Appendix A

CARB’s Transportation GHG Emissions Reduction Programs

The Audit Committee directed the California State Auditor’s Office (State Auditor) to identify the number and type of CARB’s GHG emissions reduction programs in the transportation sector. This Appendix presents a list of those programs. The green highlights in Table A indicate the programs we reviewed as a part of the audit, which we selected in order to ensure a review of programs affecting a variety of vehicle types and transportation objectives.

Table A

CARB’s Transportation GHG Emissions Reduction Programs

Program Name		Type	Description
1	AB 617 Community Air Protection Program	Incentive	Creates incentive for vehicle owners to replace older, high-polluting vehicles and equipment with newer models that have low or zero emissions. Funds can also support local strategies that air districts and communities identify.
2	Advanced Clean Trucks Regulation	Future Regulation	Will require manufacturers to make a percentage of their truck and bus sales zero-emission and will require certain entities to report once about their use of contracted services that require trucks or shuttles.
3	Advanced Technology Freight Demonstrations	Incentive	Encourages the development of advanced technologies to accelerate their market introduction.
4	Agricultural Worker Vanpools	Incentive	Expands access to clean transportation vanpools for agricultural workers and achieves emissions reduction benefits by providing incentives for cleaner vehicles instead of conventional vehicles.
5	Alternative Diesel Fuels Regulation	Regulation	Intends to create a framework for low carbon diesel fuel substitutes, such as biodiesel, to enter the commercial market in California while mitigating potential environmental or public health impacts.
6	California Climate Investments	Oversight	State law requires CARB to develop guidance on reporting and quantification methods for all state agencies that receive cap-and-trade moneys to ensure that requirements in state law are met. Programs administered with these moneys are referred to as California Climate Investments programs.
7	Cap-and-Trade Regulation (fuels)	Regulation	Establishes a declining cap on emissions from facilities accounting for about 80 percent of the State's GHG emissions and currently covers about 450 facilities, of which more than 50 are fuel suppliers. Such facilities must either acquire credits to offset their emissions or invest in emissions reduction technology to reduce emissions.
8	Car-sharing pilots	Incentive	Helps government entities or nonprofits start or expand car-share programs for residents of disadvantaged communities, using low- and zero-emission vehicles, vanpools, and other mobility options.
9	Carl Moyer Memorial Air Quality Standards Attainment Program	Incentive	Grants funding to private companies and public agencies to purchase cleaner than required engines, equipment, and emissions reduction technologies. Among other things, the program can fund trucks, emergency vehicles, and farm and cargo-handling equipment.
10	Clean Miles Standard and Incentive Program	Future Regulation	Intends to reduce GHG emissions from transportation network company services. State law required CARB to establish a baseline for emissions of GHGs for vehicles used on the online-enabled applications or platforms by transportation network companies on a per-passenger-mile basis.
11	Clean Mobility in Schools	Incentive	Funds the electrification of transportation fleets, including vehicles and infrastructure, plus education and awareness to encourage clean mobility in and around schools located in disadvantaged communities.
12	Clean Off-Road Equipment Voucher Incentive Project (CORE)	Incentive	Gives vouchers for certain zero-emission freight equipment.
13	Clean Vehicle Rebate Project (CVRP)	Incentive	Supports funding for vehicle rebates on a first-come, first-served basis for light-duty ZEVs. Rebate amounts are increased for lower-income applicants.
14	Drayage Truck Regulation	Regulation	Requires that all trucks servicing ports and railyards be equipped with 2007 or newer model year engines.
15	Electric Vehicle Supply Equipment Standards	Regulation	Intends to increase drivers' ease of access to charging infrastructure. According to CARB, creates a minimum standard of access for public electric vehicle charging and creates a more complete database of location and pricing information for consumer use, among other provisions.
16	Electrify America investments	Oversight	CARB approves the investment plans for how Electrify America, a subsidiary of Volkswagen, invests funding in California to address the adverse impacts to California's ZEV program resulting from the sale of Volkswagen vehicles equipped with emissions defeat devices to consumers who believed they were purchasing clean vehicles.
17	Clean Cars 4 All	Incentive	Creates incentives for lower-income consumers living in and near disadvantaged communities who retire their old vehicles and purchase new or used hybrid, plug-in hybrid, or ZEV replacement vehicles.
18	Financing Assistance for Lower-Income Consumers	Incentive	Supports low interest loans and vehicle price buy-downs to help lower-income Californians overcome the barrier of obtaining vehicle financing for clean vehicles.
19	Funding Agricultural Replacement Measures for Emissions Reduction (FARMER)	Incentive	Awards funds to farmers and agricultural businesses for newer, cleaner equipment.
20	Goods Movement Emission Reduction Program (Proposition 1B)	Incentive	Funds the retrofit, purchase of engines, or replacement of vehicles—including trucks, locomotives, harbor vehicles, transport refrigeration units, cargo handling equipment, and supporting infrastructure.
21	Greenhouse Gas Regulations for Medium- and Heavy-Duty Engines and Vehicles (Phase 1)	Regulation	Establishes GHG standards for new medium- and heavy-duty engines and vehicles sold in California, beginning with model year 2014. California's Phase 1 regulation harmonizes with the federal phase 1 standards.
