BILL ANALYSIS
AB 19
Page 1
ASSEMBLY THIRD READING
AB 19 (Ruskin)
As Amended May 4, 2009
Majority vote
NATURAL RESOURCES 6-3 APPROPRIATIONS 12-5
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|Ayes:|Skinner, Brownley, |Ayes:|De Leon, Ammiano, Charles |
| |Chesbro, | |Calderon, Davis, Fuentes, |
| |De Leon, Hill Huffman | |Hall, John A. Perez, |
| | | |Price, Skinner, Solorio, |
| | | |Torlakson, Krekorian |
| | | | |
|-----+--------------------------+-----+---------------------------|
|Nays:|Gilmore, Knight, Logue |Nays:|Nielsen, Duvall, Harkey, |
| | | |Miller, Audra Strickland |
| | | | |
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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. Specifically,
this bill:
1)Defines "carbon footprint" as the total amount of greenhouse
gas (GHG) emissions that occur as a result of a product's
lifecycle.
2)Defines "lifecycle" as emissions from a consumer product due
to raw material extraction, production, processing or
manufacturing, transportation, distribution, storing, consumer
use, and disposal.
3)Requires ARB to adopt a carbon labeling program for consumer
products as follows:
a) Establish protocols for assessing, verifying, and
labeling the carbon footprint of a consumer product; ARB
must establish a protocol only 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
develop "alternative means" of compliance;
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c) Allow manufacturers to voluntarily use carbon labels to
determine the carbon footprint of a consumer product using
ARB's protocol; manufacturers may use this information on
its packaging, Internet Web site, and advertising
consistent with ARB's labeling standards; and,
d) Develop a standardized, easily understandable carbon
label. The label shall only be issued to a company that
meets, and continues to meet for the life of a label, the
requirements of a protocol.
4)Requires ARB to determine the appropriate life cycle
boundaries in determining and assessing the carbon footprint
of a consumer product. ARB 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
consumer product categories.
5)Authorizes ARB to adopt alternative carbon footprint
protocols, as specified, if it determines that "feasible
measurement methodologies" are not sufficiently accurate to
compare two products.
6)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.
7)Makes related findings and declarations.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, potential special fund costs, ranging from $100,000
to $500,000, to adopt protocols, depending on how ARB interprets
the feasibility, practicality, and cost-effectiveness of
developing carbon footprint measurement standards for various
products; ongoing annual special fund costs, likely in the tens
of thousands, to administer the program.
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
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necessary to voluntarily reduce emissions through the comparison
and purchase of products with smaller 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."
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.
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
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
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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.
According to the Green Design Institute:
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EIO models have been used by planners for decades to
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.
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 (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
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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.
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 (Nunez), Chapter 455, Statutes of 2006.
While this bill authorizes ARB to rely on data from "outside
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sources" when developing its standard, it remains to be seen
whether a California-specific standard is necessary.
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%. The ARB-sponsored research is expected
to conclude mid-2010. This research, of course, could greatly
inform the implementation of this bill.
Analysis Prepared by : Dan Chia / NAT. RES. / (916) 319-2092
FN: 0001111