Existing law requires the State Energy Resources Conservation and Development Commission, by January 1, 2021, to assess the potential for the state to reduce the emissions of greenhouse gases from the states residential and commercial building stock by at least 40% below 1990 levels by January 1, 2030. Existing law requires the commission to include in the 2021 edition of the integrated energy policy report and all subsequent integrated energy policy reports a report on the emissions of greenhouse gases associated with the supply of energy to residential and commercial buildings. Existing law requires the commission to establish the Equitable Building Decarbonization Program that includes a direct install program and a statewide incentive program for low-carbon building technologies.

Existing law establishes the policy of the state to achieve net zero greenhouse gas emissions as soon as possible, but no later than 2045, and to ensure that, by 2045, statewide anthropogenic greenhouse gas emissions are reduced to at least 85% below the statewide greenhouse gas emissions in 1990.

This bill would require the commission, on or before June 1, 2024, to identify an emission reduction adopt a strategy, with milestones, to reduce emissions of greenhouse gases for the building sector to support achieving those carbon emissions reduction goals, sector, as provided. The bill would require the commission, on or before July 1, 2025, to implement the emission reduction strategy as a part of the Equitable Building Decarbonization Program and to take certain actions for purposes of implementing the strategy. commission, in developing the strategy, to consult and collaborate with certain entities, to hold at least 2 public workshops, and to convene stakeholder sessions. The bill would require the commission, on or before September 31, 2024, to submit the adopted strategy to the relevant policy committees of the Legislature.

Existing law requires the State Energy Resources Conservation and Development Commission, by January 1, 2021, to assess the potential for the state to reduce the emissions of greenhouse gases from the states residential and commercial building stock by at least 40% below 1990 levels by January 1, 2030. Existing law requires the commission to include in the 2021 edition of the integrated energy policy report and all subsequent integrated energy policy reports a report on the emissions of greenhouse gases associated with the supply of energy to residential and commercial buildings. Existing law requires the commission to establish the Equitable Building Decarbonization Program that includes a direct install program and a statewide incentive program for low-carbon building technologies.

Existing law establishes the policy of the state to achieve net zero greenhouse gas emissions as soon as possible, but no later than 2045, and to ensure that, by 2045, statewide anthropogenic greenhouse gas emissions are reduced to at least 85% below the statewide greenhouse gas emissions in 1990.

This bill would require the commission, on or before June 1, 2024, to identify an emission reduction strategy, with milestones, for the building sector to support achieving those carbon emissions reduction goals, as provided. The bill would require the commission, on or before July 1, 2025, to implement the emission reduction strategy as a part of the Equitable Building Decarbonization Program and to take certain actions for purposes of implementing the strategy.

Existing law requires the State Energy Resources Conservation and Development Commission, by January 1, 2021, to assess the potential for the state to reduce the emissions of greenhouse gases from the states residential and commercial building stock by at least 40% below 1990 levels by January 1, 2030. Existing law requires the commission to include in the 2021 edition of the integrated energy policy report and all subsequent integrated energy policy reports a report on the emissions of greenhouse gases associated with the supply of energy to residential and commercial buildings. Existing law requires the commission to establish the Equitable Building Decarbonization Program that includes a direct install program and a statewide incentive program for low-carbon building technologies.

Existing law requires the State Energy Resources Conservation and Development Commission, by January 1, 2021, to assess the potential for the state to reduce the emissions of greenhouse gases from the states residential and commercial building stock by at least 40% below 1990 levels by January 1, 2030. Existing law requires the commission to include in the 2021 edition of the integrated energy policy report and all subsequent integrated energy policy reports a report on the emissions of greenhouse gases associated with the supply of energy to residential and commercial buildings.

This bill would make nonsubstantive changes to the latter provision.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 593 (Haney) - Carbon emission reduction strategy: building sector

Bill Summary:

This bill would require the California Energy Commission (CEC), on or before June 1, 2024, to adopt a strategy, with milestones, to reduce emissions of greenhouse gasses (GHGs) for the building sector, as provided.

Fiscal Impact:

• The CEC estimates ongoing costs of about $360,000 annually until the bill sunsets in September of 2028 for 2 positions as well as one-time costs of $5 million for technical support contracts (Energy Resources Program Account [ERPA], General Fund, or other special fund) to develop the emissions reduction strategy and a report to the Legislature.
• Unknown, potentially significant ongoing cost pressure (various funds) for the Legislature to provide funding to implement the strategy as developed by the CEC.

Background:

GHG emissions from the building sector. According to CARB, residential and commercial buildings are responsible for roughly 25 percent of California’s GHG emissions when accounting for electricity demand, fossil fuels consumed onsite, and refrigerants. Of the 25 percent, roughly 10 percent of emissions are attributable to fossil fuel combustion, including natural gas, with residential buildings accounting for slightly more of those emissions than commercial buildings. However, CARB has noted that these emissions numbers can vary from year-to-year. Additionally, the building sector also includes “embodied carbon” which refers to the GHG emissions arising from the manufacturing, transportation, installation, maintenance, and disposal of building materials. The majority of a building’s total embodied carbon is released upfront at the beginning of a building’s life. Unlike with operational carbon, there is no chance to decrease embodied carbon with updates in efficiency after the building is constructed. It is unclear what the exact breakdown is between embodied and operating emissions, but due to California’s mild climate, increasing renewable electricity supply, and relatively efficient building stock, our state’s operational emissions may be a smaller percentage of total building energy use, compared to the embodied carbon in new construction.

ARB Scoping Plan. In 2006, the Legislature passed the California Global Warming Solutions Act of 2006 [Assembly Bill 32 (AB 32)], which created a comprehensive, multi-year program to reduce greenhouse gas (GHG) emissions in California. AB 32 required the California Air Resources Board (CARB or Board) to develop a Scoping Plan that describes the approach California will take to reduce GHGs to achieve the goal of reducing emissions to 1990 levels by 2020. The Scoping Plan was first approved by the Board in 2008 and must be updated at least every five years. Since 2008, there have been two updates to the Scoping Plan. Each of the Scoping Plans have included a suite of policies to help the State achieve its GHG targets, in large part leveraging existing programs whose primary goal is to reduce harmful air pollution.

The 2022 Scoping Plan, the most recently adopted plan, identifies actions to reduce GHG emissions from the building sector, including progressively improving building codes and standards, energy efficiency measures, pursuing voluntary efforts to exceed code requirements, and completing existing building retrofits. The most recent Scoping Plan also noted:

“Achieving carbon neutrality must include transitioning away from fossil gas in residential and commercial buildings, and will rely primarily on advancing energy efficiency while replacing gas appliances with non-combustion alternatives. This transition must include the goal of trimming back the existing gas infrastructure so pockets of gas-fueled residential and commercial buildings do not require ongoing maintenance of the entire limb for gas delivery.”

