Carbon Neutrality Workshops Continue

CalChamber Offers Suggestions to Balance Economic, Environmental Goals

The California Air Resources Board (CARB) kicked off its every-five-years Scoping Plan process this summer with a series of virtual workshops.

CARB spent several days presenting these workshops on several topics, including separate workshops on natural and working lands, environmental justice and equity, and the transportation and electricity sectors.

The CARB Scoping Plan process will provide us with an environmental and economic analysis of progress toward the statewide goal of reducing emissions by 40% below 1990 levels by 2030, as well as determining a path toward Governor Edmund G. Brown Jr.’s Executive Order B-55-18, which requires the state to achieve carbon neutrality by 2045.

Pursuant to Governor Gavin Newsom’s direction, CARB also will evaluate a 2035 carbon neutrality goal. Initial results are expected in spring 2022.

The next Scoping Plan Workshop, scheduled for September 8, will focus on short-lived climate pollutants. Recordings and presentations of previous workshops, as well as upcoming workshops, are posted on ARB’s Scoping Plan website. Previous workshops included engineered carbon removal, natural and working lands and scenario concepts.

Strive for Balance

As the state evaluates how to meet its post-2030 goals, it is important that we continue to strive for an appropriate economic and environmental balance.

The California Chamber of Commerce supported the bipartisan effort to reauthorize cap-and-trade to meet our 2030 goals for this reason. As set forth in AB 32, which guides the Scoping Plan process, the state must evaluate technological feasibility and cost-effective sources to reach our goals.

A few overarching suggestions are outlined below.

Remove Barriers to Innovation

The Scoping Plan process should include a robust discussion around the barriers companies currently face in investing in innovative emission reduction techniques in California.

Other than in cap-and-trade, California has tended to “choose” a technology that it deems worthy of support. For example, many zero-emission resources, such as nuclear and large hydro, are left out of the state’s limited statutory definition of “renewable.” So, of course, companies have been reluctant to invest in other technology that also reduces emissions but will not be acceptable to California.

CARB should be encouraging all cost-effective and technologically feasible ways to reduce carbon emissions. This includes collaborating with other state and local agencies to identify other barriers to entry, such as where land use and entitlements can be streamlined or tax credits can be altered to uncap research and development limits.

If California is going to take a statewide approach to climate change, it must also evaluate statewide barriers to technological development and ensure appropriate counting of emission-reducing activities.

Avoid Sector-by-Sector Limits

The Scoping Plan process should address pathways for meeting our statewide emission reduction goals and avoid imposing restrictions on any one sector of the economy, as this could have significant ripple effects.

Focusing on a statewide approach to carbon neutrality is important for several reasons:

• First, California’s economy is largely intertwined, and impacts to one sector carry through to others. For example, imposing significant burdens on the agricultural sector may risk a substantial increase in the price of food, which would in turn affect in-state grocery retailers, farmers’ markets, as well as revenue from state exports from one of the largest American markets for food.

• Likewise, impacts to the transportation sector have ripple effects throughout the entire economy. Actions that don’t aim to solve these externalities also risk increasing costs for all goods and services that are transported around and out of our state.

• A sector-by-sector approach may run the risk of increasing “leakage” — that is, sending carbon emissions (and revenue-generating new low- and zero-emission technology) out of state when increased compliance costs deter multiple sectors of the economy from expanding or investing in California.

In identifying scenarios to meet our 2045 goals, CARB must continue to focus on statewide emissions and the interaction between emission reductions and the entire statewide economy in evaluating cost effectiveness.

Encourage All Carbon Reducing and Removal Technology

CARB should avoid an all-or-nothing approach, as balance between source reduction and technology will be necessary to meet our climate goals. California has a substantial opportunity to be a leader not only in reducing emissions at the source, but in innovations to capture, store, or otherwise address existing greenhouse gas (GHG) emissions.

Companies are investing in achieving voluntary carbon reduction goals, investing in zero- and low-emission transportation options or helping them come to market, and are supporting businesses that can provide those benefits as quickly and cost-effectively as possible to address the climate crisis.

Companies are looking toward technology like carbon capture and sequestration to address hard-to-decarbonize sectors of the economy and a burgeoning carbontech market is emerging, wherein companies are researching innovative ways to utilize and sequester carbon-rich materials, or carbon dioxide (CO2) itself, in new or replacement products. According to a recent report by President Joe Biden’s Council on Environmental Quality:

To reach the President’s ambitious domestic climate goal of net-zero emissions economy-wide by 2050, the United States will likely have to capture, transport, and permanently sequester significant quantities of carbon dioxide (CO2). In addition, there is growing scientific consensus that carbon capture, utilization, and sequestration (CCUS) and carbon dioxide removal (CDR) will likely play an important role in decarbonization efforts globally; action in the United States can drive down technology costs, accelerating CCUS deployment around the world.

Companies are scrambling to address the climate crisis in any way possible, but barriers to entry for some sectors — like a lack of a reliable market in some sectors or carbon credits or regulatory certainty in others for this technology — remain.

California should be seeking opportunities to create a robust market in our state, where our technology and historic industrial sectors, our world class universities and research and development capacity can create a market for innovative emission reductions technology to complement direct emissions reductions.

Staff Contact: Leah Silverthorn

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Leah B. Silverthorn joined the CalChamber policy team in May 2018 as a policy advocate. She specializes in climate change, air quality, energy, environmental justice, marijuana/cannabis, and transportation and infrastructure issues. She brought to the CalChamber more than a decade of legal experience in environmental, energy, and land use matters. Immediately before coming to CalChamber, she was the principal owner of Silverthorn Legal, based in Seattle, Washington. She focused on environmental litigation, contaminated property redevelopment, and environmental cost recovery and defense. She is an honors graduate of Indiana University-Bloomington, with a B.S. in public affairs and environmental management. She earned her J.D., with honors, at the Indiana University McKinney School of Law, where she was articles editor for the Indiana International and Comparative Law Review and a member of the Moot Court Board.