California’s Climate Blueprint: ‘Hope,’ Mandates and Few Details

Client Alert

Calling for foundational reforms in every sector of California’s economy, now the fourth largest in the world, the California Air Resources Board (CARB) on December 15, 2022, adopted the latest and most sweeping version of the “Scoping Plan.” Called for in AB 32 in 2006, the Scoping Plan is the blueprint that defines the path for California to meet its ever-intensifying climate ambitions. While expressly premised on “hope,” the Scoping Plan is bold on drastic targets and calls for corresponding enforceable mandates but is nearly devoid of specific details.

“This plan is fundamentally based on hope. It is a hope grounded in experience and science that we can fundamentally improve the California we leave to future generations.” Staking its platform on hope, the Scoping Plan then calls on every state and local agency to adopt and amend all regulations necessary to accomplish the dramatic and ambitious targets for which it calls. Those targets include:

  • Net-zero emissions state- and economy-wide no later than 2045, 85% of that metric being attributable to the reduction of anthropogenic emissions
  • 40% below 1990 emission levels by 2030
  • As to land use, a 25% reduction in vehicle miles traveled (VMT) by 2030 and a 30% reduction by 2045, both relative to 2019 levels
  • Banning the sale of internal combustion engine (ICE) passenger vehicles—allowing only zero-emission sales—by 2035
  • 100% of medium- and heavy-duty truck sales being zero-emission by 2040
  • Relative to banning the sale of ICEs, banning oil and gas extraction and refining beyond the minimum necessary to supply the dwindling remainder of ICE vehicles—a 94% reduction in liquid petroleum use and 86 percent reduction of total fossil fuel use by 2045
  • Elimination of all natural gas appliances and conversion to full electrification by 2026 for residential and 2029 for commercial buildings

“Net zero” is defined as a point of equilibrium—the point at which any remaining greenhouse gas emissions from the state are at least fully offset by California’s natural and mechanical sequestration capacity. Using a net-zero metric is a controversial pivot in gauging success and compliance with emission reduction mandates. Original enactments such as AB 32 and the first Scoping Plan were based on strict numeric emission reductions. For example, the first mandate was that California reduce its emissions to 1990 levels by 2020—strict numbers. (California hit that target four years early.) But CARB and other global authorities such as the United Nations Intergovernmental Panel on Climate Change (IPCC) have conceded that the world will not meet the reduction goals of the Paris Accord with numeric emission reductions alone.

The alternative to getting to net zero is to capture carbon from industrial emission streams and the atmosphere itself, condense it (usually liquefy for easier transport), and securely sequester it for at least decades, usually deep underground. “Carbon capture and sequestration” (CCS) is not a new concept; oil and gas interests have long employed it to prompt additional fuel production from otherwise depleted well reserves. But that practice, known as enhanced oil recovery (EOR), has been expressly banned in California. This prohibition renders CCS largely uneconomical for commercial and industrial enterprises for which it is needed. A combination of state and federal tax credits and demonstration-project grants have been adopted to incentivize the advancement and deployment of CCS operations at an unprecedented scale.

While the Scoping Plan is not itself a regulatory document, regulatory proposals and reforms, as well as local entitlements, are routinely gauged against the ambitions identified in the Plan and may politically or judicially cause their rise or fall based on whether the proposed enactment inhibits or advances the identified Scoping Plan goals. From analysis of projects under the California Environmental Quality Act (CEQA) to VMT land use mandates to “transitions” of transportation technology and fuels, it is hard to envision any aspect of business, industry or even individual commerce not impacted by the Scoping Plan’s ambitions.

In accomplishing net zero, the Scoping Plan has unprecedented discussion, analysis and modeling of the potential of natural and biological sequestration on and in California’s pristine landscape. But natural lands can be both a source of carbon as well as a sink. For example, forests naturally capture and sequester carbon. But when those forests burn from wildfire, all that sequestered carbon is re-released into the atmosphere. Thus, the Scoping Plan calls for significant management and use restrictions on all “Natural and Working Lands.” These include not only forest management but restrictive agricultural practices as well.

Additionally, environmental justice (EJ) considerations are foundational to the Scoping Plan’s vision and ambitions. CARB convened an advisory committee on EJ to assist in the defining and drafting process for this version of the Scoping Plan. Here, too, however, the Scoping Plan is long on conceptual pronouncements on social and environmental imperatives but sparse on what such considerations actually look like in on-the-ground implementation.

CARB’s adoption of the Scoping Plan changes nothing in and of itself. But as noted, it is the blueprint through which state and local agencies are expected to reform business-as-usual to accomplish the globally unprecedented climate targets called for by Governor Newsom and adopted by the Legislature last legislative session. Vigilant attention must be paid to every jurisdiction as virtually all consider and bring forward regulatory and enforceable proposals that will reform every sector of California’s economy.

David Smith and Manatt’s comprehensive team of professionals stand ready to assist clients in engaging with, navigating through and complying with all such proposals on the horizon and beyond.



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