California’s agencies are taking steps toward achieving carbon neutrality by 2045 and meeting the state’s ambitious 2030 GHG emissions reduction target, including with actions specific to reducing emissions from the building sector.

CEC assessment on reducing GHGs from building sector. AB 3232 (Friedman, Chapter 373, Statutes of 2018) required the CEC to prepare a Building Decarbonization Assessment, in consultation with the CPUC, CARB, and the California Independent System Operator. The report is intended to assess the potential for California to reduce GHG from buildings by 40 percent below 1990 levels by 2030. The Assessment helps illustrate the state’s pathway to decarbonizing single-family, multifamily, and commercial buildings; identify challenges to and opportunities from decarbonizing; estimate the impact of decarbonization activities on the electricity grid; and illustrate topics and data gaps needing additional analysis in future proceedings. However, importantly, the Assessment did not consider cooking and other applications that use fossil fuels in buildings.

Numerous policies to address reducing GHGs from the building sector:

• The CARB adopted a strategy to end sales of natural gas space and water heaters starting in 2030 as part of the 2022 State Implementation Plan for meeting the eight-hour ozone standard, which is submitted in compliance with the federal Clean Air Act. CARB will need to adopt regulations to implement these measures.
• The CEC adopted building energy efficiency standards in 2022 that establish electric-ready standards, encourage electric heat pump technologies, and expand the solar photovoltaic system and energy storage standards.
• The California Public Utilities Commission (CPUC) has eliminated financial subsidies available to builders to offset the costs of extending natural gas lines to serve new buildings, known as allowances which are funded by natural gas utility customers. The CPUC’s intent is to eliminate these allowances, beginning in July 2023, in order to encourage builders to construct new buildings without gas utility service, essentially all-electric. (D.22-09-26 Phase III Decision Eliminating Gas Line Extension Allowances, Ten-Year Refundable Payment Option, and Fifty Percent Discount Payment Option Under Gas Line Extension Rules)
• In December, the CPUC adopted a decision to comprehensively review natural gas utility infrastructure investments “in order to help the state transition away from natural gas-fueled technologies and avoid stranded assets in the gas system. The decision requires gas investor-owned utilities (IOUs) to seek CPUC approval of projects via an application for a certificate of public convenience and necessity (CPCN) prior to commencing construction on any gas infrastructure project whose cost exceeds $75 million; or is located near a sensitive receptor (housing, school, health care facility) and the project requires a permit from the local air district in a non-attainment area for federal air quality standards. (D. 22-12-021 Order Instituting Rulemaking to Establish Policies, Processes, and Rules to Ensure Safe and Reliable Gas Systems in California and Perform Long-Term Gas System Planning.)
• Earlier this year, the CPUC adopted a decision to reduce incentives for natural gas energy efficiency measures in residential and commercial new construction to align more closely with the state’s GHG reduction, climate change mitigation, and decarbonization goals. (D. 23-04-035 Decision Addressing Codes and Standards Subprograms and Budgets and Staff Proposal on Reducing Ratepayer-Funded Incentives for Gas Energy Efficiency Measures.)

Equitable Building Decarbonization Program. The Equitable Building Decarbonization Program was established in budget trailer bill, AB 209 (Committee on Budget, Chapter 251, Statutes of 2022) with the goals to reduce GHGs related to the building sector. The program has two components: a direct install program and a statewide incentive program for low-carbon building technologies. The direct install program provides minimal or no-cost retrofits to low- and moderate-income households, with preference given for buildings located in under-resourced communities, or owned or managed by a California Native American tribe or a member of a California Native American tribe. The retrofits include installation of energy efficient appliances, energy efficiency measures, demand flexibility measures, wiring and panel upgrades, building infrastructure upgrades, efficient air conditioning systems, ceiling fans, and other measures to protect against extreme heat, where appropriate, and remediation and safety measures to facility the installation of new technologies. The statute defines low- and moderate-income residents as those persons and families whose income does not exceed 120 percent of area median income, adjusted for family size, in accordance with the U.S. Department of Housing and Urban Development. The statute also authorizes the direct install program to include tenant protections for participating rental properties.

Funding for building decarbonization. The State Budget Act of 2022 appropriated over $1 billion from the General Fund for the Equitable Building Decarbonization Program, specifically allocating $112 million for the program for its first year, and roughly $900 million is budgeted over the next four fiscal years. However, in light of changing State Budget conditions, the Governor’s January 2023 Budget proposes reducing the funding to 91 percent, maintaining approximately $835 million for support of projects reducing GHG emissions in homes and advancing energy equity. The CEC preliminarily proposes to allocate 66 percent of total funds to the direct install program. In the recently adopted budget bill, SB 101(Skinner, Chapter 12, Statutes of 2023) appropriates nearly $400 million for the program to be encumbered by June 30, 2026.

Proposed Law:

This bill would require the CEC, on or before June 1, 2024, to adopt a strategy, with milestones, to reduce emissions of GHGs for the building sector, as provided. Specifically, this bill would:

1. Require the CEC, on or before June 1, 2024, to adopt a strategy, with milestones, to reduce emissions of GHGs for the building sector consistent with the targets and strategies identified in the most recent Scoping Plan.
2. Require the CEC, in developing the strategy, to do all of the following:
   1. Consult and collaborate with the Public Utilities Commission, the California Building Standards Commission, the State Air Resources Board, the California Workforce Development Board, and the disadvantaged community advisory group established pursuant to Section 400 of the Public Utilities Code.
   2. Hold no less than two public workshops to solicit public input on the development of the strategy.
   3. Convene stakeholder sessions to solicit input from organizations representing the affected workforce, tenants, affordable housing organizations, small businesses, ratepayer organizations, and consumer organizations.
3. Require the CEC to ensure that the strategy maximizes workforce development, provides market signals to appliance manufacturers and installers, minimizes impacts on ratepayers, supports extreme heat protection and prevention goals, prioritizes the needs of low-income and disadvantaged communities, evaluates specific obstacles and considerations for low-income occupants of multifamily and mobilehome structures, and dentifies opportunities to deploy zero-emission home heating and cooling technologies to meet the needs of communities impacted by climate change and extreme weather events.
4. Require the CEC, on or before September 31, 2024, to submit the adopted strategy to the relevant policy committees of the Legislature.
5. Sunset these provisions on September 31, 2028.

