ZERO OR TO CAPTURING THE
EMISSIONS THAT ARE THERE. UM BUT
I THINK OVERALL, THE, UH,
LEGISLATION HAS FUNCTIONED WELL
TO PUSH COMPANIES TO EITHER. UM
REDUCE THEIR EMISSIONS AS MUCH
AS POSSIBLE, AND ALSO THINK
ABOUT HOW THEY'RE INVESTING IN
THE FUTURE AND HOW THEY ARE.
POSITIONING THEMSELVES AND
ACQUIRING THE ALLOWANCES. THEY
NEED TO CONTINUE. UM TO DO THE
WORK THAT THEY NEED TO DO. UM
AND UH, RECOGNIZE THAT THEY NEED
TO BE THAT THAT CAP IS GONNA
CONTINUE TO DECREASE. UM AND
THEY ARE GOING TO NEED TO EITHER
HAVE THE ALLOWANCES OR MAKE THE
REDUCTIONS. UM TO GET TO MEET
THE GOALS IN THE STATUTE. AND OF
THE CONCERN THAT WE WE'VE
CREATED FAR TOO MANY ALLOWANCES.
WELL I MEAN, THAT'S THE THAT'S
THE REGULATORY CONVERSATION
WE'RE HAVING. I MEAN, THE I
THINK, AS AS I'VE DISCUSSED
BEFORE THE ALLOWANCES. HELP
SMOOTH OUT. ACTION AS WE IF WE
WANT TO INCREASE AMBITION
TOWARDS 2030. THOSE BANKED
ALLOWANCES CAN BE PART OF THAT
STRATEGY IN TERMS OF SMOOTHING
OUT PRICE SPIKES, AS WE THINK
ABOUT PAST 2030 WHAT THE PROGRAM
LOOKS LIKE AGAIN. THOSE
ALLOWANCES CAN SORT OF HELP
COMPANIES PLAN, UM AND FIGURE
OUT THEIR TRAJECTORY GOING
FORWARD. WHICH I THINK IS THE IS
THE INTENT OF HAVING THAT LEVEL
OF FLEXIBILITY IN THE PROGRAM.
YEAH. UM OBVIOUSLY IT HAS BEEN
SUBJECT TO A LOT OF CRITICISM.
AND BUT AND I'M SURE WE'LL TALK
ABOUT IT AT THE NEXT PANEL. UM
I, I KNOW THIS ISN'T DIRECTLY IN
YOUR BILLY WICK, BUT THERE TO
THE EXTENT THAT IT'S DIRECTLY
CONNECTED THE JUST YOU ANY
COMMENTS OR THOUGHTS ABOUT THE
CONTINUOUS APPROPRIATION SIDE OF
THIS AS BECAUSE THAT'S ALSO
GONNA BE PART OF THE
CONVERSATION? UM ONE OF THE
THINGS WE TALKED ABOUT THE LAST
HEARING WAS THE WASHINGTON
MODEL. UM YOU KNOW, NOT PERFECT,
BUT CERTAINLY SOME THINGS WE CAN
LEARN FROM UM, YOU KNOW, HOW DO
WE? YOU KNOW, I. I KNOW THAT YOU
YOU KNOW YOU IT'S PART OF YOUR
MISSION TO ENSURE THAT THE WORK
YOU DO IS REALLY RESULTING IN
TANGIBLE BENEFITS FOR REGULAR
FOLKS. UH, OBVIOUSLY, THE YOU
KNOW, THE GGRF IS ALSO HAS TO
HAVE THAT MISSION AND GOAL AND,
UM HO, HOW HOW, HOW WOULD WHAT?
WHAT ARE SOME THINGS THAT YOU
WOULD LIKE US TO BE CONSIDERING,
AS WE THINK ABOUT THE FUTURE OF
THE GR F AS WELL, UNDERSTANDING
THAT IT'S YOU KNOW? NOT UNDER
YOUR DIRECT CONTROL, BUT
CERTAINLY VERY CLOSE TO IT. YOU
YOUR YOUR WORK. YEAH, UM. I
GUESS I WOULD SAY AT A HIGH
LEVEL THAT TO ME ONE OF THE
GREATEST BENEFITS OF THE G GRF
HAS BEEN ABLE HAS BEEN THE
ABILITY TO FUND COMMUNITY P
PROGRAMS LIKE COMMUNITY FOCUSED
PROGRAMS. IN MANY INSTANCES,
THOSE PROGRAMS ARE, UM
STRUCTURED, YOU KNOW. STARTING
FROM WITH COMMUNITY PROPOSALS,
RIGHT? AND I THINK THE CHALLENGE
IS OF THOSE PROGRAMS IS THAT
THEY ARE SORT OF EVERY YEAR.
THERE'S A CONVERSATION ABOUT
THEM, RIGHT? YOU KNOW, EVERY
YEAR, UH, WE HAVE TO THINK ABOUT
YOU ALL HAVE TO THINK ABOUT HOW
UM PROGRAMS LIKE CLEAN MOBILITY
OPTIONS, FOR INSTANCE, IS
FUNDED. UM AND I THINK THAT'S
SOMETHING THAT YOU ALL SHOULD
KEEP IN MIND AS YOU'RE THINKING
ABOUT THE NEXT ITERATION OF
GGRF. UM IT IS. AS WE ADMINISTER
THESE PROGRAMS. IT IS THE WHOLE
STOP AND START OF THEM IS REALLY
HARD. UM AS AIR DISTRICTS OR,
UM, COMMUNITY GROUPS OR OTHERS
THAT ARE ARE RECEIVING THESE
FUNDS AND ARE USING THESE FUNDS
TO HELP COMMUNITIES EVERY DAY.
UM, IT IS CHALLENGING FOR THEM.
TO UM HAVE SUCH A SHORT LINE OF
SIGHT, UM ON THE FUTURE OF THESE
PROGRAMS, SO I JUST THINK THAT'S
SOMETHING THAT YOU ALL SHOULD
KEEP IN MIND AS YOU'RE THINKING
ABOUT GGRF BECAUSE TO ME THAT,
UM 50% YOU KNOW, AT LEAST 50%
TO, UM, DISADVANTAGE IN LOW
INCOME COMMUNITIES, I THINK IS,
UM, IS AN IMPORTANT HALLMARK OF
THE PROGRAM. UM AND I THINK
THERE ARE WAYS THAT CAN GIVE
COMMUNITIES MORE CONFIDENCE THAT
THOSE FUNDS WILL BE AVAILABLE.
OK? YEAH JUST, UH, I KNOW WE
WANNA GO OVER THERE SOME MARSI,
BUT JUST QUICK POINT. I THINK
IT'S PROBABLY WORTH CLARIFYING
FOR THE RECORD. SO THE
ALLOCATION FORMULA THAT WE
LOCKED IN AS A LEGISLATURE,
ACTUALLY THAT GOVERNOR BROWN UM,
INSISTED ON WHEN WE WENT THROUGH
THIS LAST NEGOTIATION TO GIVE
FREE ALLOWANCES TO THE
INDUSTRIAL SECTOR OF BLINDFOLDED
AS TO LEAKAGE RISK. SETTING
ASIDE ANY OF YOUR ANALYSIS ABOUT
WHO'S BEEN MORE EFFICIENT, WHO'S
BEEN LESS WHAT THE BASELINE
OUGHT TO BE. WHO'S YOU KNOW
WHO'S WHO'S LEADING WHERE YOU
REALLY DON'T HAVE THOSE? THOSE
LEAKAGE EXPOSURES, ALL THAT SORT
OF SET ASIDE AND WE JUST HAVE TO
OPERATE WITH BLINDERS ON IN
TERMS OF THE ALLOWANCES THAT ARE
ALLOCATED AND IS IT FAIR TO SAY
THAT THOSE ARE EASILY IN THE
BILLIONS ANNUALLY IN TERMS OF
THE ALLOWANCE VALUE THAT WE GIVE
AWAY FOR FREE WITHIN THE
PROGRAM? IN TERMS OF I ASSUME
SO. I DON'T KNOW FOR SURE. UM
OK. YEAH. I MEAN, I. I THINK
IT'S ABOUT 50. SO YOU FIGURE IF
IT'S BRINGING IN 10 TO 12
BILLION A YEAR WE'RE TALKING
ABOUT. 10 TO A BILLIONAIRE
THAT'S BEING GIVEN AWAY FREE AND
THEN 1012 BILLION A YEAR THAT'S
COMING IN THROUGH AN AUCTION. I
DON'T KNOW THAT'S VERY ROUGH
MATH. I GET THAT IT'S NOT EXACT,
BUT THE POINT I WOULD JUST WHAT
YOUR CONFIRMATION ON IS THAT
WHEN WE'RE TALKING ABOUT THINGS
LIKE, UH, A REGIONAL TRANSIT,
UH, THAT SOME MEMBER FRIEDMAN'S
BEEN TALKING ABOUT. SO FUNDING
THINGS LIKE METROLINK, UM OR THE
REAP TWO POINT Ó PROGRAM IN
TERMS OF HOUSING. THE A BILLION
DOLLARS WAS CUT OUT OF THE
INFILL FUND IN THE PROPOSED
BUDGET THIS YEAR, RIGHT FROM THE
GOVERNOR CUT HOUSING BY A
BILLION CUT TRANSIT BY PROPOSING
TO CUT IT AT LEAST BY 3 TO 4
BILLION. SO THAT'S $5 BILLION IN
INVESTMENTS ALREADY THAT ARE
GOING TO BE PULLED OUT FROM
UNDER THE VÆ M Tð STRATEGY THIS
YEAR POTENTIALLY, AND MEANWHILE,
WE ARE GIVING AWAY DOUBLE THAT
IN FREE INDUSTRIAL ALLOWANCES.
SO IF THE PROGRAM DIDN'T GIVE
ALL THOSE ALLOWANCES AWAY FOR
FREE, AND WE LEFT DISCRETION TO
CARB TO EVALUATE LEAKAGE RISK,
UM COULD YOU FORESEE THAT
ACTUALLY PROVIDING MORE
INCENTIVES FOR INDUSTRY TO
DELIVER AND ACTUALLY GETTING
THEM GOING FURTHER. I MEAN, IS
THERE A CONCERN THAT THAT BY
JUST GIVING AWAY FOR FREE THAT
THERE'S THE INDUSTRIAL SECTOR
SORT OF DOESN'T HAVE YOU KNOW
OUR REFINERIES. YOU KNOW, OUR
BIGGEST POLLUTERS IN THE STATE
DON'T HAVE THE MOTIVATION TO
CHANGE. WELL I'LL, UM I GUESS I
WOULD SAY I WILL KIND OF LET THE
INDUSTRIAL SECTOR SORT OF TALK
ABOUT THEIR MOTIVATIONS. UM I
WILL SAY ONE OF THE THINGS THAT
THE LEGISLATION DID REQUIRE US
TO DO WAS TO DO ADDITIONAL
FURTHER STUDY AND ANALYSIS ON
LEAKAGE, AND WE ARE UNDERGOING
THAT RIGHT NOW. UM SO THAT MAY
HELP INFORM THE DISCUSSION ABOUT
SORT OF YOU KNOW WHAT LEAKAGE?
WE ARE SEEING HOW WE UNDERSTAND
THAT UM, EXTREME NEXT YEAR?
YEAH. IS THAT RIGHT NEXT YEAR,
OK. SO I THINK THAT CAN HELP.
INFORM THIS SORRY TO SLOW YOU
DOWN. OH, NÓ. THANK YOU. UM
FOLLOWING A ALONG THE LINES OF
THE QUESTIONS REGARDING THE
ALLOWANCES. I. I THINK WE MIGHT
HAVE TALKED ABOUT THIS, UH, AT
LAST YEAR'S HEARING, BUT I
WANTED TO REVISIT IT TO SEE IF
THERE'S BEEN ANY, UH UH, CHANGES
ARE ARE ARE PROGRESS, BUT, UM
I'M I'M I'M LOOKING AT THE, UH,
LEGISLATIVE ANALYSTS REPORT THAT
WAS PART OF OUR COMMITTEE'S BILL
PACKET. AND UH UH, IT'S UH,
REMINDING ME THAT ACCORDING TO
THE L, A Ó, UH THEY THEY THEY
BELIEVE THAT THE CAP AND TRADE.
UH I'M I'M QUOTING. I'M READING
HERE. CAP AND TRADE CURRENTLY IS
NOT STRINGENT ENOUGH TO DRIVE
THE ADDITIONAL EMISSIONS
REDUCTIONS NEEDED TO MEET THE
STATE'S 2030 GHG EMISSIONS
REDUCTION GOAL. THIS IS BECAUSE
OVER THE PAST SEVERAL YEARS
COVERED ENTITIES AND OUTSIDE
INVESTORS HAVE ACCUMULATED AND
BANKED A SIGNIFICANT NUMBER OF
UNUSED ALLOWANCES. UM WE, UH,
WHAT IS, UH, YOUR RESPONSE TO
THE L A Ó S¼ POSITION. UM AS
PART OF THE, UH PROCESS THAT WE
GO THROUGH TO UPDATE THE CAP AND
TRADE PROGRAM. YOU KNOW, WE HAVE
HELD WORKSHOPS ON THAT QUESTION
OF ALLOWANCES. AS I THINK I
MENTIONED EARLIER IN MY
COMMENTS. WE CAME UP WITH SORT
OF THREE DIFFERENT SCENARIOS.
ONE IS, UM TO, UH A LINE WITH
SORT OF THE LATEST THINKING IN
HOW WE ARE, UM, WE RECENTLY
UPDATED OUR INVENTORY PROCESS.
UM AND SO WE NEED TO ALIGN WITH
THAT. THAT WOULD SORT OF KEEP US
KIND OF AT THE 40% TARGET. UM SO
THAT'S ONE SCENARIO WE ANALYZED.
THAT IS SORT OF LIKE THE MINIMUM
I THINK WE WOULD NEED TO DO, BUT
AS YOU KNOW, WE ARE ALSO
EVALUATING AN INCREASE IN
STRINGENCY 48% OR 55% THAT WOULD
, UM, ALIGN WITH THE REDUCTIONS
WE WOULD NEED TO ACHIEVE. CARBON
NEUTRALITY BY 2045. YOU KNOW, IT
KEEPS US ON A TRAJECTORY TO GET
INCREASED REDUCTIONS IN 2030,
THEN ON TO 2045. SO THAT IS PART
OF THE DISCUSSION. UM, IN THE
REGULATORY PROCESS. UM, WE'VE
GOTTEN A LOT OF COMMENTS ALREADY
ON THAT TOPIC. UM YOU KNOW THERE
ARE THERE ARE CONCERNS. UM, FOR
INSTANCE. THE UTILITIES ARE
CONCERNED IF THEY, UM DECREASE
THEIR GET ARE SUBJECT TO A
DECREASE IN THEIR ALLOWANCE
ALLOCATION. WHAT DOES THAT DO TO
COSTS? UM THERE'S UH, CONCERNS.
UM AMONGST OTHER REGULATORY AND
REGULATED ENTITIES. YOU KNOW HOW
THAT WOULD IMPACT THEIR COSTS,
SO I MEAN, IT'S NOT. IT'S NOT.
UH, LIKE THERE'S NOT SORT OF
COMPETING INTERESTS WE HAVE TO
CONSIDER, UM THE STATUTE
REQUIRES THE PROGRAM TO BE COST
EFFECTIVE. UM AND SO A LOT OF
THE STRATEGIES AS I MENTIONED,
YOU KNOW, ALLOWING FOR BANKING
ALLOWANCES ALLOWS COVERED
ENTITIES TO KIND OF SMOOTH OUT
THEIR, UM THEIR, UH COMPLIANCE
STRATEGY. AND COST. UM SO ALL OF
THAT KIND OF HAS TO BE TAKEN
INTO CONSIDERATION, WHICH IS WHY
WE GO THROUGH SUCH AN EXTENSIVE
REGULATORY PROCESS. UM BUT THE
SHORT ANSWER TO YOUR QUESTION
IS, WE'RE ABSOLUTELY CONSIDERING
THAT AS A POSSIBILITY, AND WE
ARE UNDERTAKING THE ANALYTICAL
WORK THAT WOULD UNDERPIN THAT AS
WE'RE CONSIDERING THE REGULATORY
PROCESS. WE HAVEN'T GOTTEN TO A
DECISION POINT YET, BUT WE ARE
WORKING ON IT. OK BUT, UM I
MEAN, I, I UNDERSTAND THAT, UH,
THAT PURSUANT TO STATUTE YOU
YOU'RE REQUIRED TO CONSIDER THE
MOST COST EFFECTIVE WAY OF
ACHIEVING OUR CLIMATE GOALS. BUT
ACCORDING TO THE, YOU KNOW, WE
WERE NOT ON TRACK BECAUSE OF THE
BANKED ALLOWANCES WERE NOT ON
TRACK TO EVEN MEET 40% MUCH LESS
48% TO 55. AND THEY THEY HAVE
THIS WONDERFUL GRAPH HERE. THAT
UH, THAT THAT THAT SHOWS YOU
KNOW ALL THE BANK ALLOWANCES AND
HOW THEY THEY THEY'RE NOT GONNA
YOU KNOW, THE ONLY WAY THAT THAT
WE'RE GOING TO GET TO THE 40% IS
WITH ALL THE BANK ALLOWANCES.
BUT I, BUT THAT ASSUMES THAT
ASSUMES THINGS THAT THAT
ENTITIES WILL DO WITH THE BANKED
ALLOWANCES, WHICH MAY NOT TURN
OUT TO BE THE CASE. RIGHT. SO,
FOR INSTANCE, IF THE LEGISLATURE
WERE TO YOU KNOW, CONTINUE THE
PROGRAM, AS IS POST 2030
ENTITIES WOULD PROBABLY BE MORE
LIKELY TO HANG ON TO THOSE
ALLOWANCES SPREAD OUT OVER A
LONGER PERIOD OF TIME, RIGHT? SO
THE YOU KNOW THE POTENTIAL
IMPACT ASSUMES, OH, ALL THESE
ALLOWANCES WILL BE DUMPED ON THE
MARKET AT SOME POINT IN TIME,
AND THAT MAY NOT COME TO PASS,
SO I THINK IT'S I WOULD NOT TAKE
IT AS A GIVEN. FAIR ENOUGH. THAT
MAKES SENSE. UM YOU YOU SAID
THAT. UH UM CARB UPDATE IS ITS
INVENTORY OF ALLOWANCES. SO
COULD YOU DESCRIBE LIKE THE
CURRENT STATE OF THE, UM HOW
TRANSPARENT UM, YOU KNOW, IS IT
LIKE LIKE IF I LOOKED UP CHEVRON
CAN I SEE LIKE X NUMBER OF
ALLOWANCES? X NUMBER OF OFFSETS.
SORRY, NÓ. THAT WASN'T CLEAR. WE
MODIFIED OUR EMISSIONS INVENTORY
ACCOUNTING METHODOLOGY. UM SO
WHICH HAD AN EFFECT ON SORT OF
HOW WE CALCULATED NATURAL GAS
EMISSIONS, AND SO THAT SORT OF
HAS THIS KNOCK ON EFFECT, SO
THAT'S WHAT I WAS REFERRING TO.
SO IS THERE A UM, PUBLICLY
AVAILABLE, UM DISCLOSURE OF, UH
YOU KNOW WHAT, UH, POLLUTERS AND
IN IN CALIFORNIA HAVE YOU KNOW
HOW MANY ALLOWANCES HOW MANY
OFFSETS? WE HAVE DATA ON THAT.
BUT TO MY KNOWLEDGE, MOST OF
THAT IS NOT PUBLIC. THAT'S
CONSIDERED, UH, CONFIDENTIAL.
BUT WHEN CARB STAFF COMES UP IN
THE NEXT PANEL, UM THEY'D
PROBABLY HAVE MORE DETAIL ON
SORT OF WHAT ASPECTS ARE PUBLIC
AND WHAT ASPECTS ARE NOT IN.
GENERALLY SPEAKING, UM, CAN CAN
YOU, UH, TELL US WHY IT'S UH,
TREATED AS CONFIDENTIAL INSTEAD
OF, UH, PUBLICLY DISCLOSED UH,
BECAUSE IT'S CONFIDENTIAL
BUSINESS OPERATION INFORMATION.
UH HUH. BUT THAT WOULD, UM IN
TERMS OF OUR EXERCISING
OVERSIGHT OVER WHETHER WE'RE ON
TRACK TO ACHIEVE OUR CLIMATE
GOALS. I MEAN THAT CLEARLY
WITHOUT THAT INFORMATION, WE'RE
WE'RE WE'RE KIND OF, UH,
BLINDFOLDED IN TERMS OF NOT
KNOWING EXACTLY HOW MANY
ALLOWANCES THE MAJOR POLLUTERS
IN THE STATE OF CALIFORNIA HAVE
IS THAT IS THAT FAIR TO SAY?
WELL, WE KNOW THE TOTAL AMOUNT.
UM, AS WAS DISCUSSED. OK BUT BUT
NOT, UH, A BREAKDOWN OF THE WHAT
IS IT 400? UH, YES, SHE
EMITTERS. WE DO NOT HAVE IT. UH,
ON THAT ON THAT LEVEL. OK? UM
SWITCHING TO, UH, ANOTHER HOT
TOPIC, UH, IN IN THE
LEGISLATURE. UM THE GROWING
CONCERN ABOUT OUR EFFORTS ON UM,
YOU KNOW, WITH WITH WITH OUR
VARIOUS CLIMATE PROGRAMS AND THE
IMPACT SPECIFICALLY ON
ELECTRICITY RATES IN THE STATE
OF CALIFORNIA, UM THERE'S UH
INTERESTING CHART THAT I AM SURE
THE CHAIR IS GOING TO BE
FOLLOWING UP ON. UH UH, AS PART
OF OUR BRIEFING PACKET THAT
TALKS ABOUT THE CALIFORNIA
CLIMATE CREDIT. UH AND IT TALKS
ABOUT, UH, A SCENARIO THAT IF
THE AVERAGE HOUSEHOLD ENERGY
BILL COULD SEE IF HALF OF ALL
NEW REVENUES ABOVE THE CURRENT
GGRF REVENUES OR JUST BE SET
ASIDE FOR THE CLIMATE CREDIT
THAT WE CAN CUT UH, AVERAGE THE
AVERAGE ELECTRICITY BILL PER
HOUSEHOLD BY OVER OR ALMOST 300
THREE $160 BY 2026. IS THAT, UM
I I'M NOT SURE ACTUALLY IF THIS
IS WITHIN A CARBS, JURISDICTION,
BUT IS THAT SOMETHING OF ACTIVE
CONSIDERATION IN TERMS OF, YOU
KNOW? THE. THE INTERPLAY BETWEEN
YOU KNOW OUR EFFORTS TO STRIVE
TO OUR CLIMATE GOALS IN A WITH
THE IMPACT ON, YOU KNOW, BREAD
AND BUTTER CONSUMER ISSUES LIKE
ELECTRICITY RATES. UM WELL, I
GUESS FIRST I WOULD SAY I, YOU
KNOW, IT'S VERY IMPORTANT TO
KEEP AN EYE ON ELECTRICITY RATES
RIGHT? BECAUSE WE ARE TRYING TO
GET RELY MORE AND MORE AND MORE
ON ELECTRICITY FOR HOW WE POWER
OUR DAY. UM SO WE DON'T WANT TO
SEND THE RATES. UM UM IN AN YOU
KNOW, INCREASE IN AN
UNSUSTAINABLE WAY. UH AS I WAS
MENTIONING EARLIER, UH THE
CURRENT ELECTRICITY RATES DO
REFLECT, UH, SOME OF THE COST OF
INACTION, RIGHT? UM, THE UH, THE
NEED TO GO BACK AND REHARDEN.
ALL THE INFRASTRUCTURE TO
ADDRESS CLIMATE IMPACTS. IS A
COST THAT IS REFLECTIVE OF THE
CLIMATE CRISIS THAT WE'RE IN,
AND IT'S REFLECTIVE OF, UM SORT
OF THINGS. WE PROBABLY WHOOPS
THINGS. WE PROBABLY SHOULD HAVE
LISTENED TO BACK IN THE EIGHTIES
ABOUT WHAT WAS GONNA HAPPEN
GOING FORWARD. UM SO WE DON'T
WANT TO CONTINUE THAT MISTAKE.
