Eileen M. Nottoli
(415) 273-7481
enottoli@allenmatkins.com

Climate Change Update

California's AB 32 (the Global Warming Solutions Act) requires California to reduce greenhouse gas (GHG) emissions to 1990 levels by the year 2020.

AB32 also requires the California Air Resources Board (CARB) to examine GHG reduction measures which can be implemented early.

AB 32 will affect nearly all industry sectors and potentially will have large impacts on the manufacturing, transportation, energy, agriculture, and construction industries, and other industries, such as the real estate development industry, in which government permits are required in order to conduct business.

Allen Matkins' Climate Change Practice Group follows developments in the implementation of AB 32, and provides these Updates to keep you informed.

AB32 Background

In 2006, California enacted the California Global Warming Solutions Act, Health and Safety Code §§ 38500 et seq. (also called AB 32).
This groundbreaking legislation requires California to reduce its greenhouse gas (GHG) emissions to 1990 levels by 2020. AB 32 sets strict timeframes for the CARB. The Board must design and adopt an overall plan by January 1, 2009 to reduce GHG emissions to 1990 levels by 2020.

The Board must adopt the necessary regulations to implement that plan by January 1, 2011 with implementation by January 1, 2012 to fully achieve the emissions reduction target by January 1, 2020.

CARB's proposed new and expanded discrete early actions for reducing greenhouse gas emissions impact the manufacturing, consumer products, semiconductor and transportation industries

Information in this Alert directly affects:

Manufacturers and consumer products businesses
The transportation industry and businesses with truck fleets
The semiconductor manufacturing industry
Steamship lines, ports and businesses dependent upon ocean shipping

As part of California's efforts to address global warming, staff of the California Air Resources Board (CARB) proposed, on September 7, 2007, a second set of "discrete early actions" to reduce greenhouse gas emissions ("GHG's". If CARB approves these new measures,, the Staff will develop enforceable regulations to implement them. Such regulations must be adopted by January 1, 2010.
These six new proposed discrete early actions, which are projected to reduce greenhouse gas emissions by more than 2.8 million metric tons annually, are:

A ban on sulfur hexafluoride from non-essential applications if viable alternatives are available
Reductions in emissions from consumer products (aerosols, tire inflators, electronics cleaning and dust removal products)
A program to retrofit trucks and trailers with devices to reduce aerodynamic drag and thereby increase fuel efficiency
A program to ensure that vehicle tire pressure is maintained to manufacturer specifications
Reductions in emissions of perfluorocarbons in the semiconductor industry
Requirements for ships to shut off auxiliary engines by plugging into shore side electrical outlets or other technologies.

CARB will vote on these six proposed measures at its meeting on October 25-26.

Initial Discrete Early Actions

In June 2007, CARB adopted the first three discrete early actions (development of low carbon fuels, reduction of refrigerant emissions from motor vehicle air conditioner maintenance, and reductions in methane emissions from landfills). These measures are estimated to reduce GHG by 13 and 26 million metric tons annually.

Other Possible Early Actions

The six new discrete early actions were drawn from a longer list of "early actions" that CARB has identified for further evaluation. The early actions are listed on Table 2 of the the September 2007 Draft CARB staff report entitled Expanded List of Early Action Measures to Reduce Green house Gas Emissions in California Recommended for Board Consideration (PDF 156kb).

Definitions

Greenhouse Gases. GHGs are carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.

Discrete Early Actions. Discrete early actions are those greenhouse gas reduction measures which must have enforceable regulations by January 1, 2010. The regulations must achieve maximum technologically feasible and cost-effective reductions in greenhouse gas emissions.

Important AB 32 Deadlines

Date	Requirement
June 30, 2007	CARB must list early action measures to reduce GHG and must identify "discrete early actions" which can make immediate progress to reduce GHG
January 1, 2009	CARB must design and adopt an overall plan to reduce GHG emissions to 1990 levels
January 1, 2010	Regulations for "discrete early actions" must be enforceable
January 1, 2011	CARB must adopt the necessary regulations to implement its plan to reduce GHG emissions to 1990 levels
January 1, 2012	Regulations to reduce GHG to 1990 levels must be in effect
January 1, 2020	GHG emissions must be reduced to 1990 levels