BILL ANALYSIS Ó
AB 2223
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Date of Hearing: April 13, 2016
ASSEMBLY COMMITTEE ON AGRICULTURE
Bill Dodd, Chair
AB 2223
(Gray) - As Amended April 11, 2016
SUBJECT: Greenhouse Gas Reduction Fund: dairy digesters.
SUMMARY: Allows up to $100 million from the Greenhouse Gas
Reduction Fund (GGRF) to the California Department of Food and
Agriculture (CDFA) to fund incentives for dairy digesters and
other dairy methane reduction projects and management practices,
upon appropriation by the legislature.
EXISTING LAW:
1)Requires the Air Resources Board (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.
2)Authorizes ARB to permit the use of market-based compliance
mechanisms to comply with GHG reduction regulations, once
specified conditions are met.
3)Establishes GGRF and requires all moneys, except for fines and
penalties, collected by ARB from the auction or sale of
allowances pursuant to a market-based compliance mechanism
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(the cap-and-trade program) to be deposited in the GGRF and
available for appropriation by the Legislature.
4)Continuously appropriates:
a) 10% of the GGRF for the Transit and Intercity Rail
Capital Program;
b) 5% for the Low Carbon Transit Operations Program;
c) 20% for the Affordable Housing and Sustainable
Communities Program; and,
d) 25% for high speed rail.
5)Establishes the GGRF Investment Plan and Communities
Revitalization Act to set procedures for the investment of GHG
allowance auction revenues. Authorizes a range of GHG
reduction investments and establishes several policy
objectives, including:
a) Maximize economic, environmental, and public health
benefits;
b) Foster job creation;
c) Complement efforts to improve air quality;
d) Direct investment toward the most disadvantaged
communities and households in the state;
e) Provide opportunities for businesses, public agencies,
nonprofits, and other community institutions to participate
in and benefit from statewide efforts to reduce GHG
emissions; and,
f) Lessen the impacts and effects of climate change on the
state's communities, economy, and environment.
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6)Requires the investment plan to allocate a minimum of 25% of
the available moneys in the GGRF to projects that provide
benefits to identified disadvantaged communities (IDC), and a
minimum of 10% of the available moneys in the GGRF to projects
located within an IDC.
FISCAL EFFECT: Unknown.
COMMENTS: The Global Warming Solutions Act of 2006 requires ARB
determine the statewide 1990 GHG emission level and approve a
statewide greenhouse gas emissions limit, equal to the 1990
level, to be achieved by 2020. ARB is responsible to prepare,
adopt, and update California's greenhouse gas inventory.
Short-lived climate pollutants (SCLPs) are GHGs that remain in
the atmosphere for less time than carbon dioxide, but have a
much greater climate impact. SLCPs include black carbon,
fluorinated gases, and methane, which is the primary GHG emitted
by dairies. According to ARB, methane is the principal
component of natural gas and is also produced biologically under
anaerobic conditions in ruminants, landfills, and waste
handling. While methane does not linger in the atmosphere as
long as carbon dioxide, it is over 80 times more potent than
carbon dioxide over the first 20 years. Methane is responsible
for about 20% of current climate change, and methane
concentrations continue to increase globally. ARB identifies
dairies as the source of 35% of the state's methane emissions
and pinpoints a number of technologies and processes that have
the potential to greatly reduce dairy methane emissions.
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Biogas recovery systems are sometimes known as anaerobic
digesters or "biodigesters" because they use a process called
anaerobic digestion. During anaerobic digestion, bacteria break
down waste in an oxygen-free environment. One of the natural
products of anaerobic digestion is biogas, which typically
contains between 60% to 70% methane, 30% to 40% carbon dioxide,
and trace amounts of other gases. Applications of anaerobic
digestion for biogas capture include wastewater treatment
plants, dairies, and at organic waste processing facilities.
Biogas can be used to produce electricity using engines or fuel
cells, or it can be converted to transportation fuel or
"biomethane," which has the same properties as natural gas,
Dairy digesters are a renewable technology that uses livestock
manure to produce methane, which is a renewable source of
electrical energy generation and transportation fuel. The
technology has many environmental and social benefits.
Currently, the California Department of Food and Agriculture
(CDFA) has developed the Dairy Digester Research and Development
(DDRD) Program. $11 million in competitive grant funding has
been awarded to provide financial assistance for the
installation of dairy digesters that result in reduced GHG
emissions and other environmental benefits, and an estimated
$500,000 will be made available for research and demonstration
projects that improve the economic performance of dairy
digesters in California. Governor Brown's 2016-17 budget
proposes $ $35 million for the DDRD Program.
According to the author, providing $100 million annually will
incentivize the widespread adoption of dairy digesters and other
dairy methane reduction projects. The ARB's strategy to improve
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manure management calls for putting digesters on more than
several hundred dairies in the state and identifies a CDFA
estimate of at least $100 million per year needed to support the
development of necessary manure management infrastructure.
Dairy digesters would help California meet its organic diversion
and bioenergy goals, because dairy manure can be mixed with
other organic materials diverted from landfills or wastewater
treatment plants. Furthermore, the majorities of dairies in
California are located in the central valley in disadvantaged
communities, which further builds on the goals that GGRF provide
benefit to IDCs.
Opponents state ARB is conducted an extensive analysis of the
dairy industry in order to present a strategy on how to reduce
methane admissions from these sources. Without a complete report
on all the potential methane controls within the dairy industry,
opponents state AB 2223 is premature and inappropriate. Other
opponents believed that ARB lack the legal authority to raise
revenues though the auction of allowances and state given the
legal uncertainties on the issue, expending GGRF funds is
premature.
REGISTERED SUPPORT / OPPOSITION:
Support
Agricultural Council of California
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Agricultural Energy Consumers Association
California Dairies, Inc.
California Farm Bureau Federation
California Grain and Feed Association
Dairy Farmers of America
Dairy Institute
Producer Dairy
Producer Handlers Association
Milk Producers Council
Western United Dairymen
Opposition
CalChamber
AB 2223
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CalTax
Comite Civico Del Valle
Sierra Club California
Analysis Prepared by:Victor Francovich / AGRI. / (916) 319-2084