BILL ANALYSIS Ó SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Wieckowski, Chair 2015 - 2016 Regular Bill No: SB 1383 ----------------------------------------------------------------- |Author: |Lara | ----------------------------------------------------------------- |-----------+-----------------------+-------------+----------------| |Version: |8/31/2016 |Hearing |8/31/2016 | | | |Date: | | |-----------+-----------------------+-------------+----------------| |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Rebecca Newhouse | | | | ----------------------------------------------------------------- SUBJECT: Short-lived climate pollutants: methane emissions: organic waste: landfills. ANALYSIS: Existing law: 1) Existing law, under the California Global Warming Solutions Act of 2006 requires the California Air Resources Control 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, and to adopt GHG emissions reductions measures by regulation (Health and Safety Code §38500 et seq.). 2) Requires ARB to complete, by January 1, 2016, a comprehensive strategy to reduce emissions of short-lived climate pollutants (SLCPs) in the state. 3) Requires businesses that generate specified amounts of organic waste to arrange for recycling services for that material. (PRC §42649.81) 4) Requires California Energy Resources Development and Conservation Commission (CEC) to hold public hearings to identify impediments that limit procurement of biomethane in California, including, but not limited to, impediments to interconnection, and requires CEC to offer solutions to those impediments as part of the integrated energy policy report. (PRC §25326) SB 1383 (Lara) Page 2 of ? 5) Requires the California Public Utilities Commission (PUC) to adopt policies and programs that promote the in-state production and distribution of biomethane. (PUC §399.24 ) 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 hydrofluorocarbon gases, and a 50% reduction in anthropogenic black carbon, by 2030. 2)Requires ARB, prior to approving the strategy, to coordinate with other state and local governments; hold at least three public hearings; evaluate the best available scientific, technological, and economic information to ensure the strategy is cost effective and technologically feasible; and 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 Internet Web site at least one month prior to approval. 4)Establishes a target of 50% reduction in the statewide disposal of organic waste from the 2014 level by 2020 and a 75% reduction by 2025, and requires CalRecycle and ARB to adopt regulations to achieve the organic waste reduction targets. 5)Prohibits the above regulations from establishing numeric organic waste disposal limits for individual landfills and authorizes the regulations to: a) Require local jurisdictions to impose requirements on generators, as specified, and penalties for noncompliance. b) Include different levels of requirements for local jurisdictions and phased timelines for meeting 2020, and 2025 goals, as specified. c) Include penalties for noncompliance, as specified. 6)Requires the above CalRecycle and ARB regulations to: a) Take effect on or after January 1, 2022, as specified. SB 1383 (Lara) Page 3 of ? b) Include requirements intended to recover at least 20% of edible food currently disposed of, by 2025. 7)Authorizes a local jurisdiction to charge and collect fees to recover costs incurred in complying with the organic waste reduction targets. 8)Requires CalRecycle, in consultation with ARB, to analyze progress in achieving the organic waste reduction goals, as specified. 9)Authorizes CalRecycle to include incentives or additional requirements in the regulations to facilitate progress in meeting the organic waste reduction goals if CalRecycle determines that significant progress has not been made. 10) Prohibits ARB from adopting additional requirements to control methane emissions from the disposal of organics before January 1, 2025, other than through landfill methane control. 11) Requires ARB, in consultation with the California Department of Food and Agriculture (CDFA) to adopt regulations to reduce methane emissions from livestock and dairy manure management operations by up to 40% below 2013 levels by 2030. 12) Requires ARB, prior to adopting manure management regulations, to do the following: a) Work with stakeholders, as specified, to address challenges and barriers to the development of dairy methane reduction projects. b) Hold a minimum of three public meetings, as specified. c) Conduct or consider livestock and dairy operation research on dairy methane reduction projects and consider developing and adopting methane reduction protocols. 13)Requires ARB post a report on their Internet Web site on the progress in meeting with stakeholders, holding public meetings, conducting research, and developing protocols, as required above. 14) Specifies that the regulations shall be implemented on or after January 1, 2024, if ARB, in consultation with CDFA, determines SB 1383 (Lara) Page 4 of ? that the regulations are technologically feasible, economically feasible, as specified, and cost effective and that they include provisions to minimize and mitigate potential leakage, and evaluate achievements made by incentives. 