UM AND THAT'S WHY THE YOU KNOW
THE WORK THAT THE UTILITIES ARE
DOING IS NECESSARY. UM FUNDING
TO INCREASE. DISTRIBUTION AND
TRANSMISSION TO HANDLE THAT NEW
EXISTING LOAD IS REALLY CRITICAL
. ULTIMATELY AS THAT LOAD
INCREASED INCREASES AND YOU
HAVE, UM INCREASE. VOLUME OF THE
USE OF ELECTRICITY. THE OVERALL
SYSTEM COSTS WILL GO DOWN. UM SO
I THINK THERE IS REASON FOR
OPTIMISM. BUT THAT DOES NOT, UM
IGNORE THE FACT THAT RATES ARE
CURRENTLY HIGH. UM AND IT CAN BE
CHALLENGING FOR FAMILIES. UH, SO
SUPPORTING STRATEGIES THAT YOU
KNOW THE ENERGY EFFICIENCY
STRATEGIES. WE NEED THE NEW
TECHNOLOGY WE NEED. YOU KNOW,
THE THINGS THAT WILL MAKE, UM
RATES MORE MANAGEABLE. BOTH ON
THE UTILITY SIDE IN TERMS OF
REDUCING COSTS OF OPERATION AND
THEN UM, UH, FAMILY'S ABILITY TO
MANAGE THEIR ENERGY BURDEN. UM
ARE ALL GONNA BE IMPORTANT
CONSIDERATIONS? UM, THE CLIMATE
CREDIT. IS YOU KNOW IS MANAGED
BY THE P èC. UM, IT WAS YOU
KNOW, ORIGINALLY, UH, A WAY TO,
UM SORT OF GIVE BACK TO THE
RATEPAYERS THE COSTS THAT THEY
WERE PAYING FOR COMPLIANCE. UM
SO UH, THE LEGISLATURE COULD
SORT OF, YOU KNOW, THINK ABOUT
OH, DO WE WANT DO WE WANT TO
APPROACH THAT DIFFERENTLY? DO WE
WANT TO APPROACH GGRF LESS AS A
FUND TO SUPPORT PROGRAMS? UM
THAT REDUCE GREENHOUSE GAS
EMISSIONS AND MORE OF A YOU KNOW
, SORT OF REFUND TO CUSTOMERS. I
THINK THERE'S PITFALLS WITH
THAT. UM IF YOU ARE, UH. AND
THIS SORT OF GETS INTO THE
LARGER CONVERSATION OF ALL THE
THINGS THAT GO INTO FUEL PRICES
AND ENERGY PRICES. IT'S NOT JUST
CLIMATE ACTION THAT AFFECTS
PRICES. THERE ARE SO MANY OTHER
VARIABLES. UM AND IF YOU KIND OF
DECOUPLE, UM THE. THE FIRM,
ACTUAL GREENHOUSE GAS EMISSIONS
REDUCTIONS. UH AND TURN IT MORE
INTO. WELL, WE'RE JUST REDUCING
YOUR COST OF ENERGY. UM I'M NOT
SURE THAT INCENTIVIZES THE
COMPANIES THAT ARE PROVIDING
THAT ENERGY TO DO IT IN THE MOST
COST, EFFECTIVE WAY. UM SO I
JUST THINK THOSE ARE SOME THINGS
THAT YOU ALL WILL NEED TO THINK
ABOUT. AS YOU'RE GRAPPLING WITH
THOSE QUESTIONS. I MEAN, IF I
COULD JUST MAKE THIS MY LAST
QUESTION, MR CHAIR, I, UH YOU
KNOW PEOPLE HAVE BEEN TALKING
ABOUT, UM UM UH, A CARBON FEE
AND DIVIDEND FOR MANY YEARS AND.
GIVING MONEY BACK TO CONSUMERS
TO HELP THEM WITH THEIR
ELECTRICITY BILLS MAY NOT DR.
YOU KNOW, INCREASING CAPACITY
FOR AH PROJECTS. AND PROGRAMS TO
REDUCE GREENHOUSE GAS EMISSIONS.
CLEARLY WE NEED TO DO THAT. THAT
JUGGLING ACT OF MAKING SURE THAT
THAT CALIFORNIANS ARE NOT
SUFFERING FROM OUR OUR CLIMATE
AMBITIONS. AND SO, UM YEAH, I
JUST WANT TO COMMENT. THANK YOU,
MR CHAIR. YEP. MR OYSTER. THANK
YOU. CHAIR JUST WANTED TO GO
BACK TO THE SCOPING PLAN AND
FOLLOW UP ON A COUPLE OF SHOES.
THE SCOPING PLANTS SCENARIOS
SEEMS THAT PETROLEUM REFINING
WILL DECLINE IN LINE WITH
REDUCED PETROLEUM DEMAND. HOW
CONFIDENT CAN WE BE THAT THAT
WILL ACTUALLY PLAY OUT AS
MODELED? WHAT IF DECLINES IN
PETROLEUM DEMAND LAG BEHIND
EXPECTATIONS OR IF REFINERIES
CONTINUED TO OPERATE TO THE SAME
DEGREE, BUT SHIFT, FOR EXAMPLE,
TO EXPORTING REFINED PRODUCTS.
AND THEN I HAVE ONE MORE
QUESTION. YEAH YES, THAT WAS
SPECIFICALLY AN ISSUE THAT WE
TALKED ABOUT. AT THE TIME. THE
SCOPING PLAN WAS ADOPTED. UM AND
SO OUR STRATEGY AT THE TIME WAS
TO FORM A WORKING GROUP TO LOOK
INTO THAT QUESTION, THEN
SUBSEQUENTLY IN THE SPECIAL
SESSION, YOU ALL ACTUALLY
CODIFIED THAT PROPOSAL IN LAW.
UM SO THERE'S A COUPLE OF PIECES
YOU KNOW, THE ENERGY COMMISSION
IS WORKING ON AN ASSESSMENT OF
FUELS DEMAND THAT WOULD BE
NEEDED. UM AND THAT ASSESSMENT
IS AN INPUT INTO OUR WORKING
GROUP WORK. AND SO WE ARE JUST
GETTING STARTED ON, UM PULLING
TOGETHER A WORKING GROUP. WE'VE
IDENTIFIED KIND OF A LIST OF THE
WHICH IS ALSO IN THE STATUE,
WRITE A LIST OF SORT OF THE KEY
STAKEHOLDERS THAT NEED TO BE
THERE. UM AND SO WE'RE WORKING
ON STRUCTURING THAT WORKING
GROUP NOW WITH A GOAL OF GETTING
STARTED THIS SPRING WITH A
SERIES OF, UM CONVERSATIONS
ABOUT HOW DO WE THINK ABOUT THIS
FEELS TRANSITION? HOW DO WE
THINK ABOUT UM THE DEMAND
ASSESSMENT THAT THE C E C IS
GOING TO BE PROVIDING US AND
WHAT THAT LOOKS LIKE IN TERMS OF
OUR REGULATORY WORK AND ARE
ANTICIPATED UPTAKE OF, FOR
INSTANCE, UM, YOU KNOW, VEHICLES
, LIGHT DUTY VEHICLES, HEAVY
DUTY VEHICLES, UM, IN TERMS OF
UPTAKE OF ZERO EMISSION AND KIND
OF HOW THAT'S ALL GOING TO PLAY
OUT SO THAT WORK IS FORTHCOMING.
THANKS ARE WE KEEPING PACE TO
MEET THE BUILDING
DECARBONIZATION TARGETS OUTLINED
IN THE SCOPING PLAN. I
PARTICULARLY LIKED YOUR
REFERENCE TO HEAT PUMPS AND IN
OUR AREA OF INTEREST, WHICH WE
NOW ARE CRITICAL TO THAT EFFORT.
WHAT IS BEING DONE TO ENSURE
THAT THERE IS ROBUST SUPPLY OF
HEAT, PERHAPS IN AFFORDABLE
PRICE FOR CONSUMERS. BRIDE AND
THEN SPECIFIC. YEAH UM, THAT IS
THAT IS AN ISSUE. WE ARE ALSO
WORKING ON IN OUR STATE
IMPLEMENTATION PLAN FOR THE
2037. I WAS N STANDARD WE
IDENTIFIED AS A MEASURE IN THAT
PLAN. THE ISSUE OF ZERO EMISSION
UM, HEATING AND SPACE HEATING
AND WATER. HEATING UM, AND A
POTENTIAL APPLIANCE STANDARD TO
SUPPORT THE DEPLOYMENT OF ZERO
EMISSION SPACE AND WATER
HEATING. SO WE ARE AT CARB GOING
THROUGH THE PROCESS OF LOOKING
AT HOW REGULATION LIKE THAT
MIGHT BE STRUCTURED. WE'VE JUST
GOTTEN STARTED, SORT OF, AS IN
THE PUBLIC WORKSHOP
CONVERSATIONS AROUND THAT, AND
OF COURSE, OUR SISTER AGENCIES
ARE WORKING ON BUILDING
STANDARDS STRATEGIES AND SORT OF
FIGURING OUT WHAT THEIR NEXT
STEPS ARE GOING TO BE IN TERMS
OF DEPLOYING. UM ZERO EMISSION
APPLIANCES AS PART OF NEW
CONSTRUCTION. UM, SO THAT WORK
IS ONGOING. OKAY UM, I JUST WANT
TO GIVE YOU A CHANCE BEFORE HE
WRAPPED UP ANY OTHER BARRIERS
YOU WANT TO DO IDENTIFY HERE? I
KNOW WE'VE TALKED A LITTLE BIT
ABOUT, UM CHALLENGES WITH THE M
T. CHALLENGES S¼. I THOUGHT THE
ELECTRIC SECTORS HAS TO BE THE
EASY TO DIY CARB SECTOR, BUT
SOMEHOW IT'S BECOMING HARDER.
WHAT ELSE? WHAT ELSE OUT THERE?
WHAT ARE THOSE BARRIERS THAT
YOU'VE IDENTIFIED HERE THAT
STAND IN OUR WAY TO HITTING
ABOUT 2030 2045 GOALS, I'D SAY
WITH MORE EMPHASIS ON THE NEAR
TERM. YEAH. I MEAN, I THINK ONE
OF THE KEY BARRIERS I SEE IS, AS
I MENTIONED EARLIER KIND OF
GETTING THE, UM THE CLEAN ENERGY
DEPLOYED THAT WE NEED AND I WILL
SAY THAT THERE HAS BEEN A LOT OF
PROGRESS ON REDUCING THOSE
BARRIERS. UM I MEAN, THE
INDEPENDENT SYSTEM OPERATOR IN
THE PC AND THE TOGETHER HAVE
MADE HUGE PROGRESS ON SPEEDING
UP TRANSMISSION. UM PROJECTS. UM
AND YOU KNOW, GETTING TRASH, YOU
KNOW, UPDATING THE DEMAND
FORECASTING UPDATING THE
TRACKING OF DEPLOYMENT. UM IT
STILL NEEDS TO HAPPEN FASTER. UM
WE STILL NEED PROJECTS THAT ARE
PROPOSED TO PROCEED QUICKLY, AND
I THINK CONTINUING THE
LEGISLATURE HAS SUPPORTED SOME
OF THIS WORK. UM FOR INSTANCE,
IN THE YOU KNOW THE BILL,
ALLOWING THE CEO TO DO SOME OF
THE PERMITTING FOR RENEWABLES,
UH, YOU KNOW, CONTINUING TO
SUPPORT FASTER AND MORE
CONSISTENT DEPLOYMENT OF
RESOURCES. UM I THINK IT'S GOING
TO BE INCREDIBLY VALUABLE. SO ON
THE STREAMLINING SIDE, BUT ON
THE THERE ARE TOOLS THAT YOU'VE
GOT IN YOUR TOOLKIT. I'M
THINKING THERE'S PUC. THERE'S SO
THERE'S ALL THESE OTHER
JURISDICTIONS. BUT WHAT DO YOU
HAVE IN YOUR TOOL KIT THAT YOU
CAN EITHER MOTIVATE THE MARKET
OR PUSH THESE THINGS FORWARD
FURTHER. I MEAN, YOU HAVE A
DIRECT PERMITTING ROLE ON THE ON
THE CARBON REMOVAL SIDE RIGHT ON
THE CCS AND A BEX PROJECT OR A
DIRECT AIR CAPTURE PROJECT.
THOSE WOULD ALL HAVE TO IN
THEORY GOES THROUGH YOU AND
THROUGH RECITING AUTHORITY, BUT
WELL, YES, WE, OUR TASK IS TO
SET FORTH SOME GUIDANCE THAT THE
LEAD AGENCY FOR PARTICULAR
PROJECTS CAN USE WHICH WE THINK
WILL HELP. MAKE THINGS MOVE
FASTER BECAUSE THEY'LL BE SORT
OF A COMMON SET OF, YOU KNOW,
HERE ARE THE THINGS THAT WE UM
ARE LAYING OUT AS GUIDANCE FOR
PROJECTS. SO I THINK THAT WILL
HELP. UM AND SO WE AS I
MENTIONED EARLIER, WE ARE
GETTING STARTED ON THAT. SO I
THINK THAT WILL BE HELPFUL. UM I
THINK, UM ANYTIME YOU TALK TO
ANYONE AT THE USC, PA, MAYBE
REMINDING THEM THAT THEY HAVE
SOME WAIVERS PENDING FOR US
WOULD BE VERY HELPFUL. UM I
MEAN, WE ARE REALLY TRYING TO
GET THESE REGULATIONS MOVING AS
QUICKLY AS POSSIBLE. AND THE
FEAR IS, I MEAN, NOT JUST OUR
OUR LIGHT DUTY WAIVER. OR THE
HEAVY DUTY SIDE. BUT UM, BUT
ALSO THE FACT THAT THEY LOOKED
LIKE THEY BACKED OFF ON THEIR
POWER SECTOR REGULATIONS, AT
LEAST IN THE NEAR TERM IN THE
NEAR TERM, SO I MEAN, I GUESS
AFTER THE ELECTION, WE HAVE TO
WAIT AND FIND OUT IF THE REST OF
THE COUNTRY IS GOING TO BE
PLAYING BY SOME KIND OF RULES
UNDER FOR GREENHOUSE GAS
REGULATION, BUT RIGHT NOW IT'S A
QUESTION MARK SO THAT DOES THAT
UNDERCUT US DOES THAT MAKE MORE
CAPITAL WANT TO COME HERE AND
SORT OF LAUNCH HERE? I MEAN, IS
THERE A WAY TO YEAH, THE FIRST
LIKE WE ALWAYS TEND TO BE IN
TERMS OF THESE NEW PROJECTS. OR
DO YOU THINK THAT THERE'S
SOMETHING ABOUT CALIFORNIA WHERE
IT'S REALLY IT'S NOT THE PLACE
THAT THEY WANT TO GO RIGHT NOW,
WITH WITH THAT KIND OF PROJECT
LEVEL CAPITAL WELL, I MEAN THE
YOU KNOW, THE POWER PLANT RULE
IS, YOU KNOW SORT OF WHAT? WHAT
THE REQUIREMENTS ARE IN EXISTING
PLANTS AND WHAT REQUIREMENTS ARE
A NEW PLANTS, AND THEY SORT OF
KIND OF BIFURCATED. THE TWO YOU
KNOW, I THINK I THINK FOR US IN
CALIFORNIA. I THINK WE ARE
REALLY FOCUSED ON TAKING
ADVANTAGE OF THE MOVES THAT EPA
IS MAKING AROUND THEIR LIGHT
DUTY STANDARDS, WHICH UM WELL,
YOU KNOW, THE E P A DOES IT A
LITTLE DIFFERENTLY THAN US,
RIGHT? THEY DON'T SPECIFY YOU
HAVE TO HAVE X PERCENTAGE OF
ZEROING MACHINE VEHICLES INSTEAD
. THEY THEY, YOU KNOW, SET FORTH
A GHD STANDARD AND THE EFFECTIVE
UM, RESULT OF THE STANDARD AS IT
MOVES DOWN IS AN INCREASING
NUMBER OF ZERO MACHINE VEHICLES.
MY UNDERSTANDING THAT THAT IS
THAT THAT RULE IS THE COMPLETION
OF THAT RULE IS IMMINENT.
THEY'RE ALSO WORKING ON THEIR
SIMILARLY THERE. GHD STANDARD
FOR HEAVY DUTY. AND BOTH OF
THOSE RULES I THINK ARE REALLY
IMPORTANT FOR SUPPORTING THE
OVERALL ZERO EMISSION MARKET,
WHICH I THINK IS TO THE BENEFIT
OF CALIFORNIA THAT MORE OF THE
MORE ZERO EMISSION VEHICLES GET
DEPLOYED THROUGHOUT THE COUNTRY.
UM IS IT FAIR TO TAKE HAS A TAKE
HOME POINT, THOUGH, HERE THAT WE
HAVE LOTS OF AMBITIONS, WE WANT
TO SEE MORE FOLKS STEP UP. XEV
MARKETPLACE V. REDUCTIONS NEW
PATHWAYS. BUT THAT IN EVERY ONE
OF THESE CASES WHEN THE PROJECTS
DON'T SHOW UP FOR THE TONS DON'T
DON'T APPEAR. EVERYTHING GOES
BACK TO THE HARD CAP AND THE CAP
AND TRADE PROGRAM. THAT I MEAN,
IS IT IF THERE IS THAT A THE
RIGHT WAY TO LOOK AT THE
MECHANICS HERE THAT WE'RE GOING
TO. WE'RE GOING TO SORT OF KEEP
PUSHING OUR AMBITIONS FOR
DEPLOYMENT ALL THESE SECTORS,
BUT WHATEVER DOESN'T ARRIVE.
SOMEHOW FINDS ITS WAY BACK TO
THE CAP AND TRADE PROGRAM. SO A
LOT OF PRESSURE I WOULD IMAGINE
BETWEEN NOW AND 2030 OR NOW IN
2035 FOR THAT PROGRAM TO DO. TO
DO THE HEAVY LIFTING TO DRIVE
THOSE CHANGES. IS THAT A FAIR
WAY TO LOOK AT IT? UM YEAH. I
MEAN, I GUESS I WOULD SAY, YOU
KNOW, IT'S ALWAYS BEEN A KEY
PILLAR OF OUR STRATEGY AND WILL
CONTINUE TO BE, AND I THINK
THERE IS AN OPPORTUNITY TO SHOW
MORE AMBITION THERE. THAT
DOESN'T MEAN THAT WE NEED THAT
WE CAN AVOID PUSHING AS HARD AS
WE CAN. ON RIGHT AND
TRANSPORTATION AS WELL. I MEAN
TRANSPORTATION TO HUGE PIECE. UM
50% IF YOU INCLUDE THE
EXTRACTION AND REFINING PARTS OF
IT. UM SO WE DON'T AND YOU KNOW,
THERE IS SOME OVERLAP BETWEEN
THE CAP AND TRADE AND SOME OF
THOSE TRANSPORTATION EMISSIONS,
BUT WE CANNOT UM, FORGET THE
FACT THAT YEAH. OUR VEHICLE
STRATEGY REMAINS A KEY AIR
QUALITY AND CLIMATE STRATEGY, SO
I DON'T I DO NOT WANT TO
CONTEMPLATE FAILURE RIGHT NOW.
WE'RE AHEAD. I MEAN, EVERYBODY
IS ALL TIED UP IN KNOTS ABOUT
HOW YOU KNOW THERE'S A TINY BLIP
IN THE IN THE OVERALL
DEPLOYMENT. UM NUMBERS IN IN A
PARTICULAR QUARTER. BUT THAT
DOESN'T MEAN THAT OVERALL,
THERE'S NOT A HUGE AMOUNT OF
PROGRESS AND THAT MOMENTUM IS
GOING TO CONTINUE. AND AS I
THINK THE YOU KNOW THE BATTERY
STANDARDS, YOU KNOW THAT THAT TO
GET TAX CREDITS AND HAS ALL
THOSE ISSUES SMOOTH OUT. WE'LL
CONTINUE TO MAKE PROGRESS THERE.
I GUESS I'M TRYING TO UNDERSTAND
THE YOU THINK THAT THE EXTENSION
OF THE CAP AND TRADE PROGRAM
BEYOND 2030 SO SAY IT WENT TO
2045 STATUTORILY. MHM. WELL,
THAT MAKE OUR PROGRAM STRONGER.
DO YOU THINK THERE COULD BE
BENEFITS TO THAT? OR DO YOU
THINK IT ACTUALLY UM, COULD PUT
TOO MUCH ONUS ON THAT PROGRAM
AND SO MAYBE DETRACT FROM THESE
OTHER COMPLEMENTARY MEASURES
THAT YOU'RE LOOKING AT? NO, I
THINK IT'S A BENEFIT FULL STOP.
I MEAN, I THINK HAVING CLARITY
THAT THIS IS A CLIMATE STRATEGY
THAT HAS WORKED AND WILL
CONTINUE TO WORK AND COULD BE
EVEN MORE EFFECTIVE. THE MORE
CERTAINTY. THAT COMPANIES CAN
PLAN FOR. THE BETTER AND THAT
THAT EXTENSION TO SUMMON
MURATSUCHI IS POINT. I MEAN, THE
CONCERN ABOUT THIS OVERHANG.
THESE UNUSED SORT OF STOCKPILE
ALLOWANCES, AND WE'LL GET INTO
THAT MODELING A LITTLE BIT MORE
THROUGH THE I M F AND THE NEXT
PANEL, BUT THAT EXTENSION
ITSELF. COULD HELP DEAL WITH
THAT OVER THAT SORT OF
OVERSUPPLY PROBLEM. WITH WITH
MARKET CONFIDENCE THAT YEAH, I
BELIEVE SO, YEAH. UM WILL DIVE
DEEPER. ANY CLOSING COMMENTS
BEFORE WE LET YOU GO? NO, I JUST
WANT TO THANK YOU FOR YOUR
ENGAGEMENT. AND YOU'RE REALLY
GREAT QUESTIONS. I MEAN, THIS IS
THIS IS HARD STUFF. UM AND WE
DON'T HAVE THE OPTION TO NOT BE
SUCCESSFUL. SO CONTINUING TO
ITERATE AND TALK ABOUT HOW WE
CAN BE SUCCESSFUL IS INCREDIBLY
VALUABLE. SO I REALLY APPRECIATE
THANK YOU. THANK YOU. I
APPRECIATE YOUR TIME. ALL RIGHT.
THANK YOU. THANK YOU MEMBERS. UM
SO WE'RE GOING TO MOVE TO OUR
EXPERTS PANEL. UM MR BERTRAND,
FOUL EASE, MR KHÓ TO, UH CORNETT
AND, UH, DR GROUP. IF YOU GUYS
WOULDN'T ALL MINE COMING UP, I
THINK THERE'S FIVE TOTAL HERE.
SO WHAT WE'RE GONNA DO MEMBERS
FOR THOSE OF YOU WHO HAVE THE
ENDURANCE TO KEEP GOING HERE.
WE'RE GOING TO GO QUICK. THREE
MINUTES EACH 3 TO 4 MINUTES EACH
TRY TO LAND ON A SINGULAR POINT,
AND THEY MAY HAVE A SLIDER TO
EACH AND THEN WE'LL KEEP GOING
FOR QUESTIONS. AND THEN THOSE
WHO ARE THE BRAVE STAKEHOLDERS
WHO WANT TO KEEP WAITING AGAIN.
WE ENCOURAGE YOU TO WORK
TOGETHER. UM AND WHAT WE'RE
GOING TO DO FOR THE LAST THE
LAST PUBLIC COMMENT PANELS,
WE'RE GOING TO KEEP UP HERE TO
TRY TO KEEP UP L A O. TO THE
EXTENT THEY CAN STAY IN
POTENTIALLY CARVED TO THE EXTENT
THEY CAN STAY, AND THEN LET THE
REST OF YOU ALL GO AND THEN GO
THREE AT A TIME FOR A PUBLIC
STAKEHOLDERS TO COME UP. UM AND
WE'LL KIND OF TAKE YOU TAKE YOU
ALL IN CHUNKS IF THAT'S OKAY. UM
THAT WAY WE CAN AFFORD A LITTLE
MORE BACK AND FORTH TIME, TOO,
BUT TO KICK OFF DALLAS
BERTRAND'S CHAIR OF THE
INDEPENDENT EMISSIONS MARKET
ADVISORY COMMITTEE, AND HE'S
ALSO THE DARIUS GASKINS, SENIOR
FELLOW AT RESEARCH FOR THE
FUTURE AND A LONGTIME WATCHER ON
THE WALL FOR THIS THIS PROGRAM
OF OURS HERE IN CALIFORNIA.
WELCOME TO THE COMMITTEE.
WELCOME BACK TO THE COMMUNITY.
COMMITTEE AND THANKS FOR TAKING
A MOMENT SO SORRY FOR GIVING A
SHORT SHORT RUNWAY ON THIS ONE.
BUT LET'S GO 3 TO 4 MINUTES AT
THE OUTSET, AND WE CAN DO
QUESTIONS AND DIG DEEPER. THANK
YOU SO MUCH. THANK YOU SO MUCH.
YOU HAVE MY SLIDES. THANK YOU.
THANK YOU. SENATORS STERN. SOME
OF THEM ARE CONNOLLY AND THE
COMMITTEE. I AM MY PURPOSE.
