California Climate Policies Serving Climate Justice

Of course, California cannot be an off-the-shelf blueprint for other states facing different challenges; environmental justice concerns about intense pockets of industrial pollution in disadvantaged communities were critical in California and may be less compelling in other states. But the larger lesson is that decision-makers who conceptualize climate policies in light of the range of socioeconomic and environmental risks and benefits of transitioning to a clean economy are more likely to win political support.

Background on California Climate Policy

Before turning to specific climate justice features, this section provides a quick sketch of California’s climate policies. The linchpin is the state’s “scoping plan” process, the state’s mechanism for developing initiatives to achieve the state’s overall greenhouse gas (GHG) reduction targets. The state’s scoping plans have integrated legislative and regulatory initiatives undertaken at the state, regional, and local levels by multiple agencies and entities throughout the state. See Air Resources Board, California’s 2017 Climate Change Scoping Plan ES-6 (2017).

California’s comprehensive planning approach was launched in 2006 by Assembly Bill (AB) 32, the Global Warming Solutions Act. Cal. Health & Safety Code § 38500, et seq. AB 32 set the first GHG reduction target, 1990 levels by 2020, and required the state’s Air Resources Board (ARB) to work with other state agencies and stakeholders to develop a multi-sector scoping plan detailing the state’s strategy for achieving the initial target. Id.

AB 32 was, however, only one of innumerable legislative and regulatory initiatives that preceded, followed, and informed the scoping plan process. In the transportation sector, 2002 legislation required the state to set GHG standards for cars and develop a low-carbon fuel standard. Cal. Health & Safety Code § 43018.5. In 2008, SB 375 required the state to set regional targets for reducing vehicle emissions and set in motion regional planning efforts to reduce driving and associated emissions. Id. at § 65080.

In the electricity sector, the state passed SB 1368 in 2006, which effectively precluded new coal-fired power plants or new contracts to import coal-fired power. Cal. Pub. Util. Code § 8340, et seq. The state has passed multiple renewable portfolio standards, culminating in 2018 legislation, SB 100, requiring 60 percent renewables by 2030, id. at § 399.30(c), and establishing the goal of 100 percent renewables by 2045. Id. at § 454.53(a). Energy efficiency requirements for buildings and, to the extent not preempted by federal law, for appliances, predated and postdated AB 32. Agency initiatives to reduce short-lived but potent climate pollutants like methane and black carbon led to SB 1383, legislation requiring controls on methane from dairies and oil and gas operations. S.B. 1383, Stat. 2016, ch. 395 (Cal. 2016). The list goes on. As new laws have emerged, the scoping plan has in turn evolved, with the most recent plan adopted in December 2017. ARB, Scoping Plan, supra.

California also adopted a cap-and-trade program that is projected to cover around 80 percent of the state’s emissions, including large emitting sources as well as fuels distributors like natural gas suppliers and refineries. ARB, Scoping Plan, supra, at ES-16. To date, the cap-and-trade program’s primary role has been to generate revenue and ensure that the target is met. The prescriptive measures described above have driven emissions reductions, not the cap-and-trade program. Herman K. Trabish, Is Cap-and-Trade the Climate Solution?: The Jury’s Still Out, Utility Dive (Jan. 19, 2018), www.utilitydive.com/news/is-cap-and-trade-the-climate-solution-the-jurys-still-out/514747/. As the state confronts its demanding 2030 target, however, planned prescriptive measures are unlikely to achieve all the required reductions and so the cap-and-trade program will play a more significant role in driving emissions reductions. ARB, Scoping Plan, supra, at 28.

Climate Justice Provisions in California Climate Policy

Climate justice is a broad term that encapsulates many claims for justice and for fairness, many focused on who has caused and who will bear the consequences of climate change. In this article, however, I address a narrower set of climate justice considerations that have played a significant role in California, where core environmental justice concerns have been central. From a distributive justice perspective, disadvantaged communities have focused on the distribution of risks (like health-endangering co-pollutants that accompany GHGs) and benefits (like access to new clean technologies, from renewable energy to electric cars). From a participatory justice perspective, communities have focused on the degree to which they have a voice in shaping the state’s climate policies at the state, regional, and local levels. While the state’s programs have not always delivered to the satisfaction of impacted communities, particularly in the state’s partial reliance on cap and trade, ARB has attended to climate justice considerations to a degree unique among the states.