15) Requires ARB, in consultation with CDFA, to analyze progress by July 1, 2020, toward achieving the methane reduction targets for the dairy and livestock sector, and authorizes ARB, in consultation with CDFA and stakeholders to reduce the methane reduction goal for the dairy and livestock sector if it is determined that progress has not been made in meeting targets due to insufficient funding, or technical or market barriers. 16) Requires ARB, in consultation with PUC and CEC, to establish energy infrastructure development and procurement policies to encourage dairy biomethane projects to meet the methane reduction goals for that sector, and requires PUC and CEC to direct gas corporations to implement at least five dairy biomethane pilot projects, as specified. 17) Requires ARB to provide guidance on credits generated pursuant to the low carbon fuels standard, and cap-and-trade program, and ensure that projects developed prior to implementation of adopted regulations in the dairy and livestock sector receive credit for at least 10 years, and be eligible for an extension of credits, as specified. 18) Requires ARB to develop a pilot financial mechanism to reduce economic uncertainty associated with the value of environmental credits, including credits generated pursuant to the low carbon fuels standard, and cap-and-trade program, and make recommendations, as specified. 19) Specifies enteric emissions reductions may only be achieved through incentive based mechanisms, until ARB, in consultation with CDFA makes specified findings, but authorizes voluntary enteric emissions reductions to be used toward meeting the methane emission reduction goals for the livestock and dairy sector. 20) Specifies that the requirements in adopting dairy and livestock regulations do not limit the authority of ARB to acquire planning and baseline information. 21) Prohibits ARB from adopting methane emission reduction regulations controlling methane emissions from dairy and livestock SB 1383 (Lara) Page 5 of ? operation to achieve GHG emissions reductions other than those required pursuant to this bill. 22) Requires CEC, in consultation with ARB and PUC, to develop recommendations for the development and use of renewable gas as part of the 2017 Integrated Energy Policy Report, as specified. 23) Requires state agencies to consider, and as appropriate, adopt policies and incentives to significantly increase the sustainable production and use of renewable gas, based on the above recommendations, and requires PUC, in consultation with CEC and ARB, to consider additional policies to support the development and use of renewable gas in the state to reduce short-lived climate pollutants, based on the above recommendations. 24) Requires priority for the consideration and adoption of policies above, be given to fuels with the greatest GHG emissions benefits, as specified. Background 1) Short-lived Climate Pollutants. Greenhouse gases or climate pollutants, such as CO2, work to warm the earth by trapping solar radiation in the earth's atmosphere. Depending on the molecule, these pollutants can vary greatly in their ability to trap heat, which is termed their global warming potential, and the length of time they remain in the atmosphere. CO2 remains in the atmosphere for centuries, which makes it the most critical greenhouse gas to reduce in order to limit long-term climate change. However, climate pollutants including methane, tropospheric ozone, hydrofluorocarbons (HFCs), and soot (black carbon), are relatively short-lived (anywhere from a few days to a few decades), but when measured in terms of how they heat the atmosphere (global warming potential, of GWP), can be tens, hundreds, or even thousands of times greater than that of CO2. These climate forcers are termed short-lived climate pollutants (SLCPs). Because SLCPs remain in the atmosphere for a relatively short period of time, but have a much higher global warming potential than CO2, efforts aimed at reducing their emissions in their near term would result in more immediate climate, air quality, and public health benefits, than a strategy focused solely on CO2. According to ARB's SLCP draft strategy, "while the climate impacts of CO2 reductions take decades or more to materialize, SB 1383 (Lara) Page 6 of ? cutting emissions of SLCPs can immediately slow global warming and reduce the impacts of climate change." Recent research estimates that SCLPs are responsible for about 40% of global warming to date and that actions to reduce SLCP emissions could cut the amount of warming that would occur over the next few decades by half. According to ARB's 2015 updated Scoping Plan, the three short-lived climate pollutants with the greatest implications for California are the following: Black carbon: Black carbon, a component of soot, also known as PM 2.5, comes from diesel engines and incomplete burning of carbon sources. Wildfires contribute almost 50% of the total black carbon emissions in the state. Black carbon also darkens the surface of snow and ice, which accelerates heat absorption and melting, and is thought be the second greatest contributor to global climate change, after CO2. 