TODAY IS THE SHARE OF THE MAIN
FINDINGS OF THE 2023 ANNUAL
REPORT. UH AND ELABORATE ON ONE
SPECIAL TOPIC. CALIFORNIA HAS
RECENTLY INCREASED THE PACE OF
ITS EMISSIONS REDUCTIONS. BUT AS
WE HEARD IT'S NOT YET ON TRACK
TO ACHIEVE THE STATUTORY TARGET
FOR 2030 THE REPORT AND INDEED,
THE MARKET IN GENERAL IS SHAPED
BY CARBS INFORMAL WORKSHOP
SERIES EXAMINING A POTENTIAL
UPDATE TO THE MARKET AS AN
INTRODUCTION TO THE REPORT. WE
REVISITED SEVERAL ISSUES WE'VE
BEEN TALKING ABOUT FOR YEARS,
INCLUDING. HOW DO WE DO SO
ALLOWANCE SUPPLY AND THE
OPPORTUNITY TO REBALANCE BETWEEN
FREELY ALLOCATED AND AUCTIONED
ALLOWANCES AND THE IMPLICATIONS
FOR AFFORDABILITY? LEAKAGE AND
PROCEEDS TO THE GREENHOUSE GAS
REDUCTION FUND. THE COMMITTEE
ALSO DISCUSSED THE ACCUMULATION
OF BANKED ALLOWANCES AND HOW THE
PROGRAM UPDATE WILL AFFECT THE
FINANCIAL VALUE OF ALLOWANCES
THAT ARE ACCUMULATING IN THE
BANK. WE HAVE EMPHASIZED THE
VALUE OF RULE RULE BASED
APPROACHES, SUCH AS AN EMISSIONS
CONTAINER RESERVED TO LOCK IN
EMISSIONS REDUCTIONS. WE SEEK TO
ENSURE THAT EMISSIONS ARE CHEAP
TO THE BENEFIT OF DISADVANTAGED
COMMUNITIES AND THAT THE OVERALL
PROGRAM PERFORMANCE WILL HINGE
ON CLARIFYING THE FUTURE OF THE
PROGRAM. AFTER 2030 THE FIRST
REPORTS FIRST NEW CHAPTER TALKED
ABOUT GREENHOUSE GAS REDUCTION
ACCOUNTING, AND IT POINTED OUT
THAT UPDATES TO THE STATEWIDE
INVENTORY HAD THE PRACTICAL
EFFECT OF WEAKENING CALIFORNIA
STATUTORY POLICY TARGETS WHICH
COULD BE MITIGATED BY UPDATING
THE 1990 EMISSIONS BASELINE. THE
SECOND CHAPTER, TALKED ABOUT
AFFORDABILITY, AND I'M GOING TO
DIFFER ON THAT, TOO. IN THE
INTEREST OF TIME TO PROFESSOR
SALLY, WHO'S GOING TO GO INTO
THAT SPECIFICALLY THIRD DEALT
WITH MARKET LINKS AND UPLOADS
APPLAUDS THE STATE'S LEADERSHIP
ROLE IN PROVIDING TECHNICAL
ASSISTANCE TO OTHER STATES. BUT
THE COMMITTEE ENCOURAGES THE
AMBITION AND SUPPORT WITH
LINKING WITH OTHER MARKETS,
INCLUDING WASHINGTON AND WOULD
LIKE TO PUSH OUT AS MUCH AS
POSSIBLE. THE FOURTH CHAPTER
ADDRESSED POINT SOURCE CARBON
CAPTURE AND STORAGE, WHICH WE
WERE JUST HEARING ABOUT,
INCLUDING DIRECT AIR CAPTURE,
WHICH COULD PLAY AN IMPORTANT
ROLE. AND ACHIEVING EMISSIONS
REDUCTION IN INDUSTRY, HOWEVER,
DEPLOYMENT RAISES SIGNIFICANT
QUESTIONS ABOUT CLIMATE, SOCIAL
AND LOCAL ENVIRONMENTAL IMPACTS,
AND THERE'S GENERAL UNCERTAINTY
REMAINS ABOUT THE PROTOCOLS FOR
ACCOUNTING WITHIN THE CARBON
SLIDE. THOSE ISSUES MUST BE
RESOLVED BEFORE THOSE PATHWAYS
ARE AVAILABLE. NOW IT'S FINALLY
AS NOTED NEXT SLIDE, PLEASE. UM
THE CENTRAL ISSUE IN THE PROGRAM
UPDATE IS HOW TO ADJUST
ALLOWANCE SUPPLY COMPLIANCE
ENTITIES OBTAINED AND SURRENDER
COMPLAINTS AND INDUSTRY
INSTRUMENTS THROUGH FOUR
CHANNELS. THE FREE ALLOCATION
THE AUCTION THE BANK AND OFFSETS
AND PARTIES HAVE EXPECTATIONS
ABOUT THE VALUE THAT FLOWS
THROUGH EACH OF THESE CHANNELS,
WHICH WILL SHAPE PERCEPTIONS OF
FAIRNESS ABOUT THE PROGRAM
UPDATE HAS DESCRIBED THE NEED TO
REDUCE CUMULATIVE EMISSIONS
EMISSIONS BY 115 TO 390 MILLION
TONS BY 2030 THAT IS REDUCING
CUMULATIVE SUPPLY AND
ILLUSTRATIVE SCENARIO. OPTIONS
HAVE FOCUSED ONLY ON ADJUSTMENTS
, THE FREE ALLOCATION AND
AUCTIONED ALLOWANCES. THIS WILL
BOOST THE FINANCIAL VALUE OF
OTHER SOURCES OF COMPLIANCE
INSTRUMENTS, INCLUDING, FOR
EXAMPLE, THE BANK ALLOWANCES AND
OFFSETS. I PERSONALLY ESTIMATE
THE FINANCIAL VALUE THAT WOULD
FLOW TO HOLDERS OF BANKED
ALLOWANCES WOULD BE BETWEEN SIX
AND $14 BILLION DUE TO CARBS
PROGRAM UPDATE. CARBONS NOT
DISCUSSED POTENTIAL ADJUSTMENT
TO THE TENS THAT FLOW THROUGH
THE ALLOWANCE BANKING OFFSETS,
WHICH COULD REDUCE THE
REDUCTIONS THAT OTHERWISE WILL
BE NECESSARY THAT THEY ALLOCATED
AND AUCTION ALLOWANCE PATHWAYS
AND LOWERS LOW IN CASE I
ESTIMATE THE BANK ALLOWANCES
COULD BE ASSIGNED TO COMPLIANCE
VALUE 0.7 PEARL OUNCE THAT IS
JUST BE DENOMINATED VALUE, AND
THIS WOULD ENABLE AN ADDITIONAL
100 ADDITIONAL 100 MILLION TONS
FOR FREE ALLOCATION OR THE
AUCTION AND IN COMBINATION WITH
REDUCED OVERALL SUPPLY. THIS
WOULD LEAVE THE FINANCIAL VALUE
OF THE BANK FULLY INTACT BECAUSE
PRICES GO UP AT THE SAME TIME,
THE QUANTITY GOES DOWN, AND IT
WOULD STILL EVEN EXTRA MARGIN OF
INCREASED VALUE. ONE MIGHT VIEW
A BANK ADJUSTMENT AS AN EXPOSE
CHANGE IN THE RULES, WHICH MIGHT
UNDERMINE MARKET CONFIDENCE OR
SEEM UNFAIR. SOMEHOW HOWEVER,
OTHER STAKEHOLDERS ARE ALSO
INVESTED IN THE PROGRAM AND
AFFECTED BY THE PROGRAM. UPDATE.
PERCEPTIONS OF FAIRNESS WILL
PLAY A LARGE ROLE IN STAKEHOLDER
ACCEPTANCE. AND SO WE MIGHT LOOK
HOLISTICALLY ANOTHER APPROACH,
FOR EXAMPLE, THAT MIGHT MIGHT
APPEAL MIGHT BE THAT THE CURB
CHANGE THE COMPLIANCE VALUE OF
ALL ALLOWANCES EQUALLY AS A WAY
TO ACHIEVE ITS TIGHTER CAP THAT
WOULD BOTH ALL CHANNELS OF
SUPPLY, WHICH, THROUGH THE END
OF THE MARKET, UM AND I'D
ESTIMATE IN THE 48% BUDGET
SCENARIO THAT CAR HAS BEEN
DISCUSSING. THIS COULD BE
REALIZED WITH COMPLIANCE VALUE
OF 0.9 TONS PER ALLOWANCE. NOW,
I MENTIONED THE FINANCIAL BIAS
DETERMINED BY PRICE TIMES,
QUANTITY. AND THIS THIS THE
IMPACT ON PRICES NOT JUST
AFFECTED BY THE RATHER DRAMATIC
CHANGE IN THE PROGRAM WITH
STRENGTH OF MORE STRINGENT
ALLOWANCE SUPPLY, BUT WE'VE ALSO
PROMOTED THE IDEA OF EMISSIONS
CONTAINMENT. SERVED. THAT HAS
ITS OWN VIRTUES, WHICH I'D LOVE
TO GET INTO WITH YOU, BUT AT THE
INTRODUCTION OF EMISSIONS
CONTAINMENT RESERVE, BUT ALSO
PUSH UP THE ALLOWANCE PRICE, SO
WE'RE LOOKING AS CHAIR, RANDOLPH
SAID. THAT APPROACHES THAT BRING
ALL THESE THINGS ONTO THE TABLE
AT THE SAME TIME AS WE MOVE
FORWARD WITH THE PROGRAM. THESE
ARE POLICY ISSUES, INCLUDING
POTENTIAL SHIFTS AND VALUE
ACROSS, BUSTED IN ENTITIES THAT
I AM HAS IDENTIFIED AND I
BELIEVE THEY MUST BE FRONT AND
CENTER IN THE NEEDED UPDATE FOR
THE CARBON MARKET. THANK YOU.
THANK YOU. LOOKS LIKE I SCREWED
UP THE WHOLE ORDER HERE, BUT
WE'RE JUST GOING TO KEEP GOING
AFTER THINKING IT THROUGH
TALKING THROUGH YET JUST TOTALLY
RUIN THAT. BUT LET'S JUST LET ME
DIG MYSELF OUT OF THIS BY GOING
NEXT TO REACH GENDER SO TO OUR
DEPUTY EXECUTIVE OFFICER FOR
CLIMATE CHANGE AND RESEARCH IN
CALIFORNIA, RESEARCH SUPPORT,
GOOD AFTERNOON CHAIR AND VICE
CHAIR MEMBERS. IT'S A PLEASURE
TO BE HERE WITH YOU TODAY. I'M
RAJINDER SODA IS THE DEPUTY
EXECUTIVE OFFICER AT CARB. SO I
WANT TO FIRST START BY TALKING
ABOUT SOME OF THE THINGS THAT
WE'VE DONE IN RESPONSE TO SOME
OF THE IMAC RECOMMENDATIONS OVER
THE YEARS, WE HAVE TWO STUDIES
LOOKING AT LEAKAGE. ONE
RETROSPECTIVE ON ELECTRICITY TO
SEE IF PEOPLE HAVE BEEN
RESOURCED SHUFFLING AND SOME OF
THE CONTRACTS ARE ACTUALLY VALID
THAT ARE BRINGING CLEAN POWER TO
CALIFORNIA AND BEING COUNTED IN
OUR INVENTORY. THE SECOND STUDY
IS POTENTIAL FOR LEAKAGE, WHICH
IS ALSO FOR THE INDUSTRIAL
SECTOR. AND PART OF THE RESPONSE
TO 8398 WITH A REPORT IS DUE
NEXT YEAR. WE ALSO HAVE ANOTHER
CONTRACT THAT IS LOOKING AT THE
BUFFER POOL FOR FOREST OFFSET
CREDIT SHOULD THAT BE INCREASED
BECAUSE THE RISK OF WILDFIRE HAS
ALSO INCREASED WITH THE EFFECTS
OF CLIMATE CHANGE, AND SHOULD
PROJECTS BE CONTRIBUTING MORE TO
THE INSURANCE POOL TO MAKE SURE
THAT IT'S SUFFICIENT TO COVER
THE FUTURE OF THAT PART OF THE
OFFSET PROGRAM. ANOTHER CONTRACT
THAT WE HAD WAS IN 2022 FOR THE
2020 SCOPING PLAN. LOOKING AT
THE SOCIAL COST OF CARBON, WE
ACTUALLY WERE ABLE TO GET CENSUS
TRACTS SOCIAL COST OF CARBON
VALUES THAT WE COULD ADD TO THE
GLOBAL SOCIAL COST OF CARBON TO
MORE ACCURATELY QUANTIFIED THE
MORE ACUTE DISADVANTAGE PAIN
THAT YOU SEE IN FRONTLINE
COMMUNITIES IN RESPONSE TO
CLIMATE CHANGE. BECAUSE THEY
JUST AREN'T THAT RESILIENT AS
EVERYBODY ELSE IN TOTAL. THESE
CONTRACTS EQUAL $1.7 MILLION SO
IN RESPONSE TO THE IMAC
RECOMMENDATIONS, WE HAVE ENGAGED
IN A VERY ROBUST PROCESS TO
ENGAGE AND TO PUT RESOURCES
TOWARD THE ISSUES THAT THEY HAVE
HIGHLIGHTED. TO BE SURE, THERE
ARE OTHER RECOMMENDATIONS
BROADER THAN THE CAP AND TRADE
PROGRAM RELATIVE THE SCOPING
PLAN, BUT THERE'S ONE IN
PARTICULAR THAT I'D LIKE TO
REALLY FOCUS ON. AND THAT IS THE
5% OF UNUSED ALLOWANCES TO DATE
IN THE CAP AND TRADE PROGRAM,
AND I HAVE ONE SLIDE FOR THAT.
SO I HOPE THAT CAN BE YES, THAT
WOULD BE GREAT. 5% SAVINGS BANK
REPRESENTS EMISSIONS THAT DID
NOT HAPPEN AND WE STILL MET OUR
2020 TARGET. THEY COULD HAVE
HAPPENED AND WE COULD HAVE STILL
MET OUR 2020 TARGET. IT IS ALSO
EARLY INVESTMENT IN THE CAP AND
TRADE PROGRAM WHERE THE RESULTED
FUNDS WENT TO G R F AND WERE
USED FOR A B 617 PRIORITIES AND
WERE ALSO USED TO FUND OTHER
CLIMATE AND STATE PRIORITIES.
PER THE BUDGETING PROCESS AT THE
LEGISLATURE WITH THE
ADMINISTRATION THAT 5% SAVINGS
BANK IS GOING TO BE CRITICAL AS
A TOOL TO HELP SLIDE INTO A MORE
STRINGENT CAP AND TRADE PROGRAM,
SO WHEREAS BEFORE IT MAY HAVE
BEEN SEEN AS A POTENTIAL ISSUE
THAT DID NOT MATERIALIZE, BUT IT
IS GOING TO BE CRITICAL AS A
TOOL IF WE ARE GOING TO MAKE THE
PROGRAM MORE STRINGENT. AND FOR
THIS PARTY LIKE TO FOCUS ON THAT
GRAPH BEHIND ME IN FRONT OF ALL
THE MEMBERS HERE AND WHAT WE
HAVE ARE THREE SCENARIOS 40% AT
THE TOP FOR THE ADJUSTED
INVENTORY SCENARIO, 48% AND THEN
55% YOU WILL SEE THAT THE BAR
CHARTS FROM 2021 TO 2030 HAVE
DIFFERENT COLOR BARS, AND THAT
IS AND I WANT TO GO THROUGH EACH
OF THOSE REPRESENTS. THE TOP
PART, WHICH IS A BIT OF A HASH
IS 5% OF THE ACTUAL ALLOWANCES
EACH YEAR THAT GO TO COST
CONTAINMENT. THE LIGHT BLUE BARS
ARE THE AMOUNT OF ALLOWANCES
THAT GO TO NATURAL GAS UTILITIES
THAT COME BACK AS A CLIMATE
CREDIT TO REPAIRS IN CALIFORNIA.
THE DARKER BLUE IS THE AMOUNT OF
ALLOWANCES THAT GO TO UTILITIES
EACH YEAR ELECTRIC UTILITIES
THAT COMES BACK AS A CLIMATE
CREDIT OR IS USED FOR COMPLIANCE
BY THE PUBLICLY OWNED UTILITIES,
AND THAT IN TOTAL IS ABOUT JUST
A SECOND. THAT'S ABOUT 38% OF
THE TOTAL ALLOWANCES. THE YELLOW
IS WHAT WE GIVE TO INDUSTRY EACH
YEAR TO HELP WITH MINIMIZING
LEAKAGE. THAT IS ABOUT 16% AND
IN THE LAST FEW YEARS IS
PROBABLY AVERAGED ABOUT $1.3
BILLION OF THE TOTAL BUDGET
THAT'S CREATED AND THEN WHATEVER
IS LAST, BECAUSE WE AS THE STATE
GIVE OURSELVES WHATEVER HIS LAST
EACH YEAR GOES TO AUCTION, AND
THAT IS ABOUT 41. THIS IS A ZERO
SUM GAME. SO AS WE THINK ABOUT
CHANGING THE CAPS WE HAVE TO
THINK ABOUT WHERE DID THOSE
ALLOWANCES COME FROM? AND WHAT
YOU SEE IN THOSE COLORED BARS
FROM 2025 TO 2030 IS HOW THOSE
BARS WOULD HAVE TO CHANGE IF WE
WERE TO START REMOVING
ALLOWANCES FOR THE 40% WE WOULD
BE REMOVING ABOUT 118 MILLION
ALLOWANCES FROM 2025 TO 2030.
FOR 48% WERE REMOVING ABOUT 264
MILLION ALLOWANCES. AND FOR 55%
IT'S ABOUT 392 MILLION
ALLOWANCES. THEY HAVE TO COME
FROM SOMEWHERE. AND SO THE
QUESTION IS. HOW DO WE REMOVE
THOSE ALLOWANCES? MAKE THE
PROGRAM MORE STRINGENT AND STILL
MAKE SURE THE VALUE IS
APPROPRIATELY PLACED TO ONE
PROJECT REPAIRS, MINIMIZED FOR
LEAKAGE AND STILL HAVE MONEY FOR
STATE PRIORITIES ON CLIMATE AND
A B 617. SO WITH THAT, I WANT TO
TALK ABOUT SOME OF THE MODELING
THAT HAS COME THROUGH RECENTLY
BECAUSE WE'VE BEEN IN A WORKSHOP
PROCESS FOR ABOUT A YEAR. AND
WHAT THE MODELING SHOWS IS THAT
IF WE DID NOTHING TO THE PROGRAM
THAT 5% SAVINGS BANK WOULD BE
GONE IN THE NEXT DECADE WITH A
PROGRAM EXTENSION. IF WE MAKE
THE PROGRAM MORE STRINGENT, THAT
BANK GOES AWAY FASTER AND PRICES
START TO RISE FASTER IF WE TAKE
AWAY THAT BANK AND WE MAKE THE
PROGRAM MORE STRINGENT, WE TAKE
AWAY OFFSET AND WE ACTUALLY
REDUCED THE ALLOCATION TO
INDUSTRY PROGRAM COSTS GO UP
SIGNIFICANTLY IN THE MODELING
SHOWS THAT SO THE MORE WE TAKE
OUT, THE FASTER WE TAKE IT OUT
THE MORE IMPACT ON COSTS AND SO
THE BALANCE FOR US AND THE WORK
THAT WE HAVE GOING ON IN THE
REMAINING FEW MONTHS OF THIS
YEAR, MAYBE INTO EARLY NEXT YEAR
WILL BE TO MAKE SURE THAT WE'RE
COMING OUT WITH PROPOSALS AND
MODELING THAT REFLECT WHAT IS
APPROPRIATE AND TECHNICALLY
SOUND IN TERMS OF THE STATUTORY
GUIDANCE ON REPAIR PROTECTION.
MINIMIZING FOR LEAKAGE, AND THEN
WHAT WAS LEFT OVER FOR THE STATE
FOR G R F. THE ONE LAST THING
THAT I WANT TO LEAVE EVERYONE
HERE WITH IS THAT MAKING THE
PROGRAM. MORE STRINGENT IS
IMPORTANT BECAUSE THE 2022
SCOPING PLAN INDICATES THAT
SHOULD BE AND AS CHAIR, RANDOLPH
INDICATED THE 40% IS THE MINIMUM
THAT WE NEED TO REMOVE TO MAKE
SURE THAT WE'RE REALIGNING FOR
THE 30. A B S P 32 TARGET OF 40%
BELOW 1990 LEVELS SO SOME AMOUNT
OF ALLOWANCES DO NEED TO COME
OUT OF THE PROGRAM. THE MAULING
TALKS ABOUT HOW QUICKLY AND HOW
FAST THAT CAN HAPPEN. WE'RE
GOING TO CONTINUE TO REFINE THE
MODELING AND PUT IT ON INTO THE
PUBLIC PROCESS. BUT AGAIN, IT'S
A ZERO SUM GAME AND WE HAVE TO
FIGURE OUT WHERE ON DAY ONE THAT
VALUE GOES AND THEN WHO IS IT
SUFFICIENT FOR THE STATUTORY
TARGETS, REPAIR PROTECTION,
MINIMIZING LEAKAGE AND WHAT'S
LEFT OVER FOR THE STATE. I WILL
ALSO SAY THAT THERE ARE PROGRAMS
WHERE THE STATE HAS DECIDED TO
TAKE THEIR MONEY FIRST AND SET
ASIDE X PERCENT OF AN OVERALL
ANNUAL COMPLIANCE OR ANNUAL CAP
TO BE SET ASIDE FOR STATE NEEDS
FOR AUCTIONING AND THEN THE REST
IS DISTRIBUTED FOR THE OTHER
PURPOSES AND OTHER PARTIES. SO
THAT'S SOMETHING TO CONSIDER AND
HAPPY TO TAKE ANY QUESTIONS WHEN
THE TIME IS RIGHT. THANK YOU SO
MUCH. UM ME BACK THROUGH HERE.
OKAY NEXT MEREDITH VALLEY, ALSO
MEMBER OF THE IMAC. UM BUT èC,
BERKELEY DEPARTMENT OF
AGRICULTURAL AND RESEARCH,
RESOURCE ECONOMICS AND ENDOWED
CHAIR OF ENERGY AS WELL. SO
THANKS FOR JOINING. THANK YOU SO
MUCH CHAIR AND VICE CHAIR REALLY
APPRECIATE THE OPPORTUNITY TO BE
PART OF THIS REALLY IMPORTANT
CONVERSATION. I DO NOT HAVE MUCH
TIME. SO I WANT TO HIT MY THREE
POINTS THAT I WANT TO LEAVE YOU
WITH. AND THEN WHATEVER TIME I'M
ALLOWED TO TAKE ALL ELABORATE SO
THE FIRST POINT IS ONE THAT
CHAIR RANDOLPH ALREADY MADE, AND
THAT IS THAT THE COST OF
INACTION IS REALLY, REALLY HIGH.
WE'RE ALREADY SEEING IT IN
DAMAGES FROM EXTREME WEATHER
EVENTS AND THE COSTS OF
ADAPTATION. I THINK GIVEN THE
TITLE OF THIS SESSION, WE'RE ALL
ON BOARD THAT INACTION IS NOT A
STRATEGY WE SHOULD BE SERIOUSLY
CONSIDERING SO I'M NOT GOING TO
DWELL ON IT. USE IT AS MY POINT
OF DEPARTURE. SO WHAT THAT MEANS
IS THAT WE'RE ALL HERE TO TALK
ABOUT INCREASED AMBITION,
REDUCING OUR EMISSIONS AND
ADAPTING TO THE CLIMATE CHANGE
THAT SORT OF BAKED INTO THE
ATMOSPHERE ALREADY, AND THAT
LEAVES US WITH SOME REALLY HARD
CHOICES. AND SO MY SECOND POINT
IS THAT HOW WE CHOOSE TO REDUCE
OUR GREENHOUSE GAS EMISSIONS,
HOW IT USED TO ADAPT TO CLIMATE
CHANGE AND HOW WE PAY FOR ALL
THIS HAS HUGE IMPLICATIONS FOR
HOW EFFECTIVELY WE MAKE THE
TRANSITION AND WHO PAYS AND MY
THIRD, WHICH IS RELATED, IS IT
FOR SERIOUS ABOUT AFFORDABILITY,
AND WE'RE SERIOUS ABOUT AN
EQUITABLE CLIMATE TRANSITION. WE
NEED TO BE MORE SERIOUS ABOUT
COST CONTAINMENT AND FAIR COST
ALLOCATION NEXT SLIDE, SO I'M
SHOWING YOU SOME PICTURES
BECAUSE IT'S LATE IN THE DAY.
BUT THE BASIC IDEA IS THE
FOLLOWING. THERE'S BEEN A LOT OF
WORK TO TRY AND THINK ABOUT WHAT
IT COSTS. LET'S START WITH
GREENHOUSE GAS EMISSIONS
REDUCTIONS. PER TON OF EMISSIONS
AVOIDED AND SO THIS IS JUST A
GRAPH. WE INCLUDED IN OUR IMAC
REPORT. IT'S SOME OF THE
ESTIMATES THAT ARE OUT THERE OF
A COST PER TON AVOIDED FOR
DIFFERENT TYPES OF STRATEGIES
THAT WERE EITHER DEPLOYING OR
SCOPING OUT AS PART OF THE
SCOPING PLAN. I SHOULD SAY THERE
. THERE ARE OTHER PARTS OF THIS
COMING PLAN. THEY'RE OFF THE
CHARTS. THE COSTS ARE JUST SO
HIGH, AND SO WHAT I REALLY WANT
TO UNDER OR SERVICE AS EMPHASIZE
IS THAT WE HAVE AN OBLIGATION.
TO SEEK OUT AND DEPLOY THE LEAST
COST ABATEMENT OPTIONS. BUT
THAT'S REALLY, REALLY HARD.
REGULATORS DON'T HAVE ALL THE
INFORMATION THEY NEED. IT'S HARD
TO PREDICT THE FUTURE, BUT WE
HAVE AN OBLIGATION TO CONTAIN
THE COSTS. THE GOOD NEWS IS, WE
DO HAVE A FUNCTION IN CAP AND
TRADE PROGRAM. THE POINT OF A
CAP AND TRADE PROGRAM IS TO SEEK
OUT AND FIND THE LEAST COST
OPTIONS AND DEPLOY THEM. THEY'RE
NOT SO GOOD NEWS IS THAT WE'RE
NOT REALLY RELYING ON THAT CAP
AND TRADE PROGRAM. TO THE EXTENT
THAT WE COULD. IT'S BEEN A
BACKSTOP IN THE BACKGROUND TYPE
OF POLICY, SO THERE ARE LOTS OF
ISSUES WE NEED TO DEAL WITH.