Related Legislation:

SB 48 (Becker, 2023) would require the CEC along with other agencies, to develop to a state strategy to achieve State goals for energy and GHG emissions from existing buildings, and authorizes the CEC to implement the strategy, upon appropriation, including authorizing establishing Building Performance Standards for existing commercial buildings to require reductions in energy usage and GHG emissions.

SB 306 (Caballero, 2023) would make changes to the direct install program approved in last year’s budget as part of the Equitable Building Decarbonization Program and codifies the Extreme Heat Action Plan.

SB 101 (Committee on Budget, Chapter 12, Statutes of 2023) provided $10 million to support the Building Energy Benchmarking Program. Specifically, this funding requires the CEC to develop processes for outreach and enforcement to increase compliance by building owners, and improve the quality of the data collected by the program.

AB 209 (Committee on Budget, Chapter 251, Statutes of 2022), among its many provisions, established the Equitable Building Decarbonization Program, including a direct install program to fund the installation of measures to reduce GHGs from buildings.

AB 179 (Ting, Chapter 249, Statutes of 2022), Budget Act of 2022, appropriated $1.12 billion for the Equitable Building Decarbonization Program.

SB 68 (Becker, Chapter 720, Statutes of 2022) required the CEC to develop and publish guidance on best practices to help reduce barriers for building owners to transition to electric equipment and appliances, and install EV charging equipment.

SB 1477 (Stern, Chapter 378, Statutes of 2018) required the CPUC, in consultation with the CEC, to develop and administer a program to require gas corporations to provide incentives for near-zero and zero-emissions building technologies to significantly reduce the emissions of GHGs from those buildings below the minimum projected emissions that would otherwise be expected to result from the implementation of the state's building standards.

AB 3232 (Friedman, Chapter 373, Statutes of 2018) required the CEC to assess the potential for the state to achieve the goal of reducing the emissions of GHGs by the state’s residential and commercial building stock by at least 40 percent below the 1990 levels by January 1, 2030.

AB 1279 (Muratsuchi, Chapter 337, Statutes of 2022) established the policy of the state to achieve carbon neutrality as soon as possible, but no later than 2045.

SB 32 (Pavley, Chapter 249, Statutes of 2016) required the CARB to reduce statewide GHG emissions to at least 40 percent below the 1990 emissions level by 2030.

AB 32 (Nuñez/Pavley, Chapter 488, Statutes of 2006) required CARB to develop a Scoping Plan that describes the state’s approach to reducing GHGs to achieve the goal of reducing emissions to 1990 levels by 2020.

Staff Comments:

The CEC’s main funding source, the Energy Resources Program Account (ERPA), has a significant structural deficit. ERPA was established to provide funds for ongoing energy programs and energy projects, including the operations of the CEC. ERPA is supported by a statutory surcharge on electricity consumption. According to the CEC, as building and appliance energy efficiency and the increase of behind-the-meter solar produce customer savings and flatten statewide electricity consumption, ERPA revenues have decreased, and the costs have been borne by fewer and fewer customers. Even as revenues drop, ERPA is repeatedly tapped to support new programs and must cover increases in employee compensation and benefit contributions.

The CEC’s building and appliance standards have led to decreased energy consumption and reduced ratepayer bills, saving California consumers well over $100 billion over the last 40 years. However, these electricity reductions and consumer savings also reduce ERPA revenues. The CEC’s standards continue to save Californians more money than they pay through the ERPA surcharge.

In addition, behind-the-meter rooftop solar, wind, and non-utility generation are exempt from the ERPA surcharge. As behind-the-meter capacity grows, ERPA revenues decline correspondingly.

The surcharge generated approximately $69.1 million in 2020-21 and currently costs the average household about $2.13 annually (larger customers pay the same rate but pay more based on volume). Despite CEC efforts to reduce ERPA spending by more than $37 million over four years, a structural deficit remains and ERPA’s fund balance is projected to be in the red in 2024-25.

As part of the 2022-23 budget, the Legislature passed trailer bill language that raised the statutory cap on the ERPA surcharge, tied the statutory cap to the Consumer Price Index, and extended the surcharge to behind-the-meter electricity consumption.

-- END --

SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Steven Bradford, Chair

2023 - 2024 Regular

Bill No: AB 593 Hearing Date: 7/10/2023

SUBJECT: Carbon emission reduction strategy: building sector

DIGEST: This bill requires the California Energy Commission (CEC), on or before June 1, 2024, to identify an emission reduction strategy, with milestones, for the building sector to support achieving the net-zero greenhouse gas (GHG) emissions by 2045 and requires the CEC to implement the strategy by July 1, 2025.

ANALYSIS:

Existing law:

1. Requires the State Energy Resources Conservation and Development Commission (also known as the California Energy Commission (CEC)), by January 1, 2021, to assess the potential for the state to reduce the emissions of GHGs from the state’s residential and commercial building stock by at least 40 percent below 1990 levels by January 1, 2030. (Public Resources Code §25403(a)(b))
2. Requires the CEC to include in the 2021 edition of the integrated energy policy report (IEPR) and all subsequent IEPR, a report on the emissions of GHGs associated with the supply of energy to residential and commercial buildings. (Public Resources Code §25403(c))
3. Requires the CEC to establish the Equitable Building Decarbonization Program that includes a direct install program and a statewide incentive program for low-carbon building technologies. (Public Resources Code §25665 et seq.)
4. Establishes the policy of the state to achieve net zero GHG emissions as soon as possible, but no later than 2045, and to ensure that, by 2045, statewide anthropogenic GHG emissions are reduced to at least 85 percent below the statewide GHG emissions in 1990. Requires the California Air Resources Board (CARB) to update the Scoping Plan, pursuant to Health and Safety Code §38561, which requires the plan to be updated at least once every five years. Requires CARB to identify and implement a variety of policies and strategies that enable carbon dioxide removal solutions and carbon capture, utilization, and storage technologies. (Health and Safety Code §38562.2)
5. Requires CARB to ensure that statewide GHG emissions are reduced to 40 percent below the 1990 level by 2030. (Health & Safety Code §38566)
6. Appropriated $1.12 billion from the General Fund for purposes of the Equitable Building Decarbonization Program. (Budget Act of 2022)

This bill:

1. Requires the CEC, on or before June 1, 2024, to identify an emission reduction strategy, with milestones, for the building sector to support achieving the net zero GHG emissions by 2045.
2. Requires the emission reduction strategy to:
   1. Maximize workforce development.
   2. Provide clear market signals to appliance manufacturers and installers.
   3. Minimize impacts on ratepayers.
   4. Support extreme heat goals.
   5. Reduce barriers for low-income individuals.
   6. Identify how to deploy zero-emission home heating and cooling technologies, including bidirectional heat pumps to meet the needs of communities impacted by climate change and extreme weather events.
3. Requires the CEC, on or before July 1, 2025, to implement the emission reduction strategy as a part of the Equitable Building Decarbonization Program and to take certain actions for purposes of implementing the strategy.