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 greenhouse gas subject to AB 32 regulations. However, due to known health and air quality impacts, ARB adopted truck and bus regulations in 2008 to control diesel PM emissions. ARB also administers the Carl Moyer Program, which provides grants to fund "cleaner than required" engine upgrades, or retrofits that reduce PM 2.5 and other pollutants. Black Carbon has a global warming potential 3200 times that of CO2 on a 20-year time scale. Methane: Methane (CH4) is the principal component of natural gas and is also produced biologically from the decomposition of organic matter under anaerobic conditions in ruminants (enteric fermentation), landfills, and waste handling. 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). In fact, a 2014 Stanford University study found that methane emissions may be 50% higher than official estimates from the US EPA. In 2010, ARB approved a regulatory measure as an AB 32 discrete early action measure that requires installation of landfill gas collection and control systems. ARB has also released draft regulations to reduce SB 1383 (Lara) Page 7 of ? fugitive methane from the oil and gas sector. Methane is about 80 times more powerful as a global warming pollutant than CO2 on a 20-year time scale. Hydrofluorocarbons (HFC): 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, but they are the fastest growing source of carbon pollution. ARB has implemented several measures to reduce HFC emissions including low-global warming potential (GWP) requirements for aerosol propellants, a deposit-return recycling program for small cans of air conditioner refrigerant and a refrigerant management program. HFCs, on average, have a global warming potential 1600 times that of CO2 on a 20-year time scale. 2) Climate change, environmental quality, and public health. In addition to increasing sea levels and dwindling biodiversity, climate change will have significant impacts on environmental quality and public health. A number of impacts from climate change can lead to worsening air quality. Longer, hotter days during the dry seasons result in more ground-level pollutants like ozone. Additionally, dry conditions from high temperatures and worsening drought lead to longer fire seasons and increasing wildfire frequency and intensity. Climate change can also lead to more frequent and extreme weather. This includes heavy rainfall events, which can trigger landslides and debris flows that are especially problematic in areas where wildfires have occurred. Heavy rain events can also overwhelm sewage and water treatment facilities with negative impacts to water quality. Additionally, drought is an important consideration for water quality. Because of reduced water reserves, groundwater pumping may continue to increase, resulting in higher concentration of pollutants in drinking water. High heat and drought can also facilitate the spread of West Nile Virus (WNV) by aiding the development of mosquitoes, which spread the virus to people, birds, and other animals. Last year in California, the number of mosquitoes carrying WNV surged to SB 1383 (Lara) Page 8 of ? unprecedented levels. 3) SLCP Strategy. SB 605 (Lara and Pavley, Chapter 523, Statutes of 2014) directs ARB to develop a comprehensive short-lived climate pollutant strategy by January 1, 2016. In developing the strategy, ARB is required to complete an inventory of sources and emissions of SLCPs in the state based on available data, identify research needs to address data gaps and existing and potential new control measures to reduce emissions. In September of 2015, ARB released a draft SLCP strategy required by SB 605. The draft strategy sets targets for methane, black carbon, and reductions in F-gases, of 40%, 50%, and 40%, respectively, by 2030. Some of the proposed measures to achieve black carbon emissions reductions include replacement of wood-burning stoves, and implementing a sustainable freight strategy. To meet the methane reduction target, the draft strategy proposes manure and enteric management measures, including regulations on new dairies, prohibiting organics in landfills, oil and gas sector methane regulations, and others. F-gases are targeted in the strategy through proposals to provide financial incentives to low GWP refrigerants and bans on very high GWP refrigerants and equipment. Comments 1) Purpose of Bill. 