WITH THE CAP AND TRADE PROGRAM.
IT IS NOT PERFECT, AND THAT'S
WHY WE'RE HERE. BUT IT IS
FUNCTIONING. IT HAS GREAT
POTENTIAL, AND IF WE WANT TO
IDENTIFY AND DEPLOY LEAST COST
OPTIONS, WE GOTTA LEAN INTO THAT
PROGRAM. THE SECOND GRAPH. I
WANTED TO SHOW, YOU KNOW, KIND
OF A LITTLE BIT OF MISSION
CREEP, BUT I THINK IT'S
IMPORTANT TO THINK ABOUT. WE
ALSO HAVE TO ADAPT TO CLIMATE
CHANGE. THIS IS A PICTURE THAT
WAS TAKEN FROM A PAPER. WE JUST
RELEASED WHERE WE LOOKED AT THE
COST PER IGNITION, AVOIDED OF
DIFFERENT STRATEGIES WERE USING
TO REDUCE WILDFIRE RISK IN THE
POWER SECTOR, AND THE STORY IS
THE SAME. THERE ARE A LOT OF
DIFFERENT STRATEGIES WE CAN
CHOOSE FROM. SOME ARE HIGH
COSTS. SOME ARE LOW COST. THESE
ESTIMATES WE ALL WE HAVE TO BE
REALLY CAREFUL THEIR ASSUMPTIONS
BEHIND THEM. THEY'RE NOT
COMPREHENSIVE. BUT THE POINT IS,
IS THAT SOME STRATEGIES COST
MORE THAN OTHERS, AND WE SEEM TO
BE LEANING TOWARDS MORE
EXPENSIVE RISK MITIGATION
OPTIONS IN THE POWER SECTOR
RIGHT NOW IN CALIFORNIA, SO JUST
AS IN, WE'RE WITH THE GREENHOUSE
GAS MITIGATION OPTIONS, WE
SHOULD TRY AND CHOOSE LOW COST
OPTIONS. WHEN WE CHOOSE HIGHER
COST OPTIONS. WE NEED TO THINK
ABOUT WHAT BENEFITS WE'RE
GETTING WITH THOSE HIGH COSTS
OPTIONS BECAUSE COST CONTAINMENT
IS KEY. I THINK I'M ALMOST OUT
OF TIME. SO LET ME FINISH WITH
THE COST ALLOCATION QUESTION,
RIGHT? AND THERE'S BEEN SOME
REALLY GOOD QUESTIONS ABOUT
ELECTRICITY PRICES AND HOW WE'RE
PAYING FOR ALL THIS IF WE
MANDATE TECHNOLOGIES, AND WE
MANDATE ABATEMENT AS WE BUILD
DISTRIBUTION AND TRANSMISSION
INFRASTRUCTURE THAT WE NEED TO
SUPPORT ELECTRIFICATION AS WE
MITIGATE RISK OF WILDFIRE IN THE
ELECTRICITY SECTOR, LET'S FOCUS
ON ELECTRICITY IN THE INTEREST
OF TIME. THE TYPICAL WAY WE
RECOVER THOSE COSTS IN
CALIFORNIA IS TO RAISE THE RATES
RIGHT. SO WE'VE BEEN DOING SOME
WORK TOGETHER WITH SEVERIN,
BORNSTEIN AND JIM SILLY AND WE
RAISED TWO BIG CONCERNS ABOUT
THAT STRATEGY. ONE IS A HIGH
PRICES GETTING HIGHER, REALLY
UNDERMINE ENERGY EFFICIENCY
BECAUSE WHO WANTS TO BUY A HEAT
PUMP? WHO WANTS TO GET AN
ELECTRIC CAR WITH ELECTRICITY
PRICES THIS HIGH, SO WE'VE SHOWN
THAT HIGH PRICES ARE REALLY
SLOWING OUR PROGRESS ON
ELECTRIFICATION. THE SECOND
THING WE ARGUE, IS THAT THIS IS
A REALLY REGRESSIVE WAY TO RAISE
NEEDED REVENUES MORE AGGRESSIVE
THAN INCOME TAX MORE AGGRESSIVE
THAN THE SALES TAX BECAUSE LOW
INCOME HOUSEHOLDS SPEND A LARGER
SHARE OF THEIR INCOME ON UTILITY
BILLS, SO WE NEED TO MAKE THESE
INVESTMENTS BUT I HOPE IT'S NOT.
I'M GOING ECONOMIST I ENJOY
THINKING ABOUT THIS STUFF OTHER
PEOPLE NOT SO MUCH. WE REALLY
GOT TO THINK ABOUT HOW WE'RE
PAYING FOR THIS BECAUSE IT CAN
UNDERMINE THE EQUITY EFFICIENCY,
THE DURABILITY OF OUR CLIMATE,
AMBITION AND OUR CLIMATE GOALS.
I'LL STOP THERE. THANK YOU
PACKED A LOT IN, UM WILL MOVE
NEXT TO OOH! CATHERINE GROUPER.
CO CHAIR OF THE CARBON
ENVIRONMENTAL JUSTICE ADVISORY
COMMITTEE. YES THANK YOU, AND
ALSO EXECUTIVE DIRECTOR OF THE
CENTRAL VALLEY AIR QUALITY
COALITION, OR C VAC. UM WE
RECENTLY BECAME A PERMANENT
BODY, WHICH I APPRECIATE TOOK
THE LEADERSHIP OF CHAIR RANDOLPH
IN THE OFFICE OF ENVIRONMENTAL
JUSTICE AT CARBON. ONE OF THE
CRITICAL ASPECTS OF THIS ROLE IS
HAVING DIALOGUE WITH BODIES LIKE
THE INDEPENDENT EMISSIONS MARKET
ADVISORY COMMITTEE. WHILE
OVERALL E. JACK AND I M AC MAY
NOT AGREE ON THE EFFECTIVENESS
OF THE CAP AND TRADE PROGRAM WE
HAVE FOUND ALIGNMENT AROUND
TOPICS LIKE THE NEED FOR BETTER
DATA AND ANALYSIS. THE 2023 I AM
A REPORT ASSUMES THAT THE
PROGRAM IS EXTENDED WITHOUT
DETAILING NECESSARY REFORMS AND
ISSUES THAT HAVE BEEN RAISED IN
PREVIOUS REPORTS. THERE'S A
COMMENT LETTER INCLUDED IN YOUR
BACKGROUND PACKET THAT I CO
AUTHORED WITH DANGEROUS IT
CENTER ON RACE, POVERTY AND THE
ENVIRONMENT THAT I WILL JUST
HIGHLIGHT A FEW OF THE ISSUES IN
SOME OF THE SOLUTIONS. REGARDING
HARMFUL IMPACTS OF THE CAP AND
TRADE PROGRAM EACH. JACK HAS
REPEATEDLY EXPRESSED CONCERNS
THAT THE PROGRAM AS IMPLEMENTED,
BICARB DOES NOT SUFFICIENTLY
REDUCE EMISSIONS AND IN FACT
INCREASES POLLUTION AND
ENVIRONMENTAL JUSTICE
COMMUNITIES. THE FUNDAMENTAL
GOAL OF THE PROGRAM IS TO REDUCE
STATEWIDE GREENHOUSE GAS
EMISSIONS AT THE LOWEST COST TO
INDUSTRY. RACIST PRACTICES SUCH
AS REDLINING AND PURPOSEFUL
PERMITTING OF MAJOR POLLUTION
POLLUTION. SOURCES IN LOW INCOME
COMMUNITIES OF COLOR LEADS TO A
CONCENTRATION OF ENVIRONMENTAL
HAZARDS, THE ABILITY TO TRADE OR
PURCHASE EMISSIONS CREDITS AT A
FRACTION OF THE COST OF DIRECT
REDUCTIONS FAILS TO CREATE
SUFFICIENT COST INCENTIVE,
MEANING THOSE FACILITIES WILL
CONTINUE TO PRODUCE POLLUTANTS
DETRIMENTAL TO PUBLIC HEALTH AND
THE CLIMATE, PARTICULARLY FOR
FRONTLINE COMMUNITIES. MOST OF
THE OFFSET SO FAR HAVE BEEN
PROVEN TO BE FAKE OR VASTLY
INFLATED. IT IS UNACCEPTABLE FOR
CARVED A CONTINUOUS SUBSIDIZING
DUBIOUS REDUCTIONS IN A MANNER
THAT ALLOWS CONTINUED EMISSIONS
IN CALIFORNIA COMMUNITIES. CARBS
SHOULD ELIMINATE OFFSETS, OR AT
LEAST EVALUATE COURSE,
CORRECTIONS FOR CREDIT ALREADY
USED FOR COMPLIANCE THAT ARE NOT
DELIVERING THE ASSUMED
REDUCTIONS. CARBS SHOULD ALSO
CONTINUE TO PROHIBIT
INTERNATIONAL CREDITS. WHAT I'M
GENERALLY CALLING TAILORED
TRADING, WHICH HAS ALSO BEEN
REFERRED TO AS FACILITY SPECIFIC
CAPS OR NO TRADE ZONES. BUT
THOSE MEAN DIFFERENT THINGS AND
WE STILL NEED TO CLARIFY WHAT WE
MEAN WHEN WE SAY THOSE IS JUST
ONE TOOL TO ADDRESS
ENVIRONMENTAL JUSTICE ISSUES.
AND MR BERTRAND, NOT IN HIS I M
MACKEREL RECENTLY CONDUCTED AN
ANALYSIS ON THE IMPLICATIONS OF
SUCH A POLICY SHOWING LITTLE TO
NO ADVERSE IMPACT ON CREDIT
PRICES. CARBON CAPTURE, USE AND
STORAGE OR CC. US SHOULD ONLY BE
DEPLOYED IN THE HARDEST TO DE
CARBONIZED SECTORS OR NOT AT ALL
. CARB MUST IMPLEMENT A VARIETY
OF POLICIES AND STRATEGIES ON CC
US TO COMPLEMENT AND NOT
COMPROMISE EMISSION REDUCTIONS.
RESEARCH DISPUTES THE FIELD
FEASIBILITY OF BIOMASS CARBON
CAPTURE, ACTUALLY RESULTING IN A
NET REDUCTION OF EMISSIONS AND
RISKS PERPETUATING HARM IN
FRONTLINE SAN JOAQUIN VALLEY
COMMUNITIES SUCH AS SOUTH
STOCKTON'S MADEIRA AND DELANOE,
CCU. THIS IS NOT A GOOD FIT FOR
MOST EMISSION STREAMS ON
REFINERIES. SPACE REQUIREMENTS
MAKE IT QUESTIONABLE AND IT IS
INFEASIBLE TO ENSURE SAFE
TRANSPORT TO UM, AS APPROPRIATE
SEQUESTRATION SITES THAT WOULD
HAVE TO OCCUR OVER HUNDREDS OR
THOUSANDS OF MILES. SB 905 IS
INTENDED TO BOTH FACILITATE
DEPLOYMENT AND CONSTRAIN IT NOT
ACCELERATED COMMUNITY
PROTECTIONS IN SP 905 THAT NEED
TO BE ACTED ON OUR PIPELINE
MORATORIUM UNTIL FEDERAL RULES
ARE UPDATED A PROHIBITION ON USE
FOR ENHANCED OIL RECOVERY AND
MOST PRESSINGLY THE REQUIREMENT
THAT CARB PRODUCED REGULATIONS
THAT ENSURE OPERATORS MINIMIZE
CO POLLUTANT EMISSIONS TO THE
MAXIMUM EXTENT TECHNOLOGICALLY
FEASIBLE. THE CENTRAL VALLEY AIR
QUALITY COALITION HAS WORKED TO
BUILD CONSENSUS ON A COMMUNITY
BASED PLATFORM AND WE ARE
WAITING FOR CARB TO ACT ON THEIR
REGULATORY AUTHORITY. IF WE
COULD GO TO SLIDE TO PLEASE,
THIS SLIDE DEPICTS OVERARCHING
CONCERNS AND SOLUTIONS FROM 2020
TO SAN JOAQUIN VALLEY WORKSHOP
WITH OVER 80 RESIDENTS FROM
FRONTLINE COMMUNITIES, SO
PROVIDING THIS IMAGE IS ONE WAY
OF BRINGING THEIR VOICE INTO THE
PEOPLE'S HOUSE. AND IT IS ALSO A
REMINDER THAT WE NEED HOLISTIC
SOLUTIONS. THE CAP AND TRADE
PROGRAM IS MEANT TO BE A
BACKSTOP. SO WHILE I APPRECIATE
ATTENTION TO EQUITY ISSUES LIKE
PASSED THROUGH COSTS, JACK HAS
PREVIOUSLY SUPPORTED SOLUTIONS
SUCH AS CAP AND DIVIDEND AND NOT
JUST A FLAT DIVIDEND, BUT ONE
THAT IS TAILORED TO PRIORITY
COMMUNITIES. STEVE IS ALSO
SUPPORTING THE CLIMATE BOND TO
FUND SUSTAINABLE COMMUNITIES AND
CLIMATE RESILIENCE, SUCH AS
COOLING AND CLEAN AIR CENTERS.
AND WE HAVE TO KEEP IN MIND THAT
CLEANER IS A HUMAN RIGHT AND THE
FOCUS ULTIMATELY MUST REMAIN ON
DIRECT REDUCTIONS. IT'S
DIFFICULT TO PUT A PRICE TAG ON
THE ABILITY TO LET YOUR KIDS
PLAY OUTSIDE OR YEARS AND
DECADES TAKEN OFF OF PEOPLE'S
LIVES. IF CAP AND TRADE IS TO BE
EXTENDED, MUCH CAN BE DONE TO
ADDRESS CONCERNS. CARBS SHOULD
CLARIFY WHERE IT NEEDS
LEGISLATIVE DIRECTION AND
MEANINGFULLY INCORPORATED JACK
RECOMMENDATIONS, THE LOW CARBON
FUEL STANDARD AND CAP AND TRADE
BOTH EQUAL CARBON MARKETS AND
SHOULD BE CONSIDERED TOGETHER.
AS JUST ONE EXAMPLE. CREDITING
CARBON CAPTURE, USE AND STORAGE
IS COUNTERINTUITIVE, UNDERMINES
CARBON NEUTRALITY GOALS AND
RISKS EXTENDING BUSINESS AS
USUAL AND HAVE DONE IN BOTH
PROGRAMS INCREASES THE POTENTIAL
FOR DOUBLE COUNTING. THE GOLDEN
STATE HAS AN ABUNDANCE OF
FINANCIAL, PHYSICAL AND CULTURAL
RESOURCES, AND WE MUST DO MORE
TO ENSURE PROSPERITY, DIGNITY
AND QUALITY OF LIFE FOR ALL WITH
A FOCUS ON THOSE MOST IMPACTED
THANK YOU. THANK YOU SO MUCH. I
KNOW WE'VE GOT ELIO HERE ON HAND
IF WE HAVE ANY TECHNICAL
QUESTIONS FOR FOLLOW UP. UM DID
YOU WANT TO MAKE ANY COMMENTS,
THOUGH? WE WERE ASKED BY YOUR
STAFF TO MAKE A FEW COMMENTS
ABOUT YOUR GIRAFFE. WOULD YOU
LIKE US TO DO THAT? STILL UM
OKAY. SO I'M SARAH KORNET WITH
THE LEGISLATIVE ANALYST'S OFFICE
. SO JUST JUST FOR SOME KIND OF
CONTEXT ABOUT THE GR IF
CONVERSATION JDRF HAS RAISED
BETWEEN THREE AND 5 BILLION PER
YEAR OVER THE PAST SEVERAL YEARS
AND BECAUSE THE REVENUES ARE
AUTHORIZED IN A WAY THAT'S TAKEN
TO ATTACKS. THE LEGISLATURE
COULD IN THEORY USES REVENUES
FOR BROAD PURPOSES. MOST OF THE
REVENUES AS YOU KNOW, ARE
DIRECTED TO CONTINUOUS
APPROPRIATIONS, WITH THE
REMAINING AVAILABLE FOR
DISCRETIONARY SPENDING, AND THE
GOVERNOR IS 2425 BUDGET PROPOSES
TO USE MOST OF THESE
DISCRETIONARY DOLLARS TO
BACKFILL REDUCTIONS IN GENERAL
FUND SPENDING AND CLIMATE
PACKAGE IS PRIMARILY THE ZEV
PACKAGE. UM HOWEVER, DEPENDING
ON HOW THE BUDGET SITUATION
EVOLVES, THESE REVENUES COULD
EVEN HELP BACKFILL REDUCTIONS TO
CORE ONGOING PROGRAMS, WHICH IS
SOMETHING OUR OFFICE HAS HAS HAS
RECOMMENDED OR NOTED TO YOU OVER
THE PAST COUPLE OF MONTHS. THERE
IS ALSO CONSIDERABLE UNCERTAINTY
WITH REVENUES BECAUSE IT IS NOT
YET CLEAR HOW CARB IS GOING TO
MAKE CHANGES TO THE PROGRAM AND
ALLOWANCE PRICES MAY DECLINE.
THE LONGER THE LEGISLATURE
AWAITS TO EXTEND THE PROGRAM
BEYOND 2030. SO WITH THIS IN
MIND, WE RECOMMEND THE
LEGISLATURE MONITOR AUCTIONS AND
ADOPT SPENDING LEVELS THAT
REFLECT EVOLVING REVENUE TRENDS,
FOCUSING JDRF ON YOUR HIGHEST
PRIORITY ACTIVITIES. WHATEVER
THOSE MAY BE. THANKS FOR THAT.
WE'LL BRING IT BACK TO THE DAYS
MEMBERS HAVE FOLLOW UP QUESTIONS
FOR OUR PANELISTS. ANYTHING OFF
THE BAT? UNLESS YOU WANT ME TO
DIVE IN. ALL RIGHT, I'LL TAKE A
SHOT. UM CAN WE, UM I WANTED TO
DRILL DOWN ON, UM PROFESSOR FOUL
EASE POINTS IN TERMS OF THE SORT
OF COST OF INACTION. HOW HOW
MUCH DO YOU THINK IS SORT OF
BEING IF WE WERE TO SAY, TAKE
THE $5 BILLION OF WILDFIRE
MITIGATION. SPENDING THAT WE
CURRENTLY PUT ON UTILITY BILLS
AND PUSH THAT SAY INTO A BOND.
UM AND FINDING SORT OF OTHER
WAYS TO ANOTHER WAS PULLED SORT
OF PUBLIC PURPOSE SPENDING OFF
OF THOSE UTILITY BILLS AND FIND
OTHER TOOLS. UM LIKE THE LIKE
THE G, R F, OR LIKE OR LIKE A
BOND, WHICH I WHICH I WOULD NOTE
. MISS GROUP HAS SLIDES WERE 22
IDEAS IDENTIFIED A CAPTAIN
DIVIDEND IDEA AND THEN SORT OF
CLIMATE BOND IDEA. UM HAVE YOU
SORT OF HAVE YOU ANALYZED? WHAT
BREATHING ROOM? I GUESS FOR LACK
OF BETTER WORD WE COULD GIVE
OURSELVES UM AS WE SEEK DEEPER
PENETRATION OF ELECTRIC VEHICLES
, BUILDING DECARBONIZATION
THINGS LIKE THAT GREAT QUESTION,
AND I'LL ENTER BRIEFLY AND THEN
PLEASE PUSHBACK SO OR ASK
FURTHER QUESTIONS. SO WE'VE BEEN
THINKING A LOT ABOUT THIS. THIS
BECAUSE RATES ARE GETTING
HIGHER. AH AND LOOKING FOR
OPPORTUNITIES TO SHIFT PIECES
THAT WE'RE PAYING FOR
ELECTRICITY RATES OFF OF RATES
ON TO SAY THE STATE BUDGET AND
ONE THING I JUST WANT TO FOR
CONTEXT, YOU KNOW, A LOT OF THIS
IS THE COST OF CLIMATE CHANGE
ADAPTATION LIKE WE DON'T PUT. I
DON'T KNOW IF FLOOD WALLS ON
WATER BILLS. IT SEEMS A LITTLE
BIT ARBITRARY AND TO JUST
UNDERSCORE THE ARBITRARINESS
WHEN THERE'S VEGETATION MANAGED
DOESN'T MANAGEMENT DONE CLOSE TO
A POWER LINE? IT'S ON THE BILLS
WHEN IT'S FAR FROM THE POWER
LINE IS ON THE STATE BUDGET. SO
WE SHOULD REALLY BE THINKING
ABOUT YOU KNOW WHAT'S ON THESE
BILLS AND WHY. WHO HAVE DONE A
LITTLE BIT, AND THIS IS MORE OF
YOUR JOB THAN MINE, TRYING TO
FIGURE OUT JUST A POLITICAL
PALATABILITY OF TAKING SOME OF
THIS STUFF OUT OF THE RATES AND
ON TO PUT ONTO THE STATE BUDGET,
AND WHEN IT'S SUGGESTED THAT
THERE IS SOME POTENTIAL THERE,
BUT IT'S NOT GOING TO MITIGATE
THE PROBLEM. SO I THINK IN MY
VIEW, IT'S GOING TO BE A
COMBINATION OF ONE COST
CONTAINMENT. I REALLY THINK WE
NEED TO BEAR DOWN ON HOW MUCH
WE'RE SPENDING ON WILDFIRE
MITIGATION AND OTHER THINGS ON
THE BILLS. Tð EXACTLY AS YOU'RE
SUGGESTING. ARE THERE THINGS IN
THE BILLS THAT WE CAN TAKE OUT
OF THE BILLS AND PUT ON THE PAY
FOR THEM, USING OTHER TIMES LESS
REGRESSIVE TAX INSTRUMENTS? AND
THREE RESTRUCTURE THE RATES. I
MEAN, WE ARE PAYING SO MUCH MORE
PER KILOWATT HOUR THAN IT
ACTUALLY COSTS SOCIETY. EVEN IN
A CARBON PRICE OF $200 PER TON.
IT'S SLOWING ELECTRIFICATION
PROGRESS AND IT'S REALLY
REGRESSIVE. I THINK, IN MY
HUMBLE OPINION, A COMBINATION OF
THOSE THREE THINGS I THINK YOUR
IDEA IS GOOD, BUT I DON'T THINK
IT'S GOING TO GET US WHERE WE
NEED TO BE IF WE WANT BECAUSE
THE SCALE OF THE DOLLARS YES,
YES, BUT AGAIN, EVEN $10 BILLION
MORE ANNUALLY TO MAKE IT.
THERE'S NO QUESTION IT WOULD. IT
WOULD MAKE A DENT. BUT WHEN YOU
LOOK AT LIKE HOW WE'RE GETTING
FROM, YOU KNOW, TENCENT. WHICH
IS REALLY WHAT IT COSTS IN TERMS
OF LOCAL AIR POLLUTION CLIMATE.
AND WHAT WE'RE PAYING, WHICH IS
COMING UP ON 50 CENTS A KILOWATT
HOUR. SOME OF THAT IS JUST, YOU
KNOW, ELECTRIFICATION
DISTRIBUTION INFRASTRUCTURE,
WHICH PROBABLY WILL NEED TO GET
PAID FOR IN THE POWER SECTOR,
ALTHOUGH YOU PROBABLY KNOW
BETTER THAN I SO IT'S A GREAT
SUGGESTION. MY SENSE AND YOU'RE
THE EXPERTS IS THAT IT'S GOT TO
BE SOME COMBINATION OF COST
CONTAINMENT. RATE RESTRUCTURING
AND REALLOCATION OF THESE COSTS
OFF BILLS AND ON TO THE TAX BASE
OR OTHER CREATIVE SOLUTIONS THAT
YOU WILL COME UP WITH. OKAY SO
YOUR POINT IS THAT WE'RE
BASICALLY, UM ASKING REPAIRS TO
PAY FOR TOO MUCH OF THE
ELECTRIFICATION INFRASTRUCTURE
BUILD OUT AND WE'RE PUTTING IT
STRAIGHT INTO THE RAIDS, I GUESS
JUST WERE BECAUSE I HAVE THE
OPPORTUNITY. WE'RE ASKING THEM
TO PAY FOR CLIMATE CHANGE
ADAPTATION IN TERMS OF WILDFIRE
RISK MITIGATION AND WHETHER
IZATION AND SHORING UP THE GRID
FOR MORE EXTREME WEATHER EVENTS.
SUBSIDIES PUBLIC PURPOSE
PROGRAMS. YOU KNOW, THINGS THAT
WE LIKE AND WE WANT ARE SHOWING
UP IN THE BILLS, DISTRIBUTION
TRANSMISSION INFRASTRUCTURE THAT
WE NEED TO DE CARBONIZED THE
POWER SECTOR AND ELECTRIFY THE
BUILDING SECTOR AND IT'S JUST
IT'S ALL PILING UP TO A POINT
WHERE IT'S REALLY HARD TO
CONVINCE A HOUSEHOLD TO BUY AN
ELECTRIC CAR. AND THEN THEY LOCK
IN A GAS POWERED CAR OR BY A
HEAT PUMP, AND THEY LOCK IN AND
NATURAL GAS FURNACE. HMM REALLY
DETRIMENTAL AND I MEAN, THE
IRONY IS THAT RIGHT NOW, MAILERS
ARE BEING SENT OUT AND
BILLBOARDS ARE BEING TAKEN UP
AROUND THE STATE BY THE WESTERN
STATES PETROLEUM ASSOCIATION
BLAMING US ELECTRIC VEHICLES.