Multipollutant initiatives. Achieving air quality standards remains a significant challenge in California. Although the Clean Air Act has improved air quality relative to the bad old days, the Los Angeles area and the San Joaquin Valley have the worst smog in the country, categorized as “extreme” nonattainment. EPA, 8-Hour Ozone (2015) Designated Area/State Information, www3.epa.gov/airquality/greenbook/jbtc.html (last visited Jan. 31, 2018). In addition, pockets of poor-quality air from multiple transportation and industrial polluters continue to plague low-income communities of color, like the Los Angeles and Oakland neighborhoods close to oil refineries and major ports. Multipollutant strategies that encourage GHG reductions where they will simultaneously achieve co-pollutant reduction benefits further environmental justice.

AB 32, the state’s umbrella climate law, articulated multipollutant emission reduction goals from the outset. The law, which established the 2020 emissions reduction goal and created the scoping plan process for identifying GHG reduction strategies, endorses a comprehensive policy making approach, stating that ARB should “maximize[] additional environmental and economic co-benefits for California, and complement[] the state’s efforts to improve air quality.” Cal. Health & Safety Code, § 38501(h).

Multipollutant objectives are most apparent in the state’s transportation initiatives. California’s Advanced Clean Cars Program fully blends GHG and conventional pollutant objectives. Among a variety of initiatives, the program requires automakers to provide California with low- and zero-emissions vehicles (LEVs and ZEVs). Because this program is an important component of the state’s strategy to achieve air quality standards as well as achieving GHG reduction goals, the Trump administration’s 2018 proposal to withdraw the state’s authority to run the program could have significant consequences for the state’s GHG and conventional pollutant programs. Evan Halper et al., California Defends Mileage Rules, Los Angeles Times, Aug. 3, 2018, at A1.

California has integrated its long-standing efforts to reduce diesel pollution, a source of conventional pollutants, into climate policy. Diesel emissions not only contain toxic particulates, but are also a form of “black carbon,” with strong global warming impacts. The state’s Short-Lived Climate Pollutant Strategy’s diesel controls achieve both public health and climate objectives. ARB, Short-Lived Climate Pollutant Reduction Strategy (2017).

The multipollutant objectives of the state’s electricity policies are present but indirect. The high renewable energy goals (now 100 percent by 2045) and energy efficiency requirements will clearly reduce fossil-fuel emissions. To the extent natural gas facilities continue to be built, a 2016 law discourages new natural gas plants in already-burdened communities. Cal. Pub. Util. Code § 454.5(b)(9)(D)(i). These measures will lead to significant reductions in the long term. In the short term, however, the benefits to polluted areas will depend upon whether utilities continue to run facilities in polluted areas while they are phasing out fossil fuels.

In contrast, in the industrial sector, the climate program itself imposes few direct GHG reduction requirements and the state has not taken a multipollutant approach. ARB did require large industrial sources to conduct energy efficiency audits and, in the audits, to assess co-pollutant benefits associated with increased efficiency. The agency concluded that most facilities had already undertaken available efficiency improvements. ARB, Energy Efficiency and Co-Benefits Assessment Public Reports Workshop, June 30, 2015, www.arb.ca.gov/cc/energyaudits/meetings/063015/presentation.pdf.

Under the climate program, the primary industry requirement is to participate in the cap-and-trade program. ARB, Scoping Plan, supra, at 69–73. The state’s reluctance to impose more direct or prescriptive climate measures on industrial sources is at least partly explicable by leakage concerns: ARB is sensitive to the cost and challenge of regulation if it risks driving production to other states. If emissions “leak,” then the state would lose economic activity with no carbon reduction gain.

