California Gov. Brown signs off on ambitious greenhouse gas reduction plan

Dive Brief:

Gov. Jerry Brown (D) this week upped his state's already-ambitious climate change goals, signing legislation that requires California to cut emissions 40% below 1990 levels by 2030, and to invest in communities hardest hit by the impacts of global warming, the Associated Press reports.
The state is already on track to meet its current goal, to reduce greenhouse gas emissions to 1990 levels by 2020.
Experts say the new carbon goal is more challenging, but it could also help revive the state's struggling market for carbon permits. According to Bloomberg, revenue from California’s cap-and-trade program was $600 million short of an expected $2.4 billion.

Dive Insight:

Brown signed two pieces of legislation this week which aim to maintain California's status as a leader on emissions reductions. The first extends California's landmark greenhouse gas reduction goals, while the second will establish a legislative committee on climate change policies.

The legislation codifies an executive order signed by Brown last year, setting the state on its aggressive emissions reduction path.

"The successful effort behind these two bills is the latest sign of a growing consensus that protecting the environment and improving public health are inextricably linked and that maintaining that link is key to advancing future environmental actions," Assembly Speaker Anthony Rendon said in a statement.

A decade ago, California adopted the toughest emissions goals in the country, followed by a carbon cap-and-trade program less than five years ago. But since setting up a market to trade carbon allowances, trading has been far more subdued than anticipated. Pricing started at $10/metric ton for carbon dioxide, but rather than quintupling over time, Bloomberg points out the credits still trade closer to $12/ton.

The state's cap-and-trade program is the second largest in the world outside of Europe; and currently requires a 30% reduction in CO2 emissions by 2020. But the state's most recent carbon allowance auction fell short of expectations, leaving the state millions of dollars short of its revenue expectations.

The state's 2002 Clean Car Law in 2002 and the Global Warming Solutions Act in 2006 pushed California to the forefront of environmental protection, said Sen. Fran Pavley. "Those policies have fueled billions of dollars in private investment and spawned a thriving clean-energy sector," Pavley said. The legislation Brown signed yesterday "sends an unmistakable message that California is resolute in its commitment to remain on that healthy and prosperous course."