CLIMATE POLICY FOR WHY RATES ARE
GOING UP LOOKING AT A MAILER
THAT WENT OUT EVEN THIS WEEKEND
SAYS, YOU KNOW, YOUR RESIDENTIAL
ELECTRICITY RATES ARE UP. 70%
GAS PRICES ARE UP 35. MEANWHILE
CALIFORNIA LAWMAKERS ARE MOVING
US TO ELECTRIC CARS ARE VERY
DANGEROUS NARRATIVE IF WE
SWALLOW IT WHOLE BECAUSE AS AS
PRESS ORPHALI JUST POINTED OUT,
AND I THINK OUR OUR OTHER
EXPERTS WOULD WOULD BACK ME UP
ON THIS. UM THE PRICE DRIVER TO
DO ATTRIBUTE ALL THAT TO OUR
CLIMATE POLICIES IS JUST
FACTUALLY INACCURATE, RIGHT THAT
LOW CARBON FUEL STANDARD AND THE
CAP AND TRADE PROGRAM ARE NOT
THE PRIMARY THING, DRIVING UP
GAS PRICES OR ELECTRICITY RATES.
IT'S THAT IT'S REALLY GETTING A
LOT HOTTER. THERE'S A LOT OF
FIRES OR THERE'S WARS ALL OVER
THE WORLD AND PRICE ARE GETTING
COMPRESSED AND RUSSIA'S DECIDING
TO PULL BACK AND WE'RE EXPORTING
MORE OIL AND GAS. AND SO ALL THE
THESE THINGS, BUT THE CLASSIC.
PLAYBOOK HERE IS THAT THE OIL
INDUSTRY SCARES EVERYONE ABOUT
CLIMATE POLICY IS THE SORT OF
BAD GUY HERE. BUT IN FACT WHAT
I'M HEARING FROM YOU ALL IS THAT
IF WE ACTUALLY HAD A MORE ROBUST
, UM, APPROACH TO CARBON PRICING
, WE COULD ACTUALLY REDUCE BILLS
AT THE SAME TIME INCREASING NOT
JUST HAVING A DIVIDEND OR CREDIT
ONLY APPROACH BUT UPLIFTING,
DISADVANTAGED COMMUNITIES.
INVESTING IN RESILIENCE CENTERS
MEETING SOME OF THE STOPGAPS WE
HAVE IN TRANSIT OR HOUSING. IN
OTHER WORDS. IT'S CURRENTLY
FACTUALLY NOT A LIABILITY, BUT
WE CAN TURN IT INTO AN ACTUAL
SORT OF DRIVER AND, UM,
GUARANTOR OF SOME BENEFITS INTO
THIS FUTURE. I DON'T KNOW, MAYBE
HAPPY TO SHARE AFTER THE RAPIER
ADVOCATES AND CPUC HAS DONE SOME
ANALYSIS OF THIS RECENT RATE
INCREASE AND WILDFIRE MITIGATION
, CLIMATE CHANGE ADAPTATION AND
SOME SUBSIDY, YOU KNOW,
SUPPORTING SUBSIDIES AND THINGS
FOR RELATIVELY EXPENSIVE
INITIATIVES WERE WHAT THEY
IDENTIFIED AS SORT OF THREE KEY
DRIVERS, SO I COMPLETELY AGREE
WITH YOUR CHARACTERIZATION, BUT
I DO THINK THERE ARE NARRATIVES
OUT THERE THAT CAN MISPLACE THE
CARS AND THE DRIVERS. ONE OF
THEM WAS ONE OTHER POINT. I WANT
TO JUST DRILL DOWN BEFORE WE
WRAP UP OR GIVE YOU GUYS A
CHANCE TO SAY SOMETHING. UM
DALLAS. BERTRAND YOU MADE THE
POINT. UM ABOUT THIS THIS
CONCERN OF THE OF THE STOCKPILE
ALLOWANCES. YOU SAID, UM 6 TO 14
RECENT ESTIMATES. SO IS YOUR
POINT THAT IF WE'RE NOT IF WE
DON'T PURSUE AN EXTENSION AND AN
UPDATE TO THE CAP AND TRADE RULE
, MAKING IN THE RIGHT WAY THAT
WE COULD THAT THAT COULD ALL THE
WINDFALL PROFIT, TOO. EARLY
STOCKPILERS. I MEAN, IS THAT IS
THAT WHAT WE'RE RUNNING THE RISK
OF HERE HESITATE TO USE THE WORD
WINDFALL PROFITS JUST BECAUSE
IT'S PEJORATIVE TERM, BUT I WANT
THAT TRANSFER OF VALUE TO BE TO
OCCUR IN THE IN THE LIGHT OF DAY
FOR ONE THING, AND I ASKED, YOU
KNOW WHOSE MONEY IS IT IN THE
FIRST PLACE? WE TO THE EXTENT WE
WANT TO SEE PRICES OF CORVIN
ALLOWANCES GO UP BECAUSE IT WILL
DRIVE THE RIGHT KIND OF PURCHASE
DECISIONS BY BUSINESSES AND
HOUSEHOLDS. THAT'S GREAT THAT
THE VALUE THAT THAT CREATES TO
WHOM SHOULD THAT VALUE ACCRUE
AND IF IT WERE TO SOME EXTENT OR
CHANGE HOLY ACCRUING TO THE
GREENHOUSE GAS REDUCTION FUND,
FOR EXAMPLE THAN THAT REVENUE
WOULD BE AVAILABLE TO DRIVE YET
FURTHER INVESTMENTS, SO THAT IS
THE ISSUE. IT'S THERE'S MULTIPLE
PRECEDENTS, THE FEDERAL LEVEL IN
MID COURSE IN A PROGRAM WHERE
THEY CHANGE THE COMPLIANCE VALUE
OF INSTRUMENTS IN ORDER TO
ACHIEVE ENVIRONMENTAL GOALS, AND
THAT'S WHAT THIS INCREASE. THE
NEW PROGRAM REVIEW THAT CAR WAS
DOING NOW IS ABOUT AND ENHANCING
THE ENVIRONMENTAL GOAL OF THE
CAP AND TRADE PROGRAM. AND SO
THE QUESTION IS HOW BEST TO
ACHIEVE THAT. AND WHAT WE HAVE
LOOKED AT YET IS THE COMPLIANCE
VALUE OF BANKED ALLOWANCES AND
DRAWING SOME OF THAT INTO PLAY.
BECAUSE THE EXTENT THAT WE DO
THAT IT'S A ZERO SUM GAME, AND
SO ONCE YOU DECIDE WHAT THE GOAL
IS GOING TO BE A 48% SCENARIO OR
WHATEVER. THEN THERE'S A YOU
IDENTIFIED ACCUMULATIVE
ALLOWANCE BUDGET. AND THEN THE
QUESTION IS. HOW ARE YOU GOING
TO GET FROM HERE TO THERE? YOU
CAN TAKE IT ALL OUT OF THE
AUCTION, OR YOU CAN TAKE IT ALL
OUT OF INDUSTRIALS, OR YOU
COULD. COULD YOU LOOK ACROSS THE
WHOLE PROGRAM AND TRY TO CHANGE
THE WHOLE PROGRAM?
PROPORTIONALLY I THINK THOSE
IDEAS SHOULD BE ON THE TABLE.
AND MR HOTA. I'M WONDERING WHEN
HE MENTIONED THE SORT OF RULES
BASED APPROACH AND COMING UP
WITH SORT OF DIFFERENT
ADJUSTMENT FACTORS. BUT IF I
UNDERSTOOD YOUR TESTIMONY RIGHT
THERE, THE OTHER TOOLS I MEAN
THAT THE MIRROR EXTENSION ITSELF
AND AN INCREASED STRINGENCY
COULD ALSO HELP MITIGATE SOME OF
THAT. I DON'T KNOW WHAT THE WORD
TO USE IS OTHER THAN WINDFALL
PROFIT, UNDUE BENEFIT, UM,
UNFAIR BENEFIT TO STOCKPILERS. I
DON'T KNOW. I'LL USE THE TERM
WINDFALL PROFIT, BUT, UM BUT IT
BESIDES THIS SORT OF RULES BASED
ADJUSTMENT FACTOR TO THESE
BANKED ALLOWANCES. ARE THERE
OTHER TOOLS? YOU THINK THAT
ACCOMPLISHMENT IS AN EXTENSION
WITH INCREASED STRINGENCY? ONE
OF THEM? THERE'S A COUPLE OF
THINGS EXTENSION DEFINITELY DOES
HELP BECAUSE SOME OF THE PEOPLE
THAT OWN THOSE ALLOWANCES AREN'T
HEDGE FUNDS ARE VOLUNTARY
PARTICIPANTS. THEY ARE REGULATED
ENTITIES, AND IT HELPS THEM
MODERATE THEIR COSTS FOR
COMPLIANCE IN THE PROGRAM, WHICH
MEANS THAT MODERATES ANY
POTENTIAL PASSED THROUGH THEY
MAY HAVE AS WE THINK ABOUT BEING
HAVING STEEPER CAPS, THE HOLDING
LIMIT THE POSITION LIMIT FOR
BOTH VOLUNTARY PARTICIPANTS IN
REGULATORY ENTITIES DROPS EACH
YEAR. SO IF YOU'RE AT YOUR MAX
IN YEAR, ONE BY YEAR TWO, YOU
HAVE TO RELEASE SOME OF THAT
BACK INTO THE MARKET AT WHATEVER
THE MARKET PRICES AT THAT POINT,
AND SO THERE ARE A COUPLE OF
FEATURES THAT DO NOT LET YOU
HOLD ON TO A HUGE BANK OF
ALLOWANCES IN PERPETUITY IN THE
PROGRAM. I THINK THE OTHER PIECE
THAT IS WORTH MENTIONING IS THAT
AS WE THINK ABOUT THE EXTENSION,
IT'S THE EXTENSION AND HOW WE
THINK ABOUT THE STEEPNESS OF
GETTING INTO THAT 20 POST 2030
PERIOD AND HOW WE SMOOTH THAT
OUT AS MUCH AS POSSIBLE. AND SO
WHEN WE TALK ABOUT THE SCHEDULE,
I MISSPOKE, AND WHAT WE'RE
TRYING TO DO IS HAVE SOMETHING
THAT'S GOING TO OUR BOARD THIS
YEAR. TO MAKE SURE WE GIVE A
LONG LEAD WAY FOR PEOPLE TO PLAN
FOR A STEEPER TARGET. AND SO
THAT WE HAVE MULTIPLE YEARS TO
PULL ALLOWANCES OUT, SO WE'RE
NOT JUST STUCK IN THE LAST THREE
OR FOUR YEARS, TRYING TO PULL
OUT ALLOWANCES AND HIT A STUPOR
TARGET AND GOING SOONER THAN
LATER ACTUALLY LETS US GIVE THAT
MARKET SIGNAL THAT I THINK YOU
WERE TALKING TO A CHAIR RANDOLPH
ABOUT CERTAINTY AND INVESTMENT,
MAXIMIZING FEDERAL DOLLARS. ALL
OF THOSE GOOD THINGS WE WANT TO
SEE HAPPEN. BUT YOU CARP HAS THE
DISCRETION OF THE CURRENT LAW TO
MAKE SOME OF THESE ADJUSTMENTS
TO THE MECHANICS OF THE CAP AND
TRADE ROOM PROGRAM THROUGH THIS
RULE MAKING THIS YEAR, BUT THE
EXTENSION PIECE IS THAT'S NOT
BENEFICIALLY RECOMMENDED TO THE
CARBON. WE HEARD THE CARB CHAIR
SAY THAT, BUT WE'RE WORKING
THROUGH THE MODELING FOR THAT.
AND SO WE'VE BEEN DOING THE
MODELING ALL ALONG, AND WE'VE
BEEN DOING IT WITH QUEBEC AND
WITH UC DAVIS IN OUR PUBLIC
WORKSHOPS TO SHOW HOW A POST
2030 PROGRAM CAN HELP MODERATE
BEING STEEPER IN THIS DECADE AND
THEN GLIDING IN INTO THE
REDUCTIONS. WE KNOW WE NEED TO
HIT A B 1279 TARGETS. UM YEAH.
MR MARTIN SUJI. THANK YOU. UM SO
I FEEL LIKE I SHOULD KNOW ALL
THIS, BUT I'M GONNA YEAH. REVEAL
MY IGNORANCE AND ASKING THE
QUESTIONS. UM IT'S MY
RECOLLECTION THAT IT WAS I IMAC
THAT FIRST PROPOSED THE PUBLIC
BANKING METRICS FOR THE
ALLOWANCES. HMM. IS THAT
CORRECT? WELL I THINK YOU WOULD
FIND ALL ECONOMISTS WHO ARE
ADVOCATING CARBON PRICING OR
MARKET TO PUT ADVOCATE BANKING
OF ELEMENT ELEMENT OF GOOD
PROGRAM DESIGNED. SO IF THAT'S
WHAT YOU MEAN. YES BANKING IS A
FEATURE OF THE PROGRAM THAT'S
BUILT IN AND THAT'S GREAT. BUT
BUT BANKING I AM THINKING ABOUT
BANKING IN TERMS OF THE OR WHILE
I'M THINKING ABOUT THE, UH OPEN
AND TRANSPARENT DISCLOSURES OF
YOU KNOW? YES ABSOLUTELY. THANK
YOU VERY MUCH. YES WE HAVE
ADDRESSED THAT MULTIPLE TIMES.
BUT BUT, UH IT SEEMS TO ME THAT
SO IN MY CORRECT IN
UNDERSTANDING THAT ONLY CARB
KNOWS HOW MANY COMPANIES HAVE
HOW MANY ALLOWANCES YES, WE KNOW
EVERY INDIVIDUAL ACCOUNT HOLDERS
ALLOWANCES WE PUT UP BY SECTOR
HOW MANY ALLOWANCES ARE GIVEN
AWAY FOR FREE TO LIKE REFINING
OIL AND GAS OR CEMENT AND EVERY
INDIVIDUAL FACILITY WHEN THEY
COMPLY WITH THE PROGRAM. WE
NOTE, WHICH WHICH AMOUNT OF
ALLOWANCES OR OFFSETS THAT
COMPANY IS USING FOR COMPLIANCE.
WE ALSO HAVE QUARTERLY REPORTS
THAT SHOW IN AGGREGATE. HOW MANY
ALLOWANCES A STATE HOLDS HOW
MANY VOLUNTARY PARTICIPANTS MAY
HOLD AND THERE ARE SINGLE
ACCOUNTS AND THEN WHAT THE
REGULATED ENTITIES MIGHT HAVE IN
THEIR COMPLAINT. IT'S ACCOUNTS
SO BUT BUT BUT OF COURSE THE
COMPANIES ALSO KNOW HOW MANY.
HOW MANY ALLOWANCES THEY OWN.
THEY HAVE BANKED. THAT'S
CORRECT. BUT IN TERMS OF THE
OVERALL PICTURE CARB HAS A
MONOPOLY ON ON ACCESS TO THAT
DATA. IN TERMS OF YOU KNOW WHICH
ONE OF THE 400 COVERED ENTITIES
HAVE. HOW MANY ALLOWANCES
BECAUSE WE HAVE A JOINT PROGRAM
WITH QUEBEC. THEIR MARKET
MONITORING STAFF HAVE INSIGHT
INTO THE JOINT TRACKING SYSTEM,
JUST LIKE OUR STAFF DO, AND SO
DOES THE MARKET MONITOR. OKAY
BUT BUT IN TERMS OF THE
CALIFORNIA COVERED ENTITIES,
ONLY CARB HAS THE FULL PICTURE
OF WHO HAS HOW MANY ALLOWANCES
THAT THAT INFORMATION IS WITHIN
A FEW STAFF WITHIN CARB. IT'S
NOT EVEN ALL OF CARB THAT KNOWS
THAT BECAUSE OF THE MARKET
SENSITIVITY OF THE DATA AND THE
ACTIVE SECONDARY MARKET. OKAY,
SO TURNING BACK TO IMAC. I MEAN,
AS AS MUCH AS WE GENERALLY LIKE
TO HAVE YOU KNOW, TRANSPARENCY
IN TERMS OF TRYING TO, UH, YOU
KNOW, UH, ENSURE ACCOUNTABILITY.
I CAN SEE HOW CARB YOU KNOW,
BASICALLY HAS MORE POWER TO
DRIVE EMISSION REDUCTIONS BY
HAVING THAT MONOPOLY AND CONTROL
OVER THAT, THAT THAT THAT THAT
THOSE ALLOWANCE YOU KNOW, AND
INFORMATION, I MEAN, WHAT WOULD
BE MY MAX RESPONSE TO, UH, ONE
POINT WE'VE MADE PREVIOUSLY
ABOUT THE DATA. OBSERVE ABILITY
IS THAT ON A ON A AT THE END OF
A COMPLIANCE PERIOD AND SOME
LOVIN MONTHS, I THINK AFTER THE
END OF THE COMPLIANCE PERIOD,
FINALLY, THE SIZE OF THE BANK IS
PUBLICLY DECLARED IN CERTIFIED
BY CAR BUT WITHIN THE COMPLIANCE
PERIODS, WHICH ARE THREE YEAR
COMPLIANCE PERIODS. THERE
ESPECIALLY IN PREVIOUS
COMPLIANCE GROUPS. THERE WERE A
LOT OF CHANGES AS THERE WAS
ACCUMULATION IN THE BANK. AND
SINCE 2020 2021 WE'VE SEEN OVER
A DOUBLING IN THE ALLOWANCE
PRICE, SO THERE'S WHILE THIS
BANK WOULD BE VERY LARGE WHEN
ALLOWANCES WERE INEXPENSIVE,
THERE'S BEEN TREMENDOUS AMOUNT
OF VALUE THAT HAS ALREADY
ACCUMULATE CRUDE TO THE BANK
HOLDERS, AND THAT'S THE KIND OF
ISSUE THAT I'VE AFRAID SO
MISTRUST IN THE CARBON MARKET,
SO WE'RE WE WOULD LIKE TO SEE
THE EXTENT PLAUSIBLE. WE'D LIKE
TO SEE MORE TRANSPARENCY. SO UM
AGAIN. I SHOULD KNOW THIS. BUT
AT THE END OF EVERY COMPLIANCE
PERIOD, THE NUMBER OF ALLOWANCES
THAT THAT THE 400 COVERED
ENTITIES IS THAT IS THAT OTHER
AND OTHER HOLDING OTHER ENTITIES
HAVE HOLDING ACCOUNTS ALSO SO
EVERY QUARTER THERE IS
INFORMATION IN AGGREGATE AS TO
WHERE THOSE ALLOWANCES ARE,
WHETHER IT'S STATE ACCOUNT THE
COMPLIANCE ACCOUNT OR THE
TRADING ACCOUNTS FOR THE ENTITY,
SO IT'S AN AGGREGATE VALUE AFTER
EVERY COMPLIANCE EVENT, WHICH
HAPPENS 11 MONTHS AFTER THE END
OF THE EMISSIONS YEAR, TAKES
THAT LONG TO REPORT THE DATA,
GET IT VERIFIED AND THEN GET IT
IN THE SYSTEM. THAT IS WHEN WE
THEN PUBLICLY POST FOR THIS
COMPLIANCE EVENT THIS COMPANY OR
COMPANY BE USED THIS MANY
ALLOWANCES OR THIS. MANY OFFSETS
OR WILL SOME COMBINATION WITH
THAT OFFSET LIMIT OR NO OFFSETS?
BUT BUT AT ANY POINT IS THERE A
REPORTING OF HOW MANY ALLOWANCES
COMPANY A AND COMPANY B. HAVE
AND BANKED. NO THERE ISN'T.
THERE ISN'T OKAY. THEY DO HAVE
POSITION LIMITS. SO YOU DO KNOW
THE MAXIMUM THEY CAN HOLD. AND
SO TURN IT BACK TO IMAC.
WOULDN'T THAT PUT CARBON THE
DRIVER'S SEAT IN TERMS OF, YOU
KNOW, DOING THIS COMPLICATED
BALANCING ACT OF YOU KNOW HOW
MUCH DO WE DRAW DOWN THE CAP?
YOU KNOW, GIVEN THAT I MEAN,
IT'S ONLY CARVED THAT KNOWS LIKE
THE BIG PICTURE OF HOW MANY
ALLOWANCES ARE OUT THERE. TO TRY
TO PREVENT LEAKAGE TRIED TRY TO
MINIMIZE COST IMPACTS ON ON YOU
KNOW WHAT GOD CALIFORNIA
CONSUMERS. I MEAN, IS THAT AN
ARGUMENT, YOU KNOW, AND IN FAVOR
OF CARB CONTINUE HAVING A
MONOPOLY ON THAT INFORMATION. I
LOVE CARBS, SO I'M NOT GOING TO
SAY ANYTHING BAD ABOUT CAR FOR
STARTERS, BUT I THINK IT'S
ABSOLUTELY CORRECT THAT THEY
HOLD ALL THE CARDS ON THIS
QUESTION. AND SO IF A LEGISLATOR
LEGISLATURE, FOR EXAMPLE TO LOOK
AT THE BANK AND LOOK AT THE
CHANGE IN THE VALUE OF THE BANK
AND SAY THE WE COULD MAYBE
ACCELERATE THE STRINGENCY OF THE
PROGRAM BY BECAUSE THERE'S A THE
BANK IS ACCUMULATING OVER PERIOD
TIME. THAT'S WHAT HAPPENED
HISTORICALLY NOW GOING FORWARD
AGENDA SAYS THAT THE BANK IS
GOING TO BE DRAWN DOWN AND
THAT'S I EXPECT THAT TO BE TRUE.
ALSO, IT'S GONNA BE IMPORTANT
PART OF COMPLIANCE, AND ALSO
IMPORTANT PART OF COMPLIANCE IS
THE REDUCTION OF 103 190 MILLION
TONS OF ISSUANCE THROUGH THE
GREENHOUSE GAS REDUCTION FUND OR
TWO INDUSTRIALS, AND SO THAT'S
THE SORT OF BALANCE THING THAT I
THINK COULD BE PART OF THE
PUBLIC DISCUSSION. COULD I MAYBE
JUST STEP IN AND TALK ABOUT THE
VALUE BECAUSE I FEEL LIKE THE
QUESTION IS REALLY ABOUT VALUE
AND WHO BENEFITS FROM THE VALUE
FROM THE PROGRAM. SO AT THE VERY
BEGINNING, I HAD THE BAR CHART
WHICH SHOWED THAT THE TRANCHES
AWARE WHO GETS ALLOWANCES.
THAT'S WHERE WE INITIALLY AS THE
STATE OF CALIFORNIA THROUGH
REGULATION GIVE VALUE TO
UTILITIES GIVE SAVE SOME FOR
COST CONTAINMENT. GIVE SOME TO
INDUSTRY FOR MINIMIZING LEAKAGE
AND THEN HOLD SOME, THEN HOLD
THE REMAINDER FOR AUCTIONS. SO
THAT IS STEP ONE, AND I THINK
THERE'S AN OPPORTUNITY TO GO
BACK AND SAY, ARE WE DOING THAT
APPROPRIATELY, SO NOT JUST ABOUT
WHAT'S SITTING OUT THERE BUT
MOVING FORWARD? WE GET TO DEFINE
WHAT THAT LOOKS LIKE, AND THAT
GETS BACK TO DALLAS IS POINT.
WHO GETS HOW MANY ALLOWANCES
WHERE DO YOU PULL THEM FROM? AND
THAT SHOULD ALL BE ON THE TABLE
AND THEIR STATUTES THAT CLEARLY
TALK ABOUT MINIMIZING LEAKAGE
AND REPAIR PROTECTION, AND IT'S
A BALANCE AND SO THAT THAT IS
SOMEWHERE. WE ARE TRYING TO
WORKSHOP AND HAVE SOME
DISCUSSION AS WELL. AND SO WHEN
YOU TALK ABOUT THESE WORKSHOPS
AND THE BALANCING, I MEAN,
THAT'S THAT'S WHERE YOU'RE
TAKING ALL THIS INFORMATION AND
TRYING TO BALANCE ALL THOSE
COMPETING INTERESTS. THAT'S
CORRECT. AND YOU CAN IMAGINE
THAT ANYTIME WE SAY WE WANT TO
TAKE ANY ALLOWANCE AWAY.
EVERYBODY WANTS TO HOLD ON TO
IT. BUT IT'S AS ZERO SUM GAME,
AND SO THERE'S NOBODY'S GOING TO
GET EVERYTHING THAT THEY WANT IS
WHAT'S GOING TO HAPPEN HERE.
SURE. OKAY? UH TURNING IF I MAY
TO, UM, DR FOWLER, FOWLEY, UM SO
, UM, YOU'RE YOU'RE ADVOCATING.