The environmental justice controversy over cap and trade. From the start, environmental justice advocates have opposed the use of cap and trade to address GHG emissions. Alice Kaswan, Climate Change and Environmental Justice: Lessons from the California Lawsuits, 5 San Diego J. of Climate & Energy 179 (2009). A key concern is unrelated to traditional “environmental justice” considerations: In light of weakness in several early cap-and-trade programs, advocates have been deeply skeptical that a cap-and-trade program would be stringent enough to lead to transformative change. Other concerns reflect more traditional environmental justice considerations: Advocates have argued that facilities could purchase allowances or offsets rather than reducing emissions, leading to emissions hot spots. If purchasing facilities are located in areas suffering from poor air quality, then those areas will not reap the co-pollutant benefits of GHG reductions. In addition, until 2020, the program allows facilities to cover 8 percent of their emissions with carbon offsets, which represent reductions from unregulated sources and can include sources outside of California. To the degree emitting facilities purchase allowances and offsets instead of reducing emissions, the program could fail to maximize the air quality benefits of the state’s GHG reduction efforts. L. Cushing et al., Racial/Ethnic Disparities in Cumulative Environmental Health Impacts in California: Evidence from a Statewide Environmental Justice Screening Tool (CalEnviroScreen 1.1), 105 Am. J. of Pub. Health 2341 (2015).

Because the scoping plan does not contemplate direct climate controls on large industrial sources aside from the obligation to participate in the cap-and-trade program, advocates near industrial sources have feared that the climate program will not improve local air quality. And, in the energy sector, although they recognize that strict renewable energy and energy efficiency requirements will lead to significant energy sector emissions reductions, advocates have been concerned that the lack of direct controls on specific facilities could nonetheless lead to ongoing pollution for some time.

Some of the early data evaluating the cap-and-trade program supports environmental justice advocates’ concerns. ARB analyzed 10 disadvantaged communities and determined that co-pollutant emissions in four––Richmond, West Oakland, downtown Los Angeles, and Fresno—had increased, rather than decreased. ARB, California’s Clean Air Approach and Update on the Cap-and-Trade Adaptive Management Process 25 (Nov. 17, 2016), www.arb.ca.gov/board/books/2016/111716/16-10-5pres.pdf. A study by several researchers found a mixed picture, with co-pollutant emissions increasing in some industries and decreasing in others. Cushing et al., supra. Between 2007 and 2015, ARB’s GHG emissions inventory of sector-based emissions showed overall decreases in the energy and transportation sectors, with industrial emissions remaining flat. Id. Of course, numerous factors, including economic activity, weather, and other exogenous forces, can influence emissions levels. Nonetheless, the data suggest that, although the state has reduced GHG emissions overall, there have been fewer reductions in the industrial sector and, consequently, fewer reductions (and co-pollutant reductions) in communities near industrial sources.

The result is not surprising. Because numerous state programs are designed to drive down emissions in the transportation and electricity sectors, those sectors are unlikely to have strong demand for emissions allowances or offsets. That means that ample, and inexpensive, allowances are available for industry, potentially leading industry to purchase allowances to maintain or, to the extent consistent with existing permits, increase emissions.

Although the environmental justice movement has been skeptical about the efficacy of cap and trade and concerned about its co-pollutant implications, some Native American tribes have experienced significant benefits from the ability to sell offsets into the cap-and-trade program. According to a recent New Yorker article, approximately half of the 90 million forestry offsets used in the program as of fall 2018 were generated by forestry initiatives undertaken by tribes and Alaska Native corporations. Carolyn Kormann, How Carbon Trading Became a Way of Life for California’s Yurok Tribe, The New Yorker, Oct. 10, 2018. In California, 80 percent of the Yurok tribe’s households live below the poverty line and are constricted to 5 percent of their original reservation, which itself is one-fifth of their original land. The Yuroks have sold 2 million credits, at around $12 per ton, and, in fall 2018, had a package of offsets worth $5 million. Offset revenue has become their primary source of discretionary revenue. The Yuroks have used the money to expand their land, buying private timberland that they have committed to preserve, and have instituted forest management practices to improve forest health and resilience. That said, while many tribal members value the economic, environmental, and cultural benefits enabled by the offset program, some have expressed concern that the tribe’s benefits have come at the expense of continued pollution elsewhere. Id.