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 strategy represents the next step in those efforts, to establish a goal to reduce short lived climate pollutants 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. This impact is most profound in children. One in eleven children in Los Angeles County suffers from asthma. For Black children, the number is one in four. "The impact of air pollution on children is not limited to just SB 1383 (Lara) Page 9 of ? heart and lung problems. Asthma is now the leading medical cause of absenteeism in LA schools, impacting children's learning and development. Limited opportunities for physical activity due to respiratory illness and poor air quality also contribute to an epidemic of overweight and childhood diabetes that disproportionally impacts Black and Latino communities. "Although the problem is statewide, these challenges disproportionally impact poor families and communities of color. According to the 2015 State of the Air Report from the American Lung Association, the top five most polluted cities in the United States are all in California. "A Southern California Children's Health study that examined the long-term effects of particle pollution on teenagers found that those who grew up in more polluted areas face the increased risk of having underdeveloped lungs, which may never recover to their full capacity. The average drop in lung function was 20 percent below what was expected for the child's age, similar to the impact of growing up in a home with parents who smoked. "Reducing super pollutants in California will have an immediate beneficial effect - dramatically reducing the serious impacts these pollutants have on our air quality and on the health of our children." 2) What measures will be implemented? SB 1383 directs ARB to implement the SLCP strategy, required by January 1, 2016 pursuant to SB 605 (Lara). ARB has not yet formally approved the SLCP strategy, and it currently exists in draft form. The draft outlines numerous actions that could be taken, and in some cases are already underway, to address methane, black carbon, and F-gases in the state to meet the 2030 targets. Some of the proposals include: Removal and replacement of old fireplaces and woodstoves; Implementing a sustainable freight strategy; Regulations for best management practices for new dairies; Financial incentives for manure management and dairy digesters; Requiring organics diversion from landfills; Regulations to reduce methane emissions from oil and gas production, processing and storage; SB 1383 (Lara) Page 10 of ? Financial incentives for low-GWP refrigeration early adoption; and Bans on the sale of very-high GWP refrigerants and prohibitions on new equipment using high GWP gases. The draft strategy has not yet been approved by the Board, and is subject to review under CEQA. Additionally, SB 1383 includes requirements for ARB to conduct public hearings and ensure the strategy is cost effective and technologically feasible, as well as incorporate measures that provide public health, job growth, and technological innovation benefits, prior to approving the strategy. Because of the additional actions and evaluations needed, the approved strategy may change significantly, and it is not clear to what extent all the measures and actions identified in the draft strategy will be implemented as part of the approved strategy pursuant to SB 1383 to meet the targets. However, ARB does note in the report that any regulatory measures developed pursuant to the SLCP Strategy would undergo a public rulemaking process, including workshops, and economic and environmental evaluations. 3) SB 1383 and existing organic waste goals. While the bill does not set a specific methane reduction target for the waste sector, it does set goals of reducing statewide disposal of organic waste by 50% from 2014 levels by 2020 and 75% by 2030. The bill also requires CalRecycle's regulations to achieve a reduction in edible food currently disposed of by at least 20%. SB 1383 prohibits CalRecycle's regulations to meet these goals from taking effect before January 1, 2022. Existing law sets a statewide solid waste diversion goal of 75% 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. Additionally, AB 1826 (Chesbro, Chapter 727, Statutes of 2014) requires generators of significant quantities of organic waste to ensure the material is recycled, and lowers the organic thresholds for businesses subject to recycling requirements if at least 50% of organic waste is not SB 1383 (Lara) Page 11 of ? diverted by 2020. SB 1383 goals and timelines for reducing organic waste are consistent with CalRecycle's strategic directive, as well as current statute mandating commercial recycling of organic waste. 4) Limits ARB's authority to reduce dairy and livestock methane emissions. Currently, methane is defined as a GHG under AB 32, and ARB has the authority to regulate methane emissions from all sectors, including the agricultural and waste sectors, pursuant to AB 32. Additionally, the Legislature recently passed SB 32 (Pavley), awaiting action by the Governor, which would grant ARB the authority to reduce GHG emissions, including methane, by at least 40% by 2030. The dairy and livestock sector is not currently regulated under AB 32, although over 50% of statewide methane emissions are due to dairy and livestock operations. However, as noted, ARB's recent SLCP strategy outlines several potential measures for this sector, including regulations for best management practices for new dairies and financial incentives for manure management and dairy digesters, to contribute toward a statewide reduction in methane emissions of 40% below 2013 levels by 2030. Recent amendments to the bill would prevent implementation of methane emissions reduction regulations for the dairy and livestock sector before 2024. The amendments also limit the dairy and livestock 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. Additionally, ARB is prohibited from regulating emissions from enteric fermentation until ARB, in consultation with CDFA, 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. SB 1383 (Lara) Page 12 of ? By delaying implementation of regulations until 2024, capping the dairy and livestock sector's methane reductions to 40%, and requiring a number of specific findings prior to implementation, these amendments limit ARB's existing authority under AB 32 and ARB's authority to reduce methane emissions from the dairy and livestock sector under SB 32 (Pavley), if that bill and its companion measure, AB 197 (E. Garcia), are signed by the Governor. 