BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                SB 237
                                                                       

                      SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                        Senator S. Joseph Simitian, Chairman
                              2010-2011 Regular Session
                                           
           BILL NO:    SB 237
           AUTHOR:     Wolk
           AMENDED:    As Amended March 29, 2011
           FISCAL:     Yes               HEARING DATE:     April 4, 2011
           URGENCY:    No                CONSULTANT:       Caroll 
           Mortensen
            
           SUBJECT  :    GREENHOUSE GAS EMISSION REDUCTIONS:
                       AGRICULTURE

            SUMMARY  :    
           
            Existing law  :  

           1)Under the California Global Warming Solutions Act of 2006 
             (CGWSA):

              a)   Requires the California Air Resources Board (ARB) to 
                determine the 1990 statewide greenhouse gas (GHG) 
                emissions level and approve a statewide GHG emissions 
                limit that is equivalent to that level, to be achieved by 
                2020.  ARB must adopt regulations for reporting and 
                verification of GHG emissions, monitoring and compliance 
                with the program, and achieving GHG emission reductions 
                from sources or categories of sources by January 1, 2011, 
                to be operative on January 1, 2012, subject to certain 
                requirements.  (Health and Safety Code §38500 et seq.).

              b)   Requires ARB to prepare and approve a scoping plan for 
                achieving the maximum technologically feasible and 
                cost-effective reductions in GHG emissions from sources 
                or categories of sources of GHGs by 2020.  ARB must 
                evaluate the total potential costs and total potential 
                economic and noneconomic benefits of the plan for 
                reducing GHGs to the state's economy, and public health, 
                using the best economic models, emission estimation 
                techniques, and other scientific methods.  The plan must 
                be updated at least once every five years.  (§38561).

              c)   Requires ARB to adopt GHG emission limits and emission 








                                                                SB 237
                                                                 Page 2

                reduction measures by regulation on or before January 1, 
                2011, and meet certain requirements in adopting the 
                regulations.  ARB may include the use of market-based 
                mechanisms to comply with these regulations.  (§§38562, 
                38570).

              d)   Requires state agencies to consider and implement 
                strategies to reduce their greenhouse gas emissions.  
                (§38592).

           2)Under Executive Order S-3-05, directs the Secretary of the 
             California Environmental Protection Agency to coordinate 
             with the Secretary of the Business, Transportation and 
             Housing Agency; Secretary of the Department of Food and 
             Agriculture; Secretary of the Resources Agency; Chairperson 
             of the Air Resources Board; Chairperson of the Energy 
             Commission; and President of the Public Utilities 
             Commission.  This Climate Action Team works to coordinate 
             statewide efforts to implement global warming emission 
             reduction programs and the state's Climate Adaptation 
             Strategy.

           3)Under the Food and Agriculture Code, establishes the 
             California Department of Food and Agriculture (CDFA) which 
             is responsible for promoting, protecting, and furthering the 
             economy of the state's agricultural industry, including 
             identifying, studying, and recommending solutions to 
             agribusiness problems so that adequate supplies of food and 
             fiber will be available and the industries involved will be 
             economically sound.

            This bill  , under the CGWSA, adds a new part that:

           1) States that the purpose of this new part is to ensure that 
              California maximizes its opportunities to achieve voluntary 
              GHG reductions in the state's agricultural section while 
              also achieving environmental cobenefits.

           2) Defines "Environmental cobenefits", "Farm product", 
              "Processor", and "Producer".

           3) Establishes the California Agriculture Climate Benefits 
              Advisory Committee (advisory committee) consisting of 12 
              members appointed by an unspecified agency from nominations 








                                                                SB 237
                                                                 Page 3

              from interested persons or organizations; five producers, 
              two of which shall be organic producers; three higher 
              education researchers knowledgeable in agriculture and 
              climate change; and three nonprofit organizations 
              knowledgeable in agriculture and climate change and one 
              processor.  There are also five ex-officio members, one 
              each from CDFA, Department of Conservation, ARB, United 
              States Department of Agriculture, Natural Resources 
              Conservation Service, and US EPA Region 9.

           4) Specifies a three-year term limit for members of the 
              committee and describes a system for members to designate 
              their alternates and other administrative requirements for 
              members.

           5) Establishes eligible uses for moneys, in addition to costs 
              to administer this part,  allocated to the agricultural 
              sector from revenue generated from market-based compliance 
              mechanisms for the reduction of emissions of greenhouse 
              gases for grants as follows:

              a)    Research and demonstration projects that reduce GHG 
                 emissions, sequester atmospheric carbon, or assist the 
                 agricultural sector to adapt to global warming through 
                 the use of agricultural technologies, practices, or 
                 farming systems and that also provide environmental 
                 cobenefits.

              b)    Technical assistance to develop outreach and training 
                 programs for agriculture producers to adopt agricultural 
                 technologies, practices or farming systems to reduce GHG 
                 emissions, sequester atmospheric carbon or assist 
                 producers in adapting to global warming while providing 
                 environmental cobenefits.

              c)    Financial incentives to producers to reduce GHG 
                 emissions, sequester atmospheric carbon or assist 
                 producers in adapting to global warming while providing 
                 environmental cobenefits.

              d)    Research and demonstration projects, technical 
                 assistance, and financial incentives for processors to 
                 reduce greenhouse gas emissions from their activities 
                 through energy efficiency, renewable energy or 








                                                                SB 237
                                                                 Page 4

                 processing efficiencies.  

