BILL ANALYSIS Ó
AB 278
Page 1
Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 278 (Gatto) - As Amended: April 4, 2013
Policy Committee: Natural
ResourcesVote:9-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill places additional requirements on the Air Resources
Board (ARB) when determining the carbon intensity of
transportation fuels under its Low Carbon Fuel Standard (LCFS)
regulations or another scoring system. Specifically, this bill
requires ARB to:
1)Consider the GHG emissions associated with land use or other
significant indirect effects identified by the board,
including but not limited to, the impacts of potential or
actual deforestation and the impacts of increased food
shipping caused by food crop displacement.
2)Identify, to the extent feasible, environmental laws and
practices of the jurisdiction from which the fuel originates
that may affect GHG emissions from the production and
transportation of fuel.
3)Solicit comments, and consider and respond to evidence
regarding:
a) Significant effects upon food supply, food costs, and
food shipping caused by LCFS regulations.
b) Significant effects upon the local economy, including
job loss or worker displacement caused by the LCFS
regulations.
FISCAL EFFECT
Significant start-up and on-going annual costs in the $1million
AB 278
Page 2
to $2 million range (special fund) for the increased workload
associated with the expanded analysis for activities including:
a) The update of fuel pathways and carbon intensity scores.
b) Macroeconomic modeling of LCFS impacts on local
economies.
c) The creation of an inventory of foreign and state laws
and practices.
d) A new server and software.
COMMENTS
1)Purpose. According to the author, AB 278 will strengthen the
Low Carbon Fuel Standard by ensuring all carbon emissions are
accounted for in the Indirect Land Use Change formula,
currently used by CARB to help calculate the carbon intensity
of transportation fuels.
2) Background. The California Global Warming Solutions Act (AB
32, Núñez-Pavely, Chapter 488, Statutes of 2006) requires ARB
to adopt a statewide greenhouse gas (GHG) emissions limit
equivalent to 1990 levels by 2020, and to adopt rules and
regulations to achieve maximum technologically feasible and
cost-effective GHG emission reductions.
AB 32 also requires ARB to adopt early action measures to
reduce GHG emissions. The transportation sector is
responsible for approximately 40% of California's total GHG
emissions.
In 2007, Governor Schwarzenegger issued Executive Order
S-01-07, specifying a statewide goal to reduce the carbon
intensity of California's transportation fuels by at least 10%
by 2020. The order required ARB to consider adopting a LCFS
to implement this goal, either as an early action measure or
in other regulatory proceedings. In 2009, ARB adopted the
LCFS as a regulation to be phased-in beginning in 2010.
ARB must score all transportation fuels, renewable and
AB 278
Page 3
non-renewable, on their carbon intensity. Through the Indirect
Land Use Change (ILUC) formula, ARB accounts for any indirect
emissions resulting from the production of renewable fuels.
A similar calculation is done to account for refining and
transportation emissions to score the carbon reduction for
foreign fossil fuels.
Analysis Prepared by : Jennifer Galehouse / APPR. / (916)
319-2081