Ultimately, concern about cap and trade and the multipollutant implications of the state’s climate policies prompted two significant legislative initiatives. The first, AB 197, a companion bill to the statute establishing a post-2020 GHG reduction target, required the state to prioritize direct emission reductions from large stationary sources and mobile sources, a policy intended to encourage prompt actual reductions at all large facilities instead of leaving emissions decisions to the vagaries of market choices under the cap-and-trade program. Cal. Health & Safety Code § 38562.5; Ann Carlson, Does AB 197 Mean the End of Cap and Trade?, Legal Planet Blog (Aug. 24, 2017), http://legal-planet.org/2016/08/24/does-ab-197-mean-the-end-of-cap-and-trade-in-california/. In addition, to facilitate assessments of multipollutant benefits, the law called for more integrated emissions reporting to better track emissions of GHGs, toxics, and conventional pollutants. Cal. Health & Safety Code § 38531.

The second key statute, AB 617, passed in 2017 as part of a legislative compromise to extend the state’s cap-and-trade program to 2030, calls for enhanced monitoring of cumulative pollution levels in areas at risk of concentrated pollution, and calls on state and local planning to address those cumulative emissions. Melanie Mason & Chris Megerian, Bipartisan Votes Extend Cap and Trade to 2030, Los Angeles Times, July 18, 2017, at 1. AB 617 plays a somewhat anomalous role in the state’s climate policy: it does not directly address GHG emissions, but it was tied to GHG legislation. In its 2030 Scoping Plan, the state appears to be relying on AB 617 to demonstrate compliance with AB 197, which had prioritized direct reductions from major sources, rather than incorporating direct controls into the climate program itself. ARB, Scoping Plan, supra, at 71.

Overall, the state has developed multipollutant policies, like car standards, renewable energy standards, and energy efficiency goals that are designed to reduce both GHGs and conventional pollutants. Although the policies are not tailored to achieving reductions in the most polluted areas, they are likely to benefit the disadvantaged communities most exposed to pollution. And, while the state’s climate programs have not tailored their multipollutant objectives to specific communities, in the end, the legislature channeled direct attention to co- pollutant concerns through AB 617, a separate, non-GHG bill.

Distribution of Benefits and Opportunities

A critical feature of the state’s climate policies is the effort to ensure that all citizens have at least some opportunity to experience the benefits of a transition to a green economy, not just those wealthy enough to install solar or purchase electric cars. The November 2017 Scoping Plan states as follows: “It is critical that communities of color, low-income communities, or both, receive the benefits of the cleaner economy growing in California, including its environmental and economic benefits.” ARB, Scoping Plan, supra, at 15. Numerous climate policies attempt to spread a range of environmental and economic benefits to disadvantaged communities.

Thirty-five percent of the revenue from the state’s cap-and-trade allowance auctions must be devoted to disadvantaged and low-income communities. ARB, Priority Population Investments, www.arb.ca.gov/cc/capandtrade/auctionproceeds/communityinvestments.htm. The state identifies disadvantaged communities based on “geographic, socioeconomic, public health, and environmental hazard criteria.” Cal. Health & Safety Code § 39711. The methodology is not perfect: it suffers from all the challenges and quirks that inevitably accompany such efforts, including missing small pockets of poverty, like tribes, within large rural census tracts. Nonetheless, it provides a rational, if imperfect, basis for distributing funds.

Although the funds must be used to reduce GHG emissions, they must also, to the extent feasible, “[m]aximize economic, environmental, and public health benefits.” Cal. Health & Safety Code § 39712(b). Eligible projects include improving energy efficiency, installing distributed energy systems, measures to reduce transportation emissions, and funding for sustainable infrastructure. Id. at § 39712(c). As of 2017, 50 percent of the 1.2 billion in auction revenue devoted to specific projects was expected to benefit disadvantaged communities, and 34 percent of the projects were physically located in disadvantaged communities. California Climate Investments, Annual Report to the Legislature v (2017).