YOU'RE YOU'RE YOU'RE
RECOMMENDING THAT THAT YOU KNOW,
WILDFIRE MITIGATION, CLIMATE
MITIGATION THAT WE DON'T WE
DON'T PUT IT ON RIGHT PAIRS WE
FIND, UH, YOU KNOW IF WE WANT TO
MINIMIZE THE IMPACT ON
CALIFORNIA CONSUMERS, WE NEED TO
LOOK FOR ALTERNATIVE SOURCES OF
FUNDING FOR WILDFIRE AND CLIMATE
MITIGATION. AH YES. I MEAN, I'M
TRYING TO ELEVATE THAT
CONVERSATION BECAUSE I THINK FOR
A LONG TIME, IF IT IF THERE'S
COSTS INCURRED IN THE POWER
SECTOR, IT SHOWED UP IN THE
POWER BILL, AND THAT WAS FINE
FOR A WHILE, BUT IT'S NOT FUN
ANYMORE. AND SO, YEAH, BASICALLY
, THE TWO POINTS WERE REALLY
TRYING TO ELEVATE AND MAKE
PEOPLE THINK JUDICIOUSLY ABOUT
IS WHAT IT'S DOING TO ENERGY
EFFICIENCY AND ELECTRIFICATION.
AND WHAT IT MEANS IN TERMS OF
JUST A REGRESSIVE WAY TO RAISE
REVENUES SO GIVEN THAT RISING
ELECTRICITY COSTS ARE ARE AH,
DISINCENTIVIZE NG YOU KNOW OUR
EFFORTS TO MEET OUR CLIMATE
GOALS. UM WOULDN'T HAVE BEEN
APPROPRIATE USE OF THE
GREENHOUSE GAS REDUCTION FUNDS.
FOUR FOR WILDFIRE IN CLIMATE
MITIGATION. I KNOW IT COULD BE.
I THINK IT'S UM IF IT COULD BE A
I FEEL LIKE THERE'S THE
OPPORTUNITY COSTS OF THOSE FUNDS
ARE REALLY HIGH, AND IT FEELS A
LITTLE BIT NOT LIKE A BAND AID
IS THE WRONG WORD, BUT WE'VE GOT
A STRUCTURAL PROBLEM WITH HOW WE
ARE RECOVERING COSTS AND THE
POWER SECTOR AND THAT COULD HELP
US FOR A BIT. BUT THEN THERE'S
ALL THESE OTHER IMPORTANT
PROGRAMS WE'RE NOT PAYING FOR.
FOUR. SO MECHANICALLY. YES IT
ADDRESSES THE PROBLEM. LONG TERM
. I'M CONCERNED THAT IT KICKS
THE PROBLEM DOWN THE ROAD AT A
HIGH OPPORTUNITY COST. SO IF WE
WERE AN IDENTIFYING IF YOU'RE AN
IDENTIFIED THE TOP THREE
STRUCTURAL PRIORITIES, AND YOU
KNOW THAT THAT THAT WOULD BE IN
LINE WITH OUR EFFORTS TO FIGHT
CLIMATE CHANGE, WHAT WOULD THEY
WHAT WOULD ONE WHICH WE'VE BEEN
ADVOCATING? BUT I'M NOT A
POLITICIAN. I'M AN ECONOMIST IS
AN INCOME GRADUATED FIXED
CHARGE, WHICH REDUCES THE
VOLUMETRIC RATE. DOWN ADDRESSING
THE PROBLEMS WE'VE DISCUSSED.
THAT LEAVES A LOT OF REVENUES
NOT RECOVERED, WE COULD SHIFT
SOME TO A DIFFERENT TAX BASE AND
THOSE COSTS THAT WE CAN'T FIND A
HOME FOR WE RECOVER THEM, BUT WE
DON'T RECOVER THEM FROM THE
HOUSEHOLDS WHO CAN LEAST AFFORD
TO PAY. BUT THAT ISN'T YOU KNOW,
THERE'S SOME POLITICAL HEADWINDS
THERE. YEAH BUT I GUESS ALSO,
JUST LIKE THE COST. CONTAINMENT
IS SO IMPORTANT BECAUSE WHY ARE
WE IN THIS PREDICAMENT? WE'VE
GOT COSTS THAT ARE JUST RISING
AND RISING AND RISING. WE CAN
SEE WHERE THEY'RE GOING, AND SO
JUST LEANING INTO THAT COST
CONTAINMENT. WELL, WE ALSO THINK
ABOUT COST ALLOCATION. I THINK
OBVIOUSLY THE TWO GO HAND IN
HAND. ALRIGHT. THANK YOU. ONE.
YEAH. WRAP IT UP, PLEASE. NO
APPRECIATE THE DISCUSSION SO
KIND OF A WRAP UP QUESTION. CAP
AND TRADE HAS BEEN CITED AS
BEING A ONE OF THE LEADING COST
EFFECTIVE WAYS TO DRIVE EMISSION
REDUCTIONS. RELATIVE TO OTHER
PROGRAMS. AS WE'VE BEEN
DISCUSSING ALLOWANCE PRICES ARE
RISING RIGHT NOW. INCLUDING YOUR
RECORD PRICES IN THE RECENT
FEBRUARY AUCTION. IF PRICES
CONTINUE TO RISE, AS MUCH OF THE
MODELING SUGGESTS, WILL CAP AND
TRADE REMAIN ONE OF THE MOST
COST EFFECTIVE OPTIONS. WE HAVE
TO REDUCE EMISSIONS. UM IT'S
BECAUSE ACTUALLY, I WILL, BY
PROFESSOR FOLLY TO SPEAK UP ON
IT UP FOR HER. WE I THINK L A I
THINK EVERYONE AT THIS TABLE. I
DON'T WANT TO SPEAK FOR
CATHERINE FEEL THAT THE MOST
COST EFFECTIVE PATHWAY FOR
ACHIEVING MR REDUCTIONS IS
THROUGH THE MARKET, SO THAT
MARKET CAN'T DO ALL THE WORK FOR
US FOR A NUMBER OF REASONS WE
COULD GET INTO, BUT IT'S BUT IT
COULD DO MORE THAN IT'S DOING
RIGHT NOW AND THAT IMPLIES ARE
HIGHER ALLOWANCE PRESS. JUST
FOLLOW UP. ALTHOUGH DALLAS IS
ALWAYS IMPOSSIBLE ACT TO FOLLOW.
ONE OF THE REASONS I SHOWED THAT
GRAPH IS YOU SAW THE CARBON
PRICE YOU COULD BARELY SEE IT.
WE'RE TALKING. THE PRICES ARE
HIGH, BUT THEY'RE $40. BUT WHEN
YOU COMPARE THAT TO OTHER COSTS,
WE'RE ESTIMATING FROM SOME OF
THESE OTHER OPTIONS WERE
THINKING ABOUT THEIR HUNDREDS
AND HUNDREDS AND HUNDREDS OF
DOLLARS. NOW WE'VE GOT TO BE
SUPER CAREFUL BECAUSE THOSE
COSTS ARE YOU KNOW, THERE'S A CO
BENEFITS THAT VARY ACROSS
MITIGATION ALTERNATIVES THAT ARE
NOT ACCOUNTED FOR, BUT I
CONTINUE TO BELIEVE THAT WE NEED
TO. WE NEED OTHER MEASURES, AND
WE CERTAINLY NEED KATHERINE
RAISES REALLY ELEVATES REALLY
IMPORTANT ISSUES IN THE REDESIGN
OF CAP AND TRADE AND DESIGN
CONCERNS, BUT I FIRMLY BELIEVE
WE HAVE TO LEAN IN THE PRICE IS
GOING TO GO UP. IT'S GOT TO
BECAUSE OUR AMBITIONS GOING UP,
BUT IT'S GOING TO BE CRITICAL. I
THINK TO CONTAINING THE COSTS OF
MEETING OUR TARGETS.
WE'LL WRAP THIS ONE UP AND THEN
FOR THE ENDURANCE CREW HERE OF
PUBLIC STAKEHOLDERS. HERE'S WHAT
I'M GOING TO PROPOSE. CAN WE DO?
UM ANYONE WHO'S HERE FROM FROM
INDUSTRY REGULATED ENTITIES, UM
OR SORT OF RELATED ASSOCIATIONS.
CAN WE DO A FIRST GROUP THERE
BECAUSE WE HAVEN'T HEARD FROM
THE REGULATED COMMUNITY OF
ANYONE'S LEFT FROM THAT SECTOR.
LET'S START THERE. SO MAYBE TAKE
55 MINUTES TOTAL WITH THIS GROUP
AND THEN WE CAN MOVE. THE TO
ANOTHER GROUP. WE'RE NOT GOING
TO BE DOING INDIVIDUAL. OKAY UM,
ANY OTHER EMISSIONS TRADING
ASSOCIATIONS OF FOLKS INTERESTED
IN CARBON MARKET WORK REGULATED
ENTITIES? LET'S DO SO. WE'LL DO
FIVE MINUTES HERE WITH THIS
PANEL, AND WE'RE GOING TO SWITCH
OVER TO SEE WHOEVER'S LEFT FROM
OUR ENVIRONMENTAL, ENVIRONMENTAL
JUSTICE COMMUNITY. I SEE A FEW
HERE. WE MAY HAVE TO BREAK THAT
INTO TWO. BUT WE'LL TRY FOR THAT
. AND I SEE I THINK KEPT KOA
MIGHT HAVE LEFT ALREADY. BUT UM,
WE TRY TO GET THIS ALL DONE, SO
LET'S JUST DO A QUICK, QUICK
ROUND INTRODUCTIONS. AND THEN
YOU GUYS CAN MAYBE TAKE A MINUTE
EACH UNLESS ONE OF YOU WANTS TO
TAKE THE LEAD AND TAKE ALL FIVE
AND BE GREEDY. UM I'LL GO FIRST.
VIRGIL WELSH, CALIFORNIA CARBON
RELATIONS COALITION. FIRST OF
ALL, THANK YOU, MR CHAIR MEMBERS
FOR THE HEARING. I WANTED TO
JUST BRIEFLY HIGHLIGHT THE POINT
THAT CHAIR RANDOLPH UNDERSCORED
WITH RESPECT TO THE ROLE THAT
CARBON CAPTURE AND REMOVAL
TECHNOLOGIES ARE GOING TO HAVE
TO PLAY FOR THE 2030 CERTAINLY
THE 2045 CLIMATE GOALS AND
SENATOR YOU, YOU ASK, UM BOTH
SORT OF QUESTIONS WITH RESPECT
TO EXISTING BARRIERS THAT MAY BE
PERCEIVED BUT ALSO LEVERS AND WE
DO NOW WITH WITH THINGS LIKE 905
1279 HAVE SOME OF THE POLICY
FRAMEWORK IN PLACE TO TRY TO,
UM, START TO MOVE. MORE
EXPEDITIOUSLY ON DEPLOYMENT OF
THESE TECHNOLOGIES, WHICH
OBVIOUSLY HAVE TO BE DONE, YOU
KNOW, RESPONSIBLY AND WITH
APPROPRIATE PROTECTIONS AND
THINGS OF THAT NATURE, BUT THE
REALITY, OF COURSE, IS THAT
WE'VE GOT SOME SIGNIFICANT GOALS
EMBEDDED IN THE SCOPING PLAN AS
WELL AS NOW OF LEGISLATION THAT
ARE, YOU KNOW, UNDERSCORE THE
IMPORT OF THIS WHOLE SUITE OF
CAPTURE AND REMOVAL TECHNOLOGIES
. AND FINAL POINT I'D JUST LIKE
TO BRIEFLY MAKE IS UM, ONE OF
THE THINGS AS HIGHLIGHTED IN THE
REPORT, WHICH DALLAS AND
PROFESSOR VALLEY THAT DIDN'T
COVER WAS THE NEED TO ALIGN THE
CAP AND TRADE PROGRAM WITH, UM
UH, AFFORDING CREDIT FOR
EMISSIONS AVOIDED UNDERTAKEN VIA
CARBON CAPTURE TECHNOLOGIES AND
THAT IS SOMETHING AS I
UNDERSTAND IT. THAT CAR WAS
LOOKING AT AS PART OF THIS
PROCESS, BUT IT IS ANOTHER
IMPORTANT, UM, INCENTIVE
REGULATORY, A WAY IN WHICH WE
CAN REALLY TRY TO DRIVE SOME OF
THESE EMISSION REDUCING
TECHNOLOGIES. THANK YOU. THANKS.
PLEASE YES. CENTER
ASSEMBLYMEMBER'S MCHALE, SKVARLA
. I'M HERE ON BEHALF OF
CALIFORNIA COUNCIL FOR
ENVIRONMENT ECONOMIC BALANCE
WHERE BUSINESS LABOR
ORGANIZATION CONSISTING OF A
NUMBER OF THE COMPLIANCE
ENTITIES AS WELL AS THEIR
UNIONS. CABIN TRADES. CRITICALLY
IMPORTANT PROGRAM IS OUR SUITE
OF CLIMATE POLICIES, AND I THINK
THE THING THAT I WANT TO
HIGHLIGHT IS DR FOLEY, WHOSE
ABSOLUTE EXPERT IN THIS
TERRITORY, WHICH IS SUGGESTING
IS A RELIANCE OF HEAVIER
RELIANCE ON CAP AND TRADE. BUT
WHAT SHE'S ALSO SAYING IS THAT
OUR RELIANCE ON THE
COMPLEMENTARY MEASURES ARE
INCREASING COSTS. THESE ARE
ACCUMULATIVE COSTS ACROSS THE
SUITE OF POLICIES, SOME HIDDEN
SOME VISIBLE CAP AND TRADE. LCF
SRP S VERY VISIBLE. YEAH L CFS
IS THE HIGHER OF THOSE. BUT IT'S
CURRENTLY WHAT $58 CREDIT. YOU
KNOW, CAP AND TRADES. YOU KNOW,
RPS ARE KIND OF FLOATING AROUND.
YOU KNOW, IN THE THIRTIES
FORTIES, RIGHT? THESE ARE
VISIBLE THINGS. WHAT ARE NOT
VISIBLE OR SOME OF THE YOU KNOW
COSTS FROM OUR GDF EXPENDITURES,
I THINK WAS TAKING A SHOT AT A
COUPLE OF THOSE THINGS. SOME OF
THOSE ARE VERY HIGH $15,000 A
TON WHEN WE CAN HAVE TONS OUT
THERE THAT ARE AVAILABLE FOR
3540 BUCKS. WE'VE GOT TO THINK
ABOUT THIS IN THE TON TERMS OF
THE MILLIONS OF METRIC TONS THAT
HAVE TO BE REDUCED BETWEEN NOW
AND 2045, IN ORDER TO ACHIEVE
CARBON NEUTRALITY, AND EACH
LEVEL THAT WE PULL HAS A
DIFFERENT CONSEQUENCE. WE'VE
DEVELOPED A PROGRAM THAT'S KIND
OF UNIQUE, UH TO CARBON POLICY
AND IN THE UNITED STATES FROM
STANDPOINT THAT WE ARE OFF THE
FLOOR AND WERE BELOW THE
CEILING. WE DON'T WANT TO MAKE
THE SAME MISTAKES OF PULLING TOO
MANY LEVELS THAT AT THE SAME
TIME POKING THROUGH THE CEILING,
AND ALL OF A SUDDEN WE HAVE A
REPEAL ON THE BALLOT LIKE WHAT
THEY HAVE IN WASHINGTON, SO I
THINK THERE'S A DELICATE DANCE
THAT HAS TO BE DONE HERE WERE
FAITHFULLY ENGAGED AND WANT TO
PARTICIPATE. WE APPRECIATE
EVERYTHING THAT THE STAFF FOR
THIS COMMITTEE HAS BROUGHT AND
WE WILL CONTINUE TO ENGAGE IN
THIS CONVERSATION. BUT WE WANT
TO BE CERTAIN YOU KNOW, SINCE
THE LAST COMMITTEE HEARING
PRICES AND CAP AND TRADE DROPPED
7% THERE'S SOME SCARY
CONVERSATIONS TAKING PLACE IN
THE LEGISLATURE RIGHT NOW, AND
THERE'S UNCERTAINTY BEING
CREATED BECAUSE OF THAT. YOU
KNOW THE RULES OF THE ROAD THAT
WERE DEVELOPED BY A TWO THIRDS
AUTHORIZED POLICY HAVE KIND OF
REALLY DICTATED CONFIDENCE IN
THIS MARKETPLACE, AND WE WANT TO
MAINTAIN THAT CONFIDENCE IN A
WAY THAT NO OTHER JURISDICTION
HAS HAD BECAUSE THE COMPLIANCE
ENTITIES HAVE BEEN AT THE TABLE
THE WHOLE TIME, AND WE NEED TO
REMAIN AT THE TABLE AND ON THESE
PANELS, UM SO THAT OUR VOICE IS
ALSO HEARD. IT'S NOT JUST THE
ACADEMICS. IT'S NOT JUST THE
REGULATOR AND IT'S NOT JUST THE
ENVIRONMENTAL COMMUNITY, BUT IT
IS THE COMPLIANCE ENTITIES AND
THEIR UNIONS. ULTIMATELY MATTER
IN THIS CONVERSATION AS WELL,
WHICH IS WHY OUR PROGRAM IS SO
MUCH DIFFERENT THAN THOSE OTHERS
. YOU HAVE THE CONSENT OF THE
GOVERNED RIGHT NOW. DON'T DON'T
LOSE THAT. OKAY. THANK YOU. MR
CONSTANTINE TOÀN. THANK YOU,
JOHN COSTANTINO ON BEHALF OF THE
VERIFIED EMISSION REDUCTION
ASSOCIATION, WHICH WOULD BE THE
OFFSET DEVELOPERS, THE ONES THAT
GO AFTER THE FUGITIVE METHANE.
PROTECT THE FOREST. UM AND THE
IDEA THAT OFFSETS AREN'T REAL
ARE STATUTORILY ACCURATE? THEY
HAVE TO BE REAL, QUANTIFIABLE,
PERMANENT, ENFORCEABLE AN
ADDITIONAL AND THOSE BARRIERS TO
COMPLIANCE OFFSET ARE IN PLACE
HAVE BEEN IN PLACE AND OFFSET
PROTOCOLS ARE CONSERVATIVE BY
NATURE, SO I WANT TO JUST
RESPOND REALLY QUICKLY TO THE
QUESTION THAT WAS ASKED ABOUT
STATUTORILY PUTTING OFFSETS IN
THE PROGRAM AND HOW THAT HAS
BENEFITED THAT THAT CERTAINLY
PROVIDES THE STABILITY. THAT
FOLKS NEED TO INVEST AND ASSETS
BRING IN BROADER, AH CAPITAL
MARKETS THEY BRING IN INNOVATION
. WE COULD TALK ABOUT THE MAIL
AND PROGRAM FOR THE CAN OF
REFRIGERANT YOUR CAR REFRIGERANT
THAT THAT SOMEBODY DEVELOPED THE
MACHINE THAT TURNS THE
REFRIGERATOR UPSIDE DOWN THE
FUGITIVE METHANE. IT MINDS IT'S
THAT'S COLLECTED THAT WOULD
OTHERWISE NOT BE COLLECTED. SO
I'LL LEAVE IT SHORT AND SAY THAT
OFFSETS HAVE BEEN A VALUABLE
COST CONTAINMENT PROVISION OF
THE OF THE PROGRAM AND, UM WE'LL
LEAVE IT THERE. BUT IF YOU HAVE
QUESTIONS ABOUT OFFSETS HAPPY TO
ANSWER THEM. I'LL FOLLOW UP WITH
THE QUESTION ON THAT. HOW MUCH
OF OFFSETS ACTUALLY LIKE WITHOUT
OFFSETS DURING THIS LAST PERIOD
OF TIME, WHAT WOULD HAVE
HAPPENED TO PROGRAM COSTS AND IN
YOUR VIEW? DO YOU HAVE? DO YOU
HAVE ACTUAL LIKE MODELING OR ANY
QUANTIFICATION AROUND THAT,
POTENTIALLY IT? I DON'T. YEAH WE
KNOW THAT FOR EVERY OFFSET THAT
THAT YOU USE IN THE USAGE IT,
IT'S A SAVINGS OF THE PROGRAM.
BUT THE MARGINAL MODELING OF IF
YOU DIDN'T USE YOUR 4% OR 6%
WHAT THAT WOULD DO. I DON'T HAVE
THAT MAN YOUR SENSE THAT ALL THE
REGULATED ENTITIES ARE MAXING
OUT THEIR 4% NO, NO, NO, NOT AT
ALL. WHY? OFFSETS ARE THERE'S A
LOT OF OVERHEAD AND THERE'S SOME
RISK. BECAUSE OF INVALIDATION,
SO THE SMALLER ENTITIES DON'T
FULLY UTILIZED THEIR OFFSET
POTENTIAL. THERE WAS OFFSET
PROTOCOL TASK FORCE
RECOMMENDATION THAT THAT BE A
TRADABLE ITEM THAT SO YOU COULD
MAXIMIZE THE COST EFFECTIVENESS
OF THE PROGRAM THAT HASN'T BEEN
INTRODUCED AS A MECHANISM YET,
BUT USUALLY THE LARGER, MORE
SOPHISTICATED ENTITIES ARE THE
ONES THAT TAKE ADVANTAGE OF
OFFSETS. AND TO THE EARLIER
TESTIMONY FROM MR WELCH. I MEAN,
IF THE IF THE TONS TO MY
QUESTION TO THE CHAIR EARLIER
TONS AREN'T SHOWING UP FROM
CARBON REMOVAL, SOME OF THE
OTHER THINGS YOUR COALITION
ADVOCATES FOR WHAT WHAT HAPPENS
TO THE CAP AND TRADE PROGRAM? I
MEAN, DO YOU? DO YOU HAVE A
SENSE AND MR SQUARELY YOU MIGHT
HAVE A PERSPECTIVE TO BUT DOES
KEVIN TRADE START TO BECOME A
MARKET DRIVER? IS THAT ACTUALLY
WHAT STARTS TO MAKE THESE
PROJECTS PENCIL? IF WE HIT $65 A
TON, THAT'S STILL NOT ENOUGH TO
PUSH ONE OF YOUR PROJECTS ONLINE
SO WELL, IT WOULD PREFER TO IT
DEPENDS AS AS I THINK WE ALL
KNOW PROJECT PROJECT, RIGHT? BUT
YOU'RE RIGHT. SO YOU DO NEED
MULTIPLE INCENTIVES, UM,
DEPENDING ON PROJECT SPECIFIC OR
PROJECT BY PROJECT BASIS, RIGHT,
WHICH IS WE'VE GOT THE FEDERAL
INCENTIVES THAT ARE CURRENTLY
THERE FOR A FEW MORE YEARS.
WE'VE GOT IN SOME INSTITUTIONS
ALL CFS CAN PLAY A ROLE. AH THE
PROVISIONS IN THE CABINET TRADE
PROGRAM THAT WOULD EFFECTIVELY
NOT COUNT EMISSIONS THAT WEREN'T
ADMITTED. WHAT, OBVIOUSLY BE
ANOTHER INCENTIVE THAT YOU START
TO SORT OF MAKE THESE, UM
PROJECTS ACTUALLY VIABLE.
ADDITIONALLY YEAH, SORT OF THE
FIRST QUESTION THE CAP AND TRADE
PROGRAM. I MEAN, IT'S ALWAYS
BEEN LOOKED AT AS A SORT OF AS A
YOU KNOW, IT'S GOING TO PICK UP
THE MISSION THAT THAT AREN'T
ACCOUNTED FOR ELSEWHERE. I WOULD
WRAP UP WITH YOU, MR SCARLET.
AND JUST ON THAT POINT, BUT I
THINK TO THE BROADER POINT. I
MEAN, I WAS I WAS TALKING
EARLIER ABOUT THE MESSAGING
GOING OUT THERE STATEWIDE ABOUT
SORT OF RULING THE CARBON
PRICING SCHEMES IN THE STATE AND
BLAMING ALL THESE, UH AS YOU
SAID YOURSELF, YOU KNOW, VERY
WELL WORKED. STAKEHOLDER
CONSENSUS DRIVEN PROPOSALS AND
SORT OF STILL BLAMING THEM. SO
IF WE AS A LEGISLATURE ARE GOING
TO THEN STICK OUR NECKS OUT AND
LOOK AT AN EXTENSION, AND YET
WE'RE GETTING HIT WITH
BILLBOARDS SAYING IF YOU DO THAT
, YOU'RE GOING TO DRIVE UP
PEOPLE'S POWER BILLS. HOW DO WE
HOW DO WE ENTER THIS
CONVERSATION WITH THAT SAME
TRUST? I GUESS THAT'S BEEN BUILT
UP TO THIS POINT THROUGH AN
EXTENSION. IF THAT SORT OF IF
THAT SWORD IS HANGING OVER OUR
HEAD YES. SO IT'S A HARD ONE. I
KNOW, BUT I KNOW IT'S SO I MEAN
TO VIRGIL'S QUESTION. YOU KNOW,
THERE'S MARGINAL ABATEMENT COST
CURVES. VERY FASCINATING. HOW
YOU LOOK AT YOU KNOW WHAT POINT
THINGS ARE GOING TO COME ONLINE.
WE'RE SENDING THAT SIGNAL
THROUGH CAP AND TRADE BUT A
BUNCH OF OTHER DIRECT PROGRAMS.
BE INTERESTING TO SEE HOW THAT
FALLS UP. THE COST THING IS
PREVALENT RIGHT NOW, RIGHT?
WE'VE GOT THIS INCOME ADJUSTED
FIXED RATE OR FIXED CHARGE.
