The Independent Emissions Market Advisory Committee (IEMAC) is seeking public comment on its Sixth Annual Report to the California Air Resources Board (CARB) and the Joint Legislative Committee on Climate Change Policies on the environmental and economic performance of California’s carbon market
and other relevant climate policies.
Public comments should be sent to iemac@calepa.ca.gov by February 26.
The next meeting of the Environmental Justice Advisory Committee (EJAC) will be Thursday, February 8, 2023. The meeting agenda and information about how to attend in person or via zoom can be found on CARB’s website.
The Climate Accountability Package — comprised of Senator Scott Wiener’s SB 253 and Senator Henry Stern’s SB 261 — created the nation’s first requirements for large corporations to publicly disclose their greenhouse gas emissions, carbon embedded in supply chains, and climate risks. The New York Times called SB 253 in particular a “landmark climate disclosure bill” […] with national repercussions.”
The ink on these bills is barely dry and they are already under attack from multiple fronts.
Governor Newsom’s proposed budget included significant cuts to address a $37.9 billion budget shortfall, including all funding to new legislative programs. Thus, the $9 million requested by the California Air Resources Control Board (CARB) to implement the Climate Accountability Package was part of that proposed cut. The Newsom Administration has emphasized that the proposed budget was just a starting point for negotiations. Senator Wiener, author of SB 253, has issued the following statement: “It’s critical that the May budget include funding to implement these laws so that businesses have the certainty they need to prepare to make these new disclosures.” Thus, funding to implement these laws is far from certain.
Although having the laws have the support of many major corporations, including Apple, Google, Salesforce, Levi’s, and Patagonia, the California Chamber of Commerce was stanchly opposed. In fact, it file suit in federal district court to challenge the laws on January 30, 2024. The petition, drafted by the firm multinational law firm Gibson, Dunn & Crutcher, LLP, raises claims largely rooted in the US constitution.
All of these arguments are clearly aimed at the activist, conservative United States Supreme Court.
So far, the litigation has not been successful in the courts, but it is early days. In November 2024, US District Court for the Central District of California denied the plaintiff’s motion for summary judgement as premature, granting leave to refile after discovery.
Senator Wiener issued the following statement in response to the litigation:
“The U.S. Chamber of Commerce’s lawsuit against these groundbreaking climate laws is straight up climate denial,” said Senator Wiener. “Why is the Chamber of Commerce working so aggressively to block basic transparency for the public? We know the answer. It’s not because of the Chamber’s bogus arguments about cost and implementation, since it’s both inexpensive and easy for corporations to make these disclosures. It’s not because of the Chamber’s bizarre and frivolous First Amendment argument. Rather, the Chamber is taking this extremist legal action because many large corporations — particularly fossil fuel corporations and large banks — are absolutely terrified that if they have to tell the public how dramatically they’re fueling climate change, they’ll no longer be able to mislead the public and investors. The Chamber and large corporate polluters don’t want the public to know how much they’re strangling the planet with carbon emissions — that’s why they filed this baseless lawsuit.
“The climate crisis is a real and present threat to our planet and to businesses’ success. Investors and consumers have a right to know the details of how billion dollar companies are navigating the greatest challenge of our time, and many major corporations like Apple and Google are already making these disclosures and support these laws because they understand that need. While corporate lobby groups continue to wage an unhinged misinformation campaign against these laws, investors and consumers are being deprived of vital information to navigate our rapidly warming planet.”
See more from Senator Weiner on the need to fund these measures at Four questions for Scott Wiener.
The Legislature proposal in SB 252 this year would have required the California Public Employees’ Retirement System (CalPERS) and the State Teachers’ Retirement System (CalSTRS) to stop investing in fossil fuels as of January 1, 2024, and to sell their remaining fossil fuel investments by the 2030, if consistent with their fiduciary duty. (The Legislature is allowed by the California Constitution prohibit certain investments by these retirement boards, where it is in the public interest to do so, provided that the prohibition satisfies the standards of fiduciary care and loyalty owed by the boards to pension plan participants. (Cal. Const., art. XVI, § 17.) ) The bill would also require annual reporting on fossil fuel holdings.
