BILL ANALYSIS Ó SB 1383 Page 1 Date of Hearing: August 30, 2016 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Das Williams, Chair SB 1383 (Lara) - As Amended August 19, 2016 SENATE VOTE: 21-13 SUBJECT: Short-lived climate pollutants: methane emissions: organic waste: landfills SUMMARY: Requires the Air Resources Board (ARB) to approve and implement the comprehensive short-lived climate pollutant (SLCP) strategy to achieve, from 2013 levels, a 40% reduction in methane, a 40% reduction in hydrofluorocarbon gases (HFCs), and a 50% reduction in anthropogenic black carbon, by 2030. Establishes specific procedures to regulate landfill and dairy sources of methane, including delaying ARB's authority to require emission reductions from livestock and dairy sources until 2024. Specifically, this bill: 1)Requires ARB to approve and begin implementing the comprehensive strategy to reduce SLCPs in the state to achieve, from 2013 levels, a 40% reduction in methane, a 40% reduction in HFCs, and a 50% reduction in anthropogenic (i.e., non-forest) black carbon, by 2030. SB 1383 Page 2 2)Requires ARB, prior to approving the strategy, to do all of the following: a) Coordinate with other state and local governments to develop measures identified in the strategy; b) Hold at least three public hearings in geographically diverse locations in the state; c) Evaluate the best available scientific, technological, and economic information to ensure the strategy is cost effective and technologically feasible; and d) Incorporate and prioritize, as appropriate, measures and actions that provide cobenefits, as specified. 3)Requires ARB to publicly notice the strategy and post a copy of the strategy on their Web site at least one month prior to approval. 4)States the intent of the Legislature: a) To support the adoption of policies that improve organics recycling and innovative, cost-effective, and environmentally beneficial uses of biomethane derived from solid waste facilities; and; SB 1383 Page 3 b) That the disposal reduction targets established by the bill serve as a statewide average target and not as a minimum requirement for any jurisdiction. 5)States that methane emission reduction goals shall include targets to reduce the landfill disposal of organic waste 50% by 2020 and 75% by 2025 from the 2014 level. 6)Requires the California Department of Resources Recycling and Recovery (CalRecycle), in consultation with ARB, to adopt regulations to achieve the organics reduction targets. Specify that the regulations: a) May require local jurisdictions to impose requirements on generators or other relevant entities within their jurisdiction and impose penalties for noncompliance; b) Include requirements intended to meet the goal that not less than 20% of edible food that is currently disposed is recovered for human consumption by 2025; c) Shall not establish a numeric organic waste disposal limit for individual landfills; d) Include different levels of requirements for local jurisdictions and phased timelines based upon their progress in meeting the organic waste reduction goals, as specified; e) May include penalties to be imposed by CalRecycle for noncompliance; and, SB 1383 Page 4 f) Take effect on or after January 1, 2022, except the imposition of penalties imposed by CalRecycle shall not take effect until two years after the effective date of the regulations. 7)Specifies that a local jurisdiction may charge and collect fees to cover the costs incurred in complying with the regulations. 8)Requires CalRecycle, in consultation with ARB, to analyze the progress that the waste sector, state government, and local governments have made in achieving the organic waste reduction goals. Require the analysis to include: a) The status of new organics recycling infrastructure development; b) The progress in reducing regulatory barriers to the siting of organics recycling facilities and the timing and effectiveness of policies that will facilitate the permitting of organics recycling infrastructure; and c) The status of markets for the products generated by organic recycling facilities, including cost-effective electrical interconnection and common carrier pipeline injection of digester biomethane and the status of markets for compost, biomethane, and other products from the recycling of organic waste. 9)Authorizes CalRecycle, if it determines that significant progress has not been made, to include incentives or SB 1383 Page 5 additional requirements in the regulations. 10)Declares that the bill does not limit the authority of a local jurisdiction to adopt, implement, or enforce requirements in addition to the requirements of the bill or the regulations. EXISTING LAW: 1)Requires ARB, pursuant to California Global Warming Solutions Act of 2006 [AB 32 (Nunez), Chapter 488, Statutes of 2006], to adopt a statewide greenhouse gas (GHG) emissions limit equivalent to the 1990 level by 2020, and adopt regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions. 2)Requires ARB, pursuant to SB 605 (Lara), Chapter 523, Statutes of 2014, to complete, by January 1, 2016, a comprehensive strategy to reduce emissions of SLCPs, defined as an agent that has a relatively short lifetime in the atmosphere and a climate-warming influence that is more potent than carbon dioxide. 