Background

GHG emissions from the building sector. According to CARB, residential and commercial buildings are responsible for roughly 25 percent of California’s GHG emissions when accounting for electricity demand, fossil fuels consumed onsite, and refrigerants. Of the 25 percent, roughly 10 percent of emissions are attributable to fossil fuel combustion, including natural gas, with residential buildings accounting for slightly more of those emissions than commercial buildings. However, CARB has noted that these emissions numbers can vary from year-to-year. Additionally, the building sector also includes “embodied carbon” which refers to the GHG emissions arising from the manufacturing, transportation, installation, maintenance, and disposal of building materials. The majority of a building’s total embodied carbon is released upfront at the beginning of a building’s life. Unlike with operational carbon, there is no chance to decrease embodied carbon with updates in efficiency after the building is constructed. It is unclear what the exact breakdown is between embodied and operating emissions, but due to California’s mild climate, increasing renewable electricity supply, and relatively efficient building stock, our state’s operational emissions may be a smaller percentage of total building energy use, compared to the embodied carbon in new construction.

Scoping Plan. The 2022 Climate Change Scoping Plan, the most recently adopted plan, identifies actions to reduce GHG emissions from the building sector, including progressively improving building codes and standards, energy efficiency measures, pursuing voluntary efforts to exceed code requirements, and completing existing building retrofits. The most recent Scoping Plan also noted:

“Achieving carbon neutrality must include transitioning away from fossil gas in residential and commercial buildings, and will rely primarily on advancing energy efficiency while replacing gas appliances with non-combustion alternatives. This transition must include the goal of trimming back the existing gas infrastructure so pockets of gas-fueled residential and commercial buildings do not require ongoing maintenance of the entire limb for gas delivery.”

California’s agencies are taking steps toward achieving carbon neutrality by 2045 and meeting the state’s ambitious 2030 GHG emissions reduction target, including with actions specific to reducing emissions from the building sector.

CEC assessment on reducing GHGs from building sector. AB 3232 (Friedman, Chapter 373, Statutes of 2018) required the CEC to prepare a Building Decarbonization Assessment, in consultation with the CPUC, CARB, and the California Independent System Operator. The report is intended to assess the potential for California to reduce GHG from buildings by 40 percent below 1990 levels by 2030. The Assessment helps illustrate the state’s pathway to decarbonizing single-family, multifamily, and commercial buildings; identify challenges to and opportunities from decarbonizing; estimate the impact of decarbonization activities on the electricity grid; and illustrate topics and data gaps needing additional analysis in future proceedings. However, importantly, the Assessment did not consider cooking and other applications that use fossil fuels in buildings.

Numerous policies to address reducing GHGs from the building sector:

• The CARB adopted a strategy to end sales of natural gas space and water heaters starting in 2030 as part of the 2022 State Implementation Plan for meeting the eight-hour ozone standard, which is submitted in compliance with the federal Clean Air Act. CARB will need to adopt regulations to implement these measures.
• The CEC adopted building energy efficiency standards in 2022 that establish electric-ready standards, encourage electric heat pump technologies, and expand the solar photovoltaic system and energy storage standards.
• The California Public Utilities Commission (CPUC) has eliminated financial subsidies available to builders to offset the costs of extending natural gas lines to serve new buildings, known as allowances which are funded by natural gas utility customers. The CPUC’s intent is to eliminate these allowances, beginning in July 2023, in order to encourage builders to construct new buildings without gas utility service, essentially all-electric. (D.22-09-26 Phase III Decision Eliminating Gas Line Extension Allowances, Ten-Year Refundable Payment Option, and Fifty Percent Discount Payment Option Under Gas Line Extension Rules)
• In December, the CPUC adopted a decision to comprehensively review natural gas utility infrastructure investments “in order to help the state transition away from natural gas-fueled technologies and avoid stranded assets in the gas system. The decision requires gas investor-owned utilities (IOUs) to seek CPUC approval of projects via an application for a certificate of public convenience and necessity (CPCN) prior to commencing construction on any gas infrastructure project whose cost exceeds $75 million; or is located near a sensitive receptor (housing, school, health care facility) and the project requires a permit from the local air district in a non-attainment area for federal air quality standards. (D. 22-12-021 Order Instituting Rulemaking to Establish Policies, Processes, and Rules to Ensure Safe and Reliable Gas Systems in California and Perform Long-Term Gas System Planning.)
• Earlier this year, the CPUC adopted a decision to reduce incentives for natural gas energy efficiency measures in residential and commercial new construction to align more closely with the state’s GHG reduction, climate change mitigation, and decarbonization goals. (D. 23-04-035 Decision Addressing Codes and Standards Subprograms and Budgets and Staff Proposal on Reducing Ratepayer-Funded Incentives for Gas Energy Efficiency Measures.)

Equitable Building Decarbonization Program. The Equitable Building Decarbonization Program was established in budget trailer bill, AB 209 (Committee on Budget, Chapter 251, Statutes of 2022) with the goals to reduce GHGs related to the building sector. The program has two components: a direct install program and a statewide incentive program for low-carbon building technologies. The direct install program provides minimal or no-cost retrofits to low- and moderate-income households, with preference given for buildings located in under-resourced communities, or owned or managed by a California Native American tribe or a member of a California Native American tribe. The retrofits include installation of energy efficient appliances, energy efficiency measures, demand flexibility measures, wiring and panel upgrades, building infrastructure upgrades, efficient air conditioning systems, ceiling fans, and other measures to protect against extreme heat, where appropriate, and remediation and safety measures to facility the installation of new technologies. The statute defines low- and moderate-income residents as those persons and families whose income does not exceed 120 percent of area median income, adjusted for family size, in accordance with the U.S. Department of Housing and Urban Development. The statute also authorizes the direct install program to include tenant protections for participating rental properties.