To facilitate community-driven planning for auction revenue investments, the state adopted a “Transformative Climate Communities Program,” which provides funding for multi-stakeholder local planning and implementation. Cal. Pub. Res. Code § 75240. In its first year, the state distributed $140 million to three communities. California Strategic Growth Council, Transformative Climate Communities, http://sgc.ca.gov/programs/tcc/ (last visited Jan. 31, 2019). Fresno received $70 million to implement a plan for distributed solar and energy efficiency initiatives, clean transit, car and bike sharing, as well as a new satellite college campus. Ontario, California’s Healthy Ontario Initiative’s plan will use a $35 million-dollar grant to fund affordable housing, transit, bike and pedestrian accessibility, as well as an urban farm. Lastly, the Watts neighborhood in Los Angeles received $35 million for a range of housing and environmental initiatives.

A 2016 law urged utilities investing in renewable energy to “give preference” to projects that provide environmental and economic benefits to disadvantaged communities. Cal. Pub Util. Code § 399.13(a)(7)(A). In addition, the California Energy Commission has provided grants for tribal microgrid development, providing $5 million to the Blue Lake Rancheria in 2017, Elisa Wood, Tribal Microgrid in Northern California Shows How Communities Can Lead on Climate, Microgrid Knowledge (Apr. 28, 2017), https://microgridknowledge.com/tribal-microgrid/, and $7 million for the Pala Band of Mission Indians in 2018. Lisa Cohn, Why These 10 Microgrids Won Funding in California, Microgrid Knowledge (Feb. 28, 2018), http://www.iitmicrogrid.net/microgrid/pdf/microgridarticle/2018MicrogridKnowledge.pdf?iframe=true&width=980&height=780. And, to increase access to distributed renewable energy for low-income renters, the 2015 “Multifamily Affordable Housing Solar Roofs Program” requires utilities to dedicate up to $1 billion (over ten years) to install renewable energy on multifamily apartment buildings housing low-income tenants. Cal. Pub. Util. Code § 2870(c). The program is funded by utility sales of freely distributed allowances in the cap-and-trade program. The state has also completed a “Barriers Study” analyzing impediments to increasing energy efficiency and renewable energy in poor communities, and developed recommendations for facilitating greater access. California Energy Commission, Low-Income Barriers Study, Part A (2016).

In the transportation sector, the state is required to “increase access [to zero-emission vehicles] for disadvantaged, low-income, and moderate-income communities and consumers . . . to enhance air quality, lower greenhouse gases, and promote overall benefits for those communities and consumers.” Cal. Health & Safety Code § 44258.4(b). State rebates for clean vehicles are now reserved for low-income consumers. Rob Nikolewski, California Tweaks Electric Car Rebates: Will It Work? San Diego Union Trib., Oct. 27, 2016. ARB must also develop programs to increase access to electric vehicles, including financing beyond the state rebates, car-sharing programs, and charging infrastructure near multiunit dwellings in disadvantaged communities. Cal. Health & Safety Code § 44258.4(c)(4).

These initiatives not only share the benefits of transitioning to a clean economy, but also provide an indirect mechanism for improving pollution in burdened communities. Communities can use auction revenue to reduce GHG and co-pollutant emissions from local sources, and the transportation initiatives can directly lower GHG and co-pollutant emissions from mobile sources, currently the largest category of statewide emissions.

Meaningful Participation

The environmental and climate justice movements are concerned not only with results, but also with the ability to participate meaningfully in decisions that affect their communities. Several features of California’s climate programs enhance participatory opportunities for communities that have often felt marginalized. AB 32, the umbrella climate law, required ARB to convene an Environmental Justice Advisory Committee (EJAC), consisting of representatives of environmental justice groups around the state, to advise ARB throughout the scoping plan process. Cal. Health & Safety Code § 38591(a). Although ARB has not always accepted the EJAC’s recommendations, the EJAC has provided an organized forum for analyzing ARB proposals and formulating strategies and provided a platform and visibility for the perspectives of those most impacted by poverty and pollution.

