| September 12, 2009 |  |
California Legislature Passes Offsets Bill
Statement by Erin Rogers, Union of Concerned Scientists
SACRAMENTO (September 12, 2009) — The California Senate voted 21 to 19 today to approve AB 1404, a bill that would limit the use of offsets in the state's landmark global warming policies. The Assembly passed AB 1404 in June by a 45 to 30 margin. The Union of Concerned Scientists (UCS) is urging Gov. Arnold Schwarzenegger to sign the bill into law.
Below is a statement by Erin Rogers, UCS's California climate campaign manager:
"This bill would close a major loophole in the state's otherwise strong global warming program. It will help ensure that the biggest global warming polluters in California clean up instead of simply paying others to do so. If we cut global warming pollution in California, we will create local jobs, clean up the air, and promote clean energy technology. That's why more than 90 labor, public health, business, religious, social equity and environmental groups support this bill. Governor Schwarzenegger should secure his legacy of leadership on climate change by signing this bill into law."
AB 1404 BACKGROUND
The bill, AB 1404, sets careful parameters on offsets used for compliance with the state's global warming emission reduction policies. It has the support of the Union of Concerned Scientists, the California State Building and Construction Trades Council, and more than 90 health, labor, environmental, faith, social justice and civic organizations, who maintain that the bill would foster green job growth in the state, reduce smog-forming air pollutants that endanger public health, and help the state meet its global warming emission reduction goals.
When the state legislature passed AB 32 in 2006, it authorized the California Air Resources Board (CARB) to establish a cap-and-trade program as one of a number of policies to reduce global warming pollution. CARB's proposed cap-and-trade program would set a declining limit on global warming pollution from sources covered by the cap, including electric power plants, fuel providers and large industrial facilities. These polluters would have to obtain an allowance for each ton of global warming pollution they emit. Every year, the state would distribute fewer and fewer allowances, thus ratcheting down the amount of pollution emitted.
CARB has proposed that up to half of all global warming emission reductions below the 2012 cap could be achieved through offsets, possibly from other states or countries. Offsets allow polluters to pay others to cut or sequester their carbon emissions as a substitute for obtaining allowances or cutting their own emissions.
Assembly Members Kevin De Leon (D-45), Manuel Perez (D-80) and Wilmer Amina Carter (D-62) introduced AB 1404 to limit the use of offsets in California's cap-and-trade system to 10 percent of reductions, and encourage offsets that provide local environmental and public health benefits.
TOO MANY OFFSETS COULD UNDERMINE GREEN JOB GROWTH
According to CARB estimates, implementing California's global warming policies without offsets could create roughly 500,000 new jobs in the state. A percentage of those jobs, however, likely would not materialize if local climate action is outsourced to other parts of the country or to other nations.
In-state climate action can drive many types of job growth. Local climate action can stimulate growth in green jobs such as energy efficiency retrofits, constructing wind turbines and solar panels, building public transit, and developing clean technology. Investing in local climate solutions can also have benefits for general job growth. For instance, according to a study (pdf) produced for the non-partisan advocacy group Next Ten, state energy efficiency measures have saved California households $56 billion on their energy bills from 1972 to 2006. The study found that Californians spent that money in more economically productive sectors of the economy, creating about 1.5 million jobs. According to the study, for every job that was not created in the oil, gas or electric power sector because of energy efficiency gains, more than 50 new jobs were created in other sectors the state's diverse economy.
OFFSETS COULD UNDERMINE CLIMATE ACTION HEALTH BENEFITS
When electricity generators, fuel providers, refineries and other regulated polluters reduce their global warming emissions, they often simultaneously cut smog-forming and toxic air pollutants as well. Offsets, however, decrease the incentive for these polluters to reduce their own emissions. Thus, offsets could undermine the local reductions of smog-forming and toxic pollution that accompany climate action within the capped sectors.
Limiting the use of offsets also could protect public heath by encouraging owners of the state's most heavily-polluting facilities to retrofit or replace them. That would especially benefit communities located near oil refineries, power plants or other fossil-fuel facilities, and other communities that are plagued by severe air quality problems. Several regions in the state rank among the highest in the nation for unhealthy air. For example, all or parts of 30 California counties do not meet federal health standards for the most dangerous type of lung-damaging particulate matter, PM 2.5, which is less than 2.5 microns in size.
A recent University of California Berkeley study (pdf) examined two scenarios: one in which all of California's cap-and trade-reductions were met through offsets, and one in which cap-and-trade reductions were met by directly lowering emissions from California's electricity, transportation and industrial sectors, the sectors regulated by the cap-and-trade program. It found that the cap-and-trade program would reduce more smog-forming and toxic air pollutants reductions without offsets.
For example, by 2020, annual PM 2.5 levels under a no-offsets scenario would be 400 tons less than under an offsets scenario. That's equivalent to taking some 9,000 big-rig trucks off of California's roads.
The Union of Concerned Scientists puts rigorous, independent science to work to solve our planet's most pressing problems. Joining with citizens across the country, we combine technical analysis and effective advocacy to create innovative, practical solutions for a healthy, safe, and sustainable future.
