Comment Log Display

22 October 2021

IETA COMMENTS ON CARB SCENARIO INPUTS TECHNICAL WORKSHOP 
(2022 SCOPING PLAN UPDATE)

The International Emissions Trading Association (IETA) welcomes
this opportunity to submit feedback to the California Air Resources
Board (CARB) on the 30 September 2021 workshop "2022 Scoping Plan
Update - Scenario Inputs Technical Workshop." 

As the leading international business voice on climate markets and
finance, IETA's non-profit organization represents over 190
companies, including many facing climate risks and opportunities
across California. IETA's market expertise is regularly called upon
to inform market-based policies that deliver measurable greenhouse
gas reductions and removals, address economic competitiveness
concerns and balance economic efficiencies with social equity and
co-benefits. Our mission is to support broad and functional carbon
markets, guided by the principles of efficient, low-cost,
measurable climate outcomes while ensuring environmental
integrity.

As stated in prior comment letters (8 July 2021 and 2 September
2021), IETA recommends that CARB's 2022 Scoping Plan explicitly
model a cap-and-trade scenario with caps declining to net zero by
2045. This scenario, further outlined in IETA's 2020 Paper
"Achieving Carbon Neutrality in California," would center
cap-and-trade as the "workhorse" measure and strategy for achieving
most of the abatement required to achieve carbon neutrality in
California. As this paper indicates, a flexible Cap-and-Trade
program that includes the use of net emissions through offsets,
carbon removal and sequestration can provide the most
cost-effective abatement--a factor that should be guiding the
decision-making on the scenarios and the Scoping Plan more
generally. If CARB does not consider cap-and-trade to be this
cornerstone measure, it relegates the state to choosing from a
suite of second-best, less efficient options. This would
unnecessarily increase California consumer costs and ultimately
lower the probability of measurably achieving carbon neutrality.
Continued reliance on alternative direct policies would also forego
opportunities that higher allowance prices afford, including more
revenue for the State to spend on addressing the climate challenge
while protecting its disadvantaged communities. 

At the 30 September workshop, CARB staff presented four proposed
modeling scenarios: two that achieve carbon neutrality by 2035 and
two that achieve carbon neutrality by 2045. IETA believes that the
modeled scenarios must include feasible pathways to carbon
neutrality, adhere to existing science, and be cost effective. The
existing body of work that CARB is relying on as a policy and
technical foundation for the Scoping Plan Update show that reaching
Carbon Neutrality by 2045 would be challenging but technically
feasible.*   However, the proposed Scoping Plan Scenario
alternatives that show carbon neutrality by 2035 do not appear to
be technically feasible and cost effective. In addition to being
highly prescriptive, these scenarios would likely result in
significant economic impacts and emissions leakage. In particular,
the exclusion of CCS as an option is especially concerning as it
contradicts the known science and takes a potentially powerful
option off the table for offsetting emissions from hard to
decarbonize sectors.

While IETA recognizes the urgency of climate action, the most
recent studies and assessments indicate that pursuing carbon
neutrality by 2045--powered in large measure through market-based
reductions--provides the greatest opportunity for success at the
lowest cost.

We look forward to close and frequent engagement with CARB staff
and other stakeholders over the coming months. Please direct
comments or questions to IETA's West Coast Representative, John
Blue (blue@ieta.org). 

*This includes the 2021 SB 100 Joint Agency Report, Achieving 100
Percent Clean Electricity in California: An Initial Assessment; the
AB 74 Carbon Neutrality Studies: Driving California's
Transportation Emissions to Zero; and, Enhancing Equity While
Eliminating Emissions in California's Supply of Transportation
Fuels.