           6) Requires the undetermined agency to consider input from the 
              advisory committee on establishing criteria for grant 
              proposals, reviewing grant proposals, meeting 
              recommendations on grant approval, and making 
              recommendations on implementation.

           7) Specifies that grant proposals for research and 
              demonstration projects that include multiple co-applicants 
              including at least one producer shall receive priority.

           8) Limits the imposition of a matching fund requirement that 
              exceeds  25 percent of the total state award for research 
              and demonstration projects and technical assistance 
              projects for processors.

           9) Makes findings and declarations regarding GHG emissions and 
              California agriculture.

            COMMENTS  :

            1)Purpose of Bill  .  According to the author, the CGWSA 
             recognizes that climate change will have detrimental effects 
             on some of the state's largest industries, including 
             agriculture.  Much is at stake - California agriculture 
             contributes $35 billion annually to California's economy and 
             supplies more than half of the country's fruit and 
             vegetables. 

             In a state where water is already scarce, climate change 
             scenarios predict that water supplies will become 
             increasingly constrained.  Warming temperatures also 
             threaten to shift the kinds of crops that can be grown in 
             the state.  Statewide, the impact of climate change on 
             California agriculture could hamper food and fiber 
             production. 

             At the same time, agriculture can help reduce GHG emissions 
             and meet California's AB 32 objectives.  Research funded by 
             the California Energy Commission suggests that some 
             agricultural practices not only reduce GHGs, but may also 
             sequester atmospheric carbon in the soil.









                                                                SB 237
                                                                 Page 5

            2)Background  .  Many of the possible agricultural practices to 
             reduce GHG emissions and sequester carbon can offer 
             environmental cobenefits.  For example, cover cropping, 
             improved soil management and conservation tillage can 
             improve air and water quality, contribute to wildlife 
             habitat values and reduce GHG emissions and sequester 
             carbon. 

               a)   Climate Action Team Activities and Agriculture  .  
                According to the Climate Action Team (CAT) 2009 report, 
                "Agriculture Sector Write-Up for Public Distribution AB 
                32 Scoping Plan", the agriculture sector is unique in 
                that nearly 82 percent of all GHG emissions from the 
                sector involve biological processes.  Sources which do 
                not involve biological systems are energy use/fuel 
                combustion and agricultural burning.  These sources 
                account for approximately 5 million metric tons of carbon 
                dioxide (MMTCO2E) of the total 28 MMTCO2E emitted by the 
                sector.

                The report also notes that " . . .there are gaps in 
                scientific knowledge and scientific uncertainty in 
                existing data on greenhouse gas emissions resulting from 
                the complex biological process of agro-ecosystems making 
                the identification of real, permanent, additional, 
                verifiable and enforceable reduction measures difficult 
                to immediately implement.  Research on understanding 
                these systems, emissions, and rigorous quantification 
                methodologies are needed to achieve the full reduction 
                potential from this sector."

                Further, the report recognizes that because of the 
                complex nature of the biological functioning of 
                agro-ecosystems, emission reduction projects can often 
                result in multiple cobenefits.  Cobenefits include 
                reductions in criteria and toxic pollutants; reduced 
                impacts on soil, water, groundwater and watershed 
                quality; reduced chemical inputs to soil, agro-ecosystem 
                functioning, soil quality, erosion control and habitat 
                enhancement; improved animal health, animal productivity; 
                increased use of renewable fuel sources and reduced 
                dependence on energy imports.

            3)What's next for CGWSA and Agriculture?   The CAT report cites 








                                                                SB 237
                                                                 Page 6

             that the goals for the agriculture section in terms of GHG 
             mitigation are very uncertain at this point.  Much must be 
             learned to allow for the development of potential 
             quantification methodologies.  The report refers to the need 
             for research to reduce uncertainties related to the 
             quantification of GHG emissions and potential emission 
             reductions including life cycle analysis for soil carbon 
             sequestration activities.  It also lays out areas for 
             further work including the need for more research, incentive 
             programs and technical assistance to further the work in 
             this area.  All these efforts are consistent with the intent 
             of this bill.

            4)Who will implement this new requirement?   This bill does not 
             designate a lead agency that will establish the Advisory 
             Committee and lead the efforts specified in this bill.  In a 
             similar bill last year (see Previous Legislation below), the 
             CDFA was the lead agency; however the responsibility could 
             also be given to the ARB or the Department of Conservation.  
             The author is working with stakeholders and the 
             Administration to make that determination.
            5)Previous Legislation  .  In 2009, the Committee heard SB 1241 
             by the same author.  SB 237 is similar to that measure. SB 
             1241 was held in the Senate Appropriations Committee. 

            SOURCE  :        The California Climate and Agriculture Network  

           SUPPORT  :  Audubon California
                          Californians Against Waste
                          Center for Land-Based Learning
                          Clean Water Action
                          Community Alliance with Family Farmers
                          Ecological Farming Association
                          Full Belly Farm
                          Hedgerow Farms
                          National Center for Appropriate Technology
                          Organic Farming Research Foundation
                          Sierra Orchards
                          Soil Born Farm Urban Agriculture and Education 
                     Project
                          Wild Farm Alliance

            OPPOSITION  :    None on file  
            








                                                                SB 237
                                                                 Page 7