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Does Our Industry Have a Stake In Prop 23 Outcome Allowing  Temporary Suspension of AB 32?    

Yes, Here's Why





AB 32 (2006) mandates state regulators to cut Green House Gasses (GHG) to 1990 levels by 2020 – an estimated 15% (or more) reduction from current CO2 output. There is mechanism in AB 32 for a governor to suspend statutory provisions for “emergency circumstances” but our governor has refused to invoke it to mitigate the recession’s impacts.  

Under AB 32, Schwarzenegger signed an Executive Order (EO) in 2007 requiring oil companies to reduce the carbon content in fuel 10% by 2020. This will most likely result in higher fuel costs for all transportation vehicles maybe sooner than later.    

Prop 23 would temporarily suspend AB 32 including the fuel carbon content EO until unemployment drops in California to 5.5% for four consecutive quarters.

CARB’s Heavy Duty Truck and Bus Dec 2008 Regulation (HDT&BR) is a separate regulation, in a long line of previous HD fleet regulations, driven primarily by the Federal Clean Air Act mandates to reduce NOx and “diesel” PM emissions - estimated to represent 30% & 40% respectively of these type of emissions. So, on the surface AB 32 and the HDT&BR are separate regulations on separate tracks.

Upon further examination both regulations are closely linked by the promoters of AB 32. First, there is a GHG or CO2 component to HD vehicles. According to environmentalists, in California “heavy duty trucks are responsible for one-fifth of the global warming pollution from the transportation sector”. They allege that the transportation sector is “the largest source of global warming pollution” meaning non-criteria CO2 emissions.

CBA discovered when we examined CARB’s estimates for statewide emissions by category that all HD vehicle CO2 emissions are included in CARB’s inventory database. CARB concludes however, that under the HDT&BR from 2014 to 2020. “overall CO2 reduction for each category (bus & other categories) is negligible” partly due to performance of PM retrofit devices. Based on a mountain of environmental doomsday scenarios, how will the transportation sector contribute to CO2 reduction? Put another way, can our industry escape the impacts of AB32?    

AB 32’s “Climate Change Scoping Plan” involving over 69 separate laws and regulations has already affected some long haul tractors per the new Heavy Duty (Tractor-Trailer) Greenhouse Gas Regulation (CO2 reduction from HD vehicles) effective Jan 1, 2010.

This regulation is supposed to improve tractor and trailer aerodynamic designs as a way to reduce fuel use. If CARB is scoring its HDT&BR CO2 impact as “negligible”, AB 32 may have other surprises down the road from bus design to diesel engine fuel efficiency to the cost of fuel itself.

All of this activity will be driven on a daily basis by the professional environmental community demanding that state regulators take action and expand AB32’s reach. We experienced this in discussions with CARB staff. They are naturally susceptible to outside pressures when developing this type of regulation.

The opposition to Prop 23 is understandable given that AB 32 represents “billions of dollars” of wealth transfers from some private sector companies to entities chosen and subsidized by state regulators. Our customer’s ability to pay for these hidden costs are of no concern to those trying to expand AB 32’s reach into our sector. 

For example, a group called the International Council On Clean Transportation (ICCT) has linked AB 32’s Scoping Plan” to future actions and new regulations for the transportation industry. At minimum AB 32’s “Cap & Trade” program will target “fuel production and refining”. That is a cost increase that falls to the bottom line of every member.

Passage of Prop 23 will send a strong signal to the next Governor, state and federal regulators that the economic effects of excessive regulations are unacceptable if we want to encourage job creation and cost-effective transportation choices – the backbone of our economy.


Jim Seal