LAO Says Scoping Plan Lacks a Clear Strategy and Recommends Changes to Cap‑and‑Trade Program
California nonpartisan legislative analyst reported that the state’s 2022 Scoping Plan Update lacks a clear strategy for meeting its 2030 greenhouse gas (GHG) reduction goals. The Legislative Analyst’s Office (LAO) January 4, 2022 report recommends in its report that the Legislature direct the California Air Resources Board (CARB) to clarify its GHG reduction plan in a report to the legislature by July 31, 2023.
California has set the statutory goal to reduce GHG emissions by 40% below 1990 levels by 2030 and to reduce GHG emissions by 85% below 1990 levels in the goal to achieve carbon neutrality. (see California Implements More Ambitious Climate Agenda) AB 32, the Global Warming Solutions Act of 2006, requires CARB to update the scoping plan at least every five years to meet these goals. (California’s Final 2022 Scoping Plan Adds New Climate Strategies.) The LAO’s report on CARB’s reported the following:
CARB Plan Lacks a Clear Strategy for Meeting 2030 GHG Goals
The LAO reports that the “plan does not identify which specific policies it will implement” and is “unclear regarding how much the state will rely on financial incentives, sector‑specific regulatory programs, or cap‑and‑trade.” The LAO states that the reduction estates are “driven primarily by assumptions developed by CARB, without specifying how those assumed outcomes might be achieved.” The LAO concludes that the lack of focus on policy options “is a missed opportunity that has important ramifications for California’s overall GHG reduction efforts.” More specifically, the LAO reports:
The lack of specificity likely will lead to delayed action, as it defaults to state departments to identify necessary implementation steps. This increases the risk that the state will not meet its statutory 2030 GHG goal, much less CARB’s more ambitious target.
If the state needs to adopt policy changes in a relatively short period of time to meet its goal, this could be costlier and/or disruptive for private businesses and households.
The plan does not provide the Legislature with sufficient information—such as about cost‑effectiveness, distributional impacts, or other environmental impacts—to evaluate the merits of new policies that might be needed to meet the 2030 goal.
Failing to develop a credible plan to meet statewide GHG goals could adversely affect California’s ability to serve as an effective model for other jurisdictions or demonstrate global leadership.
Cap‑and‑Trade Program Is Not Currently Positioned to Close 2030 Emissions Gap
The LAO reports that the cap‑and‑trade is “not currently positioned to ensure the state meets it statutory 2030 GHG goal, much less CARB’s more ambitious target.” The LAO concludes that the program is “not stringent enough” to drive the needed additional emission reductions as “there will be more than enough allowances available for covered entities to continue to emit at levels exceeding the 2030 target.”
Legislature Should Require CARB to Clarify 2030 Plan and Consider Cap‑and‑Trade Changes
The LAO recommends that the legislature require CARB to clarify its plan for reducing GHG emissions to meet the 2030 statutory goal by July 31, 2023. The LAO also recommends that the legislature consider changes to the cap‑and‑trade program to make the program more stringent. It identifies potential changes to include reducing supply of allowances issued in future years, limiting the use of offsets, and extending the program beyond 2030.