3)Establishes, pursuant to AB 341 (Chesbro), Chapter 476, Statutes of 2011, a statewide waste diversion goal of 75% by 2020. Requires a commercial waste generator, including multi-family dwellings, to arrange for recycling services and requires local governments to implement commercial solid waste recycling programs designed to divert solid waste from businesses. SB 1383 Page 6 4)Requires, pursuant to AB 1826 (Chesbro), Chapter 727, Statutes of 2014, generators of specified amounts of organic waste to arrange for recycling services for that material. Defines "organic waste" as food waste, green waste, landscape and pruning waste, nonhazardous wood waste, and food-soiled paper that is mixed in with food waste. FISCAL EFFECT: According to the Assembly Appropriations Committee, unknown cost pressures, potentially in the tens of millions of dollars or more, to fund programs to implement the strategies (Greenhouse Gas Reduction Fund or other special funds). COMMENTS: 1)Background. The 5th assessment report from the Intergovernmental Panel on Climate Change (IPCC) notes that atmospheric concentrations of global warming pollutants have risen to levels unseen in the past 800,000 years. Carbon dioxide concentrations have increased by 40% since pre-industrial times. There is broad scientific consensus that these global GHG emission increases are leading to higher air and water temperatures, as well as rising sea levels. Sea level is expected to rise 17 to 66 inches by 2100, and the frequency of extreme events such as heat waves, wildfires, floods, and droughts is expected to increase. Pursuant to AB 32, ARB approved the first Scoping Plan in 2008. The Scoping Plan outlined a suite of measures aimed at achieving 1990-level emissions, a reduction of 80 million metric tons of CO2 (MMT CO2e). Average emission data in the Scoping Plan reveal that transportation accounts for almost 40% of statewide GHG emissions, and electricity and commercial and residential energy sector account for over 30% of statewide GHG emissions. The industrial sector, including refineries, oil and gas production, cement plants, and food processors, was shown to contribute 20% of California's total GHG emissions. SB 1383 Page 7 The 2008 Scoping Plan recommended that reducing GHG emissions from the wide variety of sources that make up the state's emissions profile could best be accomplished through a cap-and-trade program along with a mix of other strategies, including a low carbon fuel standard (LCFS), light-duty vehicle GHG standards, expanding and strengthening existing energy efficiency programs, and building and appliance standards, a 33% Renewable Portfolio Standard (RPS), and regional transportation-related GHG targets. Pursuant to authority under AB 32, the ARB adopted a Low Carbon Fuel Standard in 2009, and a cap-and-trade program approved on December 13, 2011. ARB approved an update to the Scoping Plan in 2014. The update describes policies, actions, and strategies in the energy, transportation, fuels, agriculture, waste, and natural lands sectors as a means to continue emissions reductions in each of these sectors. The update also asserts that California is on track to meet the near-term 2020 GHG limit and is well positioned to maintain and continue reductions beyond 2020 as required by AB 32. CO2 remains in the atmosphere for centuries, which makes it the most critical GHG to reduce in order to limit long-term climate change. However, climate pollutants, including methane, HFCs, and soot (black carbon), are relatively short-lived (anywhere from a few weeks to 15 years), but have much higher global warming potentials than CO2. New research suggests that aggressively reducing these short-lived climate pollutants in the short-term, compared to only cutting CO2 emissions, can do more to slow sea level rise and other climate change impacts in the near-term. a) Methane (CH4) is the principal component of natural gas and is also produced biologically under anaerobic conditions in ruminants, landfills, and waste handling. SB 1383 Page 8 Atmospheric methane concentrations have been increasing as a result of human activities related to agriculture, fossil fuel extraction and distribution, and waste generation and processing. Many emissions sources of methane are unregulated (e.g., methane from dairy production and fugitive methane emissions from landfills and natural gas distribution). Methane is about 80 times more powerful as a global warming pollutant than CO2 on a 20-year time scale. b) HFCs (also known as F-gases) are synthetic gases used in refrigeration, air conditioning, insulation foams, solvents, aerosol products, and fire protection. They are primarily produced for use as substitutes for ozone-depleting substances which are being phased out globally. Currently, HFCs are a small fraction of the total climate forcing gases, but they are the fastest growing source of carbon pollution. HFCs, on average, have a global warming potential 1600 times that of CO2 on a 20-year time scale. c) Black carbon, a component of soot, also known as PM 2.5, comes from diesel engines and incomplete burning of carbon sources. Wildfires contribute two-thirds of the total black carbon emissions in the state. In addition to being a powerful global warming pollutant, black carbon is associated with numerous negative health impacts and is designated a potential human carcinogen. Black carbon is not listed under AB 32 as a GHG subject to AB 32 regulations. However, due to known health and air quality impacts, ARB has several programs to reduce PM emissions from heavy-duty vehicles. Black carbon has a global warming potential 3200 times that of CO2 on a 20-year time scale. SB 605 requires ARB to complete