The bill noted that the combustion of coal, oil, and natural gas, known as fossil fuels, is the single largest contributor to global climate change, and that fossil fuel companies’ plans to expand production, public relations campaigns, and efforts to obstruct climate stabilization policies are incompatible with California’s climate goals, and our obligation to current and future generations. The idea behind the bill is that, to meet our zero carbon goals, money needs to move from funding fossil fuel infrastructure and instead be invested at scale in clean energy. CalPERS has investments of $9.4 billion currently in fossil fuels.
The bill was blocked by the chair of the Assembly Committee on Public Employment and Retirement–Senator Lena Gonzalez (D-Long Beach). CalPERS specifically expressed strong opposition to the bill. In its message to the public, expressed both on its website and in mailers sent to public employees, presumably in the thousands, CalPERS noted that divestment would not be consistent with its fiduciary duty. The logic there is circular in as much as the condition for divestment under SB 252 is that divestment be consistent with the fiduciary duty.
In point of fact, CalPERS appears to have a divestment policy to oppose all calls for divestment that are not “investment related.” CalPERS opposes the potential lost investment performance and the transaction costs associated with divestment. It’s divestment policy states that its fiduciary obligations require it to oppose this and all other divestment initiatives by the Legislature: “However, fiduciary obligations generally preclude CalPERS from sacrificing investment performance for the purpose of achieving goals that do not directly relate to CalPERS’ operations or benefits.”
CalPERS also may have been opposed to the limits on future investments as well as the requirement to report on the scale of its investments in fossil fuels on a regular basis.
The proposal is up for reconsideration next year.
Fifth National Climate Assessment (NCA5) was released this month. The NCA5 describes itself as “the US Government’s preeminent report on climate change impacts, risks, and responses. It is a congressionally mandated interagency effort that provides the scientific foundation to support informed decision-making across the United States.”
NCA5 reports that climate change is having severe and worsening effects on California. It details that increasing temperatures have intensified drought, leading to a more arid future, while extreme heat will harm crop production and bring widespread economic impacts. Additionally, the assessment warns of unprecedented wildfires in California, driven in part by the changing climate, with high-severity wildfires expected to continue as temperatures rise, putting people and ecosystems at greater risk. The report also describes food shortages, floods, droughts, wildfires, pollution, and disease—all linked to climate change. Furthermore, the assessment emphasizes that many regional climate impacts, including extreme heat and flooding, disproportionately impact low-income communities and communities of color.
Overall, the NCA5 underscores the urgent need for action to prevent additional heating of the planet and to adapt to the changing climate in California and the Southwest.
The recently adopted Voluntary Carbon Market Disclosures Act (VCMDA) will go into effect on January 1, 2024. (See Assembly Bill (AB) 1305 (Chapter 365, of Statutes of 2023).)
According to the bill’s author, the “voluntary carbon offset industry is currently a wild west with all transparency or regulation being entirely voluntary. While offsets used for compliance market are regulated, voluntary carbon offset credits sold to consumers or businesses to voluntarily offset their emissions are completely unregulated. With a variety of recent reports all demonstrating consistent over crediting and lack of legitimate additionality in voluntary offset projects, there is a clear and pressing need for increased accountability and transparency. Requiring important details about the offsets being sold and purchased, such as the site location and how the total number of credits to be sold were calculated allows researchers and the public to better evaluate the validity of the credits being sold. By doing this, AB 1305 will combat greenwashing and give consumers a meaningful tool to decide which projects are worth investing in to reduce their carbon footprint.”
The VCMDA will apply to public and private companies operating in California that make claims or purchase or use VCOs, or sell or market VCOs in the state. Violations of the VCMDA could result in civil penalties of up to $2,500 per day per violation, not to exceed $500,000.
CARB recently released a preliminary greenhouse gas inventory reporting that the the state’s emissions increased in 2021 and 2022 as compared with 2020.
