Sorting out Air Quality Regulations After Cap-and-Trade’s Renewal
By Leslie Stewart
Now that the dust is settling from the legislative tumult surrounding renewal of California’s cap-and-trade program, participants are taking stock of the changed landscape for air quality regulation, both statewide and regionally. Legislation passed this summer sets a more ambitious goal for greenhouse gas reductions through cap-and-trade, while also shifting some duties for regional air districts. Under the new laws, these local agencies will see a reduced role in greenhouse gas regulation, but an added responsibility for implementing a statewide community-focused air quality monitoring and enforcement program.
The cap-and-trade program is a complicated balancing act between protecting the environment — specifically by reducing greenhouse gas emissions — and retaining industries that contribute to the state’s economic base. As the limit on permitted greenhouse gas emissions decreases (the “cap”), businesses which exceed the limit must obtain allowances (the “trade”), either through state auctions or from other businesses which are under the cap and therefore have extra allowances. The state opted to give some allowances away for free, initially to ease adoption by industries and utilities, and now to reduce the financial burden on companies which may otherwise decide to relocate.
Passed in July, Assembly Bill 398 (E. Garcia) extended cap-and-trade to 2030 from the program’s original sunset year of 2020. This created more certainty for industry, which was increasingly reluctant to pay for allowances, fearing these might lose value if the program ended soon. The bill also raised the bar for the state’s Air Resources Board. The agency’s goal for 2020 has been to decrease greenhouse gas emissions down to 1990 levels; AB 398 adds a target for 2030, requiring a 40 percent reduction below 1990 levels. Stanley Young, ARB’s director of communications, noted that “the cap has decreased by two to three percent over the previous years of the program, and will drop by four percent by 2020, but then will need to drop exponentially to achieve this goal.”
Additionally, it is now up to ARB, rather than regional air districts, to regulate emissions of carbon dioxide from any source covered by cap-and-trade, whether in industry, agriculture, or elsewhere. Many environmental groups and agencies that were generally supportive of cap-and-trade renewal, including the Bay Area Air Quality Management District, opposed this aspect of AB 398. Following its passage, the Air District announced it expected to shelve a proposed regional cap on refinery emissions, Rule 12-16, which environmental groups had been working toward for five years.
“Victory snatched away at the last minute,” was Andrés Soto’s description of the regional air district restrictions in AB 398. Soto is a community organizer with Communities for a Better Environment, a strong proponent of Rule 12-16. However, his organization is refocusing. Soto noted that “local air districts can’t touch CO₂ reductions, but methane and other gases can still be regulated regionally.” CBE is planning a new campaign to pressure the Air District to cap non-CO₂ refinery emissions at current levels before permitting any new refinery infrastructure projects.
Meanwhile, Tom Addison of the Air District’s Legislative Affairs division commented, “Given passage of AB 398 and its restrictions on local air districts, we are considering how best to coordinate with ARB on actions on greenhouse gases moving forward. Our climate problems are so large and pressing that it makes sense for everyone to work together to address them.”
Greenhouse gases are not the only emissions from industry, and often the attempts to curb them get intertwined with grassroots efforts to limit the local impact of other categories of air pollution. However, not everyone agrees with this approach, since greenhouse gases harm the environment on a global level, not a local one. As ARB’s Young asserted, “We have an equally ambitious goal to address toxic air contaminants and criteria air pollutants, but the system works better when you do that separately [from greenhouse gases].”
That separation was the rationale for AB 398’s companion bill, AB 617 (C. Garcia). The bill requires the state to set up a uniform databank, where data gathered from emission monitoring throughout California will be publicly available. The databank will inform a new ARB strategy to reduce toxic air contaminants and criteria air pollutants, including identifying the most environmentally-burdened communities and locations where additional monitoring is needed.
When the state identifies those sites, local air districts will be required to set up new monitoring there, and also create community-specific pollution reduction plans. Districts may also require individual facilities to set up monitoring at their fencelines. As Young pointed out, “there has been a technical revolution in air monitoring, so that viable, accurate, and consistent monitoring can be done at the community level.”
Under AB 617, ARB will coordinate all these efforts through the newly formed Community Air Protection Program. Its director, Karen Magliano, sees the new program as “fundamentally transforming community-based planning, by bringing in the communities themselves at all levels.” She explained that “we want to look at the problem at a granular level — implementation will be a shared responsibility.”
According to Addison, the Air District is concerned about some aspects of that shared responsibility, especially the financial ones. “We are very supportive of the general philosophy behind AB 617, and some pieces we’re enthusiastic about,” he noted. “For example, AB 617 increases the penalties for strict liability violations. However, there is no additional funding [for districts], and a host of new requirements.” Air District staff subsequently noted that a budget trailer bill signed into law on September 17 contains some AB 617 implementation funding, yet it is unclear whether that funding will be adequate.
Not all of the responsibilities in AB 617 are brand-new to the Air District. Some fenceline and community monitors — measures which will be required by AB 617 in any state-identified communities — are already in place around several Bay Area facilities, because of industry-community agreements or as compliance with the Air District’s Rule 12-15, passed in 2015. Addison observed that better coordination of data reporting on emissions sources is already happening as well. “More data is always helpful, but we want to have that without being forced to divert resources from other programs,” he explained.
Designing community emission reduction plans will be a new task for the Air District, and Addison is concerned that the tool is limited. However, he was quick to add, “We are committed to trying to improve public health and working to implement the bill. Cutting emissions for disproportionately impacted communities is something we have long aimed at.”
Bill Magavern, policy director for the Coalition for Clean Air, is also focused on making the community plans work. “The community action plans rely a lot on implementation by air districts — it’s important that they yield strong measures to help the communities in the areas most impacted by pollution,” he observed. “The concern is not only identifying the problem, but moving quickly to implement solutions.”
Magavern added another area which may require community watchdogs. AB 617 mandates that regional air districts require facilities to use Best Available Retrofit Technology, starting with those which have gone longest since being permitted. “We need to be sure that districts are actually requiring that equipment be updated, and not just letting them use credits,” Magavern warned. Overall, however, he is “cautiously optimistic that AB 617 will yield significant improvements in air quality — but we need to be actively involved to be sure that actually happens.”
Leslie Stewart covers air quality and energy for the Monitor.