In addition, the scoping plan process itself has engaged the public. For the initial scoping plan and its two updates, ARB has held public hearings across the state. Multiple stakeholders, including but not limited to environmental justice representatives, have attended hearings and submitted comments. ARB, Scoping Plan, supra, at 6.

The Transformative Communities program, discussed above, is designed to encourage bottom-up engagement within affected communities, including community members, local government members, and local economic interests. And multiple other programs are designed to enable participation. For example, in implementing AB 617, which requires assessments of cumulative pollution burdens and planning to reduce them, ARB is offering grants to assist community member participation. As the state considers offsets in the post-2020 cap-and-trade program, the law requires a task force to evaluate the offsets and specifically includes multiple stakeholders, including environmental justice representatives, on that task force. Cal. Health & Safety Code § 38591.1(a).

The Political Value of Comprehensive Climate Policies

California’s climate and environmental justice legislative provisions have a larger lesson for other states pursuing climate action. Notwithstanding the urgency of deep cuts in GHGs, climate policy doesn’t always sell, or at least doesn’t sell well enough to overcome the powerful interests working to block it. Climate policies that conceptualize a green economy transition in ways that address a state’s broader socioeconomic issues could have a greater chance of success than more narrowly drawn initiatives. In California, given pockets of intense pollution and poverty, climate justice was a critical political factor. In other states, other concerns, like transitioning from fossil-fuel dependent jobs or developing new clean energy economic opportunities, could be the socioeconomic issues that capture political support.

Despite California’s reputation as a strongly pro-environment state, the politics of climate have never been easy. The environmental justice provisions embedded in the state’s climate legislation represent legislative compromises that allowed climate legislation to move forward. In 2006, as the legislature initially considered AB 32, the most comprehensive climate legislation in the country, representatives of low-income communities-of-color would not support the legislation unless it contained provisions that would provide benefits to their communities, like improvements in air quality. Julie Sze et al., Best in Show? Climate and Environmental Justice Policy in California, 2 Envtl. Justice 179 (2009).

And as California looked past 2020, environmental justice again played a pivotal role. Representatives of marginalized communities would not support the more demanding 2030 target unless there was a stronger effort to yield tangible co-benefits for the most impacted communities. SB 32, the bill establishing the 2030 target was explicitly conditioned on the legislature also passing AB 197, which prioritized direct emission reductions from major sources and required clearer multi-pollutant emissions reporting.

From 2015 to 2017, continued opposition to the cap-and-trade program stymied legislation to extend the program past 2020. Most Republicans opposed the climate programs, and votes from representatives of marginalized communities were necessary to pass the bill by the two-thirds vote that would insulate it from potential legal challenges. The breakthrough occurred when the legislature voted to adopt AB 617, requiring attention to localized cumulative pollution burdens, alongside the cap-and-trade extension bill. See George Skelton, Gov. Brown’s Climate Change Deal Was a Lesson in Compromise That Should Be Studied at the White House, Los Angeles Times, July 20, 2017, at 1. (Garnering the votes for the cap-and-trade bill also required some concessions to industry, a topic beyond the scope of this article.)

In California, which continues to struggle with poor air quality and poverty, incorporating climate justice provisions into climate proposals broadened political support. Although cap and trade or a carbon tax may be the climate policy that appears most palatable to industry due to expectations of lower costs, few states, beyond those participating in the northeastern Regional Greenhouse Gas Initiative, have had the political will to adopt even this industry-friendly approach. The November 2018 failure of a ballot initiative to establish a carbon tax in Washington state demonstrates this point. Hal Bernton, Washington State Voters Reject Carbon-Fee Initiative, Seattle Times, Nov. 6, 2018. Coupling cap and trade or a carbon tax with other policies that resonate with a broader set of socioeconomic concerns––whatever they may be in a given state––could provide more compelling prospects for political success.