Funds appropriated. The State Budget Act of 2022 appropriated over $1 billion from the General Fund for the Equitable Building Decarbonization Program, specifically allocating $112 million for the program for its first year, and roughly $900 million is budgeted over the next four fiscal years. However, in light of changing State Budget conditions, the Governor’s January 2023 Budget proposes reducing the funding to 91 percent, maintaining approximately $835 million for support of projects reducing GHG emissions in homes and advancing energy equity. The CEC preliminarily proposes to allocate 66 percent of total funds to the direct install program. In the recently adopted budget bill, SB 101(Skinner, Chapter 12, Statutes of 2023) appropriates nearly $400 million for the program to be encumbered by June 30, 2026.

Local rules to limit or ban gas use. In 2019, the City of Berkeley adopted the nation’s first ban of natural gas hookups in most new residences and commercial buildings. Since then, about 50 other California cities and counties have adopted reach codes (those that surpass state building standards) or ordinances that either limit or ban the installation of gas connections to new buildings. Additionally, last month, the Bay Area Air Quality Management District adopted rules prohibiting installation of natural gas furnaces and water heaters in residential and commercial settings beginning in 2027.

Federal court overturns City of Berkeley ban. On April 17^th, a federal court overturned the City of Berkeley’s ban on natural gas hookups. The California Restaurant Association filed suit against the City of Berkeley months after the city adopted the ban. The Restaurant Association explains in its complaint that restaurants rely on natural gas for preparing certain foods, with many chefs trained only on natural gas stoves. The Association alleges that one or more of its members would like to open or relocate a restaurant in a new Berkeley building completed after the ordinance became effective on January 1, 2020. But those members could not do so because of the ban on natural gas.

A lower district court upheld the ban in 2021, however, the 9th U.S. Circuit Court of Appeals found the ban to be in direct violation of the Energy Policy and Conservation Act of 1975 (EPCA) (California Restaurant Association v. City of Berkeley (United States Court of Appeals, 9^th Cir. 2023). The three-judge panel held that “the Energy Policy and Conservation Act 42 U.S.C. § 6297(c), expressly preempts state and local regulations concerning the energy use of many natural gas appliances, including those used in household and restaurant kitchens. Instead of directly banning those appliances in new buildings, Berkeley took a more circuitous route to the same result. It enacted a building code that prohibits natural gas piping into those buildings, rendering the gas appliances useless.” The court ruled that the EPCA preempts the Berkeley ordinance. The City of Berkeley is likely to appeal the decision. It may be too soon to know the full implications of the court decision on similar local ordinances and related state rules.

Comments

Need for this bill. The proponents of this bill suggest an updated emissions reduction strategy, with milestones, is needed in light of the state’s carbon neutrality goal. The supporters argue that the state simply can’t wait to tackle these emissions sources and there’s a need to delegate to one state agency the responsibility to address emissions from the building sector. However, CARB is tasked as the agency to develop emissions reductions targets and strategies, including an existing statutory requirement to update the Scoping Plan at least once every five years. Given the recent adoption of the net-zero GHG emissions goal, per AB 1279 (Muratsuchi, Chapter 337, Statutes of 2022), including strategies for carbon capture, utilization, and storage, CARB will be updating the next Scoping Plan to include this goal economy wide and by sector. As such, this bill would seem to circumvent that effort and instead require the CEC to develop and implement the strategy. Such a change would be a departure from agencies’ historical roles. Additionally, it would be premature to implement a strategy that has yet to be developed. However, given the numerous activities (including many noted above) as it relates to reducing GHG emissions from the building sector, there may be value in having the CEC work with stakeholders and relevant agencies, through a robust public process, to develop a strategy informed by the GHG targets established by CARB and providing recommendations about milestones, policies to address stakeholder needs (including the affected workforce, low- and middle-income residents, disadvantaged communities, renters, rural communities, and others). As such, the author and committee may wish to amend this bill to ensure the emissions reduction target is pursuant to the targets determined in the Scoping Plan, to ensure the CEC develops the strategy via a public process, including public workshops, and working with relevant agencies, and require consideration of related issues (such as: extreme heat, energy utility bills for customer segments, unique considerations for tenants. Additionally, the author and committee may wish to delete language that requires the CEC to implement the strategy.

Prior/Related Legislation

SB 48 (Becker, 2023) requires the CEC along with other agencies, to develop to a state strategy to achieve State goals for energy and GHG emissions from existing buildings, and authorizes the CEC to implement the strategy, upon appropriation, including authorizing establishing Building Performance Standards for existing commercial buildings to require reductions in energy usage and GHG emissions. The bill is pending in the Assembly Committee on Natural Resources.

SB 306 (Caballero, 2023) makes changes to the direct install program approved in last year’s budget as part of the Equitable Building Decarbonization Program and codifies the Extreme Heat Action Plan. The bill is pending in the Assembly Committee on Natural Resources.

SB 101 (Committee on Budget, Chapter 12, Statutes of 2023) provided $10 million to support the Building Energy Benchmarking Program. Specifically, this funding requires the CEC to develop processes for outreach and enforcement to increase compliance by building owners, and improve the quality of the data collected by the program.

AB 209 (Committee on Budget, Chapter 251, Statutes of 2022), among its many provisions, established the Equitable Building Decarbonization Program, including a direct install program to fund the installation of measures to reduce GHGs from buildings.

AB 179 (Ting, Chapter 249, Statutes of 2022), Budget Act of 2022, appropriated $1.12 billion for the Equitable Building Decarbonization Program.

SB 68 (Becker, Chapter 720, Statutes of 2022) required the CEC to develop and publish guidance on best practices to help reduce barriers for building owners to transition to electric equipment and appliances, and install EV charging equipment.

SB 1477 (Stern, Chapter 378, Statutes of 2018) required the CPUC, in consultation with the CEC, to develop and administer a program to require gas corporations to provide incentives for near-zero and zero-emissions building technologies to significantly reduce the emissions of GHGs from those buildings below the minimum projected emissions that would otherwise be expected to result from the implementation of the state's building standards.

AB 3232 (Friedman, Chapter 373, Statutes of 2018) required the CEC to assess the potential for the state to achieve the goal of reducing the emissions of GHGs by the state’s residential and commercial building stock by at least 40 percent below the 1990 levels by January 1, 2030.

AB 1279 (Muratsuchi, Chapter 337, Statutes of 2022) established the policy of the state to achieve carbon neutrality as soon as possible, but no later than 2045.

SB 32 (Pavley, Chapter 249, Statutes of 2016) required the CARB to reduce statewide GHG emissions to at least 40 percent below the 1990 emissions level by 2030.

