SACRAMENTO - The Global Warming Solutions Act of 2006 (Assembly Bill [AB] 32, Nunez, Chapter 488) created a comprehensive program to reduce greenhouse gas emissions in California. AB 32 requires California to reduce greenhouse gases to 1990 levels by 2020, and to maintain and continue reductions beyond 2020. In March 2012, Governor Brown signed Executive Order B‐16‐2012 affirming a long‐range climate goal for California to reduce greenhouse gases from the transportation sector to 80 percent below 1990 levels by 2050.
The Cap‐and‐Trade Program is a key element in California’s climate plan. It creates a limit on the emissions from sources responsible for 85 percent of California’s greenhouse gas emissions, establishes the price signal needed to drive long‐term investment in cleaner fuels and more efficient use of energy, and gives covered entities flexibility to implement the lowest‐cost options to reduce greenhouse gas emissions.
In 2012, the Legislature passed and Governor Brown signed into law three bills, AB 1532 (Pérez, Chapter 807, Statutes of 2012), Senate Bill (SB) 535 (De León, Chapter 830, Statutes of 2012), and SB 1018 (Budget and Fiscal Review Committee, Chapter 39, Statutes of 2012), that established the Greenhouse Gas Reduction Fund to receive proceeds from the distribution of allowances via auction and provided the framework for how those auction proceeds will be appropriated and expended. These statutes require that expenditures from the Greenhouse Gas Reduction Fund be used to facilitate the achievement of greenhouse gas emission reductions and further the purposes of AB 32. In addition, expenditures must comply with the requirements contained in SB 862.
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