a comprehensive strategy to reduce emissions of SLCPs by January 1, 2016. Following the SB 1383 Page 9 release of a concept paper and a draft strategy, on April 11, 2016, ARB published a proposed SLCP Reduction Strategy, which is scheduled for adoption in September. The ARB Strategy recommends the same 40/40/50 targets for methane, HFCs, and black carbon as established by this bill. In addition to the targets, the Strategy proposes specific measures, including: a) Removal and replacement of old fireplaces and woodstoves; b) Implementing a sustainable freight strategy; c) Regulations for best management practices for new dairies; d) Financial incentives for manure management and dairy digesters; e) Requiring organics diversion from landfills; f) Regulations to reduce methane emissions from oil and gas production, processing and storage; g) Financial incentives for low-global warming potential (GWP) refrigeration early adoption; and h) Bans on the sale of very-high GWP refrigerants and prohibitions on new equipment using high GWP gases. SB 1383 Page 10 ARB indicates that each proposed regulation will be subject to its own public process with workshops, opportunities for stakeholder discussion, consideration of environmental justice, and legally required analyses of the economic and environmental impacts. CalRecycle has been engaged with ARB in developing ARB's Strategy to reduce methane emissions from landfills. It is also is tasked with diverting at least 75% of solid waste generated statewide by 2020. Organic materials make up one-third of the waste stream and food continues to be the greatest single item disposed, comprising over 15% of materials landfilled. CalRecycle is also charged with implementing its Strategic Directive 6.1, which calls for reducing organic waste disposal by 50% by 2020. According to CalRecycle, significant gains in organic waste diversion are necessary to meet the 75% goal and implement Strategic Directive 6.1. Recycling technologies for organic waste include composting, anaerobic digestion, and other types of processing that generate renewable fuels, energy, soil amendments, and mulch. AB 1826 requires generators of significant quantities of organic waste to ensure the material is recycled. Recycling organic waste provides significant GHG reductions over landfilling. Composting and other organics processing technologies, including anaerobic digestion, reduce GHGs by avoiding the emissions that would be generated by the material's decomposition in a landfill, as well as by displacing fossil fuels. While most modern landfills have systems in place to capture methane, significant amounts continue to escape into the atmosphere. According to ARB's GHG inventory, nearly 8.28 million metric tons of CO2 SB 1383 Page 11 equivalent are released annually by landfills in California. According to the author, California has been a proud and bold leader in pursuing environmental policies to reduce climate change and address the sources that cause it. Those policies have mostly focused on reducing emissions of CO2, the most significant long-term driver of climate change. This bill represents the next step in those efforts, to establish a goal to reduce SLCPs that are among the most harmful emissions to both human health and global climate change. There is an urgent need to develop a strategy to address and reduce these deadly pollutants. Extensive research links particulate pollution and increased ozone levels to severe and chronic health conditions such as cancer, heart disease, and asthma. Reducing super pollutants in California will have an immediate beneficial effect - dramatically reducing the serious impacts these pollutants have on our air quality and the health of our children. 1)Proposed amendments. The author proposes amendments for adoption by the committee relating to emission reductions from the dairy sector and development and use of renewable gas, as follows: a) Require ARB to adopt regulations to reduce methane emissions from dairy and livestock manure management operations, subject to the following limitations: i. Reductions are limited to 40% below 2013 levels by 2030; SB 1383 Page 12 ii. Reduction regulations may not be implemented before 2024; iii. ARB must first complete specified steps, including stakeholder consultation, public meetings, and research; iv. ARB must determine the regulations are technologically feasible, economically feasible, cost-effective, and minimize and mitigate potential leakage; v. Requires ARB to analyze progress toward the targets and authorizes ARB to reduce the 40% by 2030 goal if the analysis determines that progress has not been made due to insufficient funding, technical or market barriers; vi. Requires ARB and PUC to establish energy infrastructure development and procurement policies for dairy biomethane projects, including directing gas utilities to implement at least five dairy biomethane pilot projects; and vii. Enteric emission reductions shall be achieved only through incentive-based mechanisms SB 1383 Page 13 until ARB determines that a cost-effective, considering the impact on animal productivity, scientifically proven means of reducing enteric emissions is available and that adoption of the enteric emissions reduction method would not damage animal health, public health, or consumer acceptance. b) Require the Energy Commission, ARB and Public Utilities Commission to develop recommendations for development and use of renewable gas, then consider and adopt policies and incentives to increase production and use of renewable gas, including biomethane and biogas, that reduces SLCPs in the state. 