AB 32 (Nuñez/Pavley, Chapter 488, Statutes of 2006) required CARB to develop a Scoping Plan that describes the state’s approach to reducing GHGs to achieve the goal of reducing emissions to 1990 levels by 2020.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT:

Building Decarbonization Coalition, Sponsor
350 Humboldt: Grass Roots Climate Action
California Environmental Voters
Call 4 Change

Carbon Free Palo Alto
Carbon Free Silicon Valley
Carbon Zero Buildings
Climate Action California
Efficiency First California
Electric Action

Green Building Architects
Hammond Climate Solutions Foundation
Let's Green CA!
Marin Clean Energy
Menlo Spark
Redwood Energy
Rewiring America
Rising Sun Center for Opportunity
RMI
Sierra Club of California
Silicon Valley Clean Energy
Southern California Edison
SPUR
Stand.earth
UndauntedK12
USGBC-LA

OPPOSITION:

California Association of Realtors, unless amended

ARGUMENTS IN SUPPORT: According to the author:

Out of control greenhouse admissions have forced our planet in to a climate crisis that is more and more apparent with every extreme weather forecast.

In California, commercial and residential buildings that burn methane gas are responsible for approximately 25% of the state’s greenhouse gas emissions—second only to the transportation sector.

AB 593 requires the Energy Commission to take action to create an emissions reduction strategy for our building sector that will set low emission targets and create an action plan to move California’s buildings away from methane and towards modern electrification.

ARGUMENTS IN OPPOSITION: The California Association of Realtors opposes this bill, as heard on April 10^th in the Assembly Committee on Natural Resources, proposing amendments that would prohibit the CEC from adopting emissions reduction strategies which are triggered by the purchase of the home.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 593

Author:(Haney)

As Amended Ver:April 12, 2023

Majority vote

SUMMARY

Requires the California Energy Commission (CEC) to identify an emission reduction strategy for the building sector to support the achievement of the state's 2045 greenhouse gas (GHG) emission reduction goals.

Major Provisions

1. Requires CEC, on or before June 1, 2024, to identify an emission reduction strategy, with specified milestones, for the building sector to support achieving the emission reduction goals established by the California Climate Crisis Act.
2. Requires CEC, on or before July 1, 2025, to implement the emission reduction strategy as a part of the Equitable Building Decarbonization Program.
3. Requires CEC, on or before July 1, 2025, to take specified actions related to identifying and applying for state and federal financing or investment solutions, for purposes of implementing the emissions reduction strategy.

COMMENTS

Achieving net zero GHG emissions – when GHG emissions are either zero or are offset by equivalent atmospheric GHG removal – is an important part of reducing GHG emissions and minimizing the effects of climate change. Net zero GHG emissions is also often used interchangeably with carbon neutrality; however, net zero GHG emissions includes GHGs other than those that contain carbon, such as nitrous oxide. Constructing buildings to be net zero will substantially reduce the state's GHG emissions.

According to CEC, California has nearly 14 million homes and 7.5 million square feet of commercial buildings, which collectively produce a quarter of the state's GHG emissions. Reducing these emissions is a critical part of the state's climate strategy. More than 70 local jurisdictions have adopted electric-friendly "reach codes" that exceed the state's building code, and there are numerous efforts underway across multiple state agencies to tackle emissions from the building sector.

This bill requires CEC to identify an emissions reduction strategy for the building sector to help California achieve its GHG emissions reduction goals.

According to the Author

Out of control greenhouse admissions have forced our planet in to a climate crisis that is more and more apparent with every extreme weather forecast. In California, commercial and residential buildings that burn methane gas are responsible for approximately 25% of the state's greenhouse gas emissions—second only to the transportation sector. AB 593 requires the Energy Commission to take action to create an emissions reduction strategy for our building sector that will set low emission targets and create an action plan to move California's buildings away from methane and towards modern electrification.

Arguments in Support

According to the California Building Decarbonization Coalition, which writes in support of this bill:

While a number of policies and funding programs have been established over the years, there hasn't been a single, overarching strategy established to reduce GHG emissions associated with our homes and commercial buildings. Without a clear statewide approach, California will not be able to effectively reduce emissions from the second largest emitting sector, compromising our ability to meet our climate goals.

Arguments in Opposition

The California Association of Realtors, in an oppose-unless-amended position, objects to the lack of a prohibition on "point of sale" requirements for the renovation or replacement of appliances:

To that end, we would implore the Assemblymember to add a subsection (e) to Sec. 25403.7 that would read: (e) The commission shall not adopt emission reduction strategies which are triggered by the home purchase process.

FISCAL COMMENTS

CEC estimates ongoing annual costs of approximately $1.2 million for seven positions and additional ongoing annual costs of $500,000 in technical support contract funds to implement this bill (Energy Resources Program Account). Tasks include project planning and management, research, data collection and analysis, scenario modeling and analysis, hosting public workshops, outreach and engagement with stakeholders, agency coordination, generating reports, and implementation of the strategy.

VOTES

ASM NATURAL RESOURCES: 8-0-3

YES: Luz Rivas, Addis, Friedman, Muratsuchi, Pellerin, Ward, Wood, Zbur

ABS, ABST OR NV: Flora, Hoover, Mathis

ASM APPROPRIATIONS: 11-3-2

YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Papan, Pellerin, Weber, Ortega

NO: Megan Dahle, Dixon, Sanchez

ABS, ABST OR NV: Mathis, Robert Rivas

UPDATED

VERSION: April 12, 2023

CONSULTANT: Elizabeth MacMillan / NAT. RES. / (916) 319-2092 FN: 0000652

Date of Hearing: May 3, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 593

Author:(Haney) – As Amended Ver:April 12, 2023

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the California Energy Commission (CEC) to identify an emission reduction strategy for the building sector to support the achievement of the state’s 2045 greenhouse gas (GHG) emission reduction goals.

Specifically, this bill:

1. Requires CEC, on or before June 1, 2024, to identify an emission reduction strategy, with milestones, for the building sector to support achieving the emission reduction goals codified in AB 1279 (Muratsuchi), Chapter 337, Statutes of 2022, which establishes a goal for the state to achieve statewide carbon neutrality as soon as possible, and no later than 2045, and establishes an 85% emission reduction target as part of that goal.
2. Requires CEC, on or before July 1, 2025, to implement the emission reduction strategy developed pursuant to 1) as a part of the Equitable Building Decarbonization Program.
3. Requires CEC, on or before July 1, 2025, to take specified actions related to identifying and applying for state and federal financing or investment solutions, for purposes of implementing the emissions reduction strategy.

FISCAL EFFECT:

CEC estimates ongoing annual costs of approximately $1.2 million for seven positions and additional ongoing annual costs of $500,000 in technical support contract funds to implement this bill (Energy Resources Program Account). Tasks include project planning and management, research, data collection and analysis, scenario modeling and analysis, hosting public workshops, outreach and engagement with stakeholders, agency coordination, generating reports, and implementation of the strategy.

