BILL ANALYSIS
AB 19
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Date of Hearing: April 13, 2009
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Nancy Skinner, Chair
AB 19 (Ruskin) - As Amended: December 1, 2008
SUBJECT : Greenhouse gas emissions: consumer product labeling.
SUMMARY : Requires the Air Resources Board (ARB) to adopt a
program for the voluntary assessment, verification, and labeling
of the "carbon footprint" of consumer products.
EXISTING LAW :
1)Requires ARB to adopt a statewide greenhouse gas (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 (Nunez),
Chapter 488, Statutes of 2006)
2)Requires GHG emission labels on passenger cars beginning in
2009 which reflect the GHG emissions attributable to operation
of the car, but not the GHG emissions associated with its
manufacture, distribution and sale.
THIS BILL :
1)Defines "carbon footprint" as the total amount of GHG
emissions that occur as a result of a product's lifecycle, or
as determined by the ARB to best implement this bill. In
doing so, ARB may consider the emissions associated with raw
material extraction, production processing or manufacturing,
transportation, distribution, consumer use and disposal.
2)Requires ARB to adopt a carbon labeling program for consumer
products as follows:
a) Establish a methodology for assessing, verifying, and
labeling the carbon footprint of a consumer product; ARB
can choose to initially establish a methodology for a
single product category if it determines it is feasible and
practical to do so.
b) Develop standardized criteria for third-party
verification if ARB determines this is necessary; ARB may
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develop "alternative means" of compliance.
c) Allow consumer product manufacturers who volunteer to
use carbon labels to determine the carbon footprint of
their product using ARB's methodology; manufacturers may
use this information on its packaging and advertising
consistent with ARB's labeling requirements.
d) Develop a standardized, easily understandable carbon
label.
3)Authorizes ARB to adopt alternative carbon footprint
methodologies if it determines that "feasible measurement
methodologies" are not sufficiently accurate to compare two
products. These alternatives include:
a) Average GHG emissions in a product category to
facilitate comparisons across categories.
b) Comparing a product's carbon footprint with that average
footprint of a comparable product within the same category.
c) A carbon footprint "score" that delineates the range of
error associated with a methodology.
4)Authorizes ARB to contract for "cost-effective services"
necessary to implement the bill and may use data from "outside
sources" or existing models and labels to develop a
methodology.
5)Requires manufacturers to pay for ARB's cost of reviewing and
validating their carbon labels. ARB may assess an application
fee to pay for the costs of the carbon footprint program.
6)Makes related findings and declarations.
FISCAL EFFECT : Unknown
COMMENTS : According to the author's office, "A [carbon] label
would make assessing the carbon content of ice cream as easy as
counting its calories. The law will harness market forces to
make reducing global warming emissions important to
manufacturers' bottom line. Consumers benefit because they have
the information necessary to voluntarily reduce emissions
through the comparison and purchase of products with smaller
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carbon footprints." Furthermore, the author believes that
"?without a clear state auditing standard for a label, as
private labels proliferate there will be confusion among
consumers and an unfair playing field for companies wishing to
sell climate friendly products."
1)What's a "carbon footprint"?
A "footprint" has become a metaphor for the impact of humanity
as a whole on the environment. The concept of measuring our
environmental impact by means of a footprint originated in the
early 1990s. More recently, the concept has narrowed to focus
on the carbon emissions of energy use, transportation, housing,
consumer products, and other elements of lifestyle. A full
accounting of these emissions on a lifecycle basis-via lifecycle
assessment or LCA-is the gold standard of measurement. U.S. EPA
defines LCA as "A concept and methodology to evaluate the
environmental effects of a product or activity holistically, by
analyzing the whole life cycle of a particular product, process,
or activity."
All goods and services produced by a company have an inherent
carbon footprint. If quantified, these emissions on a
product-by-product basis can provide a significant indicator of
the company's carbon performance, can become a benchmark
criterion, and allow for more credible product differentiation.