2)Dairy amendments delay and otherwise limit ARB's existing authority to require emission reductions from dairy and livestock operations. The proposed amendments prevent implementation of emission reduction regulations before 2024. What appears to be a delay of up to seven years is mitigated by the fact that the bill does not limit ARB's authority to adopt and implement other regulations prior to 2024, such as requiring reporting and monitoring of emissions, and even to develop and adopt emission reduction regulations prior to 2024, as long as reduction obligations don't begin before 2024. The proposed amendments limit the dairy sector's reduction obligation to 40% below 2013 levels, even if additional reductions are feasible and cost-effective relative to other sectors. The proposed amendments also authorize ARB to reduce the goal for the dairy and livestock sector if specified findings are made. SB 1383 Page 14 The proposed amendments prohibit ARB from regulating emissions from enteric fermentation until ARB, in consultation with the Department of Food and Agriculture, determines that a cost-effective, considering the impact on animal productivity, scientifically proven means of reducing enteric emissions is available and that adoption of the enteric emissions reduction method would not damage animal health, public health, or consumer acceptance. The proposed amendments impose additional procedural and analytical requirements on ARB, including considering milk prices and the commitment of public funds, which are inconsistent with AB 32 and the recently passed requirements of AB 197 (E. Garcia), which provides direction to ARB regarding its actions to achieve GHG reductions beyond the 2020 statewide limit, including introducing the consideration of "social costs." The author and the committee may wish to clarify that all of these limitations apply only to the 2020 and 2030 targets. REGISTERED SUPPORT / OPPOSITION: SB 1383 Page 15 Support Alliance of Nurses for Healthy Environment All Power Labs American Academy of Pediatrics - California American Cancer Society Cancer Action Network, California American Heart Association, California American Lung Association in California Anaergia Asian Pacific Environmental Network Asthma Coalition of Los Angeles County Atlas ReFuel Audubon California Bay Area Regional Health Inequities Initiative SB 1383 Page 16 Baz Allergy, Asthma and Sinus Center, Central Valley and Bay Area Bioenergy Association of California Bonnie J. Addario Lung Cancer Foundation Breathe California California Association of Environmental Health Officers California Association of Sanitation Agencies California Bicycle Coalition California Black Health Network, Inc. California Conference of Directors of Environmental Health California Hydrogen Business Council California League of Conservation Voters California Medical Association California Natural Gas Vehicle Coalition SB 1383 Page 17 Californians Against Waste California Nurses Association California Pan-Ethnic Health Network California Public Health Association - North California Refuse Recycling Council California Thoracic Society California Walks CalPIRG Center for Climate Change and Health, Public Health Institute Central California Asthma Collaborative Clean Energy Renewables Climate Resolve Climate 911 SB 1383 Page 18 Coalition for Clean Air Coastal Environmental Rights Foundation CR & R Dignity Health Environmental Defense Fund Environment California Harvest Power, Inc. Health Care Without Harm Health African American Families II Health Officers Association of California Inland Empire Disposal Association Long Beach Alliance for Children with Asthma Los Angeles County Department of Public Works SB 1383 Page 19 Los Angeles County Waste Management Lutheran Office of Public Policy - California Maternal and Child Health Access (Los Angeles) Natural Resources Defense Council Network of Ethnic Physician Organizations Next Gen Climate Phoenix Energy Physicians for Social Responsibility, Los Angeles Physicians, Scientists and Engineers Healthy Energy Physicians for Social Responsibility/Sacramento Prevention Institute RAMP and Community Action to Fight Asthma Recology SB 1383 Page 20 Republic Services, Inc. San Francisco Bay Area Chapter, Physicians for Social Responsibility San Joaquin County Asthma and COPD Coalition Sierra Club California Sierra Energy Santa Clara County Public Health Department Solid Waste Association of Orange County St. John's Well Child and Family Centers (Los Angeles) The Trust for Public Land TSS Consultants Union of Concerned Scientists Voices for Progress SB 1383 Page 21 West Biofuels 29 Individuals Opposition Association of Home Appliance Manufacturers California Business Properties Association California Chamber of Commerce California Fresh Fruit Association California Grain & Feed Association California Independent Petroleum Association California Manufacturers & Technology Association California Retailers Association Los Angeles County, Solid Waste Management Committee/Integrated Waste Management Task SB 1383 Page 22 Force Milk Producers Council National Federation of Independent Business Nisei Farmers League Western Agricultural Processors Association Western Growers Association Western Plant Health Association Western States Petroleum Association Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916) 319-2092