Report 2020-114 Recommendation 2 Responses

Report 2020-114: California Air Resources Board: Improved Program Measurement Would Help California Work More Strategically to Meet Its Climate Change Goals (Release Date: February 2021)

Recommendation #2 To: Air Resources Board, State

As part of its work to measure both incentive and regulatory programs' additional GHG reductions, by February 2022 CARB should begin collecting and analyzing the data it needs to assess the extent to which the requirements in its regulatory programs are being exceeded by manufacturers. To the extent applicable, that analysis should focus on the components of the requirements that overlap with CARB's incentive programs, such as the extent to which manufacturers are complying with regulations for heavy-duty vehicles via low- and zero-emission vehicles.

1-Year Agency Response

For CARB's light-duty ZEV Regulation, CARB staff began disclosing additional public data starting with the 2020 reporting year to help identify manufacturer over compliance. These data can be found in CARB's 2020 ZEV credits annual disclosure report (https://ww2.arb.ca.gov/sites/default/files/2021-12/2020_zev_credit_annual_disclosure_ac.pdf), which was released in December 2021. Disclosures for this reporting year and subsequent years include a more comprehensive overview of manufacturer compliance. Updates include: the regulatory credit requirement by manufacturer, the number of eligible vehicle sales and associated credits generated by make and model, a complete accounting of each manufacturer's credit generation and balance from the prior reporting year to the current year, and the industry-aggregated requirement and credits earned from 2014 through the current reporting year. This public disclosure and related data will allow stakeholders (including contracted researchers) to better understand how manufacturers are complying with the ZEV Regulation in terms of vehicles and regulatory credits relative to the regulation requirements for each year.

For CARB's heavy-duty GHG regulations, CARB staff has begun analyzing data to assess over-compliance with the California Phase 1 GHG regulation for 2019 and 2020 model year heavy-duty vehicles. Findings include, but are not limited to, the number of vehicles produced in California, and the number of certified manufacturers that generated conventional and advanced technology credits due to producing heavy-duty battery electric, fuel cell, and hybrid-electric vehicles. CARB will continue to do this annually. This information will be used to inform CARB's work in isolating benefits of our incentive programs.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

CARB provided documentation of the extent to which manufacturers are overcomplying with required standards for the vehicles affected by CARB's consumer incentive programs. CARB's analysis demonstrates that manufacturers of light- and heavy-duty vehicles are using low- and zero-emissions vehicles to exceed the regulatory requirements. CARB's continued analysis of this behavior by manufacturers will help it better identify the effects of its incentive programs on the sale of these vehicles.

6-Month Agency Response

To identify the extent to which manufacturers are over complying with CARB's light-duty ZEV Regulation, CARB staff will include additional data that original equipment manufacturers (OEMs) disclose to CARB for purposes of complying with the regulation starting with the 2020 reporting year. This additional data will be posted in CARB's ZEV Credits Public Disclosure Document (https://ww2.arb.ca.gov/our-work/programs/advanced-clean-cars-program/zev-program/zero-emission-vehicle-credit-balances), which is typically released annually in the fall of each year. Additional disclosures for each reporting year will include, but are not limited to: the regulatory credit requirement by manufacturer, the number of eligible vehicle sales by make and model, and the associated credits generated by make and model for each manufacturer. This data will allow stakeholders to better understand how manufacturers are complying with the ZEV Regulation in terms of vehicles and regulatory credits relative to the regulation requirements for each reporting year.

For CARB's heavy-duty GHG regulations, CARB staff has begun analyzing data to assess over compliance with Phase 1 GHG regulation for 2019 model year heavy-duty vehicles. Staff will continue to analyze data for 2020 model year heavy-duty vehicles. Findings including, but not limited to, the number of vehicles produced in California, and the number of certified manufacturers that generated conventional and advanced technology credits due to producing heavy-duty battery electric, fuel cell, and hybrid-electric vehicles would be provided once available. CARB will continue to do this annually in future years.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

CARB provided documentation indicating it has begun analyzing the extent to which heavy-duty vehicle manufacturers are using low- and zero-emission technology to comply with emissions regulations. According to CARB's documentation, certain manufacturers are using low-and zero-emissions technologies to over comply with the regulatory requirement. As we state in our report, such overcompliance could indicate the additional effect of incentive programs focusing on the same vehicles. CARB should use this information, and the information it plans to collect for its ZEV regulations, to inform its work on implementing our related recommendations for isolating the benefits of its incentive programs.

60-Day Agency Response

CARB is committed to assessing the extent to which manufacturers are exceeding requirements in our regulatory programs. CARB staff is currently investigating the most appropriate methodology to assess the extent to which the requirements in the ZEV Regulation are being exceeded by manufacturers in number of vehicles. Beginning in the 2020 reporting year, CARB staff will annually analyze over compliance with the light-duty ZEV Regulation. Findings will be provided in the fall of each year to CARB's incentives team for use in complying with Recommendation 1. CARB staff is also evaluating what additional data and resources are necessary to complete the recommended assessment for our heavy-duty programs as they are implemented.

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2020-114

Agency responses received are posted verbatim.