According to researchers at Lawrence Berkeley National
Laboratory (LBL), up to 80 percent of the annual carbon
footprint of the average U.S. consumer can be attributed to the
purchase, use, and disposal of retail products. About
two-thirds of these emissions typically result from a product's
manufacture; disposal of retail products also accounts for
significant emissions.
2)Top-down and bottom-up LCA approaches to measure carbon
footprint
There are two established LCA methodologies for estimating
carbon footprints: process analysis (PA), the more traditional
method, or environmental input/output (EIO). The following
description of each is adapted from the Green Design Institute
at Carnegie Mellon University:
For PA, one itemizes the inputs (materials and energy
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resources) and the outputs (emissions and wastes to the
environment) for a given step in producing a product. So,
for a simple product, such as a paper drinking cup, one
might list the paper and glue for the materials, as well as
electricity or natural gas for operating the machinery to
form the cup for the inputs, and one might list scrap paper
material, waste glue, and low quality cups that become
waste for the outputs.
However, for a broad lifecycle perspective, this same task
must be done across the entire lifecycle of the materials
for the cup and the use of the cup. So, one needs to
identify the inputs, such as pulp, water, and dyes to make
the paper, the trees and machinery to make the pulp, and
the forestry practices to grow and harvest the trees.
Similarly, one needs to include inputs and outputs for
packaging the cup for shipment to the store, the trip to
the store to purchase the cups, and that result from
throwing the cup in the trash and eventually being
landfilled or incinerated. Even for a very simple product,
this process-based LCA method can quickly spiral into an
overwhelming number of inputs and outputs to include.
Now, imagine doing this same process-based LCA for a
product such as an automobile that has over 20,000
individual parts, or a process such as electricity
generation.
The primary methodological challenge with PA is defining the
boundary of the analysis: what processes or emissions will be
included and excluded. For the paper cup, it may be reasonable
to exclude the emissions from producing the steel used to
manufacture the equipment that makes the cups. This simplifies
an already-complicated process but it also can lead to
subjective underestimates of the true carbon footprint. In
addition to being costly and time-consuming, the data underlying
PA can be proprietary and thus unavailable for public review or
replication.
EIO models have been used by planners for decades to
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calculate the resources and supply-chain requirements to
support an increase in demand for an industrial output like
automobiles or food. Model estimates show the indirect
increase in production, both for automobiles and for all
the other sectors that supply products, directly or
indirectly, to the automobile industry. In general, each
sector contributes directly or indirectly to every other
sector. For example, an expansion in the automobile
production would require steel, electricity, petroleum, and
plastics. By multiplying the economy-wide output changes
by the average pollution discharge associated with a unit
of production, researchers can estimate lifecycle emissions
due to a change in demand in a sector.
The advantages of EIO models include their ability to estimate
the direct and indirect economy-wide effects to changes in
emissions, the use of publicly available data, and the existence
of transparent methodologies. However, emission estimates only
reflect changes at the broad, sector level, which can represent
several industry types; this over-aggregation can lead to
uncertainties depending on how well a sector is modeled. As
with any modeling exercise, the quality of the output is
contingent on the quality of the underlying data. EIO models
rely on publicly available emissions data and economic data that
haven't been updated since 1997. Finally and most importantly,
EIO models do not estimate lifecycle emissions beyond the
manufacturing stage.
3)Should ARB defer to international labeling efforts?
While some LCA methodologies are robust and have been in
existence for decades they have only recently been used to
estimate carbon footprints. Among several labeling efforts in
the U.S. and internationally, the United Kingdom (through an
independent entity called Carbon Trust) has embarked on the most
ambitious effort to date. In 2007, it released a PA standard
(PAS 2050) for the voluntary assessment of GHG emissions from
goods and services. Thus far, of the 100+ products that have
been certified under the standard, only about 20-30 products
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(e.g., potato chips, milk, oranges, light bulbs, paving stones,
and detergents) have a carbon label, which communicates a
standardized carbon score (e.g., 100 grams of CO2) for the
purposes of comparing products within the same category. A
company that chooses to measures the footprint of a product must
commit to reduce the emissions associated with that product.
