Kenneth
C. Johnson
408-244-4721
kjinnovation@earthlink.net
April 8,
2005
To the members of the California State Assembly Committee on Transportation:
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The Honorable Russ Bogh State Capitol Room 4098 |
The Honorable Wilma Chan State Capitol Room 6005 |
The Honorable Shirley Horton State Capitol Room 2174 |
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The Honorable Bob Huff State Capitol Room 5164 |
The Honorable Betty Karnette State Capitol Room 2176 |
The Honorable Carol Liu State Capitol Room 4112 |
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The Honorable Dennis Mountjoy State Capitol Room 3141 |
The Honorable Roger Niello State Capitol Room 2016 |
The Honorable Fran Pavley State Capitol Room 3120 |
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The Honorable Mark Ridley-Thomas State Capitol Room 3152 |
The Honorable Simon State Capitol Room 2175 |
The Honorable Alberto Torrico State Capitol Room 2179 |
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The Honorable Jenny Oropeza State Capitol Room 2148 |
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Re: AB 1493 and the
Dear Assembly Members:
AB 1493 directs the California Air Resources Board to adopt regulations to achieve “the maximum feasible and cost-effective reduction of greenhouse gas emissions from motor vehicles,” and yet data and analysis provided by Board staff show that the proposed regulations fall short of this goal. Therefore, I am writing to request that the legislature revise the regulations to at least bring them into compliance with the statutory mandate.
The proposed regulations do not comply with the legislative mandate, in part because the emission standard is based on an erroneous computational methodology. The proposed mid-term (2016) emission limits are 205 g/mi for PC/LDT1 and 332 g/mi for LDT2. This is what the optimal limits would be if the regulations did not allow emissions trading between the two LEV vehicle classes, but with trading the optimal limits would be approximately 189 and 343 g/mi for PC/LDT1 and LDT2, respectively.
At a more fundamental level, the regulations do
not comply
with the mandate (and would not comply even with the computational
error
corrected) because the LEV-type emission limits specified by the
standard do
not correspond to the emission limits that staff has explicitly
identified as
representing “the maximum feasible [emission] reduction levels”. The
Board’s
At an even more fundamental level, it may not be possible to achieve “maximum feasible and cost-effective” reduction of vehicular greenhouse gas emissions within the legislatively-imposed constraints of AB 1493, which appear to preclude regulatory instruments other than the cap-and-trade-type system adopted by the Board. Contrary to AB 1493’s explicitly mandated policy objective of achieving maximum emissions reduction, cap-and-trade policy instruments function to minimize compliance costs, and not to minimize emissions (even within defined cost constraints). This policy incompatibility is illustrated by the U. S. Acid Rain program: Compliance costs for sulfur dioxide emissions abatement are over five times lower than original estimates, implying that investment in pollution abatement technology could be increased by a factor of five within the limits of cost acceptability. Yet the program provides no incentive to make such additional investments because the program’s cap-and-trade regulations function to achieve minimum costs, not minimum emissions. In the context of AB 1493, regulators cannot be reasonably expected to know in advance what optimal emission level will satisfy mandated feasibility and cost-effectiveness constraints many years or decades in the future.
An alternative regulatory approach that actually would be compatible with AB 1493’s policy objective is exemplified by the Swedish Nitrogen Oxide program, which uses a cost-constrained, feebate-type system to incentivize reduction of NOx emissions from large power plants. The regulation-induced financial incentive resulted in a 60% reduction in specific NOx emissions from regulated plants between 1990 and 1995, achieving emissions performance much better than other industrialized countries including the U. S. – and at an estimated cost to electricity consumers of only $0.0004/kWh.
Vehicle feebates have been considered under
Vehicle feebates could coexist with and complement a vehicle emission standard, but the currently-proposed AB 1493 standard would probably be incompatible with and could deter the adoption of efficiently designed feebates due to the discrepancy that exists between the standard and the “maximum feasible reduction levels”.
The enclosed paper, “A Policy Critique of
The Board staff has estimated that under the proposed AB 1493 regulations, aggregate emissions from regulated California vehicles will not actually decrease, but will be 8.7% higher than 2004 levels in 2030, by which time almost the entire state vehicle fleet will be compliant with the regulations. And yet the goals of climate stabilization articulated in section 1 of AB 1493 will likely require actual and substantial reductions in aggregate emissions – not just a reduction in the emissions growth rate or in per-vehicle emissions. Insofar as the proposed AB 1493 regulations fall short of both climate stabilization requirements and legislative requirements, I urge the legislature to give serious consideration to the above proposals and recommendations and to develop a regulatory strategy for achieving real and necessary reductions in aggregate greenhouse gas emissions.
Sincerely,
Kenneth C. Johnson