WE'VE GOT THE ISSUES AROUND THE
SB ONE X TWO PROCEEDINGS, AND
THINGS LIKE THAT QUESTION IS
LIKE, ARE THESE THE SAME ISSUE?
AND I WOULD SAY THAT THAT THE
ISSUES THAT WERE THE COSTS THAT
WE'RE TALKING ABOUT CAP AND
TRADE YOU PROBABLY DON'T FIND
THE SAME RESISTANCE ON FROM
THOSE PARTIES THAT ARE RUNNING
BILLBOARDS AND OTHER ADS, RIGHT?
IT'S UH AND WHETHER THE
MESSAGING IS INTENDED TO COME
AFTER THIS PROGRAM SPECIFICALLY
NOW IT'S HARD TO TELL BECAUSE OF
THE DEBATES THAT TAKING PLACE TO
OUR NEIGHBOR IN THE NORTH AND
THINGS LIKE THAT, BUT I DO KNOW
THAT IN THE STATE OF CALIFORNIA
THE COMPLIANCE ENTITIES HAVE
BEEN AT THIS TABLE FOR AT LEAST
THE LAST SEVEN YEARS AND WE WANT
TO CONTINUE TO MOVE THE BALL
FORWARD ON THIS PROGRAM, AS WELL
AS SOME OF THE OTHER VISIBLE
PROGRAMS LIKE WE'VE GOT A STRONG
LEGACY HERE ON R. P S THAT IT
WAS A GREAT PROGRAM. IT'S REALLY
HOW YOU CONSTRUCT THOSE PROGRAMS
TO KEEP EVERYONE TABLE. I DON'T
THINK THAT THERE'S A DIRECT LIKE
THIS IS NOT THE DIRECT POINT OF
CONFLICT, AND I THINK THERE'S AN
OPPORTUNITY RIGHT NOW WHAT WE'RE
TALKING ABOUT NEEDING TO
POSSIBLY BRING REVENUES FORWARD,
WHICH THERE IS MENTION OF IN
THIS AND WITH OTHER YOU KNOW,
WITH PROPER ONE AND THE
IMPLICATIONS OF THAT AND HOW IT
PLAYS OUT WITH SCHOOLS AND
EVERYTHING ELSE THAT WE'RE
TRYING TO DO IN THE STATE OF
CALIFORNIA, YOU KNOW WHAT DOES
THE ROLE OF CAP AND TRADE PLAY
IN THE IN THE OUT YEARS? AND TO
BE HONEST, THE SOONER THAT WE
START TO HAVE THE
REAUTHORIZATION CONVERSATION? I
KNOW YOU GUYS ARE TRYING TO IN
EARNEST, THE BETTER. WE ARE
OUTSIDE OF THE INVESTMENT CYCLE
ALREADY. WE'RE LOOKING, YOU KNOW
THE SENSE A SIGNAL FOR A CERTAIN
PERIOD OF TIME AND INVEST
ABILITY. YOU'RE LOOKING FOR
ABOUT SIX YEARS OUT. YEAH. TIME
WAS LAST YEAR. YOU KNOW, IT'S GO
TIME THE NEXT TWO YEARS TO TRY
TO GET SOMETHING DONE HERE. UM,
BUT ULTIMATELY, I THINK
COMPLIANCE ENTITIES ARE LOOKING
TO THIS PROGRAM TO HELP GUIDE
THEIR INVESTMENT DECISIONS.
PROGRAMS DONE A LOT TO PRESERVE
KIND OF, YOU KNOW, WITH THE
ALLOCATIONS, AND THOSE THINGS
WERE MITIGATING RISKS. UM WE'RE
ALSO PROVIDING GREAT BENEFIT
THROUGH G R F TWO OTHER PROGRAMS
THAT WE CAN'T NECESSARILY GET AT
BECAUSE OF YOU KNOW, THIS
PROGRAM IS DESIGNED TO GET
GREENHOUSE GASSES. WE CAN'T DO
ANYTHING ON KIND OF THE
COMMUNITY ISSUES, BUT WE CAN
CERTAINLY FUND THEM. AND SO
THERE'S A CREATIVE WAY HERE TO
FIND A PATH FORWARD FOR
EVERYONE. THANKS FOR THAT ON
THAT HOPEFUL NOTE. WE'LL WRAP
THIS ONE UP. THOSE WHO ARE STILL
HERE FROM ENVIRONMENTAL, PUBLIC
HEALTH AND ENVIRONMENTAL JUSTICE
GROUPS. I JUST SAW PHOEBE LEAVE.
UNFORTUNATELY SO I FEEL BAD.
WHOEVER KNOWS HER APOLOGIZE FOR
GOING ALONG. BUT DO WE WANT TO
HAVE A LITTLE COHORT HERE? I
THINK WE'VE GOT FIVE SEATS, SO
WHOEVER MIGHT WANT TO JOIN WE
CAN SIZE IT. WE CAN SIZE IT
ACCORDINGLY. HERE. IF YOU WANT
TO AMONGST FIVE OF YOU UM, WE
CAN LET'S TAKE IT INTO PHASES.
SO UM 1ST 45 UP. YEAH CAITLIN,
COME SIT. YOU WANT ONE MORE? ONE
MORE? I HAVE ONE MORE AND THEN
WE'LL ROLL THROUGH AND THEN
WE'LL COME WITH ANOTHER
SUCCESSION. YEAH GREAT. THIS IS
SUPPOSED TO ENCOURAGE BY THE
WAY, COLLECTIVE ACTION, BUT I
DON'T KNOW. I THINK I FAILED AT
THAT MISSION. MY APOLOGIES IN
ADVANCE. START RIGHT TO LEFT,
AND NO NO PARTICULAR ORDER.
PLEASE WELCOME UM, ONE OF THE
NASA DOES HAS GOTTA SOUND GOOD
AFTERNOON, EVERYONE. MY NAME IS
GARZA. I AM HERE REPRESENTING
SECA, THE CALIFORNIA
ENVIRONMENTAL JUSTICE ALLIANCE.
WE ARE COMMUNITY LED ALLIANCE,
WHICH SERVES TO ACHIEVE
ENVIRONMENTAL AND RACIAL JUSTICE
BY ADVANCING BOLD AND EQUITABLE
SOLUTIONS AS CALIFORNIA CITIZENS
AND CALIFORNIA TAXPAYERS. WE
EAGERLY WANT TO PARTNER WITH
CALIFORNIA ELECTED OFFICIALS AND
AGENCY HEADS TO MEET
CALIFORNIA'S AMBITIOUS EMISSION,
AND, UH AND POLLUTION REDUCTION
GOALS, ALL WHILE CENTERING
EQUITY AND DRIVING DIRECT
INVESTMENTS TO OUR MOST
DISADVANTAGED COMMUNITIES ACROSS
THE STATE, CALIFORNIA OUR HOME
IS THE FIFTH LARGEST ECONOMY IN
THE WORLD. WE ALL KNOW THAT VERY
WELL. BUT WE'RE IN A PRIME
POSITION TO SHOW THE WORLD HOW
CUTTING EDGE POLICY CHANGES CAN
LEAD TO A JUST AND EQUITABLE
TRANSITION AWAY FROM FOSSIL
FUELS. AND THAT WAY
DISADVANTAGED COMMUNITIES CAN
BENEFIT FROM THE BENEFITS. UM
SECOND PARTNERS ARE IN ALIGNMENT
. WE WANTED TO ENSURE OUR
MISSION PROCESS CONSIDERED
IMPROVING CAP AND TRADE WITH THE
FOLLOWING REFORMS, ONE ELIMINATE
FREE ALLOWANCES. TO ELIMINATE
OFFSETS AND THREE RESTRICTING
TREATING IMPACTS IN
DISADVANTAGED COMMUNITIES. WE
RECOMMEND THESE REFORMS FOR THE
FOLLOWING REASONS NUMBER ONE.
OUR MEMBERS ARE CONCERNED
GREENHOUSE GAS EMISSIONS FROM
FACILITIES LOCATED IN EGYPT,
COMMUNITIES ARE NOT
SUBSTANTIALLY DROPPING, EVEN
THOUGH OVERALL GREENHOUSE GAS
EMISSIONS HAVE DECLINED. EGYPT
COMMUNITIES ARE CONCERNED. CAP
AND TRADE CREATES SACRIFICE
ZONES AS LOCAL EMISSIONS
REDUCTIONS FAILED TO BENEFIT THE
EJ COMMUNITIES THAT THEY'RE IN
RESEARCH SHOWS GREENHOUSE GAS
EMISSIONS HAVE INCREASED IN
SEVERAL SECTORS, INCLUDING
CEMENT, HYDROGEN AND OIL GAS
PRODUCTION. TO EGYPT,
COMMUNITIES ARE
DISPROPORTIONATELY IMPACTED BY
LARGE GREENHOUSE GAS EMITTERS
WHOSE EMISSIONS ARE CORRELATED
WITH HARMFUL TOXINS. PM 10
EMISSIONS COMPOUND AND
POTENTIALLY EXACERBATE EXISTING
ENVIRONMENTAL IMPACTS. UM LARGE
GREENHOUSE GAS EMITTERS ARE MORE
LIKELY TO BE IN NEIGHBORHOODS
WITH ALREADY HIGH POLLUTION
BURDENS. THREE OFFSETS GIVEN, UH
GIVE POLLUTERS A LOOPHOLE TO
AVOID ALIZED
REDUCTIONS BASED ON THE STATE'S
RESEARCH. LARGE CLIMATE
POLLUTERS ARE BENEFITING FROM
CHEAP OFFSETS TO MEET GREENHOUSE
GAS EMISSION REDUCTIONS. MANY OF
THE LARGEST EMITTERS ARE BUYING
CREDITS. 76% OF THOSE CREDITS
WERE PURCHASED FROM PROJECTS
OUTSIDE OF CALIFORNIA. THIS
MEANS WE HAVE BEEN EXPORTING OUR
POTENTIAL CLIMATE BENEFITS TO
OTHER STATES AND ALSO EVEN OTHER
COUNTRIES FOR WE ALSO RECOMMEND
REGULATORS TO CONSIDER, UH,
RESTRICTING TRADING AND IN
DISADVANTAGED COMMUNITIES CREATE
A NO TRADE ZONES BASED ON
RESEARCH. THESE ARE GROWING
UNJUST CONSEQUENCES. AND THERE'S
GROWING CONSEQUENCES IN
MAINTAINING THESE SACRIFICE
ZONES. CARBON EMISSIONS
ACCUMULATE IN ONE AREA IN A BIG
LOCAL METER, AND THEN THOSE
GREENHOUSE GAS EMISSIONS WILL
STAY IN THAT LOCAL AREA. THE
FIFTH THING I WOULD LIKE TO
RECOMMEND, AND WE'RE PLEASED TO
HEAR THAT THE CONVERSATION HAS
ALREADY STARTED. TRANSPORTATION
TRANSPORTATION ACCOUNTS FOR 50%
OF OUR GREENHOUSE GAS EMISSIONS,
AND SECA AND OTHER EJ
ORGANIZATIONS ARE BEGINNING TO
TAKE TRANSPORTATION IN OUR
PORTFOLIO AND TO REALLY DRIVE A
REDUCTION IN A VM T. AND WE HAVE
ALREADY ACKNOWLEDGED THAT
HOUSING TRANSPORTATION EQUITY
ARE ALL INTERCONNECTED. SO THIS
IS SOMETHING THAT WE ARE BARELY
STARTING TO EXPLORE. LARA
FREEMAN. WE'VE ALREADY ENGAGED
WITH LARA FREEMAN'S OFFICE ON A
B SIX AND B SEVEN TO SEE WHERE
WE CAN ENGAGE ON THIS ISSUE. BUT
THIS IS SOMETHING THAT'S
EMERGING FOR ALL OF US, AND WE
ARE VERY INTERESTED IN FINDING
EQUITABLE SOLUTIONS TO REDUCE
BMT NOT ONLY IN URBAN CENTERS
BUT ALSO IN RURAL CENTERS WHERE
WE ACKNOWLEDGE THAT THERE IS A
DIFFERENCE IN TRANSPORTATION
METHODS. THOSE SOLUTIONS ARE
DIFFERENT FOR EVERY COMMUNITY,
AND EVERY COMMUNITY HAS A VOICE
AND WHAT WORKS FOR THEM? SO WE'D
BE HAPPY TO PARTNER WITH
EVERYONE ELSE IN THOSE FUTURE
ENDEAVORS, AND ALSO THIS IS A
CHANCE I'LL SAY IT OUT LOUD.
PHILANTHROPY IS ALSO JUMPING ON
BOARD AND THEY'RE BARELY
STARTING TO SEE THIS AS AN
OPTION AS WELL. SO IT SEEMS LIKE
WE'RE ALL GOING ON GOING TO BE
IN A CROSSROADS TOGETHER WHERE
WE CAN DO SOME REAL SOME REAL
GOOD FOR THE COMMUNITY, SO I'D
LIKE TO SAY THAT OUT LOUD. UM SO
YEAH, OFF THE SCRIPTS BACK ONTO
THE SCRIPT. WE'RE WE WERE
LOOKING FORWARD TO WORKING WITH
ALL OF YOU TO REFORM CAP AND
TRADE, BUT WE DO ACKNOWLEDGE
THAT THERE NEEDS TO BE SOME
REFORMS AND JUST LIKE INDUSTRY
ASKED TO BE AT THE TABLE, WE
WILL POLITELY ASK AS WELL TO BE
AT THE TABLE TO MAKE SURE THAT
FRONTLINE COMMUNITIES HAVE A
HAVE A CHANCE TO WASTE THEIR
CONCERNS AND BE A PART OF THE
DECISION MAKING. SO THANK YOU.
THANK YOU, GARZA. YOU CAN COUNT
ON THAT. YEAH. WELCOME GOOD
EVENING. I'LL BE QUICK. I
PROMISE. SALAS PATTER WITH THE
NATURE CONSERVANCY. WE JUST
WANTED TO TAKE A QUICK MOMENT TO
UPLIFT THE ROLE OF NATURAL
WORKING LAND, SINCE IT HASN'T
REALLY COME UP YET IN THE
DISCUSSION, WE RECOGNIZE THAT
THE RESTORATION PROTECTION AND
STEWARDSHIP OF OUR NATURAL
WORKING LANDS ARE A CRITICAL
PART OF STATE EFFORTS TO ADDRESS
CLIMATE CHANGE WITHOUT
INTERVENTION, RE RISK THEM
BECOMING AN INCREASING NET
SOURCE OF EMISSIONS INSTEAD OF A
HEALTHY NET SINK OF CARBON DUE
TO CLIMATE IMPACTS AND LAND USE,
CHANGE AND CONVERSION. WE NEED A
COMPREHENSIVE SET OF STRATEGIES
AND INCENTIVES THAT EXTEND
BEYOND OFFSETS AS HAS ALREADY
BEEN DISCUSSED, AND THE
LEGISLATURE DOES HAVE A KEY ROLE
TO PLAY HERE. IN ADDITION TO
CONSIDERING NEW SOLUTIONS. THIS
ROLE ALSO INCLUDES PROVIDING
OVERSIGHT ON THE IMPLEMENTATION
OF POLICIES SUCH AS A B 1757,
WHICH REQUIRED THE DEVELOPMENT
OF ACTIONABLE CLIMATE TARGETS
FOR THE N W L SECTOR. NATURAL
WORKING LAND SECTOR BY JANUARY
OF 2024, NOTABLY THAT HAS NOT
YET BEEN PRODUCED. AND IT IS
MARCH OF 2024. SO JUST THROWING
THAT OUT THERE WE ASK THAT THIS
COMMITTEE HOLDS A HEARING KIND
OF MORE TAILORED TO THIS TOPIC,
FOCUSING IN ON THE SUITE OF
STRATEGIES. WE NEED TO SUPPORT
NATURE BASED CLIMATE SOLUTIONS,
AND WE'D BE HAPPY TO FOLLOW UP
WITH YOUR EXCELLENT STAFF ON
THAT TOPIC. AND THEN FINALLY,
I'LL JUST UPLIFT WHAT CHAIR
RANDOLPH WAS, IN PARTICULAR,
UPLIFTING AROUND THE COST OF
INACTION. YOU KNOW, OFTENTIMES
IT'S WE DON'T HAVE THE MONEY
RIGHT NOW. WELL, IT'S JUST GOING
TO GET INCREASINGLY MORE
EXPENSIVE, NOT ONLY IN TERMS OF
PHYSICAL DOLLARS, BUT IN TERMS
OF PEOPLE AND THE IMPACTS TO
NATURE, SO WE WOULD ALWAYS
UPLIFT THE IDEA OF HAVING A
CLIMATE BOND. SENATOR ALLEN HAS
A GREAT PROPOSAL AND SV 867, SO
WE'LL CONTINUE TO ADVOCATE FOR
THAT. THANK YOU. YEAH THANK YOU.
NEXT THANK YOU. THANKS NICOLE
HUTCHINSON ON BEHALF OF HEALTH
START THE CAP AND TRADE PROGRAM
PLAYS A CRITICAL ROLE IN
CALIFORNIA'S CLIMATE STRATEGY.
AND THE FUNDING IT PROVIDES
THROUGH THE GREENHOUSE GAS
REDUCTION FUND HAS BEEN
ESSENTIAL AND FURTHERING
TRANSPORTATION, ELECTRIFICATION
OF DEPLOYMENT, WHICH, AS THE
CHAIR NOTED IN HER TESTIMONY.
ARE IMPORTANT TO OUR OVERALL
GREENHOUSE GAS EMISSION
REDUCTION STRATEGY, IN ADDITION
TO LOOKING AT INCREASING
PROGRAMS TURNED INTO THE FOR THE
FUTURE, WE LOOK FORWARD TO
PARTICIPATING IN THE
CONVERSATION SURROUNDING HOW TO
BEST FOCUS THE CLIMATE
INVESTMENTS IN ORDER TO ENSURE
THAT WE'RE MEETING OUR CLIMATE
GOALS AND PROVIDING PUBLIC
HEALTH BENEFITS FOR PRIORITY
POPULATIONS. CANCER IS COMMITTED
TO TAKING ACTION TO HELP THIS
ARE THE STATE MEET OUR GOALS,
WHICH WILL REQUIRE FOCUSING ON
TRANSFORMING THE TRANSPORTATION
SECTOR. AS IT IS THE SINGLE
LARGEST SOURCE OF GREENHOUSE GAS
EMISSIONS AND IS RESPONSIBLE FOR
NEARLY 80% OF SMOG FORMING
KNOCKS SEMESTER EMISSIONS. WE
KNOW THIS IS JUST THE START OF
THE CONVERSATION, AND WE LOOK
FORWARD TO WORKING WITH THE
ADMINISTRATION AND THE
LEGISLATURE AS YOU WORK TO
EXAMINE AND RE AUTHORIZED THIS
PROGRAM. THANK YOU. THANK YOU
NEXT. YEAH, CLAIM MONIES FROM
SOCIETY. LET'S TRY IT ONE MORE
TIME. OKAY THAT ONE'S JUST NOT
WORKING. CLAYTON MONIES FROM
ELEVATE CLIMATE COMMISSION BASED
CONSULTING FIRM FOCUSED ON
AMBITION AND EQUITY AND CARBON
MARKETS DON'T LIKE QUITE NEATLY
FIT IN THIS GROUP OR THE OTHER
GROUPS. SO SORRY. AH SO I'LL
MAKE THREE POINTS. THE FIRST IS,
I THINK THE CORRECT APERTURE OR
LENS TO LOOK AT THE CAP AND
TRADE PROGRAM OR EVALUATE THE
CAP AND TRADE PROGRAM WITHIN IS
NOT WITH LCF S. IT'S ACTUALLY
WITH THE WHOLE SUITE. OF THE
STATE'S CLIMATE POLICIES, WHICH
INCLUDES SEVERAL DOZEN OTHER
POLICIES. AND WHEN YOU LOOK AT
IT THROUGH THAT LENS, SEVERAL
THINGS BECOME CLEAR FIRST, AS
OTHERS HAVE SAID, IF DIRECT
POLICY FAILS, LIKE OUR AMBITIOUS
BMT GOAL, WHICH WILL LIKELY FAIL
THE CAP AND TRADE PROGRAM DOES
INDEED PICK UP THOSE REDUCTIONS,
AND THAT IS THE BACKSTOP ROLE
THAT WE'RE SO USED TO
DISCUSSING. THE SECOND BIT, AS
OTHERS HAVE POINTED OUT IS THE
COST EFFECTIVENESS MEASURE.
DOCTOR FOLLY SPOKE ELOQUENTLY
TOWARDS THAT, BUT I'LL POINT OUT
THAT CARB HOUSE TO ACTUALLY DO
COST BENEFIT ANALYSES FOR ANY OF
THEIR POLICY UPDATES CALLED
SYRIA'S SO THERE HAVE BEEN
ABOUT, UM 30 OF THEM OVER THE
LAST DECADE, AND IF YOU START
LOOKING INTO THOSE SYRIA'S AS I
HAVE, YOU'LL FIND OUT THAT MANY
OF OUR POPULAR POLICIES LIKE
ADVANCED CLEAN CARS, FORKLIFT
REDUCTIONS IN LOCOMOTIVES. THESE
POLICIES COST $600 OR MORE SO
THE POLICIES ARE QUITE PER TIME
ABATED. YEP. SO THESE ARE NOT
SMALL NUMBERS AND ANOTHER POINT
I'LL MAKE IS DEAF. INITIALLY
DEFINITIONAL CAP AND TRADE IS
THE MOST COST EFFECTIVE AND
DON'T FORGET ABOUT THE OTHER
POLICIES IN THE SUITE. FOR THE
RECORD. I SUPPORT ALL THESE
OTHER POLICIES. BUT THE QUESTION
WE HAVE BEFORE US FOR THE NEXT
YEAR OR SO OR TWO YEARS WE'LL
SEE IS HOW LOW TO GO ON THE
MARKETS AND COSTS SHOULD NOT BE
A BARRIER TO GOING HARDER. UH,
ON THE MARKETS OR LOWER WITH THE
CAPS, AND THE OTHER THING I
MENTIONED IS CAP AND TRADE AS A
FORCE MULTIPLIER. SO EVEN THAT
NUMBER OF THOSE THREE POLICIES I
MENTIONED THE $600 PER TON
NUMBER IN ALMOST ALL CASES, IF
CAP AND TRADE OR ELSE CFS WERE
TO MAGICALLY GO AWAY, THOSE
COSTS PER TON NUMBERS WOULD GO
HIGHER FOR THE DIRECT POLICIES.
UM I THINK TO FOCUS THE
CONVERSATION HERE ON THE
AMBITION SIDE SENDS. OTHERS HAVE
SPOKEN TO THE EQUITY SIDE. UM
CARBS. GONNA PICK A LOWER CAB,
SO I THINK WHAT THE LEGISLATOR
COULD DO CONSTRUCTIVELY AS
EXTENDED ASAP. THE NUMBER ONE
QUESTION I GET WHEN I TALK TO
NONCOMPLIANCE ENTITIES IS WILL
THE PROGRAM BE AROUND IN 2030?
SO THAT UNCERTAINTY HAS FELT
TODAY? I THINK THE LEGISLATORS
WELL POSITIONED TO SPEAK TO COST
CONTAINMENT MEASURES. CARBONS
IDENTIFIED DOC CCS, AND TO SOME
EXTENT, RENEWABLE HYDROGEN AS
THINGS THAT PERHAPS SHOULD BE
INTEGRATED IN THE CAP AND TRADE
PROGRAM AND WHETHER TO INTEGRATE
THEM AND HOW INAPPROPRIATELY
STAFFING CARB IS SOMETHING THE
LEGISLATURE IS POISED TO DO
WELL, AND I THINK NEEDS TO GET
STARTED BECAUSE THESE ISSUES ARE
VERY, VERY COMPLICATED. UM AND
THE LAST THING I WOULD SAY IS
MAINTAINED BANKING DON'T TOUCH
THE BANKING RULES. AND ON THAT
LAST POINT, I'LL SPEAK TO THE
PROPOSAL THAT DR PETAR
MENTIONED. I THINK THAT CONCEPT
REALLY CHANGES THE RULES OF THE
ROAD. WHILE WE'RE DRIVING ON IT,
IT WILL ERODE CREDIBILITY WITH
COMPLIANCE AND NONCOMPLIANCE
ENTITIES AND I THINK TO SOME
EXTENT, DEPENDING ON HOW IT'S
DONE, IT PUNISHES FOLKS WHO ARE
EITHER COMPLIANCE ENTITIES AND
PARTICIPATED IN EARLY REDUCTIONS
OR NON COMPLIANCE ENTITIES AND
DECIDED EARLY ON TO BELIEVE IN
THE PROGRAM WHEN THE PRICE WAS
STILL AT THE FLOOR. SO I WOULD
SAY, LOOK FORWARD, NOT BACKWARD.
IF WE'RE GONNA CUT CAPS, LET'S
DO IT AT AUCTION ALLOCATION AND
FORWARD LOOKING MATTER, NOT A
BACKWARD LOOKING MATTER. THANKS.