Despite the effort, the UK is currently considering whether to
communicate on a product label the emissions reductions achieved
by a company instead of its carbon score. According to Carbon
Trust, a score of 100g CO2 is not entirely meaningful to
consumers or the media yet. Additionally, companies are
somewhat loathe to subject themselves to unfavorable advertising
should their score be higher than their competitors. These
developments have had the inadvertent effect of discouraging
companies from achieving the ultimate goal of labeling efforts:
reducing their actual emissions.
In addition to the UK effort, the World Resources
Institute/World Business Council for Sustainable Development is
developing a standard for product and supply chain carbon
accounting and reporting. The International Standards
Organization is developing a new international standard (due
March 2011) for product carbon footprinting and labeling.
Closer to home, the website coolcalifornia.org, developed in
partnership with ARB, California Energy Commission, U.C.
Berkeley, LBL, and the nonprofit Next10, is based on EIO
modeling and purports to allow households to measure "everything
they consume," including food, goods and services, household
energy and transportation and to compare their results to other
households in the same city, nationally, and globally. In a
paper recently published on this approach, the authors found
that, on average, every $1,000 consumers spend on food releases
about one ton of CO2 into the atmosphere, and every $2,000 spent
on goods (motor vehicles, clothes, appliances, household
supplies, toys, furniture, etc.), also results in about one ton
of CO2.
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Considering the above initiatives, this bill may divert
significant time and resources away from ARB's principal charge
of reducing GHG emissions under AB 32. While this bill
authorizes ARB to rely on data from "outside sources" when
developing its standard, it remains to be seen whether a
California-specific standard is necessary.
4)ARB-sponsored research
Even though ARB has no position this bill, it signaled an
interest in carbon labeling when it awarded a research grant to
LBL to develop a California-specific LCA model to estimate the
lifecycle GHG emissions, both inside and outside the state, of
about 20 retail products (e.g., cement, paint, bread, beer,
beef, soft drinks, cheese, milk, personal computers, flat screen
TVs, refrigerators, and furniture). LBL researchers will also
estimate the lowest-achievable lifecycle GHG emission by product
based on best available technologies and practices at each
lifecycle stage. Finally, and critically, the research will
develop an understanding of the technical potential of emissions
reductions via product standards or labels. For example, LBL
researchers found that compared to the average lifecycle
emissions of personal computers, the technical emissions
reduction potential, from production through disposal, is 28
percent. The ARB-sponsored research is expected to conclude
mid-2010. This research, of course, could greatly inform the
implementation of this bill.
5)Suggested Amendments
The author has agreed to the following technical and substantive
amendments that, among other things, align the development of
any carbon labeling protocol with the goals of AB 32, give
guidance to ARB when selecting a protocol, ensure that a label
complies with a protocol for the life of the label, require ARB
to consider harmonizing a protocol with existing carbon label
standards, and authorize ARB to vary or exclude particular
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emissions from a product's lifecycle under certain conditions.
44572. As used in this division the following terms have the
following meanings:
(a) "Carbon footprint" means the total amount of emissions of
a greenhouse gas, as defined in Section 38505, that occur as a
result of a consumer product's lifecycle , or as determined by
the state board to best implement this division .
(b) "State board" means the State Air Resources Board.
(c) "Lifecycle" includes a consumer product's emissions
boundaries such as raw material extraction, production,
processing or manufacturing, transportation, distribution,
storing, consumer use, and disposal.
44574. (a) (1) In furtherance of the goals and objectives of
Health and Safety Code section 38500 et seq., T t he state board
shall develop and implement a program for the voluntary
assessment, verification, and labeling of the carbon footprint
of consumer products sold in this state. In order to create As
part of this program, the state board shall adopt establish
standard methodologies protocols for assessing, verifying, and
labeling the carbon footprint of a consumer product in order for
a consumer to, among other things, reliably compare greenhouse
gas emissions of different products within or across a product
category.