5) Dairy industry concerns. As noted above, recent amendments to the bill lay out a number of provisions that limit the scope and timing of the regulations ARB can adopt to control methane emissions from the dairy and livestock industry. In a March 23, 2016 letter from agricultural, dairy, and livestock stakeholders regarding SB 1383, they argued that unlike other entities regulated by ARB, the dairy industry cannot pass costs through to customers who purchase milk, cheese, and other dairy products, since milk prices are set by the state. The letter also stated that, because the California dairy industry produces low levels of enteric fermentation emissions, directly regulating enteric emission from cows is unrealistic, and could lead to greatly reducing the number of dairy cattle in the state, or eliminating most pasture and organic dairies, or both. Recent amendments limiting the scope and delaying the implementation of manure management regulations remove the dairy and livestock industry opposition to the bill. 6) Renewable gas policies. Recent amendments require CEC, in consultation with ARB and PUC, to develop recommendations for the development and use of renewable gas. The amendments also require state agencies to consider, and adopt, as appropriate, policies and incentives to significantly increase the sustainable production and use of renewable gas, based on those recommendations. By authorizing any state agency to adopt policies based on recommendations made by other agencies, does this bill sidestep the role of the Legislature in granting authority and direction to state agencies? 7) Referral to the Committee pursuant to Senate Rule 29.10. SB 1383 was originally introduced by Senator Lara on February 2, 2016, to SB 1383 (Lara) Page 13 of ? require ARB to approve and implement the comprehensive short-lived climate pollutant strategy to achieve, from 2013 levels, a 40% reduction in methane, a 40% reduction in hydrofluorocarbon gases, and a 50% reduction in anthropogenic black carbon, by 2030. On August 30, 2016, Assembly amendments added new sub-targets for organic waste, and for the dairy and livestock sector, as well as a number of additional requirements for ARB, and other agencies, in implementing regulations to achieve the emissions reduction targets. The measure passed the Assembly Floor on August 31, 2016, by a vote of 41-22. Consistent with Senate Rule 29.10 the Senate Rules Committee has referred the amended bill to the Senate Environmental Quality Committee for a hearing of the Assembly amendments. Related/Prior Legislation SB 605 (Lara and Pavley, Chapter 523, Statutes of 2014) requires ARB to develop a short-lived climate pollutant strategy by January 1, 2016. The following support and opposition was verified by the author's office on 8/31/2016: SOURCE: Author 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 Asthma Coalition of Los Angeles County Atlas ReFuel Audubon California Bay Area Regional Health Inequities Initiative 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 SB 1383 (Lara) Page 14 of ? 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 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 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 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 SB 1383 (Lara) Page 15 of ? RAMP and Community Action to Fight Asthma Recology Republic Services, Inc. San Francisco Bay Area Chapter, Physicians for Social Responsibility San Joaquin County Asthma and COPD Coalition 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 Voices for Progress West Biofuels 29 Individuals OPPOSITION: Asian Pacific Environmental Network 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 Center for Food Safety Center for Race Poverty & the Environment Food and Water Watch Leadership Counsel for Justice and Accountability Communities for a Better Environment Center for Community Action for Environmental Justice Comite ROSAS Committee for a Better Arvin Committee for a Better Shafter Delano Guardians Greenfield Walking Group. Lamont Parent Partners Los Angeles County, Solid Waste Management Committee/Integrated Waste Management Task Force National Federation of Independent Business Nisei Farmers League Western Agricultural Processors Association Western Growers Association Western Plant Health Association Western States Petroleum Association SB 1383 (Lara) Page 16 of ? -- END -