22	Greenhouse Gas Regulations for Medium- and Heavy-Duty Engines and Vehicles (Phase 2)	Regulation	Expands the scope and stringency of the GHG regulations established in the Phase 1 regulations and are applicable starting with the 2021 model year for engines and vehicles.
23	Greenhouse Gas Vehicle Regulations ("Pavley" regulations)	Regulation	Establishes GHG standards beginning with 2009 model year light-duty vehicles and medium-duty passenger vehicles and added various GHGs to the emissions that the State was regulating.
24	Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP)	Incentive	Funds vouchers to reduce the cost of hybrid and zero-emission trucks and buses at the time of purchase.
25	Innovative Clean Transit Regulation	Regulation	Requires transit agencies to purchase increasing percentages of new zero-emission buses, with 100 percent of new buses purchased being zero-emission by 2029.
26	Low Carbon Fuel Standard (LCFS)	Regulation	Sets carbon intensity standards for transportation fuels in California. LCFS uses a system of tradeable credits to determine compliance. Fuel producers must comply with the regulation either by producing or buying lower carbon-intensity fuels, lowering their fuels' carbon intensity, or buying credits from other producers.
27	Low-Emission Vehicle Program III (LEV III) Greenhouse Gas Regulations	Regulation	Establishes GHG standards for multiple kinds of emissions for 2017 and subsequent model year light-duty vehicles and medium-duty passenger vehicles.
28	Lower-Emission School Bus Program	Incentive	Funds the purchase of new buses to replace old, high-emission public school buses and to equip in-use diesel school buses with retrofit devices that significantly reduce certain toxic emissions.
29	Ocean-Going Vessels at Berth Regulation	Regulation	Requires fleets to reduce their auxiliary engine power usage or equivalent emissions when at berth at regulated ports within California.
30	Optional Low-NOx Standards for Heavy-Duty Engines	Regulation	Establishes optional low-NOx emission standards for heavy-duty engines. Manufacturers can certify engines to these standards or to an existing mandatory standard.
31	Outreach, Community Transportation Needs Assessments, Technical Assistance, and the One-Stop-Shop	Incentive	Provides funding and technical assistance to community-based organizations for outreach on other sources of funding, conducting community transportation needs assessments, strengthening partnerships, developing projects, and applying for CARB's clean transportation incentive projects.
32	Rural School Bus Project	Incentive	Funds zero-emission school buses and new school buses that use renewable fuels. It prioritizes older school buses with higher mileage in small- and medium-sized air districts.
33	Sustainable Communities	Land Use and Transportation Planning	Establishes regional GHG emission targets for each metropolitan planning organization (MPO) in the State. The MPOs are required to develop a Sustainable Community Strategy that shows how the region could meet CARB's GHG emissions reduction targets.
34	Sustainable Transportation Equity Project (STEP)	Incentive	Grants funding to support planning and capacity-building efforts in communities in order to prepare those communities to implement clean transportation and land-use projects. STEP additionally provides grants intended to increase community residents' access to and use of their mobility system so they can get where they need to go without the use of a personal vehicle.
35	Tire Inflation Regulation	Regulation	Requires automotive service providers to perform a tire pressure service on all passenger cars, light-duty trucks, medium-duty vehicles, and light heavy-duty vehicles while performing any vehicle maintenance or repair service.
36	Tractor-Trailer Greenhouse Gas Regulation	Regulation	Requires certain types and sizes of trailers and their tractors used for long-distance goods movement to have aerodynamic equipment and low rolling resistance tires when traveling in California.
37	Truck and Bus Regulation	Regulation	Requires emissions control equipment retrofit for certain trucks and buses and accelerates the turnover of older trucks and buses.
38	Volkswagen Environmental Mitigation Trust	Oversight	CARB is the lead agency implementing California's allocation of this trust, which includes developing a plan that describes the State's goals for the use of the funds, the categories of what can be funded, and the percentages of funds to be allocated to the categories.
39	Zero- and Near Zero-Emission Freight Facility Project	Incentive	Funds a variety of heavy-duty vehicles, off-road equipment, and fueling infrastructure, as well as other facility and efficiency improvements to reduce emissions facilitywide. Freight facilities include warehouses, distribution centers, seaports, and freight airports, among others.
40	Zero-Emission Airport Shuttle'Regulation	Regulation	Requires airport shuttle operators to transition to 100 percent zero-emission vehicle technology by 2035.
41	Zero-Emission Drayage Truck Pilot	Incentive	Funds a large-scale deployment of zero-emission trucks that can operate in drayage or regional haul service.
42	Zero-Emission Powertrain Certification Regulation	Regulation	Establishes an optional certification pathway that manufacturers can use to certify their heavy-duty electric and fuel-cell vehicles and is intended to help reduce variability in the quality and reliability of heavy-duty zero-emission technology, among other things.
43	Zero-Emission Truck and Bus Pilot Projects	Incentive	Funds competitively awarded projects intended to complement HVIP by supporting larger-scale deployments of zero-emission vehicles.
44	Zero-Emission Vehicle Regulation (ZEV)	Regulation	Requires auto manufacturers to produce a certain amount of ZEVs each year to meet credit requirements established by the regulation. The manufacturer's credit requirement is a percentage of their total annual passenger car and light-duty truck sales in the State.