COMMENTS:

1) Purpose. According to the author:

Out of control greenhouse admissions have forced our planet in to a climate crisis that is more and more apparent with every extreme weather forecast. In California, commercial and residential buildings that burn methane gas are responsible for approximately 25% of the state’s greenhouse gas emissions—second only to the transportation sector. AB 593 requires the Energy Commission to take action to create an emissions reduction strategy for our building sector that will set low emission targets and create an action plan to move California’s buildings away from methane and towards modern electrification.

2) Background. According to CEC, California has nearly 14 million homes and 7.5 million square feet of commercial buildings, which collectively produce a quarter of the state’s GHG emissions. Reducing these emissions is a critical part of the state’s climate strategy. More than 70 local jurisdictions have adopted electric-friendly “reach codes” that exceed the state’s building code, and there are numerous efforts underway across multiple state agencies to tackle emissions from the building sector:

• 1. AB 3232 (Friedman), Chapter 373, Statutes of 2018, required CEC, in consultation with the California Public Utilities Commission (CPUC), California Air Resources Board (CARB), and the California Independent System Operator (CAISO), to prepare a Building Decarbonization Assessment to assess the potential for the state to reduce GHG emissions from buildings by 40% below 1990 levels by 2030. CEC published this roadmap in 2021.
  2. SB 1477 (Stern), Chapter 378, Statutes of 2018, established and provided initial funding for two building electrification programs, BUILD and TECH.
  3. The most recently adopted state building code encourages all-electric new construction and requires “all-electric-ready” new construction beginning in 2023.
  4. The fiscal year (FY) 2022-23 budget allocated $922 million to support equitable building decarbonization programs at CEC and CARB. However, in response to a multibillion dollar budget shortfall, the Governor’s January budget for FY 2023-24 proposes to either delay or cut close to 42% of this funding.
  5. In July 2022, Governor Newsom directed CARB to incorporate the following goals into CARB’s 2022 Scoping Plan: three million climate-ready and climate-friendly homes by 2030 and seven million homes by 2035, the deployment of six million heat pumps statewide by 2030, and at least 50% of the funding to achieve these goals directed toward disadvantaged communities.
  6. In September 2022, the CPUC voted to end gas line extension subsidies starting in July 2023.
  7. As part of the 2022 State Implementation Plan Strategy, CARB approved a measure to set a purchase standard so that all new space and water heaters purchased after 2030 will be zero-emission.

According to the California Building Decarbonization Coalition, which writes in support of this bill:

While a number of policies and funding programs have been established over the years, there hasn’t been a single, overarching strategy established to reduce GHG emissions associated with our homes and commercial buildings. Without a clear statewide approach, California will not be able to effectively reduce emissions from the second largest emitting sector, compromising our ability to meet our climate goals.

The California Association of Realtors, in an oppose-unless-amended position, objects to adding “point of sale” requirements for the renovation or replacement of appliances:

To that end, we would implore the Assemblymember to add a subsection (e) to Sec. 25403.7 that would read: (e) The commission shall not adopt emission reduction strategies which are triggered by the home purchase process.

Energy Resources Program Account (ERPA). The CEC’s main funding source, the ERPA, is in a structural deficit and has overspent revenues by more than $17.4 million since 2014-15. The ERPA was established to provide funds for ongoing energy programs and projects, including the operations of the CEC, and is supported by a statutory surcharge on electricity consumption. The CEC increased the surcharge to its statutory maximum – from $0.00029 to $0.0003 per kilowatt-hour – effective January 1, 2019. The surcharge generated approximately $67.5 million in 2017-18 and costs the average household roughly $2.01 annually. According to CEC, the structural deficit results from the commission’s growing role in implementing aggressive climate policies that reduce electricity consumption, thereby reducing ERPA revenues. The CEC notes that even as revenues drop, ERPA is repeatedly tapped to support new programs and must cover increases in employee compensation and benefit contributions.

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: April 10, 2023

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Luz Rivas, Chair

ABPCA Bill Id:AB 593 (

Author:Haney) – As Amended Ver:March 9, 2023

SUBJECT: Carbon emission reduction strategy: building sector

SUMMARY: Requires the California Energy Commission (CEC) to identify an emission reduction strategy, including milestones, for the building sector to support the achievement of the state’s greenhouse gas (GHG) emission reduction goals.

EXISTING LAW:

1. Requires the Air Resources Board (ARB), pursuant to California Global Warming Solutions Act of 2006 [AB 32 (Núñez), Chapter 488, Statutes of 2006], to adopt a statewide GHG emissions limit equivalent to 1990 levels by 2020 and adopt regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions. AB 32 authorizes ARB to permit the use of market-based compliance mechanisms to comply with GHG reduction regulations once specified conditions are met. Requires ARB to approve a statewide GHG emissions limit equivalent to 85% below the 1990 level by 2045. (Health and Safety Code (HSC) 38500-38599.11)
2. Establishes the California Climate Crisis Act, which creates a policy of the state to:
   1. Achieve net zero GHG emissions as soon as possible, but not later than 2045, and to achieve and maintain net negative GHG emissions thereafter; and,
   2. Ensure that by 2045, statewide anthropogenic GHG emissions are reduced to at least 85% below the statewide GHG emissions limit equivalent to 1990 levels. (HSC 38562.2)
3. Requires, by January 1, 2021, the CEC, in consultation with ARB, the Public Utilities Commission (PUC), and the Independent System Operator, to assess the potential for the state to reduce GHG emissions from the state’s residential and commercial building stock by at least 40% below 1990 levels by January 1, 2030. (Public Resources Code (PRC) 25403)
4. Requires the CEC, by December 31, 2023 and in coordination with the Governor’s Office of Business and Economic Development, PUC, and the State Treasurer, to:
   1. Identify available state and federal financing or investment solutions that are consistent with the United States Environmental Protection Agency’s inclusive utility investments policies or other industry best practices that will enable electrical corporations, community choice aggregators, or other eligible entities to provide zero-emission, clean energy, or decarbonizing building upgrades;
   2. Apply for federal financing or investment solutions, where applicable; and
   3. Provide technical assistance to electrical corporations, community choice aggregators, or other eligible entities to apply for state and federal financing or investment solutions. (PRC 25235)
5. Establishes the Equitable Building Decarbonization Program, which:
   1. Requires CEC to establish a direct install program to reduce GHG emissions and, where feasible, resilience to extreme heat, indoor air quality improvements, energy affordability, and grid reliability. Specifies that eligible projects include installation of energy efficient electric appliances, energy efficiency measures, demand flexibility measures, wiring and panel upgrades, building infrastructure upgrades, efficient air conditioning systems, ceiling fans, and other measures to protect against extreme heat, where appropriate, and remediation and safety measures to facilitate the installation of new technologies; and,
   2. Requires CEC to establish and administer a statewide incentive program for low-carbon building technologies in coordination with other program administrators. Specifies that eligible measures include funding for low-carbon building technologies such as heat pumps, space and water heaters, and other efficient electric technologies. (PRC 25665-25665.6)

