MARCH 10, 2014
Good afternoon Chair Chesbro and distinguished committee members, my name is Erica
Morehouse and I'm a member of the Climate Program at EDF focusing on California’s B 32
Founded in 1967, EDF is a non-profit organization with over 40,000 members in California, and
700,000 nationwide. The organization was an original sponsor of AB 32 in 2006 and has
participated in the associated administrative rulemakings at the California Air Resources Board
and Public Utilities Commission since adoption.
It is with years of personal commitment to the successful implementation of AB 32, and
decades of organizational commitment to environmental issues in California that I testify
before you today.
As a co-sponsor of AB 32, EDF has been closely focused on program implementation and the
development of the Scoping Plan Update - we are very supportive of the ambitious
recommendations it contains so far.
The Scoping Plan Update takes a thorough look at all aspects of the state's economy, asking
both what California has done to address climate change already and where critical
opportunities still remain. I want to highlight three of EDF's main takeaways from the Scoping
Plan Update:
1. First, AB 32 and especially the cornerstone cap-and-trade program are a resounding
success and California is cruising towards meeting our ambitious 2020 targets.
2. Second, California needs a post-2020 GHG target to guide the state’s strategy as we
strive to avoid and adapt to climate change.
3. Third and finally, California is not alone in addressing the global threat of climate change
but our international leadership is absolutely critical.
AB 32 and cap-and-trade are working:
Contrary to some “sky is falling” predictions made before cap-and-trade began, capping
carbon pollution has occurred amidst a balanced state budget, raising the minimum
wage, job growth that has lead the nation, and sustained economic recovery.
California's unemployment has fallen from 9.8 to 8.5 percent and the state has added
almost one million new jobs since cap-and-trade passed in 20101. I have to emphasize
that California is not just keeping pace with the nation; it is leading it when it comes to
job growth and economic recovery2. That's not a surprise to those of us who know that
green sectors grow jobs ten times faster than traditional sectors and that those jobs
have proven more resilient during times of economic downturn.
Wise auction proceed investments can also have a multiplier effect on these trends and
create triple wins for the economy, environment, and our health. Auction proceeds are
also an important source of investments for disadvantaged communities as they cut
GHG and local air pollution and increase economic opportunities.
Success in California has led both ARB and independent observers to conclude that
California is on track to reduce emissions to 1990 levels by 2020. That's a fact to
celebrate. But there are important milestones left before 2020, especially in
transportation and energy which contribute the overwhelming majority of climate
Transportation alone contributes 38 percent of the state's climate pollution and is
emitting significantly more pollution today than in 19903. Transportation is also the
primary source of smog-forming and toxic air pollutants that wreak havoc on the health
of Californian's, especially in disadvantaged communities. California has an important
suite of policies that will effectively reduce transportation pollution by capping overall
emissions, increasing vehicle efficiency, reducing the carbon intensity of fuels, and
decreasing vehicle miles traveled. California needs to stay strong in its commitment to
these policies.
In the energy sector, California is also on track to meet its 33% renewable goal by 2020.
But we need a holistic approach to how we finance, generate, distribute, and utilize
energy in a low-carbon world. As our renewable energy continues to expand, California
will need to create a more integrated system where customers are able to shift more
demand for electricity to times when it is cheap, clean, and abundant. Innovative
financing mechanisms and proper alignment of incentives can enable this
Californians will see real benefits from staying strong on existing policies. We are
already paying hundreds of dollars less for electricity than the average American while
creating only a fraction of the emissions. ARB research shows the same will be true for
1 Employment Development Department, News Release Number 13-90: California's Unemployment Rate
Decreases to 8.5 Percent, December 20, 2013 http://edd.ca.gov/About_EDD/pdf/urate201312.pdf.
2 Governor's Office of Business and Economic Development, California Economy by the Numbers, October 2013
3 California Air Resources Board, Proposed First Update to the Climate Change Scoping Plan: Building on the
Framework, February 10, 2014.
fuel costs and transportation emissions if we just stick with the successful policies laid
out in the Scoping Plan Update4.