Source: CARB’s management, regulatory documents, funding plans, reports, and documents provided to the Legislature and state law.

Note: CARB has identified that some programs have a primary goal of reducing GHGs while others reduce GHG emissions as a “co‑benefit” to other emissions reductions.

Appendix B

Scope and Methodology

The Audit Committee directed the State Auditor to conduct an audit of CARB to determine the effectiveness of its oversight of GHG reduction programs related to transportation. Table B lists the objectives that the Audit Committee approved and the methods we used to address them.

Table B

Audit Objectives and the Methods Used to Address Them

AUDIT OBJECTIVE		METHOD
1	Review and evaluate the laws, rules, and regulations significant to the audit.	Reviewed relevant state laws and regulations related to GHG reduction and transportation programs.
2	Identify the number and type of CARB’s GHG emissions reduction programs in the transportation sector.	Reviewed a list of programs CARB has created; reviewed program descriptions in CARB’s annual funding plans and its website; interviewed CARB staff.
3	Determine the extent to which CARB’s programs overlap and how they may interact with one another.	Identified transportation‑related objectives in CARB’s 2017 scoping plan and selected 19 programs for review based on vehicle type and transportation sector objective, program type, and potential for overlap. For the selected groups of programs that work toward shared objectives in CARB’s 2017 scoping plan, we reviewed CARB’s documentation justifying the development of each program and interviewed CARB officials to determine the extent to which CARB identified and addressed overlap among the programs. Our consultant assessed the programs’ design and CARB’s measurement of the programs’ benefits to assess whether CARB accounted for any overlap.
4	For a selection of CARB’s GHG emissions reduction programs in the transportation sector, identify the following:
	Whether CARB assesses the effects of the programs on communities and households after it has implemented those programs. Assess, to the extent possible, how each program has affected households and communities, including those of different economic status, ethnicities, and locations throughout California.	Reviewed CARB’s program data on spending in disadvantaged and low‑income communities to ensure that spending was appropriately categorized. Reviewed CARB’s underlying program data and information in CARB’s funding plans and annual reports, and interviewed CARB staff to identify the specific socioeconomic benefits it intends its programs to provide to participants and their households, including financial and employment benefits. Determined the extent to which CARB measures and reports on those benefits.
	The annual GHG emission reductions that result from each program and whether those reductions result from moving emissions rather than eliminating them.	Assessed the extent to which CARB reports on the GHG emissions reductions that result from its transportation programs. Reviewed the underlying data and assessed CARB’s processes for collecting and compiling those data to assess the completeness of CARB’s reporting on emissions reductions. With our consultant’s assistance, assessed the reasonableness of CARB’s methods for projecting emissions reductions and for estimating actual reductions from each program. Reviewed emissions estimates for its most recent annual report to determine whether CARB calculated those data accurately and consistently. As part of our review of CARB’s regulatory programs, our consultant assessed the risk that projected emissions reductions may be achieved by merely shifting those emissions elsewhere.
	The programs’ cost‑effectiveness, including social benefits and costs, and compare them to other GHG emissions reduction programs, such as the cap‑and‑trade program.	Reviewed and verified the total program expenditures in CARB’s annual reports for a selection of programs. Compared the cost information to the GHG reduction information we reviewed in Objective 4b. Assessed select incentive programs’ relative costs in the context of our review of socioeconomic benefits under Objective 4a.
	To the extent possible, the number of program participants who may have changed their behavior without the program and whether CARB’s strategies to reduce the occurrence of this issue have been successful.	For the 10 incentive programs we reviewed, interviewed CARB staff and assessed their data collection mechanisms, such as surveys, for each program to determine if they collect information on behavioral changes and, if so, how they have used the information.
	To the extent possible, whether the programs’ activities have contributed to the development of a diverse and equitable workforce in the affected industries.	For incentive programs we reviewed, particularly pilot programs targeted at specific industries, evaluated CARB’s approach to setting job creation goals and job training goals, and evaluated its data collection and reporting.
