Managing uncertainty and risk in California’s proposed Scoping Plan Update

California’s prospects for meeting mandated targets for reducing greenhouse gas emissions, as described in the Scoping Plan Update issued by the state’s Air Resources Board (ARB), face major sources of uncertainty and risk. This report focuses on three particular sources of uncertainty and risk, with the goal of increasing the resilience of California’s overall climate strategy:

1. Preemption risks affecting vehicle efficiency standards
2. Preemption and political risks affecting planned hydrofluorocarbon (HFC) emission
   reductions
3. Uncertainty in projecting business-as-usual emissions through 2030

First, we analyze two important sources of uncertainty related to the Trump Administration’s hostile views on climate policy. We note that the Scoping Plan Update process began in a context where California could expect ongoing support from the federal government. However, since the November election—and in particular, in the wake of President Trump’s recent Executive Order—it has become clear that several of the regulatory authorities that California has relied on in the past may now be in legal and/or political jeopardy. While we hope that California will ultimately retain these authorities, we argue here the final Scoping Plan Update should more explicitly account for the potential impact of federal preemption and other federal policy changes.

Specifically, we analyze potential impacts from changes in:

• Light-duty vehicle efficiency standards. We assess risks to planned transportation sector emission reductions from the possible reversal of the mid-term review of the federal Corporate Average Fuel Economy (CAFE) standards for light-duty vehicles (LDVs) and possible revocation of the Clean Air Act waiver6 for California’s Advanced Clean Car (ACC) program. ARB’s PATHWAYS modeling indicates that emission reductions from policies that target LDVs are expected to cumulatively contribute 39 MMtCO2e over 2021 to 2030; however, we project using ARB’s PATHWAYS and VISION models that if the mid-term CAFE standards are reversed and California loses its ACC waiver, emissions could be 52 MMtCO2e higher than the proposed Scoping Plan Scenario over the same period.
• Short-lived climate pollutants. We assess risks to planned reductions of hydrofluorocarbon (HFC) emissions under the Short-Lived Climate Pollutant Reduction Strategy (SLCP Strategy), which assumes compliance with the Kigali Amendment to the Montreal Protocol and a stable set of regulatory authorities from the Environmental Protection Agency’s Significant New Alternatives Program (EPA SNAP). ARB’s PATHWAYS modeling indicates that the proposed Scoping Plan Update includes about 111 MMtCO2e in cumulative HFC reductions over 2021-2030; however, based on the SLCP Strategy, we calculate that about 51 MMtCO2e of those planned reductions are contingent on federal implementation of the Kigali Amendment, which has not been ratified by the U.S. Senate and is not likely to be ratified in the near term. Additional risks could develop if EPA makes deleterious modifications to its SNAP regulations.

In both instances, federal policymakers could make decisions that are hostile to climate policy and would therefore frustrate some of the planned reductions included in the proposed Scoping Plan Update Scenario.

We recommend that ARB analyze these risks and include quantitative estimates of their possible impacts in the final Scoping Plan Update. This assessment should also identify what other policy measures would be pursued to make up for any lost ground. To assist ARB staff in this effort, we provide calculations and methodologies based on ARB’s own modeling work for these two important policy areas.

Finally, we also emphasize the importance of considering a broader range of plausible business-as-usual scenarios related to future economic and technological changes in California. In contrast, the proposed Scoping Plan Update projects a single reference scenario representing business-as-usual emissions through 2030, despite the fact that no economy-wide forecast is reliable over this timeframe. We believe ARB should analyze multiple reference scenarios that represent a range of realistic possible futures in the final 2030 Scoping Plan, consistent with best practices adopted in other prominent efforts to assess long-term energy futures and the impact of proposed policies over long timeframes.

This report includes a comment letter submitted to ARB with two technical appendices, on vehicles and HFC emissions.