But California can and should do even more. Which brings me to my second point:
California will benefit from the guidance a post-2020 GHG reduction target will provide:
The Scoping Plan Update and the Governor's Environmental Goals and Policy Report
both recommend that a 2030 GHG reduction target will benefit California and ensure we
stay on a path to the prosperous, low-carbon economy we need by 2050. EDF fully
We can expect real benefits both economic and environmental from doing so. Setting
a 2030 target sooner rather than later means strengthening incentives to reduce
pollution that will create economic, health, and environmental benefits. It also means
incentivizing immediate and significant emissions reductions, enhancing the stability of
the carbon market, and increasing opportunities for the breakthrough innovations we
The Scoping Plan Update is not just about one statewide target, although that is
important; it's also about not leaving any sector of the economy behind as we transition
to a low-carbon future. Short lived climate pollutants are a particularly important piece
of the puzzle. Methane, black carbon, F-gases, and many more comprise the portfolio
of short-lived climate forcers whose reductions can help mitigate climate change
quickly. On the benefits side, reducing leaks of methane and refrigerants saves people
money. Reducing black carbon saves people’s lives. Short lived climate pollutants are a
challenge the world has overlooked for too long and one that can be aggressively
addressed with California’s leadership.
Decisions about California's path to deep pollution reductions beyond 2020 are a topic
of momentous import that we are looking to all decision-makers, including the
Legislature, Governor, and expert agencies for leadership on. But we do appreciate the
very appropriate role ARB is playing through the Scoping Plan Update to plan and make
recommendations about what is needed.
This brings me to my final point:
4 According to the Scoping Plan Update Californians are already paying about $300 less for their electricity than
the average American and creating only one third the emissions. The same trend will occur in the transportation
sector as California implements its suite of policies. ARB estimates that existing policies will result in fuel costs
savings per person of over $400 by 2020 and over $700 by 2035.
5 Based on forthcoming EDF economic analysis.
California is not alone in taking action but its leadership is critical:
Since AB 32 passed, a refined understanding of climate science and an increase in visible
climate change impacts globally has only heightened the stakes and the urgency of
tackling climate change. But fortunately California is not alone in meeting this
Ten percent of the world’s population and a third of its GDP come from areas
implementing carbon caps6. Like California, Europe is considering a 2030 target and
they are proposing a 40 percent reduction beneath 1990 levels.
The growing number of countries that California has agreed to share climate policy
information with demonstrates just how eager others are to learn from our experience
and success. We are working with Mexico and Brazil to explore opportunities for
reducing deforestation and forest degradation. And as Mexico moves towards a
national carbon reduction strategy, we can expect our partnership with them to expand
and deepen. The list also includes China, Australia, and most recently Peru and Israel.
Of course California's partnership with Quebec which began with information sharing
through the Western Climate Initiative, has now matured into a full linkage where
California and Quebec now accept carbon allowances issued by either government.
California and Quebec are internationally recognized as an important model of bilateral
action in the face of stalled international negotiations. Both can achieve greater
emissions reductions together than either market could achieve alone.
California's leadership is not just bearing fruit internationally. The Pavley clean car
standards - really the first climate law in the nation - have become a nationwide
standard and will keep reducing pollution and saving people money through 2025, at
least. The U.S. Environmental Protection Agency has proposed carbon pollution
standards for new power plants based on California's innovative SB 1368 and will soon
propose standards for existing power plants. These are just a few components of
President Obama's on-going commitment to reduce U.S. emissions 17 percent below
2005 levels by 20207.
And finally, California is working through the Pacific Coast Collaborative with
Washington, Oregon, and British Columbia. All governments are working towards or
already have a price on carbon and are considering other California policy tools like the
low carbon fuel standard.
6 Environmental Defense Fund and the International Emissions Trading Association, The World's Carbon Markets
7 Executive Office of the President, The President’s Climate ction Plan, June 2013
If California continues to innovate and commit resources to bringing others along and
remains resolved and ambitious in addressing the looming threat of climate change, the
state will be the critical leader that the world needs.
In conclusion, I would like to thank this committee, the Legislature, the Air Resources Board,
other state agencies, and the Governor's office for the tremendous leadership provided
California as it implements a very successful economy wide climate protection program,
becomes an important international leader in the process, and plans for future success. Thank