(2) The state board shall only develop a protocol include a
product category in a standard if it determines that it is
feasible and practical to do so.
(3) In determining which protocols to develop, the state board
may use the following criteria:
(A) total lifecycle greenhouse gas emissions of a product or
product category;
(B) emissions impact of a product category in California and;
(C) size or growth of the product market.
The state board may choose to adopt a methodology for a single
product category before expanding the scope of the adopted
standard to other product categories.
(b) The program shall do both of the following:
(1) Allow a consumer product manufacturer or distributor , on
a voluntary basis, to determine the carbon footprint of the
product by applying the criteria and standards protocol
developed by the state board, and to include that information on
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the product, product packaging, internet Website, product
manual, or and product advertising, consistent with the labeling
standards developed by the state board.
(2) Develop a standardized, easily understandable, label that
communicates to consumers relevant information about the carbon
footprint of a consumer product. The label may shall only be
issued to a company that meets, and continues to meet for the
life of a label, all of the obligations of the adopted standard
protocol for measuring a product's carbon footprint. ARB may
specify a maximum life of a label in order to capture potential
changes in emissions associated with evolving supply chains,
technology, or other considerations.
(c) The state board may use data from outside sources to
develop the standards protocols required to be created by
subdivision (a), including the use of existing models and other
carbon labeling standards , and labels . In order to minimize
costs for manufacturers or distributors, the state board shall
consider aligning any protocols with other carbon labeling
standards. The state board may consult with academics and
research institutions, representatives of consumer product
manufacturers, consumer groups, and environmental groups, and
conduct public hearings and workshops, to inform the development
of the standards protocols required to be established pursuant
to subdivision (a).
(d) (1) Notwithstanding subdivision (a), T t he state board
shall determine the appropriate lifecycle boundaries in
determining and assessing the carbon footprint of a consumer
product . , which may include raw material extraction, production
processing or manufacturing, transportation, distribution,
consumer use, and disposal. The state board may vary these
boundaries or exclude a boundary by product category as it deems
reasonable and necessary but shall strive to ensure consistency
and comparability between product categories .
(2) The state board may develop a carbon footprint protocol
that is based on a combination of hybrid life cycle assessment
methodologies analysis methodology standard by relying on
company measurements of energy use , fuel consumption and other
direct contributions to greenhouse gas emissions, and secondary
or non-company specific sources of greenhouse gas emissions for
product inputs or raw materials provided by company suppliers. ,
other greenhouse gas emission sources, and national averages, or
other available information for determining the carbon
footprint.
(e) If the state board determines that feasible measurement
methodologies are not sufficiently accurate to allow for direct
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comparisons of the carbon footprint of two like products within
a
product category, the state board may elect to develop standards
protocols for communicating any or all of the following:
(1) The average greenhouse gas emissions in a product
category in order to allow consumers to compare across
categories.
(2) Whether a product has a lower carbon footprint than the
average comparable product available in that category.
(3) A specific carbon footprint score that delineates the
range of error produced by the methodology protocols .
44575. The state board may adopt standardized criteria for
third-party verification of the carbon footprint of a consumer
product, if the state board determines that this kind of
verification
is necessary, or the state board may develop an alternative
means of ensuring compliance with the protocols adopted labeling
standards created pursuant to this chapter.
44576. The state board may contract for cost-effective
services necessary to implement this chapter.
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REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees,
AFL-CIO
Audubon California
Breathe California
California League of Conservation Voters
CarbonCounted
Environment California
Hero Arts Rubber Stamps, Inc.
National Parks Conservation Association
Open Hand Manufacturing, Inc.
Santa Clara Valley Water District
South Coast Air Quality Management District
The Carbon Trust
Xtracycle Inc.
Opposition
Grocery Manufacturers Association
TechAmerica
Analysis Prepared by : Dan Chia / NAT. RES. / (916) 319-2092