THIS BILL:

1. Requires CEC, on or before June 1, 2024, to identify an emission reduction strategy, with milestones, for the building sector to support achieving the GHG emissions reduction goals established by the California Climate Crisis Act.
2. Requires the emission reduction strategy to:
   1. Maximize workforce development;
   2. Provide clear market signals to appliance manufacturers and installers;
   3. Lessen impacts on ratepayers;
   4. Support extreme heat goals;
   5. Reduce barriers for low-income individuals; and,
   6. Identify how to deploy zero-emission bidirectional air conditioning to meet the needs of communities impacted by climate change and extreme weather events.
3. Requires, on or before July 1, 2025, CEC to implement the emission reduction strategy as part of the Equitable Building Decarbonization Program.
4. Requires, on or before July 1, 2025, CEC to take actions specified in PRC § 25235 (see bullet 4 above) for purposes of implementing the emissions reduction strategy.

FISCAL EFFECT: Unknown

COMMENTS:

1. Author’s statement:

Out of control greenhouse admissions have forced our planet in to a climate crisis that is more and more apparent with every extreme weather forecast.

In California, commercial and residential buildings that burn methane gas are responsible for approximately 25% of the state’s greenhouse gas emissions—second only to the transportation sector.

AB 593 requires the Energy Commission to take action to create an emissions reduction strategy for our building sector that will set low emission targets and create an action plan to move California’s buildings away from methane and towards modern electrification.

1. Embodied carbon. The term “embodied carbon” refers to the GHG emissions arising from the manufacturing, transportation, installation, maintenance, and disposal of building materials. The majority of a building’s total embodied carbon is released upfront at the beginning of a building’s life. Unlike with operational carbon, there is no chance to decrease embodied carbon with updates in efficiency after the building is constructed.
   
   In California, according to ARB’s GHG Emission Inventory, residential and commercial buildings account for more than 10% of the state’s total GHG emissions. However, residential and commercial buildings are responsible for roughly 25% of California’s GHG emissions when accounting for fossil fuels consumed onsite and electricity demand. Refrigerants used in heating and cooling systems also contribute to building-related GHG emissions. It is unclear what the exact breakdown is between embodied and operating emissions, but due to California’s mild climate, increasing renewable electricity supply, and relatively efficient building stock, our state’s operational emissions may be a smaller percentage of total building energy use, compared to the embodied carbon in new construction.
2. Reducing building emissions. Achieving net zero GHG emissions – when GHG emissions are either zero or are offset by equivalent atmospheric GHG removal – is an important part of reducing GHG emissions and minimizing the effects of climate change. Net zero GHG emissions is also often used interchangeably with carbon neutrality; however, net zero GHG emissions includes GHGs other than those that contain carbon, such as nitrous oxide. Constructing buildings to be net zero will substantially reduce the state’s GHG emissions.
   
   Buildings can also sequester carbon. Building materials, depending on how they are manufactured, can be considered to sequester carbon. For example, the carbon that comprises wood (roughly 50% by weight) is from the carbon dioxide (CO₂) the tree absorbed from the air. California policies typically consider a 100-year time horizon for the sequestration to be considered permanent. Thus, if atmospheric CO₂ could—reliably and accountably—be stored in wood used in buildings for at least a century, those could potentially be counted as sequestered. Given California’s stated goal of net zero GHG emissions by 2045, there is a need for GHG emissions to be balanced by atmospheric GHG removal.
3. Buy Clean California Act. The BCCA establishes limits on embodied carbon emissions and construction materials procured by the state for public construction projects. By January 1, 2022, the law requires the Department of General Services (DGS) to publish acceptable maximum global warming potential (GWP) limits for structural steel, concrete reinforcing steel (rebar), flat glass, and mineral wool board insulation. In order to determine and compare the GWPs of different products and materials, DGS relies on environmental product declarations (EPDs).
4. Environmental product declarations and life cycle assessments. An EPD is a widely-accepted, verified report of the ways in which product affects the environment throughout its life cycle. It provides information about a product’s impact upon the environment, such as GWP, air emissions, ozone depletion, and water pollution. EPDs allow purchasers to have comparable, objective, and third-party verified data to better understand a product’s environmental impacts so they can make more informed product selections.

Life cycle analyses attempt to quantify the environmental impacts associated with a given product. The analyses can vary depending on the assumptions made and the extent of the life cycle considered. For life cycle analyses of building materials, assessments are usually either cradle-to-gate or cradle-to-grave. Cradle-to-gate analyses consider the emissions associated from extraction up until arrival at the project site, while cradle-to-grave continue further to consider any emissions associated with the product’s use within the project and building and, ultimately, its end of life.

1. Building decarbonization framework. AB 2446 (Holden), Chapter 352, Statutes of 2022, requires ARB to develop a framework for measuring and reducing GHG emissions associated with new building construction. This bill requires the framework to include a comprehensive strategy to achieve a 40% net reduction in the carbon intensity of construction and materials used in new construction as soon as possible, but no later than December 31, 2035 and an interim target to achieve a 20% net reduction in carbon intensity by the end of 2030.
2. Suggested amendments. The committee may wish to make the following amendments to the bill:
   1. Replace “lessen” with “minimize” on page 2, line 12.
   2. Clarify that the emission reduction strategy identify zero emission home heating and cooling technologies, including bidirectional heat pumps.
      

REGISTERED SUPPORT / OPPOSITION:

Support

Building Decarbonization Coalition
California Environmental Voters
Call 4 Change
Carbon Zero Buildings
Climate Action California
Efficiency First California
Electric Action
Green Building Architects
Hammond Climate Solutions
Let’s Green CA!
Marin Clean Energy
Menlo Spark
Redwood Energy
Rewiring America
Rising Sun Center for Opportunity
RMI
Sierra Club of California
Southern California Edison
SPUR
Stand.earth
UndauntedK12
USGBC-LA

Opposition

California Association of Realtors

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. /