YES, THANK YOU. AND I WILL BE
QUICK HERE SINCE I THINK YOU'VE
ALL HEARD ME SAY ALL OF THESE
THINGS BEFORE CAITLYN RUDNER
CENTER WITH ENVIRONMENTAL
DEFENSE FUND ALSO SIT ON THE
IMAC WITH DR FOLLY AND DR
BERTRAND, UM, BUT SPECIFICALLY
FROM PDF'S PERSPECTIVE. I MEAN,
CAP AND TRADE IS ABSOLUTELY
ESSENTIAL TO MEETING BOTH ARE
2030 2045 GOALS. I MEAN, WE'VE
HEARD THIS CONVERSATION ABOUT A
BACKSTOP. I MEAN, CAP AND TRADE
UNIQUELY CAN PICK UP THE SLACK
IF OTHER POLICIES DON'T DELIVER
THE LEVEL OF ABATEMENT THAT
WE'RE EXPECTING, SO IT IS. IT'S
AN ESSENTIAL POLICY BOTH RIGHT
NOW AND IN ORDER TO MEET OUR NET
0 2045 GOALS. UM I ALSO WANT TO
SAY THAT I APPRECIATE THE WORK
THAT CARB IS DOING ON THE
CURRENT RULEMAKING. I'M I AM
ENCOURAGED BY THIS FOCUS ON
INCREASING NEAR TERM AMBITION IN
THE PROGRAM. UM I'M VERY EAGER
TO SEE THIS PROGRAM ALIGNED WITH
OUR SCOPING PLAN GOALS. SO I'M
PLEASED WITH WHAT CARB HAS BEEN
DOING IN THIS RULEMAKING. I WANT
TO UNDERSCORE A COUPLE OF THE
RECOMMENDATIONS THAT HAVE COME
UP IN THE CONVERSATION THIS
AFTERNOON. ONE DR BERTRAM
BRIEFLY MENTIONED IN EMISSIONS
CONTAINMENT RESERVE, WHICH IS
SOMETHING THE ADF IS ALSO VERY
SUPPORTIVE OF AS A WAY TO
BASICALLY HELP INCREASE AMBITION
IN THE PROGRAM SHOULD PRICES BE
LOW? UM SO IT'S A VERY EASY SORT
OF SELF RATCHETING MECHANISM
THAT MAKES A LOT OF SENSE FROM
OUR PERSPECTIVE. UM WE'VE ALSO
HEARD BOTH DR GRUPA AND MY
FRIEND GARZA AT THE END OF THE
TABLE, TALK ABOUT NO TRADE ZONES
OR FACILITY LEVEL EMISSION CAPS.
UM FACILITY LEVEL CAPS OR
SOMETHING THAT WE HAVE ALSO
REALLY ENCOURAGED CARB TO TAKE A
LOOK AT FOR THE CAP AND TRADE
PROGRAM AS YOU ALL START TO
THINK ABOUT A PROGRAM POST 2030.
I THINK THAT NEEDS TO BE IN THE
MIX TO MAKE SURE THAT NOT ONLY
AS WE ARE INCREASING OUR CLIMATE
AMBITION, BUT WE'RE ALSO
INCREASING THE AIR POLLUTION
BENEFITS THAT WE ARE GETTING IN
THE MOST POLLUTED COMMUNITIES.
AND THEN THE LAST THING I'LL
POINT OUT IS, UM BANKING
ALLOWANCES IS REALLY, REALLY
IMPORTANT FROM A CLIMATE
PERSPECTIVE, AND I THINK
SOMETIMES WE FOCUS A LOT ON THE
COST CONTAINMENT ARGUMENT, BUT
FOR CLIMATE BANKING ALLOWANCES
BRINGS EMISSION REDUCTIONS
FORWARD IN TIME AND SO WE CAN
GET MORE NEAR TERM EMISSION
REDUCTIONS. NOW JUST REDUNDANT,
BUT YOU TAKE MY POINT. UM AND
THAT'S REALLY IMPORTANT FOR THE
CLIMATE BECAUSE WE GET MORE NEAR
TERM REDUCTIONS. WE HAVE LESS
CUMULATIVE POLLUTION. UM SO WE
NEED TO NOT ONLY PRESERVE THE
ABILITY TO BANK ALLOWANCES WITH
ALL OF THE RESTRICTIONS IN PLACE
THAT, UH, AGENDA SOHO TO TALKED
ABOUT IN TERMS OF HOLDING LIMITS
AND ALL OF THAT, BUT, UM, I
WOULD JUST REALLY CAUTION
AGAINST MEASURES THAT WOULD
DISINCENTIVIZE BANKING
ALLOWANCES BECAUSE IT HAS REAL
CLIMATE BENEFITS. UM AND I WILL
STOP THERE. THANK YOU VERY MUCH.
AND IF I WAS IT'S OK. OKAY UM,
YEAH, LET'S UM LET'S SUPPOSE
DRILLING DOWN. LET'S JUST KEEP
GOING FOR WHOEVER'S LEFT HERE
BECAUSE I WANT TO MAKE SURE WE
GET TO EVERYBODY. THANK YOU ALL
FOR YOUR TESTIMONY. WHOEVER ELSE
IS REMAINING TO ME. MAYBE SOME
ENVIRONMENTAL STAKEHOLDERS THERE
COULD BE OTHERS, THOUGH, THANKS.
SOME OF OUR LABOR PARTNERS MIGHT
HAVE CLEARED OUT, BUT ANYONE IS
WELCOME TO COME UP FOR THE
FINAL. LAST BUT LATE, NOT LEAST
IT'S GONNA BE BIG. YEAH. AH NO
PARTICULAR ORDER. LET'S TRY THE
RIGHT YOUR YAHOO. UM AND I DID
GET SOME COMMENTS FROM PHOEBE.
SO I WILL BE HAPPY TO MAKE SOME
COMMENTS ON BEHALF OF LEADERSHIP
COUNCIL FOR JUSTICE AND
ACCOUNTABILITY AS WELL AS MY
CLIENTS, CAL BIKE GREENLINING
INSTITUTE AS WELL AS TRANSFORM
UM, I WANT TO THANK YOU. DESPITE
THE STAFF REPORT, THERE'S BEEN A
LOT OF DISCUSSION ABOUT GMT AT
THIS HEARING, SO I WANT TO
APPRECIATE YOUR COLLEAGUES SOME
OF WHO HAVE OF COURSE LEFT. BUT
ALL THE ATTENTION ON THE NEED TO
REDUCE DRIVING AND HOW THAT
REALLY IS CENTRAL TO THE SCOPING
PLAN AND TO OUR GOALS. UM THESE
QUESTIONS REALLY NEED TO BE
CENTRAL TO THE LEGISLATURE'S
FOCUS. MY CLIENTS ALL WORK ON
TRANSPORTATION AND AS CHAIR,
RANDOLPH SAID, THIS AREA OF
REDUCING DRIVING IS ONE OF THE
HARDEST NUTS TO CRACK. UM AND I
THINK PART OF THE REASON FOR
THAT IS BECAUSE WE REALLY NEED
TO REIN IN SPENDING ON HIGHWAY
EXPANSION, WHICH IS REALLY
DIFFICULT. THERE'S A LOT OF
MOMENTUM IN THE SYSTEM BEHIND
THOSE PROJECTS. BUT EVERY TIME
WE EXPAND THE HIGHWAY, WE ARE
INCREASING DRIVING. WE ARE
MOVING OURSELVES IN THE WRONG
DIRECTION AND UNDERMINING
INVESTMENTS IN SUSTAINABLE
TRANSPORTATION. WE HAVE SEVERAL
BILLS THIS YEAR THAT WE'RE
WORKING ON. UM ONE IS
SPECIFICALLY TO GO AFTER THIS
ISSUE OF RAINING AND HIGHWAY
EXPANSION FOCUS ON THE TRADE
CORRIDOR ENHANCEMENT PROGRAM,
WHICH IS EXPANDING HIGHWAYS IN
ENVIRONMENTAL JUSTICE
COMMUNITIES, THE COMMUNITIES
THAT ARE MOST BURDENED BY THE
GOODS MOVEMENT SECTOR. WE WANT
TO TRY TO LIMIT THAT AND ALSO
MAKE SURE THAT WE'RE INVESTING
IN ELECTRIFICATION,
ELECTRIFICATION OF THE HEAVY
DUTY SECTOR, WHICH WE CAN DO
WITH TRANSPORTATION FUNDS REALLY
IMPORTANT IN A YEAR WHERE
THERE'S BUDGET DEFICIT ON
GENERAL FUNDS, ALSO ON THE SIDE
OF INCREASING AND STRENGTHENING
INVESTMENTS IN SUSTAINABLE
TRANSPORTATION. WE'RE WORKING ON
SP 960 WAS SENATOR WIENER. AS
WELL AS A B 2086 WITH
ASSEMBLYWOMAN SHIAVO, SO LOTS OF
OPPORTUNITIES AND WE REALLY WANT
TO WORK WITH YOU TO, UM YEAH
SHIFT INVESTMENTS AND
PARTICULARLY REDUCE HARMS TO
ENVIRONMENTAL JUSTICE
COMMUNITIES. THANK YOU. SB 9 60
2086 A B 2535 WAS THE FIRST ONE.
THANK YOU. THANK YOU SO MUCH.
WELCOME. THANK YOU, SENATOR.
THANK YOU, PANEL. UH FIRST I'D
LIKE TO ASSOCIATE MYSELF WITH
MISS WARD WALLER'S REMARKS AND
THANK YOU FOR YOUR DISCUSSIONS
WILL TODAY TELL EVERYONE WHO YOU
ARE, IF YOU DON'T MIND? YES.
DAVID WEISS COUGH NEXT GEN.
CALIFORNIA IF HE WOULDN'T MIND.
I WOULD LIKE TO ADDRESS, UH,
COMMENTS FOR BOTH OF THE PANELS
TODAY FOR THE FIRST PANEL. UM
REGARDING THE DISCUSSION IN
PARTICULAR ONE OF THE THINGS
THAT I THINK CAME UP DURING THE
DISCUSSION, BUT THAT I WOULD
REALLY LIKE TO UNDERLINE IS THAT
IF WE FAIL ON VM T ACCORDING TO
THE PLAIN LANGUAGE IN THE
SCOPING PLAN REPORT AS WELL AS
THE APPENDICES WE WILL NOT BE ON
TRACK TO MEET OUR 2045 CARBON
NEUTRALITY CALL OR ARE 85%
EMISSION REDUCTION TARGET. UM IN
CARBS MODELING IN 2030, ROUGHLY
TWO THIRDS OF THE EMISSION
REDUCTIONS THAT THEY ATTRIBUTE
TO THE TRANSPORTATION SECTOR
COME FROM REDUCTIONS IN CAR
DEPENDENCY AND ONLY A VERY SMALL
PROPORTION FROM E V. ADOPTION.
UM THERE'S BEEN SOME DISCUSSION
OF KEPT AND TRADING
COMPLEMENTARY POLICIES AND OTHER
THINGS ARE PICKING UP THE SLACK.
IF THESE POLICIES FAIL. THE FACT
IS, IF YOU LOOK AT THE SCOPING
PLAN, EVERY KNOB IS ALREADY
TURNED TO 11 THAT INCLUDES CAP
AND TRADE THAT INCLUDES BUILDING
ELECTRIFICATION. WE DON'T HAVE
THE OPTION TO SAY MAYBE WE JUST
DON'T MAKE IT ON THE. THERE'S
SOME DISCUSSION, I THINK ALSO A
VM T TARGETS IN THE STATE. WE
DON'T HAVE THE. TARGETS IN THE
STATES. WE SHOULD WE SHOULD LOOK
AT ADOPTING THEM. UM ON THE
BENEFITS SIDE, AS OPPOSED TO
JUST THE RISK SIDE, UH, CREATING
A LESS CAR DEPENDENT CALIFORNIA
ACCORDING TO, UM, TOOL THERE'S
RECENTLY RELEASED BY THE ROCKY
MOUNTAIN INSTITUTE. UM COULD
ABATE OVER ROUGHLY MORE THAN A
FULL YEAR'S WORTH OF CARBON
POLLUTION AT TODAY'S LEVELS.
IT'S ABOUT 338 MILLION METRIC
TONS. UM ACCORDING TO THE ARMY
TOOL, THE AVERAGE HOUSEHOLD
COULD BE $3650 RICHER. UM I
THINK ANOTHER WAY TO LOOK AT
THIS IS IF THE IF SOMEBODY IN
THE HOUSEHOLD HAS AN OPPORTUNITY
TO ONLY HAVE ONE CAR RATHER THAN
TO, UM THE COST TO OWN AND
OPERATE A NEW CAR IN CALIFORNIA
IS ON THE ORDER OF $12,000.
THAT'S EQUIVALENT TO YOU KNOW,
$17,000 IN SALARY, UM SO
PROVIDING WAYS TO FOR PEOPLE TO
GET AROUND WITHOUT HAVING TO SIT
IN TRAFFIC IN A CAR BY
THEMSELVES. FOR A LONG PERIOD OF
TIME REALLY IS AN ECONOMIC
JUSTICE ISSUE AS WELL. EXCUSE
ME. MY NOTES DISAPPEARED ON ME.
UM BUT, UM, MAYBE MOST
IMPORTANTLY, REDUCE TRAFFIC
COLLISIONS, UM IMPROVED HEALTH,
IMPROVED AIR QUALITY. ASSOCIATED
WITH REDUCED CAR DEPENDENCE
COULD ACTUALLY SAVE ON THE ORDER
OF 300,000 LIVES BETWEEN NOW AND
2050. UM SO I JUST WANT TO
UNDERSCORE THE IMPORTANCE OF
THIS ISSUE, AS WELL AS THE
URGENT NEED FOR THE LEGISLATURE
TO CONSIDER POLICY AND ADOPT
POLICY ALONG THE LINES THAT MS
WORD WALLER MENTIONS THAT REALLY
GET OUT THE CAUSE OF CAR
DEPENDENCY, WHICH IS CONTINUED
FREEWAY EXPANSION. WE CAN INVEST
IN TRANSIT, WE CAN INVEST IN
INFILL HOUSING. UM BUT THE WAY
THAT ROAD EXPANSIONS WORK IS IF
YOU EXPAND. IT'S THE SAME AS
BUILDING A COAL POWER PLANT NEXT
TO A SOLAR PLANT. BUILDING A
SOLAR PLANT DOESN'T REDUCE
ELECTRICITY EMISSIONS. SHUTTING
DOWN THE COAL PLANT DOES IF
YOU'RE BUILDING BOTH AT THE SAME
TIME. GREAT THAT YOU'RE
INVESTING IN CLEAN ENERGY, BUT
YOU'RE ALSO STILL MAKING THE
FUNDAMENTAL POLLUTION PROBLEM
WORSE. THIS IS RELATED TO THE
SECOND SECTION. IF CAP AND TRADE
AS A BACKSTOP OR IS AT LEAST
COST POLLUTION REDUCTION MEASURE
. UM IT'S REALLY NEITHER UNDER
CURRENT LAW AT CURRENT PRICES IN
THE MARKET, IT'S NOT CLEAR THAT
IT'S DRIVING ANY EMISSION
REDUCTIONS. I THINK THIS IS
IMPLIED IN SOME OF THE IMAC
MATERIALS, BUT I WOULD JUST
WANTED TO SAY IT VERY BLUNTLY,
UM BUT WHY IS EVERYONE INVESTING
? I MEAN, WHY ARE WE GETTING
BILLIONS OF DOLLARS IT INTO THE
AUCTIONS? IF IT'S NOT REALLY
DRIVING WELL, IT'S NOT DRIVING
EMISSION REDUCTIONS. IT IS IT IS
, THERE IS A FINITE QUANTITY OF
A VALUABLE FINANCIAL INSTRUMENT
AVAILABLE. UM COMPLIANCE
ENTITIES ARE REQUIRED TO, UM, TO
COVER THEIR EMISSIONS BY
PURCHASE OF THESE OF THESE
INSTRUMENTS, BUT, UM THERE'S NO
EVIDENCE REALLY THAT PURCHASING
THESE INSTRUMENTS AT THESE
PRICES. WHEN YOU KNOW WE HEARD
REPEATEDLY. EMISSION REDUCTIONS
FROM DIFFERENT PROGRAMS ARE, UM
AVAILABLE AT $40 A TON, BUT
WE'RE PAYING. WE'RE TREATING THE
MARKET AS IF IT MAGICALLY GOES
OUT AND FINDS $40 A TON OF
MISSION REDUCTIONS, WHICH I
THINK IS JUST NOT, UM NOT THE
WAY THAT IT WORKS FROM FROM
PERSPECTIVE OF A POLLUTER.
THERE'S NO ONE WHO'S SAYING
WELL, THIS WOULD COST ME ANOTHER
$40. SO I'M NOT GOING TO ADMIT
IT. UM TOWARDS THAT END. I THINK
THAT SOME OF THE REFORMS,
ESPECIALLY THOSE PROPOSED BY THE
FOLKS THAT SAY HA IN THE
PREVIOUS TABLE, UM, ARE WORTH
CONSIDERING. UM BUT I ALSO WANT
TO NOTE THAT THERE'S NO BACKSTOP
MECHANISM CURRENTLY IN CAP AND
TRADE. SO THE IDEA THAT IF WE
FALL SHORT ON VM T THAN THE CAP
AND TRADE, PRICE CAP AND TRADE
PRICE OR AUCTION AVAILABILITY
WILL TAKE CARE OF IT. WE DON'T
ACTUALLY HAVE UM, A LIMIT IF WE
HAVE A PRICE CAP, AFTER WHICH
UNLIMITED NUMBER OF ALLOWANCES
CAN BE SOLD. AND THEN, OF
COURSE, SOME OFFSETTING THE WORD
OFFSET IS NOT IN THE STATUTE,
BUT SOME OTHER MITIGATION IS
REQUIRED FOR PRICES FOR
ALLOWANCES SOLD OUT ABOVE THE
CAP. WE HAVEN'T TESTED THAT
THEORY YET TO FIND OUT IF WHAT
THAT TOOL IS OR WHAT IT MIGHT
BE. UM LESS COMMENT, AND I
APPRECIATE YOU BEARING WITH ME
FOR SO LONG IS THAT, UM IN
REVISING THE CAP AND TRADE RULES
, ONE TOOL THAT WAS NOT
DISCUSSED ON TODAY'S PANEL THAT
CARB DOES HAVE AVAILABLE TO IT
IS TO REVISIT THE INDUSTRY, UM,
EFFICIENCY FACTOR IN THE FREE
ALLOWANCE ALLOCATION. UM 8398
DID FIX THE LEAKAGE ALLOWANCE
FACTOR UNTIL 2030 THAT, OF
COURSE, COULD BE REVISITED BY
THE LEGISLATURE. UM IT DID NOT
REQUIRE MAINTAINING THE CURRENT
EFFICIENCY FACTOR AND SO CARB IN
ADDITION TO HAVING DISCRETION TO
ADJUST THE EMISSIONS CAP FACTOR
CAN ALSO ADJUST EVERY VISIT THAT
THAT EFFICIENCY FACTOR. UM IT'S
A GOOD POINT. THANK YOU. OKAY,
THANKS. THANK YOUR LAST STEP.
YEAH GOOD AFTERNOON CHAIR. AND
UH ONE MEMBER. UM UM I'M ALREADY
HERE WITH THE CALIFORNIA LABOR
FEDERATION. UM, I JUST WANT TO
BE BRIEF AND SAY THAT, YOU KNOW,
THANK YOU ALL FOR CONVENIENCE
DISCUSSION AND FOR ALLOWING US
TO INCLUDE LABOR IN THIS
IMPORTANT DISCUSSION ON CLIMATE
AND INFRASTRUCTURE. UM YOU KNOW,
AS I MENTIONED IN THE BRIEF FOR
THIS HEARING WITH HISTORICAL
FEDERAL INVESTMENTS, WE HAVE THE
OPPORTUNITY TO CREATE THOUSANDS
OF JOBS IN THE STATE. UM BUT WE
WANT TO ENSURE THAT THESE JOBS
ARE CREATING THAT WE'RE CREATING
ARE GOOD PAYING JOBS AND, UM,
THAT THEY BENEFIT OUR
COMMUNITIES, SO PROPER LABOR
STANDARDS SHOULD BE APPLIED TO
ALL PUBLIC FUNDS TO MAKE SURE
THAT THIS IS THE CASE. THERE WAS
A STUDY FROM LAST YEAR THAT THE
U. C BERKELEY LABOR CENTER PUT
OUT THE STATE STATED THAT
CALIFORNIA WILL SPEND ABOUT 32
BILLION ON CLIMATE PROJECTS OVER
THE NEXT FOUR YEARS. AND THAT
40% OF THAT WHICH IS ABOUT 12.7
BILLION WILL BE SPENT WITHOUT
ANY LABOR STANDARDS TO ENSURE
GOOD JOBS AND COMMUNITY BENEFITS
. UM YOU KNOW, I THINK WE HAVE
THE POWER AND THE RESPONSIBILITY
TO CHANGE THAT NOW. UM WE HAD
THE CALIFORNIA LABOR FEDERATION
HAVE BEEN ACTIVE IN THE SB 150
PROCESS. UM AND WE ARE LOOKING
FORWARD TO THE UPCOMING REPORT
THAT THE CALIFORNIA WORKFORCE
DEVELOPMENT BOARD IS GOING TO BE
PROVIDED WITH THEIR
RECOMMENDATIONS. BUT WE ALSO
WANT TO MAKE OURSELVES AVAILABLE
TO YOU ALL AND EVERYONE IN THE
LEGISLATURE TO COLLABORATE THIS
YEAR AND MOVING FORWARD ON HOW
WE CAN MAKE SURE THAT OUR PUBLIC
FUNDS HAVE ADEQUATE LABOR
STANDARDS AT EVERY LEVEL. UM WE
AS THE HEARING HAS, UH, DISCUSS
TODAY. THIS IS ESPECIALLY
CRITICAL NOW THAT CALIFORNIA IS
LEADING INNOVATION IN THESE
INDUSTRIES THAT ARE GOING TO BE
CHANGING HOW WE TACKLE THE
CLIMATE CRISIS. SO THANK YOU.
THANK YOU. FOR THAT PERSPECTIVE.
I MEAN, I WAS WONDERING THAT WAS
JUST TO FOLLOW UP. UM THERE'S
THE LABOR FEDERATION HAVE A
POSITION ON THE FUTURE THAT CAP
AND TRADE PROGRAM. I MEAN THE
PRESUMPTION IN THE BèC LABOR
STUDIES THAT CAP AND TRADE WOULD
BE EXTENDED THAT THE REVENUES
WOULD KEEP GOING. THERE WOULD
STILL BE A PROGRAMMED IN LINE
WITH YOUR SORT OF BIGGER POINT
ABOUT HAVING GOOD LABOR
STANDARDS. DO YOU GUYS HAVE A
PERSPECTIVE ON THE WHETHER WE
SHOULD BE LOOKING TO EXTEND THE
PROGRAM REFORM THE PROGRAM? I
CAN GET BACK TO YOU DIRECTLY.
OKAY WE WOULD LOVE THAT. WE'D
LOVE THAT THAT INPUT. I KNOW
VARIOUS SLICES OF LABOR HAVE
DIFFERENT PERSPECTIVES TO
DEPENDING ON THE SECTOR. YOU
OPERATE WITH HIM. I'D BE W WAS
JUST HERE A MINUTE AGO. THEY'RE
GOING TO HAVE A CERTAIN VIEW OR
STEEL WORKER WILL HAVE A CERTAIN
VIEW. BUT S E I U WORKER MIGHT
HAVE A ANOTHER VIEW, BUT I WOULD
REALLY APPRECIATE JUST THAT
HOMEWORK AT THE FED AND COMING
BACK TO US WITH THAT BECAUSE IF
WE ARE GONNA GO DOWN THIS ROAD.
UM IT'S CERTAINLY NOT GOING TO
BE WITHOUT YOU ALL. UM SO I
APPRECIATE YOU BEING HERE AND
TAKING TIME. AND TO THE OTHER
PANELISTS TO THANK YOU FOR DOING
THAT FOR PLUGGING THE CLIMATE
BOND. UM AND NOTING WHAT AN
IMPORTANT PART OF THE DISCUSSION
THAT'S GOING TO BE AS WELL AS
SORT OF JUST TEMPERING THE
EXPECTATIONS OF THE MAGIC THAT
CAP AND TRADE CAN SOLVE
EVERYTHING. SO THANKS FOR
FORCING SOME HARD WORK UPON US,
MR VICE CHAIR. ANY CLOSING
COMMENT? I KNOW YOU'RE THE LAST
MAN STANDING HERE, SO THANK YOU
FOR STAYING LONG. APPRECIATE IT,
AND WE ALL HAVE A LOT TO DO. BUT
THIS WAS REALLY GOOD. YES,
STAYED. WILLINGLY AND REALLY
APPRECIATE ALL THE COMMENTS AND
LOT TO THINK ABOUT GOING FORWARD
, BUT THANKS. OKAY SO WE'VE BEEN
THOROUGH HERE. THANK YOU ALL FOR
STICKING WITH US. AND AS NOTED
IN THE COMMITTEE REPORT, WHICH I
WOULD STILL COME INTO EVERYONE.
AH VERY, VERY COPIOUS AMOUNT OF
FOOTNOTES, TOO, IF EVERYONE HAS
SOME EXTRA READING, BUT IT'S A
TIGHT 11 PAGES. I WOULD SAY
THANK YOU TO THE STAFF REALLY DO
APPRECIATE YOU GUYS DIGGING
DEEP. THIS COMMITTEE IS GOING TO
BE GOING DEEPER THROUGHOUT THE
YEAR. THAT THIS MEETING IS
ADJOURNED.