5	Assess the process CARB uses to create initial statements of reasons for proposing new GHG reduction programs in the transportation sector, including the following:
	How it considers effects of a program on air quality, the environment, administrative costs, the overall economy, and low‑income and disadvantaged communities.	For the eight regulatory programs we reviewed, assessed CARB’s initial statements of reasons—the documentation that CARB is required to publish when proposing regulatory programs that set forth the rationale for CARB’s determinations that the adopted, amended, or repealed regulations are reasonably necessary and that are prepared in a manner consistent with the environmental purposes of CARB’s regulatory activity—as well as selected regulations. Assessed the contents of this documentation against selected key criteria in the Administrative Procedures Act (APA) governing the regulation development process. The programs we reviewed complied with the selected key requirements in law. Reviewed the initial statements of reasons and supporting documentation, and interviewed CARB staff, to determine the extent to which CARB considered the effects of the regulations on air quality, the environment, administrative costs, the overall economy, and low‑income and disadvantaged communities. For the 10 incentive programs we reviewed that CARB did not establish through regulation, reviewed documentation related to the design, implementation, and funding of the programs, and interviewed CARB staff to determine the extent to which CARB considered the effects of the programs on air quality, the environment, administrative costs, the overall economy, and low‑income and disadvantaged communities. As described under Objective 4b, our consultant also reviewed CARB’s projected emissions reduction methodologies for regulatory and incentive programs.
	How it considers potential interactions and effects with existing policies and programs.	Reviewed selected regulations, the initial statements of reasons for the eight regulatory programs and relevant documentation for the 10 incentive programs we reviewed, and interviewed CARB staff to assess whether and how CARB considers interactions with other programs when proposing new programs. Our consultant reviewed whether CARB’s program design accounts for potential interactions as a part of the work under Objective 3.
6	Assess whether changes to GHG emissions reduction programs in the transportation sector should be addressed through changes to state law or regulation.	Assessed whether changes to state law or regulations were required to address issues we identified as a part of our work on the other objectives. Concluded that without improved program measurement and reporting, specific changes to existing programs in law or regulations would be premature.
7	Review and assess any other issues that are significant to the audit.	We did not identify any additional issues that are significant to the audit.

Source: Analysis of Audit Committee’s audit request number 2020‑114, state law, and information and documentation identified in the column titled Method.

Assessment of Data Reliability

In performing this audit, we relied on electronic data obtained from CARB’s California Climate Investments Reporting and Tracking System (CCIRTS) database, which CARB populates with data from its program administrators. The U.S. Government Accountability Office, whose standards we are statutorily required to follow, requires us to assess the sufficiency and appropriateness of the computer‑processed information we use to support our findings, conclusions, and recommendations. To perform this assessment, we compared a selection of data from CARB’s program administrators for the period from December 2015 through May 2020 to CARB’s annual report to the Legislature. We identified discrepancies in the data for two of the five programs that could affect the precision of CARB’s reports to the Legislature.

We also reviewed CARB’s efforts to ensure that the detail in the program data is accurate, which includes formal reviews of how a program administrator carries out its duties under its cap‑and‑trade grant agreement. However, we found that CARB has only completed formal reviews for two of the five programs we selected for our review. Further, CARB has not formally reviewed one of those two programs since 2014, and it has retained very limited documentation from its two reviews of the other.

Although our findings raise questions about the reliability of some of the data CARB reports to the Legislature, we disclose these issues in our report and make recommendations to CARB to address them. Furthermore, our overall conclusion about CARB’s program measurement is that CARB should make improvements that go beyond the validity of the program data itself. For these reasons, although the issues we identified above may affect the precision of some of the numbers we report, there is sufficient evidence in total to support our findings, conclusions, and recommendations.