Supported by The Climate Center

AB 9 (Muratsuchi) Market-based compliance mechanism for greenhouse gas accounting

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Existing law, The California Global Warming Solutions Act of 2006 (Act) designates the State Air Resources Board (ARB) as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases (GHGs). Under the Act, the ARB is required to approve a statewide GHG emissions limit equivalent to the statewide GHG emissions level in 1990 to be achieved by 2020 and to ensure that statewide GHGs are reduced to at least 40% below the 1990 level by no later than December 31, 2030.

The Act authorizes the ARB to include the use of market-based compliance mechanisms in regulating greenhouse gas emissions and requires the ARB to prepare and approve a scoping plan for achieving the maximum technologically feasible and cost-effective reductions in GHG emissions and to update the scoping plan at least once every 5 years.

This bill would:

  • Require the ARB to initiate a regulatory process to evaluate potential updates to the market-based compliance mechanism, and would require regulatory changes to take effect no later than January 1, 2025;
  • Require the evaluation to focus on specified items, including whether the supply of emission allowances and carbon offsets are consistent with a linear trajectory toward the statewide GHG emissions reduction goal established in the ARB’s most recent scoping plan, rules for banking allowances to use for future compliance, and recommendations made by the Independent Emissions Market Advisory Committee and the ARB’s environmental justice advisory committee;
  • Require the ARB, beginning January 1, 2028, and subsequently on a triennial basis, as specified, and in consultation with the Independent Emissions Market Advisory Committee and the environmental justice advisory committee, to conduct an evaluation of the market-based compliance mechanism;
  • Require the chairperson of the ARB to appear before the Joint Legislative Committee on Climate Change Policies to present the results of an evaluation and specified proposed revisions to the regulations implementing the market-based compliance mechanism;
  • Authorize, following the chairperson’s appearance before the Joint Legislative Committee on Climate Change Policies, the ARB to revise the regulations implementing the market-based compliance mechanism so that the mechanism can more effectively meet the goals of the Act and objectives specified in the most recent scoping plan.

Committee Location: Ordered to inactive file at the request of Assembly Member Muratsuchi on June 1. Item A-10 on the June 6 Assembly Inactive File agenda.

Full bill text and related information.

Bill Author