Reporting by Scoping Plan sector in units of million metric tons of carbon dioxide equivalent (MMTCO2e), CARB revealed that emissions are on an upward trend:
| Sector | 2020 GHG Inventory (MMTCO2e) | Ratio of MRR Emissions (2021/2020) | Estimated 2021 Emissions (MMTCO2e) | Estimated 2022 Emissions (MMTCO2e) |
| Transportation | 136 | 1.0913 | 148 | 148.8 ±13.3 |
| Electric Power | 60 | 1.0345 | 62 | 60.4 ±1 |
| Industrial | 73 | 1.0186 | 75 | 76.1 ±3.8 |
| Residential & Commercial | 39 | 0.9998 | 39 | 39.3 ±1 |
| Agriculture | 32 | N/A | 32 | 31.6 ±0.2 |
| High GWP | 21 | N/A | 21 | 20.9 ±0.3 |
| Recycling & Waste | 9 | N/A | 9 | 8.8 ±0.1 |
| Total | 369 | 384 | 386 ±17.7 |
This is of course bad news, since addressing climate change requires deep and swift emissions reductions and the trend is clearly inconsistent with state law, which requires carbon neutrality by 2045. (See Health & Saf. Code, § 38562.2, subd. (c).)
CARB’s disclaimer for this analysis sounds defensive. It reports that these estimates are provided only because they are required by law and “should not be used for any policy making decisions or regulatory compliance, nor cited for any purpose.” (Emphasis added.)
The EJAC meet several times during the preparation of the new scoping plan in 2021 and 2022, on June 3, August 3 and 26, September 22 and 27, October 12 and 15, November 9 and 16, December 1 and 14, 2021, and January 25, February 8 and 28, March 1, 10, and 30, April 25 and 26, May 23 and 24, June 27 and 28, July 25 and 26, August 22 and 23, September 1, 26, and 27, October 24 and 25, and November 29 and 30, 2022.
On September 30, 2022, the EJAC wrote a letter to CARB. EJAC was critical of the draft scoping plan, calling it “business as usual.” It argued that greater focus should be on direct emission reductions that covered all sources, rather than a plan that extends the life of fossil fuel and natural resource extraction. See details in the letter. You can also find CARB’s response here.
Recently, California enacted two climate-related reporting statutes, making it the first state in the U.S. to impose requirements on companies to disclose and report their emissions. The Climate Corporate Data Accountability Act (SB 253, Chapter 382, Statutes of 2023)) and the Climate-Related Financial Risk Act (SB 261, Chapter 383, Statutes of 2023)) require certain public and private entities doing business in California to make public disclosures of their scope greenhouse gas emissions and publicly report their climate-related risks and efforts to address them. These statutes expand the scope of companies covered by their requirement beyond those covered by the current Securities and Exchange Commission (SEC) proposed disclosure standards. The California Air Resources Board (CARB) must promulgate regulations implementing SB 253 by January 1, 2025, and reporting obligations under both statutes will begin in 2026.
The new California laws impose unprecedented reporting requirements on large U.S. public and private companies doing business in California, including disclosure of Scope 1 and Scope 2 greenhouse gas emissions beginning in 2026 and Scope 3 GHG emissions in 2027, submission of biennial climate-related financial risk reports to CARB beginning in 2026, and obtaining third-party assurance of disclosures. The California Climate Accountability Package requires both public and private U.S. companies doing business in California and generating over $1 billion in gross annual revenue to disclose their Scope 1, Scope 2, and Scope 3 GHG emissions to the state of California on an annual basis.
The California legislature’s stated purpose in adopting this legislation is to address the impact of climate change on the state’s residents and economy, increase corporate transparency and informed decision making, standardize climate-related disclosure, and increase corporate accountability in the effort to move toward a net-zero carbon economy.
The California Scoping Plan refers to a comprehensive strategy developed by the California Air Resources Board (CARB) to outline measures and actions aimed at reducing greenhouse gas emissions in the state. The plan is a key component of California’s commitment to addressing climate change and meeting its statutory targets for reducing emissions.
The 2008 Scoping Plan, which was actually finalized in 2009, was the first such plan. As required by statute, the Scoping Plan has been updated every five years by CARB since then.
The 2022 Scoping Plan can be found here: 2022 Scoping Plan for Achieving Carbon Neutrality
The 2017 Scoping Plan can be found here: California’s 2017 Climate Change Scoping Plan
The 2013 Scoping Plan can be found here: First Update to the Climate Change Scoping Plan: Building on the Framework Pursuant to AB 32: The California Global Warming Solutions Act of 2006
The 2008 Scoping Plan can be found here: Climate Change Scoping Plan: A Framework for Change Pursuant to AB 32 The California Global Warming Solutions Act of 2006