California has the most ambitious target for curbing greenhouse gas (GHG) emissions in the world. Aiming to reduce its GHG emissions to 40 percent below 1990 levels by 2030, California is positioning itself as a leading force in the world’s effort to address climate change. Craig Segall and David Hults (both Assistant Chief Counsel) from the California Air Resources Board (CARB) recently spoke at Stanford Law on CARB’s unique role and challenges in shaping climate change policy in the U.S. CARB’s role is becoming even more important as the Trump administration aims to relax federal climate policy.

CARB was created as a response to California’s air quality problems stemming from the state’s early urbanization. When the federal Clean Air Act (CAA) was amended to preempt all states from adopting any emissions standards for new motor vehicles in 1967, California was given special status to set its own vehicle standards. This special status under the CAA positioned California to take the lead not only in air quality issues, but also in climate change policy. California’s Global Warming Solutions Act of 2006 (AB 32) is landmark legislation that confirmed California’s commitment to transition to a clean energy economy.

Under AB 32, California has been implementing a cap-and-trade system since 2012, which is one of the most comprehensive in the world in terms of economy-wide reach. The carbon dioxide reduction through the program has been successful in that it is well on track in meeting its 2020 goal and decoupling economic growth from emissions growth. Nevertheless, the cap-and-trade system does not provide a perfect solution. For example, it leaves out the forestry and agricultural sectors. It also does not directly address local toxin emissions levels because it does not control source-specific emissions. With the Central Valley populated with mainly low-income populations and the coastal area populated with more affluent communities, this lack of control also raises environmental justice concerns. Power plant siting decisions and the economic and distributive effects of certain environmental policies must also be carefully evaluated to avoid environmental justice issues.

CARB’s role is not confined to reducing GHG emissions; CARB also realizes that it is, in effect, a social planning agency, envisioning how California’s economy should grow. In terms of emissions reductions alone, its influence on global emissions is limited. Even though California represents the 6^th largest economy in the world, its emissions only comprise one percent of global greenhouse gas emissions. And, CARB must incentivize GHG emissions reduction without causing leakage problems.

Under the current administration, CARB’s role as a leader in shaping climate change policy is becoming increasingly important. The Trump administration has publicly announced it will reconsider the emissions standards for vehicles and consider a rollback of the Clean Power Plan. Relying on its special status under the CAA to set its own vehicle emissions standards, California is trying to stand up against President Trump’s recent move on emissions regulations. It remains to be seen whether CARB can achieve its own objective notwithstanding the current administration’s efforts to ease GHG regulations.